| Show sEcY GORTEL YOU AD NO PANAMA BONUS BONDS to President of Senate Detailed Statement State Con Concerning Concerning corning Their Award HE ANALYSES THE CRISIS Business Conditions Becoming Unsettled When He Hc Entered The Cabinet in March rl sl Amount of 01 Currency from WH Jan 29 2911 In to a n i solution i agreed to by tho the senate on en Pi Dc 12 Wi the secretary of ot the tho to toI I ur today transmitted to that body bd detailed concerning the award ot at Panama bonds and 3 per ent certificates together with recent nt Information aa as af to tie general state of at atthe the nations finances during tho th closing cosing months of ot 1907 tho period over which wl ch the tho recent financial panic extended ct The Tho report report which Is It h accompanied by bv a tong inns letter leller letor from Secy SOc Cort lyou to t the president ot of the senate embraces es Cs a list of ot depositories and ald the amount of money placed on n deposit therein in I various dates dales a list hut ot of other banks i with wih the tho th amounts of ot actual deposits and the security held state statements statements ments showing the condition of ot banks bankson baks on Odd 01 August and Dec 10 3 S 1907 and the amount of ot bank bani notes outstanding at lt various periods lists ot of banks and Individuals who received Panama canal bonds and lists of at those tholo who bid for the tho bonds without receiving an nn allotment and subscriptions ot of 3 per cent certificates cates eates of ot indebtedness data dala datu concerning Issued dur during durIng dealing house dl ing Ing the punic panic and a a s budget ot of circulars circulars lars press mess announcements and nd corre correspondence correspondence relating r to government fin tn financial In uncial ancial transactions that took place during tho the ported mentioned in to the tho res resolutions rs Si Sr Siry py before analyzing tho the and II setting forth his ac ftC actions II In regard to the report gives a ft summary of at occurrences In 1 tho the Unit United ed Statts t financial world from irom the tho time ho he h assumed charge until tho the special r report port t gives a I summary sumar of ot occurrences In Ilk II the tho States Stales financial world toni the time he h do assumed u lm d charge until the tho special report was WUI ns compiled d Ho states stales that th t business conditions wore bo boo unsettled when whon ho he became financial member er of lt the cabinet cabnet In I n J March larch Various oc occurred occurred currel prior to lo August which were weri promptly IJ I relieved A plan of ot weekly sits Iti of ot government funds fun s In var vai various 1 ious hanks banks was be bun un on 00 Aug Al 2 By Dy Oct Ocl 14 II these had reached a 1 of a In October occurred the stirring events in Now ew York which culminated In the Ihu closing of ot tho the Knick Knickerbocker Trust company and the tho do cl lon ot of New York bonks banks to t Issue clearing dearing house certificates GOVERNMENT T TRANSFERS ImS The Tho he treasury transferred to t national banks bank within wl n a n low few days daYn the tha sum ot of and transmitted to t Now New NewYork ow York within three days dys about In Idi small smal bills bis In III 11 New York city cHy alone alno aone tho the report ort shows clearing house 1 wore Issued In excess ot or C Hy By the Iho middle of November the Ihn tr surY l had mEt the d mald for tor relief to tha extent that the tho working balance was WA as reduced r uce to approximately It H become became apparent that no further deposits 1 could safely be bo made mao banks anlU were permitted to substitute bonds suitable for tor savings bank Invest Investments ments for tor government bonds bond which ere held h ld as security agaInst public ImbUe de deposits d posits Government bonds honc vero thus thusel el used as additional bank note nato cir dr circulation culaton After tho Issue of o Panama bonds and ono one year treasury rates lalee tho tide batik bank blk note noto circulation began belan to until It stood atod on Dec Det 31 5 as 1 against on onUi Ui Od t H 15 On Jon Jan JI IS 18 tho Issue IS o had 1121 reached The Tho announcement ot of tho United r Stairs Stal of ot f thu tidO th now HOW lew securities by the tho I says as Mr Cortelyou mark marked ed edi In idd some somo degree degl the tho turning point of or orthe the panic No 0 further steps were con coit COl necessary except to continue the tho deposit of ot public moneys for a time they th Y were available anti and nn early earl carl in ilk 1 1 December It became possible to 1 i Il MIk h the tue dish In the tho treasury by the tha 1 of at about JC from frol national banks In NOl Now York city olty This IR IRl WI l followed on Jan JIU 22 by another call cul f for fr r from flom New York banks T i will wl bo 10 10 followed noon oon by a I call callen cul tm on outside banks hanks based baaed upon ulon local con COI dl rather than tan upon a n fixed per 11 r twin y ot of their luh holdings of at public HOARDED lii l 1 h of o currency which Fp rr i from fro circulation front from trl tho the or 01 f Hi t t of ot tho the Knickerbock T r 1 company until wan WIL wanI WILIra I Ira Idra ra U d al ily lly restored 1 In December Is IA tit it n 8 t approximately 2 IM 1 toil substantially to ono one on r e