The semi-weekly messenger., 1908-01-31
METHODS OF CORTELYOU
Operations of Treasury During Re
cent Financial Disturbance EX-
planned to Sena1e-f1licitS Great
Comment.

Washington, January 29.-The SEN
ate was entertained today by q, series
OF animated comm entS on the meth
Cd adopted by Secretary Of the Treas
urp CortelyOu in placing before tie
senate his reply to the resolution
calling for information relative to the
operations of the treasury department t
in connection with the financial dis
turEance.
The secretary had the intro
duCtory part of his reply printed and
copies of the pamphlet were on the
desks of all senators, which was do
clared by democratic senators to be
without precedent.
The senate devoted considerable
| time to passing minor bills on the
calendar and at 2.15 D. m adjourned
Secretary Cortelyou's report is in
response TO resolution agreed to
| by the senate on December 12, 1907.
calling for information concerning
| the award Of Panama bonds and S
per cent certificates and other recent
| financial transactions Of the govern
ment. 1t also cmbOdies Information
as TO the general state of the nations
| finances during the closing months of
19O7-the period over which the re-
| cent financial panic extended.
Secretary COrtGlYOu in his reply de-
fends the issue of Panama bonds and
| tbrCasury certificates by saying that
| it was advisable to take some strong
and resOlute step which would con-
vince the public both at home and
| abroad that the government was thor
oughly alive to the situation and de-
| terplined to give its aid in every pos
sible legal and proper form.
Concerning the allotment of the
| new issues Of securities he says their
character was such that 1t was antic-
| lpated most of the subscriptions
would come from national banks:
| that the two per cent. bonds afforded
such privileges to national banks rs
q basis of note circulation that there
were strong inducements to the banks
to 0utbid private investors, who
would find in the bonds nothing more
| than the best form of security paying
| only per cent per annuIn: and that
! it was; eXpected-and this eXpecta-
! ton was fulilIed-that the bonds
| would he usei chiefly as q basis Tor
additional bank note circulation AMI
| that SuC}: circulation would contribute
| its share 20 relieving the acute pres
| sure for currency which existed
throughout the country. Even II
! there had heen no other Justification
! for limiting subscriptions to national
: banks. this cOnsideratiOn-that the
! bonds would be used to meet the pres
| sure Tor ClrrencE-"Ould, In Ine
! opinion of tho department have JUS
| tifed an absolute restriction Of the
| awards 20 national hanks.
"Obviously." the report continues.
| So far rs the offer Of securities were
influenced by the desire to prevent
| distress III the money market IT
! would have failed of this purpose if
! awards had been made. even to bona
} noe bidders, which would have re-
/ suited in large drafts upon the reserve
! money of the banks and would not
| have aided in drawing money from
! private boards. It was, therefore. de-
/ cided in the case of the Panama
! bonds to make no awards to fndiyid-
| uals In excess of $4,000.
The total bids for the Panama
! canal bonds amounted to S2.22U,604-
$50. or more than "A times the
amount offered. This fact, not here
! tofore made public, would have
stamped the loan as an even more re-
markable success than 1t was, 1t is
pointed out. il all bids could have
been regarded as r1ade in good faith
by responsible parties. Examination
Of the bi1s showed, however, that
many CT them were not only specuia-
tive in character, bur that they were
made In many cases for very large