“I do not say that this is the right system.  I only advance it to emphasize my belief that there is need for the adoption of some system which shall be automatic and open to all sound banks, so as to avoid all possibility of discrimination and favoritism.  Such a plan would tend to prevent the spasms of high money and speculation which now obtain in the New York market; for at present there is too much currency at certain seasons of the year, and its accumulation at New York tempts bankers to lend it at low rates for speculative purposes; whereas at other times when the crops are being moved there is urgent need for a large but temporary increase in the currency supply.  It must never be forgotten that this question concerns business men generally quite as much as bankers; especially is this true of stockmen, farmers, and business men in the West; for at present at certain seasons of the year the difference in interest rates between the East and the West is from 6 to 10 per cent, whereas in Canada the corresponding difference is but 2 per cent.  Any plan must, of course, guard the interests of western and southern bankers as carefully as it guards the interests of New York or Chicago bankers, and must be drawn from the standpoints of the farmer and the merchant no less than from the standpoints of the city banker and the country banker.”

I again urge on the Congress the need of immediate attention to this matter.  We need a greater elasticity in our currency; provided, of course, that we recognize the even greater need of a safe and secure currency.  There must always be the most rigid examination by the National authorities.  Provision should be made for an emergency currency.  The emergency issue should, of course, be made with an effective guaranty, and upon conditions carefully prescribed by the Government.  Such emergency issue must be based on adequate securities approved by the Government, and must be issued under a heavy tax.  This would permit currency being issued when the demand for it was urgent, while securing its requirement as the demand fell off.  It is worth investigating to determine whether officers and directors of national banks should ever be allowed to loan to themselves.  Trust companies should be subject to the same supervision as banks; legislation to this effect should be enacted for the District of Columbia and the Territories.

Yet we must also remember that even the wisest legislation on the subject can only accomplish a certain amount.  No legislation can by any possibility guarantee the business community against the results of speculative folly any more than it can guarantee an individual against the results of his extravagance.  When an individual mortgages his house to buy an automobile he invites disaster; and when wealthy men, or men who pose as such, or are unscrupulously or foolishly eager to become such, indulge in reckless speculation—­especially if it is accompanied by dishonesty—­they jeopardize not only their own future but the future of all their innocent fellow-citizens, for the expose the whole business community to panic and distress.