America's Money Machine

go PART II / THE GREAT REVERSAL
was in bonds and securities; and collateral loans provided $63,836,000,
or 13.8 per cent. The maximum amount of collateral in the hands of the
clearing house committees at anyone time was reported at $158,327,000.
The total issue of clearing house certificates by all the clearing house
associations was $255,536,300.3
On December 1 the Comptroller ofthe Currency declared the termination
of the monetary crisis in the following announcement:
Telegraphic advices received. from the clearing house associations
throughout the country show that all clearing house loan certificates have
either been paid off or called for redemption.
Chicago wires that the banks there are ready to payoff the comparatively
small balance still outstanding and are only delayed by the required notice
ofredemption which prevents the last ofthem from being paid for a few days
longer. The Baltimore banks have given notice for redemption of the last of
their loan certificates not later than the 15th instant. New York, Boston,
Philadelphia, St. Louis, New Orleans, and all other cities throughout the
country which issued any clearing house certificates report all now paid in
full.
This encouraging fact is an acknowledgment and important evidence of
the almost complete return to normal financial conditions in this country and
marks our safe exit from the disquieting conditions which so recently confronted
us.
The total amount ofadditional currency issued under the provisions ofthe
Aldrich-Vreeland Act to date is $381,530,000, and of this amount $127,­
272,000, or more than one-third has already been redeemed. Very few new
applications are being received, while redemptions are large and steadily
increasing. 4
Meantime, the crisis had passed from the financial to the commodity
markets. The war scare had driven shipping to port, and exporters of
wheat and cotton were unable to find bottoms to carry their merchandise.
The problem was further aggravated by the demoralization ofthe foreign
exchanges. Prices plummeted, particularly for cotton, and farmers
throughout the South were in distress. The large mail order house of
Sears, Roebuck & Co., whose trade was largely with farmers, offered to
accept all cotton offered at 10 cents a pound.
On August 14, Secretary of the Treasury McAdoo convened a conference
of leading bankers, business men and steamship and railroad
managers to consider the grain export and foreign exchange and shipping
situation, and on August 18 a similar conference convened to deal
with the cotton problem. The cotton crisis was the more severe, for the
war had broken out just at the beginning of the cotton picking season,