thu tle entire clUre estimated money II Ii n i iu In the thu United 17 ni tOil States rite Tho riter Tit r t ry t y of or tho the treasury touched upon t i Uty vity of oC the abroad as Il v in lit II this tl country coultry and Ind gives SIN l uro t tog ing the tho export nt ot is 1 j I tho thu energy with which tho the k of at tho the country wore wele I I 1 to IC tho t ii relief I 1 of or t tha ho th I situation si t t 1 i RS RI of f exports over Imports pin ris rl I ii 1 in 11 August 1807 1007 to toM I M I t i In 11 December D 1007 1907 IMPENDS IJ BOND nOND 1 I I 0 fOHl I the III ISHun of Il Itin t 1 i i i and treasury i nig I g that It wn ris to Ii Ink AI s j ronK I roe g and tutu 11 I e stop liluis 11 U I i Ino thu he I public 11 I Ic Ic both at ii 1 ml I broad abroad a that the tho go v vein V i I alive IP to II tho tim t i i to In ii give its Is I Is alii til a iii lii 11 ovary I 1 HI nod and proper form I time til of at tho time now new ICI if t f ho III hl Hay 1 n 1 I i was Wil such mich luch that It wOn Wil ri i I i j awl moNt t of 01 tho the mm U n I hlll i w n fm ti amid un hat that I I i 1 ni rout lIli cOlI Bitch luch 1 j II I to national an as 11 a n rt Idt j I that hint lal thorn them welo wet ii I d Inducements tH to 10 the he I brinks bri ii Ii ii out nut hl m Investors who would find dud in iii ii i bonds 11 1 more than I luau th iff 1 d i of l paying only oily 2 ii ni 01 pup im and that It was Wil ftp i i 1 I hit expectation fill ful was WIB i 1 nut hat time the tl bonds would ho bo lINed 1101 UK u a 1 hi IB for o noto I 1011 UI it loll and flu that hat I c I I jut lilt to Its 11 I I s oharo to rd Ia Iw nf ir in 1410 lIO nf ot currency X XI 1 I throUGhout 1 thiro ro hail had been beco no 11 Illel lion fol for tor limiting to na nn national banks this consideration that tho tue bonds bOlds would be used to meet leet the tho pressure Ih luro for tor currency would In lii the opinion of ot the tho department hlo have havo justi justl justified fied an Rn absolute restriction to tho tide award B Tho The local legal lelal right ot of tim Iho department to make mako Ilko allotments of ot the tho bonds anti and 11 securities to such Euch persons and banks and In i such stich amounts It as Oil II teB nt fit n can an hardly bo ho called col In II question Qu ston In 10 of ot the tho fact that the tho circular of oC fering foring the tile Panama bonds contained COl this thin provision Tho Tue department also ISO reserves tho the right to reject any or all RI bids bide If It to bo be to tho Interests ot of the tha United States to do so Obviously so 80 far fat an lS the offer of ot se pc securities was Influenced by tho desire to prevent distress In lit II the until mar Ial ket It would have havo of ot Us its Is lair pur those pone if it awards had been made malo even cn to bidders which would have havo re suited stilted In lit II largo large drifts drafts upon the tho reserve money of Ct tho the banks hanks and would not have havo aided In drawing money mono from tout private un vate Vat hoards It I was wa therefore do de decided In the tho th coco case ot of tho the Panama bonds to make llO no 10 awards to Individuals In II excess of ot It I was ws also decided to accept tha thu highest bids of or national banks for or the tilO of at issue Isue after these those minimum allotments to ator I i TOTAL OTAr HID BD Tho total bid for the Panama canal canti bands continues time the secretary amount amounted ed ell to or 44 tunes times tho the amount otc This hl fact not heretofore announced would have stamped the tide loan bait as an nn oven more mO remarkable success s titan than It was If all nih tl tiie hide bids could have havo ben been regarded reganild us tie lS mado In good god faith by responsible parties 8 Examination ot of the tho bids bid show showed ed cd however that many mal of at them ero vera not ilot only speculative In 11 character but hul that they thc were ere made In many cases for very vcr large huge amounts amount by those who wore voie personally personal Irresponsible and In Incapable capable ot of having made even cven the tho small smallest est preliminary payment pa If It such pay pa ment had hal been ben reQuited reQuired When tho the awards were made there fore roro tho the bonds wore awarded without aware hesitation to national banks In those cases CISe where here tho the prices off offered rod woi wel Ci or higher anti ana where the bid ap te penrod p ared In other oIlier respects to be bo made ap In 11 good goo faith and with wih full ful capacity on tho part pmt of at the tho th bidder to execute his contract Tho rho amount thus awarded to national banks was Tho The Awards made to Individuals were limit limited ed to those cases casos where the tho amounts subscribed for were for or lens bus because such bids had at nt least prIma face taco appearance of ot good Hood faith Even upon title this basis hais tho thc payments made after tho the allotment of ot the th bonds bond showed that a considerable portion of at these small bids Were speculative sp porton AIDED BANKS DANKS There Thero was less margin for tion ton in tho thin case of 3 S per cent cont certificates cerUI cates become because us as the report nays their term tonn of ot ono one year did not allow Ilo for fop torIn any In till considerable