Without attempting to express an opinion upon the proposals of Senator Aldrich at this time, I am afraid that in the preparation of these proposals this vast aggregation was forgotten for the moment. But I am quite sure that any reasonable request that may be made by the trust companies will be given fair consideration.

In the Wilmington plan, covered by the resolutions referred to this body, it is provided that the central bank may establish reciprocal relations with any bank or trust company in the United States or in any territory thereof, under regulations prescribed by the Board of Managers of the bank.

Senator Aldrich refers to National trust companies. I assume that it would be practicable to transform our State trust companies into National trust companies. But, as the acceptance of any new legislation on this question and the succesful operation of any scheme that may be adopted will depend entirely and completely upon a healthy public sentiment, it is questionable whether it would be wise to attempt to destroy the entity of the present day trust companies; and I shall suggest, when acting with the other members of the Committee on Resolutions of this body, that distinct reservation be made of the trust companies as they now exist and of the State banks.

After all, gentlemen, public sentiment controls in this country, and it is because we are a free people that it does control. I believe that it has been the aim of the National Monetary Commission, as it has unquestionably been the high purpose of Senator Aldrich, to crystallize public sentiment in support of any change in our monetary system that may be finally agreed upon.

I have been in close touch with the money question nearly all my life. As a boy, in my father's store, I remember the importance of Peterson's Bank Note Detector; how eagerly it was received in the counting room and how carefully its reports were considered in relation to the bank notes we had on hand to ascertain whether any of them were bad. My recollection goes back distinctly to the days of State banking and to the great uncertainty in our finances in those days. As I have gone along in the study of this

question from that time down to the present, I have become more and more firmly convinced that any currency that will satisfy the people of this country must be a reliable, uniform currency, guaranteed by the National Government. Whatever our theories may be, however beautiful they may seem, however ably, they may be expressed, whatever attempts we may make at successful demonstration of these theories, we must have uniformity, stability and elasticity in our circulating medium, because no other will be suitable for the business growing out of the diversified activities of this great country.

If I may refer again to the Wilmington plan (of which we Wilmington people are naturally proud), I wish to call attention to the fact that it is based upon the theory that the currency of the country, though issued by a central bank, should be, along with the gold and silver coin, a Government guaranteed currency, a currency that, whether of fered in Maine or in California, would be accepted without a moment's hesitation.

We all know that, while we must have an absolutely sound currency, money enters to only a very small degree into the immense volume of business transacted in this country; that it is, rather, the $15,000,000,000 of bank credits upon which the trade and the commerce of the nation is conducted; and that it is, therefore, more a problem of the conservation of credit than of the issuance of bank notes, important and absolutely necessary as a reliable and sufficient currency is to the welfare of the nation.

We have endeavored, in the Wilmington plan, to look to the conservation of the credit of the country and to its regulation through the operations of a central bank; for, call it what we may, whether a "central reserve association" or anything else, we know that it means a concentration of power and control in directing the banking business of the country. We may as well, therefore, adopt at once the title of "The Bank of the United States," and give the bank full authority to issue currency and to regulate the National credit. I believe we can do this without destroying the entity of any purely local institution. Then

we shall have gathered together and concentrated into one great force all the banking interests of the country.

We are making progress. We have made great progress. I feel that we are almost at the conclusion of the discussion, for the magnificent work of the National Monetary Commission has enlightened the people as never before on the question of banking and currency; and in all the Commission has done it is very gratifying to find a manifestation of the truly American spirit of patriotism and fair dealing, together with a willingness to waive particular and personal opinions in order to arrive at a decision intended to promote the greatest good of the whole people.

As I must now, in the discharge of my duty as a member of the Committee on Resolutions, retire from your deliberations, I desire to express the hope that, as the result of the committee's efforts, we may be able to present to you resolutions so comprehensive, so clear, so fair and so acceptable, that to the honor of the National Board of Trade and to the credit of this conference, it will be said that if we have not solved the problem in its entirety, we at least have laid a firm foundation upon which the Congress of the United States may, with perfect safety, base the necessary measures to carry out all the required reforms. [Applause.]

