New-York tribune., 1908-01-30
CORTELYOU REPORTS.
EXPLAINS SITU1TION.
Defends Treasmy's Policy in Finan-
cidI Disturbance.
rEnnn ne Tribune Bureau. J

From The Tribune Bureau
washington jan ss-The Secretary o4 the Treas
t,ry submitted 20 the Senate to-day an exhaustive
report on the recsat operations OF his oeFar
especially those associated with the recent henciai
,,rtr ana from the cursory examination which
Senators were able 10 give TO the document To-Day
shey are of the impression that MT- Sof,e'sou
makes an excellent showing and that his statement
viii go far 10 disarm that criticism which, Win no
knowledge Of the facts the minority has oeeh So
recklessly hurting the administrator
IT Is generally assumed that the only phases OF
the Secretsry's which may be suo9ected 10
proper criticism that after October he accepted
as security federal deposits bonds which dd not
coyne within the provisions of the savings bank
laws OF New York. Massachusetts,. Connecticut or
New Jersey and the issue OF Treasury certihcates
to the amount OF approximately s15eee.etH LIZ IL
should be found further examination thai the
Secretary exceeded the authority conferred on MN
by the Constitution. the Republican leaders VIII
frankly admit the fact and plead as Justincauo tne
seriousness Of the crisis and the damage Wflch
:nust otherwise have occurred throughout the couh
try.
The opinion is eInphatcsny expressed, however,
that taken as a whole the reporc will only aod
tsurels Mr., Corelyou's reputation as hIlancief'
Ms. coRTELyoU's EXPLANATION.
Ii the course Of his statement Secretary Cor
teiyou summarizes the operations Of the Treasury
for the last few months. When he took charge. IN
March 1907 business conditions were becoming
unsettled and in a short time d period OF acute
etrinsencv arose. which promptly relieved In
Aueust Il was decided TO make deposits Of public
-nonevs in national banks TO facilitate the move
men. OF crops. and up 10 October ahout $2scass'
had been allotted. He goes to say:
sboa+ the middle Of October events occurred
xrficn indicated that a monetary stringency had
arisen much more severe than that when expert
eonnection with the movement Of the crops Ru-
srg establishments ana others lItereste0 N ie' se
projects who Were embarrassed nE nanIllty 10 ~
New YofR Sy tbs SR Condition % was 6roue
head by the appeal Of several @ national ion baRkS @ se
quickly followed by the suspension on cIooer = OF
rnenf CT about Ss.r,oe0 in cash TO depositors. Al
most Immediately runs began upon two other large
other institutions. money began 70 be boarded ny
individuals, and October 3s tie New York banks
decided to issue Clearing House certificate
Before the decision of the New York clearing
3 few SsEs the sum Of about SIS e,5e9s These
senese.s Eftb | ~. I'D piven 70 fS%se Banking in
etitutions which were severely assailed BY those
which was otherwise imminent. In order meet
the msnd for cuTrensy ~ the the rSg%nT e %hiGh
r1ent forwarded to New York within three days
ehort sSs,@t"o in small bills
ACTION JUSTIFIED.
While the action of the department in placing
barge sums in the national banks in New York was
subjected criticism. il was amply justified
they have been disclosed in tie light of subsequent
sYents. Figures show that the national banks in
1ubiic moneys received but were enabled through
1fh banks f ali eiassss trog66t the couniT
70 employ these moneys to meet large proportion
ra Fl M Sf hf f deR3Ss , ., made 9i hE E the
ming in the middle Of OCTOBER viii show that as
,hs Etringency progressed the treasury gave relief
sssme5 te BE- required some q the dI
Pittsburg si5@eo0: CINCINNATI 81 $50 500: Mime,
.polis an5 ST PAU. s5e1etO and in many places
ordinarily Would be Te.nifed to the Taroas sub
allowed 10 accumulate in national bank deposi-
ever. which eIated IN fns ra Hfon three hIn- Inv
portant trust companies, the demand for money be-
were obliged 70 issue clearing house certificates to
use in place Of currency in settling balances among
shemselves, and in many places outside Of New
nork cerfi1cates OF sinal! denominations printed
Thus each city endeavored TO avoid the shipment
es might still be within control.
HOW DEMAND WAS MET
The Treasury had met the demand for relief by
the middle Of November such an extent that
ali funds not needed for immediate expenditure
had been deposited with the banks. The state
snent continues:
~ the mean time, snG apparently further de-
Trash resources OF the Treasurg national banks
sere notified thai they would permitted 10 sub
1or government bonds which We're held as security
egainst public deposits. The purpose of this meas
itnent bonds which were thus released as security
1or additional banknote circulation, in conformity
11th law To this offer the banks responded
promptly. and as result many millions OF addi-
fionai panknoteS were taken and were employed
tH meeting the currency famine.
AS usual in emergencies, the difficulty of obtain
ing bonds, and other instructions of detail ure-
vented the increase in circulation becoming effec-
1--WE TO the fail amount until time after The
fesd for il had passed Just before acute stage
Sf the crisis the national bankn0te circulation stood
fon October 49, at s50IIS.7z2 While strenuous eff
forts were made. especially by of the large
banks in New York and Chicago to comply with
the expressed wishes Of the department and of the
Controller OF the Currency to increase circulation
the amount outstanding had risen November
70 Only slls2Z65, and November 10 to S3
Ae most important Increase in the circulation took
place after the announcement about be referred
10. Of the government issues of Panama bonds and
cne-year Treasury certificates, that circuIa-
sicn attained on December the amount Of sG55 2lS-
1s6 on December u. sS5sl4,2S5; and finally, or De
cenber 81. seSoI5sg5 By the latter the urgent
Set notes continued issued in compliance with
orders previously received. until the outstanding
circulation on Saturday, January Is, last, was $685.
E7sS
The fact that the national banks were exerting
iheTnselves 10 increase circulation. and that the
Treasury by these new issues placed at their COM
Snard means OF doing undoubtedly had a moral
efect which tended check the panic and reduce
She premium currency. The banks were ham
RIGHT