The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1908-01-29
STORY OF PANIC.
1t Is Told Officially by Secre.
tary Geo. b. C0rtelyou
In a Statement in Answer to a
Senate Resolution.
THE TURNING POINT
Was Reached When He An
nOunced an Issue of Bonds.
100000 Of Currency Had
Disappeared From Circulation.

Washington, Jan. 29.-In response to
a resolution agreed to by the senate on
December IL, 1907, the secretary Of the
treasury today transmitted to that
body detailed statements concerning
the award of Panama bonds and 8 per
cent certificates together with recent
financial transactions of the govern
ment and also embodying information
as to the general state of the nations
finances during the closing months of
1907-the period over which the recent
financial panic extended.
The report, which is accompanied by
a long letter from Secretary CorteIyou
to the president of the senate embraces
a list of repositories and the amount
of money placed on deposit therein in
various dates; list of other banks
with the amounts of national deposits
and the security held therefor; state
ments showing the condition of banks
! on August %, 1907, and December 8,
1907, and the amount of bank notes
outstanding at various periods; lists
of banks and individuals who received
Panama canal bonds and lists of those
who bid for the bonds without receiv-
| ing an allotment; and subscriptions of
3 per cent certificates of Indebtedness;
|
Gates issued during the panic and a
budget of circulars, press announce
| ments and correspondence relating to
government financial transactions that
| took place during the period mention
| ed in the resolution.
Reviews the Panic.
Secretary Cortelyou before analysing
the crisis and setting forth his official
actions in regard to the report, gives a
summary of occurrences in the United
| States financial world from the time he
| assumed charge until the special re-
| port was compiled. He states that bus
| mess conditions were becoming unset
tied when he became financial member
of the cabinet in March, 1907. Various
stringencies occurred prior to August,
of weekly deposits of government
funds in various banks was begun on
August 2S. BY October IA, these depos-
| it's had reached a total of $28, 900, 900.
In October occurred the striking events
| in New York, which eliminated in the
| closing of the Knickerbocker Trust
company and the decision of New York
| banks to issue clearing house certifi-
| Gates. The treasury transferred to ma
/ tional banks within few days the
New York within three days about
| $50, 000, 900 in small-bills. In New York
alone the report shows, clearing house
certificates were fssued in excess OF
I ID
Der the treasury had met the demand
for relief to the extent that the work
ing balance was reduced to approx
mately $5,o0O.OO0 1t being apparent that
no further deposits could safely be
| made banks were permitted to subSti-
| tute bonds suitable for savings bank
investments for government bonds,
| which were held as security against
public deposits. Government bonds
| were thus released as additional bank
! note circulation.
| After the issue Of Panama bonds and
| one year treasury certificates the bank
| note circulation began to increase until
it stood on December 81 at 690,130 1896,
as against s607, 11S,742 on October Is. On
January Is, 1908, the issue had reached
| $685., 925, S06.
| The Turning Point.
| 1.-THE announcement of the United
States Of the issue Of new securities by
| the treasury" says Mr.. Cortelyou,
marked in some degree the turning
| point Of the panic. No rurther steps
were considered necessary except to
! continue the deposit, of public moneys
| for time where they were available
and early in December it became posi-
BILE to replenish the cash in the treas
ury by the withdrawal Of about $4,000
600 from national banks in New YORK
| CYty This was followed on January %
| by another call for so 900, 900 from New
York banks This will be followed soon
hy a call on outside banks based upon
local conditions rather than upon fix
ed percentage OF their holdings of pub
lie money" -a-
The amount Of currency which disap-
peared from circulation from the time
Of the suspension of the Knickerbocker
/ Trust company until confidence was
practically restored in December, Is
stated as approximately s296.0OO,OO0
This amounted substantially to one
tenth of the entire estimate of money
in circulation in the United States.
The secretary of the treasury touches
upon the gravity Of the situation
) abroad as well as in this country and
gives figures concerning the export OF
merchandise to show the energy with
which the economic resources Of the
country were devoted to the relief OF
the situation, the excess OF the exports
: over imports rising from 81, 404 In
August. 1907, to s114,S9O,665 in December
1907.
| Secretary Cortelyou defends the issue
of Panama bonds and treasury certih-
Gates by saying that it was advisable
to take some strong and resolute steI
which would convince the public, both
at home and abroad that the govern
ment was thoroughly alive to the sit
IT,. Eo~ Eof Wor1on