The PRESIDING OFFICER.-We have about a quarter of an hour left, gentlemen. The Chair is informed that Mr. ROBERT D. KENT, President of the Merchants' Bank of Passaic, N. J., is present. We should like to hear from him.

Mr. KENT.-By way of introduction to this paper, I will state that I have had a banking experience of thirty-five years in Philadelphia, New York City and "out-of-town" small cities.

TWO AVAILABLE REMEDIES FOR OUR PRESENT UNSCIENTIFIC MONETARY SYSTEM.

The presence of this body of business men gathered from so many distant parts of the country proves that the serious faults of our present currency and credit system are becoming generally understood and that an intelligent public opinion

regarding the subject is being formed. I believe that the Monetary Commission will evolve a plan that will give us adequate relief. At the present rate of progress, however, it will probably be two or three years before the relief will be effective.

We have just closed a business year without financial disturbance, for which we are thankful. This result, however, has been brought about by the fact that for nearly the whole year credit has been severely restricted. Many solvent, substantial business concerns have been refused accommodations that would gladly have been extended by the bankers of the country under normal conditions. As the representative of several out-of-town banks, I am in close touch with New York bankers, and during the past year I have found on every hand an exceedingly cautious spirit. This was necessary under conditions as they were, but as a result, legitimate trade was seriously hampered.

While I have no doubt that in due time relief will be afforded, we must face from one to three years' experience under our present unscientific system. There are, however, two minor remedies about which I wish to speak. Either one of these will afford us great help. One or both should be obtainable almost immediately by a comparatively slight effort on the part of the men comprising this and other commercial and banking associations.

Our present Emergency Currency Law would have resulted in the issue of currency in the fall of 1909 and 1910, if the tax had been placed at 3 or even 4 per cent. for the first month. As you may remember, the tax is placed for the first month of issue at 5 per cent., the second 6 per cent., the third 7 per cent., and so on, advancing each month until 10 per cent. is reached.

The Secretary of the Treasury in 1909 endeavored to get currency associations formed in the principal cities, but only one or two were organized. In 1910, under special urging by the Secretary, some twelve or fourteen associations were formed; but in neither year was any currency taken out. The tax is placed so high that there is no inducement for banks to avail themselves of the privilege. If circulation

were issued under the present regulations, it would be a confession to the whole country and to the world that we were in financial trouble.

It is well known that each fall we need extra currency for two or three months, amounting to some $200,000,000 or $300,000,000 dollars. Why, then, should it not be made easy for us to obtain it? The increasing scale of the tax rate would insure the retirement of the currency in a month or two, and so we would have a large degree of elasticity -something that is now entirely lacking. As it is, we are short of currency two or three months each year, and during a large portion of the remaining months money is over abundant. If we put it in use when it is plentiful we are strained to supply it when the fall demand is upon us.

What I advocate is: that we make known the situation to our Congressmen and unitedly work to get the law amended so far as it relates to the rate of tax on the circulation.

I will now read a letter from the President of a National bank bearing on the matter, and also one from Mr. VREELAND, Chairman of the Committee of Banking and Currency, to whom I sent a copy of the letter referred to. Mr. VREELAND himself is a practical banker.

MY DEAR MR. KENT:

Knowing that you are specially interested in the Currency Reform movement, and being in entire sympathy with this movement myself, I am writing you about our experience. As you know, we have a capital and surplus of over $500,000, and deposits of about $1,600,000. Our experience alone might not be of any general interest, yet from our connection with other banks and bankers, we believe it fairly represents conditions all through our country.

While we have had no serious difficulty in our money conditions this fall, yet this condition exists because we have been obliged to refrain from doing the active business we should have done for the past four or five months.

Our reserve banks in New York City, and other strong banks, have been holding large cash reserves, and their example, as well as advice to us, has been that it would be wise for us to follow in the same line. It was on this account that the local business demands made upon us could not be met as fully as we should have liked, and, to that extent, we have been unwillingly forced to join in curtailing business accommodation to our manufacturers and business houses.