Notwithstanding the apparent prosperity of the country, there were signs of danger in the inflation and unsound finance that prevailed during the period, and these, at about the beginning of the year 1907, had developed into a state of affairs which portended immediate disaster. Banks were greatly inflated with large lines of credit which they could not liquidate. Business men were unable to pay their obligations. In the late summer it appeared inevitable that there would be a collapse, and this, in fact, occurred in October. The first open symptom of difficulty was noticed in New York, and from there the trouble steadily spread throughout the country. As usual, specie payments were suspended and clearing-house certificates were issued. There was a general shortage of currency, accompanied by many bank failures. In order to relieve the situation, Secretary of the Treasury Cortelyou and Comptroller of the Currency Ridgely did all in their power to enlarge the volume of bonds available for the purpose of carrying the new national-bank notes. At the opening of the panic it seemed as if all the available bonds had already been deposited with the Treasury to secure national-bank notes or else to protect public deposits. As public deposits with banks were then very large, the amount of bonds thus rendered unavailable as a basis for bank-note issue was likewise considerable. The Treasury Department ruled that other securities might be substituted for national bonds behind public deposits, and this released a good many national bonds, which were then transferred to circulation account, thereby providing for the issue of an additional supply of notes. In this way considerable enlargement of the circulation was obtained, but, as on former occasions, the assistance came too late to do very much good.