While we feel the above action was wise and necessary on our part, yet it would seem that some general provision should have been made by our Government, in the way of central reserve banks, or otherwise, so that such an experience every fall would not be necessary.

I attended the recent monetary conference in New York, and was greatly pleased with the tenor of the papers and addresses, and trust that it may be possible for some wise action to be taken by this session of Congress. Should this not be possible, then an amendment to the present law, by which the tax or emergency circulation should be reduced to 3 per cent. to start with, would be of great benefit.

Mr. VREELAND writes:

I have your letter of recent date inclosing a copy of a letter written by Charles M. Howe, of the Passaic National Bank.

Everything Mr. Howe says in his letter is true as to the banking situation. The emergency bill of 1908 ought to have started the tax at 4 per cent., but the opposition, especially from Mr. Fowler and his friends, was so fierce, the charge was so persistent that it was a mere measure for inflation, that the bars against inflation were placed a little higher than they ought to have been.

It is not an unmeasured evil, however, especially in the West, where during the past year there seems to have been a strong tendency towards speculation in land and other enterprises, and perhaps the inability to obtain additional loans, except at high rates, has been beneficial.

I do not think it would be possible to pass any financial legislation of any kind at the present short session. Under the so-called reform rules adopted last winter, legislation, other than that relating to appropriations, which has the right of way, goes on the calendars of the various committees of the House and can only be reached one day in the week, on Calendar Wednesday. Enough bills are already on the calendars of the various committees coming over from the last session of Congress to take up all of the time not needed for the passage of appropriation bills during the present session.

Whether we can pass general reformatory legislation in the next Congress or not will depend upon how united the business men and bankers of the country are in demanding it. We hope that the great amount of discussion now going on throughout the country in bankers' and business men's associations will result in a crystallization of opinion towards some form of centralization, under proper safeguard, at the next session of Congress. If that cannot be obtained at that time, then certainly the modification of the tax rate in the emergency law should be made.

The second remedy which I propose will now be specified. The Bank of England, in contrast to the New York

banks, pays no interest on balances maintained with it, but it makes use of a very effective means of regulating the supply of money and credit. This is so effective that the whole world governs its financial actions upon the raising or lowering of its discount rate to the extent of even onehalf of 1 per cent. If the rate should be raised 1 per cent., the whole world would be wise to take in sail financially.

The New York banks, with their tremendous capital and line of deposits, have no action to correspond with that so effectively used by the Bank of England. They could, however, very easily have one if they would adopt a sliding scale of interest in payment for balances kept with them by out-of-town banks. When money begins to be plentiful, after the return of the crop-moving currency and the disbursement for the January interest and dividends, the New York banks should discourage the accumulation of money by lowering the rate of interest one-half of I per cent., or more, if necessary; and, beginning with August or. September, they should raise the rate sufficiently to attract as much money as possible from all parts of the country except where actually needed. In other words, the New York banks should do as the Bank of England does-act in harmoney with the law of supply and demand-something which they now entirely disregard.

To indicate the wide fluctuations in the interest rate for money, I would state that in 1905, for the month of December, the average rate for call money in New York was 211⁄2 per cent.; in November, 1906, 104 per cent.; in October, 1907, 201⁄2 per cent., and in December, over 12 per cent. As a contrast to these exceedingly high rates, there was a period of six months or more in the spring and summer of 1908 when the average rate was about 11⁄2 per cent., and for six months in 1909 the average was about 2 per cent. Under these widely different conditions the New York banks paid the uniform rate of 2 per cent., for out-of-town balances.

From every indication, money for the next four or five months is going to be very plentiful and cheap. As we all know, this condition usually leads to speculation in the

stock market, and the over extension of credit in general business.

If emergency or temporary currency had been used to move the crops of 1910, it would now be in process of being retired; but what is actually happening is that the money that was squeezed out of legitimate business during the year is now accumulating in New York to tempt speculation in the stock market and the over-use of credit in development schemes and in regular business.

In a letter from Boston on the monetary situation in the New York "Evening Post" of January 14th, it is stated:

The tendency of the rate on commercial paper indicates indubitably that money is in lessened use throughout the country, and that it is pouring into the banks at the reserve centres, which evidently have a feeling that it is going to be difficult to find adequate employment for it.