premium wl wi n Ii tho amount of Int Interest Thoy were Issued nt at It pete piti pit and tutU th a IL them Ulem Immediately available as It was WM not necessary to secure soure bids as us In iii the case easo of ot bonds bond They Tey afforded a I convenient means U t tin thu hanks at once to 10 Increase l their circulation For lor l or this reason rason tho the secretary tary of ot this tho tl treasury thought proper to at itt lt an alt al early day that offers of ot tho the in would no 10 longer I bo be received and ald It I was ultimately decided to make no flu ni allotments to national hanl This decision was dictated by n two con cnn consideration first tho thu sro to late Into tho the of bank bali l note oto circulation for tO a n which would relieve thit th crisis crl mind mid second the fact tact that tho the announcement of a the tho issue of at the now lew securities had already to a large ex ox tent accomplished Its I Intended purpose anti and had hal made mude It unnecessary ssu to Issue more mora than a 1 fraction of the full amount The Tue he of ot theM securities was us as suspended therefore before hue tho date dato dab first named for tor closing the tho th receipt of ot subscriptions tho the total amount of tho tIm subscriptions having reached rache 6 o 50 Tho The amount Issued was only As all al ot of theto vero regis toted tar end and Id Issued ISHUN to t national bonks banks with tho the understanding that they tho should bo ho used use as IS a n for fOl 01 Increasing theli thel circulation or to secure public deposits they tho ore are IU nil 11 on deposit with wih the tines treas titer urel of ot tho the United States for these purposes BOND HOND nO D While hlo the tho awards of at 2 pot POI cent bonds iero made primarily to the highest bid ders d among Ilon national banks tho time effect of oC tho the awards was Wi to distribute among Imon banks In II 46 states of ot tho thu Union The he ono year certificates werl were ero toss ions widely but taken how ever cor by hy Institutions in at least IS Th 1 states Tho ho issue ISu of ot tho titu Panama bonds bon s would have havo boun required In Iii any ease case cas within a short time to meet tho ex ox of construction of ot tho canal und tind Ind the secretary of oC the tho treasury It Is ar sr I gued ged could hardly bo hue held h ld responsible for tar tho effect affect of ot such Issues isue ot of of at bank bunk note noto circulation whatever might height ho bo his hut opinion us ikS lS to the desir desirability ability of the tho Inflation which might ro ru rosult 10 suit sult lul Practically therefore the tue rot roi resting upon him hum relates only to tl tho the In tile the one ar ent and Md will wi with wih their thuIr maturity and redemption on Nov 80 10 o of ot tho the present year Concerning the tho distribution of ot public moneys In banks throughout tho ennui coun cOln try the tho secretor says that this has bias been done Iono without regard rc gard to partisan partisanship partisanship ship tout and Inel no section has hW received recel d other oilier than hum the tho fair and amid ald Impartial consider tion Uon to which It I U is II entitled It I Is shown that the time amount of ot public deposits on 01 Aug 22 was wail about 10 of at which tho the Now ow York YIrk banks held huhl On al Dec DIC 7 tho the figures show public h the tho country county amounting to In connection conn with this statement the tho report nays soya r While tho banks of the tho state tato of ot New York appear an us IS holders of at public mono mon moneys eys nys to the amount of or o per cent of their capitol capital and surplus tho the banks of or Now England eastern and middle western states taken 11 as s a it n whole and Including Now w York show how a n percent percentage age of o to II It capital anti and surplus of ot only a n little hittle 1 I h moro more than timan 15 IS iter or cent The batiks banks ot of the tho western wOlter anti and Pacific I on 01 the tho whole show a n pro proportion portion porton ot or nearly 18 per por POI cent With Wih the tho of ot Now York from tho thin east elst urn orn group thin tho perron II r ago of oC thin tho I re ye remaining eastern and nn middle I II le western IB imi II only olly about abolt 12 1 DEPOSITS I Details of uC tho tue appended to tn tho the show that tho the deposits are aro Iro divided among 1121 lUI Con Is In to showing that Eliot grout caro no has bias hal boon licen horn taken I In imi ill I i ng tit til deposits is and much ii I Ion IH is It to communities coin in I I ins mu lar II Iii r Undo trade men I H Iloh I u n 0 1 special vale vals n I fur for II currency tit lit lt curtain Inter Intervals Ilter After ACer nt at II lime tho policy the hits government should adopt In regard to paying all off obligations Idoft time ho report I hints In lii II a n general way at itt lt a I at mit tho the close of o the tho ho cur year tin thu collections for or tIme the nix month 01 elliod Doc Dec 31 1007 1907 showing a n In customs receipts of ot 8 83 And Internal revenue receipts f ot of t with the tho that limit tho dining I II i I uig tw tim o m pg half of tuf lt the tho year yeav will wil tl ii 1 ethic Anticipating the th financial of or this tho Immediate future c Hery loc tortel you 01 Intimates that if It now no |
