an, which loaned
$25,000,000 at the prevailing rate of interest. With the strengthening
of the Stock Exchange another stage of the panic passed.

[Illustration: Hundreds of people waiting in line.]
The panic of 1907. Run on the Lincoln
Trust Company, Fifth Avenue entrance.

In spite of the use of the surplus of the Treasury the banks showed a
loss of $50,000,000 in actual cash during the five weeks of the panic.
Now demands were made on foreign countries for gold. The Bank of England
made no move to block the great withdrawals of gold except to raise the
official discount to seven per cent. The flow of gold did much to stay
the ebb of confidence.

Some contended for an issue of paper money and after a long discussion
by the officials of the Treasury, it was decided to sell $50,000,000
worth of Panama two per cent bonds and $100,000,000 worth of three per
cent notes in the hope of calling from its hiding-place the money which
was being hoarded. The result of the venture was not satisfactory and
the loan operations soon ceased.

Gradually financial affairs righted themselves. The emergency currency
was redeemed, the runs on banks ceased, confidence slowly returned, and
business picked up, although by the middle of 1908 the volume was
scarcely half of what it had been a year before. The number of bank
failures had been comparatively small. Only twenty-one banks were
obliged to suspend payment, while in 1893 the number was 160.

[Illustration: Hundreds of people in the street.]
The panic of 1907. Wall Street, in front of the Sub-Treasury Building,
when the run on the Trust Company of America was at its height.

Naturally there was much discussion concerning the defects of our
financial system, of the needs of elastic currency, of a central bank,
etc., when the Sixtieth Congress met in December, 1907. Several bills
were offered for the establishment of a central bank; some for the issue
of a special currency by the government; others for the legalization of
certificates and currency created by clearing-house associations. The
aversion of the people to the centralization of the banking business in
the hands of a few of the great money powers made the establishment of a
central bank out of the question.

The bills which were discussed at any length were the Fowler Bill, the
Vreeland Bill, and the Aldrich Bill. The first was discarded, although
it had merits, and the two branches of Congress were unable to agree