Mr. Forgan, President of the First National Bank of Chicago, states that in the long run commerce suffers more from periods of over-abundance of money than from those of scarcity. He says: "The origin of each recurring period of tight money can be traced to preceding periods of easy money.'

Political economists and many writers on financial matters attribute much harm to the practice of paying interest on reserve money deposited in banks. I will not enter upon that discussion beyond saying that the evils they specify can be minimized by paying a low rate when there is an abundance of money and a higher rate when it is scarce. In times of special need of funds, in the reserve centres, the increase in the rate paid would tend to draw funds from all points from which they could be spared. I believe that a sliding scale of interest would average up about the same as the rate now paid, and thus neither the reserve city banks nor the out-of-town banks would suffer loss; but the application of such a method would be of inestimable value to the country at large. It would result in a much more stable condition of the money market for the whole year-something which the management of the Bank of France claims confers incalculable benefit upon trade in all its forms.

I will close by reading from three letters bearing on my second recommendation, one from Edward D. Page, of Faulkner, Page & Co., commission merchants, New York:

I have read with a good deal of interest your paper read to the Passaic Board of Trade on June 30th, which you were recently so good as to send me. As a member of the Currency Committee of the Merchants' Association, I have made it my business to read almost every plan that has been produced both by sensible men and by cranks, for the last five years. The common sense description of the situation and the common sense remedy which you suggest are refreshing. A great part of the trouble is due undoubtedly to an interest rate on bank deposits. In default of its entire abolition, your suggestion is an extremely interesting and practical one, and it is a continual surprise to me that the banks will not co-operate to enforce such a plan of action. They seem engaged in a hopeless system of competition on all points, whereas they might, as do merchants, cooperate on some, leaving others still open to a plentiful regulation by means of the forces of competition.

In a letter from Mr. Ridgely, late Comptroller of the Currency, he says:

I think the suggestions you make would have the effect you predict if the co-operation could be brought about, but I am far from confident that such an agreement could be had among prominent New York banks.

August Blum, Vice-President of the First National Bank of Chicago, in a letter to me says:—

I have for years, in meetings of the Clearing House section of the American Bankers' Association, advocated a sliding rate of interest allowed on bank deposits. I do not believe that this will cure all the ills that the American banking system is heir to, but it will accomplish good in various directions:

Secretary ANDERSON.—Mr. President, the impression has gone abroad that the regularly accredited delegates to the National Board of Trade are not delegates to this conference unless specifically accredited thereto. This is an error. This conference includes all the delegates attending the regular sessions of the National Board of Trade, as well as the invited representatives of organizations not members of the National body. I hope every one here will make it clear to all delegates to this annual meeting that they are expected

to attend the sessions of the Business Men's Monetary Conference.

The PRESIDING OFFICER.-The hall at this moment, like Ireland, seems to be "swarming with absentees." So if there be no objection, inasmuch as only a very few moments can elapse before half-past 12, the Chair will now declare the convention in recess until 2 o'clock this afternoon.

At 12.27 o'clock P. M. the convention took a recess until 2 o'clock P. M.

AFTERNOON SESSION.

The convention reassembled at 2 o'clock P. M.

The PRESIDING OFFICER.-Before we proceed to the regular business I would say that I have been informed that the Committee upon Resolutions have agreed upon a report which will be brought in presently.

The regular order is an address by Mr. VREELAND, vicechairman of the Monetary Commission. I have great pleasure in presenting to you Mr. VREELAND.

ADDRESS BY HON. EDWARD B. VREELAND, VICE-CHAIRMAN NATIONAL MONETARY COMMISSION.

Mr. Chairman and gentlemen of the National Board of Trade, it is a great pleasure to me, I assure you, to meet you to-day, especially in view of the fact that this day has been laid aside for consideration of reform in our monetary system.

I want to express my satisfaction at the action of this great body of business men, with which I am familiar, in asking their local bodies in the cities throughout the country, during the past year, to take up in a formal way, by the appointment of committees, the study of banking and currency reform. I consider it of inestimable value.