forenoon, and the carefully prepared and elaborate statement made by Mr. Vreeland this afternoon. [Applause.] It would seem as if they had covered all the ground, yet I want to add that I have seldom heard a better statement on a financial or any other topic than that just made by the Secretary of the Treasury. [Applause.] I facetiously asked Professor Andrew if he had anything to do with the preparation of it, and he said he wished to Heaven he had had. [Applause and laughter.] I suggested that, because when I prepare a speech, which I have not done for this occasion, my secretary usually writes it for me. [Laughter.]

When I came to Congress a few years ago I was assigned to the Committee on Banking and Currency. In those days there was a good deal of prejudice against that committee, and a feeling that anybody who devoted much time to currency or banking matters was something of a crank. I recall, soon after I entered Congress, making a few remarks on a monetary subject and when I had finished an old and experienced member came over to me and said, “I noted a ray of intelligence in what you just said on that financial question, and, as an old and experienced member, I want to advise you to get off the Committee on Banking and Currency. There are none but cranks on it." The probabilities are that this condition was what the person had in mind who called the Banking and Currency Committee (composed as it is of seventeen members) the Sixteen to One Committee. He called it that because he said if one member had an idea, the other sixteen were sure to be against it. [Laughter.]

But we are seeing better days for this subject, and better prospects are ahead of us. Mr. Warburg, who sits on my left, had at that time written his admirable monograph on the central bank. Nobody paid much attention to it then, but we are doing so now. Most men had not considered the monetary or currency question from a scientific standpoint. We were getting along like those people who do not shingle their houses because it does not rain, and cannot shingle them when it does. We were taking things as they came. Everybody knew we had outgrown our banking sys

tem. Everybody knew we needed a better currency system -that is, everybody who thought about it at all-but nobody took the lead to bring about the change. In fact, you cannot make great changes in public policies without a public sentiment in favor of them. Those things must be developed as you go along. The result was that we needed that kind of a panic to which the Secretary has referred, the panic of 1907, to bring us to our senses, because it illustrated better than any previous panic our weakness in time of trouble. Every nation in the world had more or less financial trouble at that time. Everybody had over expanded; everybody had been extravagant; everybody had a panic of some kind. And I want to say right here, that no matter what we do with our banking or monetary system, we will have panics again, because people will over-speculate, merchants will over-expand, manufacturers will accumulate large stocks of unmarketable goods and too much money will go into fixtures.

All of these things are producers of panics which will come in some form; but what we can avoid is a currency panic, which is the aftermath of the other panics; and what we can absolutely prevent is the failure and the breaking down of our domestic exchange system. That is what happened in 1907. We issued clearing house certificates, as we had done under similar conditions half a dozen times before. This action eased the situation in the centres, but, as you will recollect, it absolutely broke down domestic exchange. If, for instance, one of you merchants sold a bill of goods in Texas and received a Texas check to pay for it, vour bank sent that check back for collection. The Texas bank replied that it would give your bank credit for the check until it could buy New York or Chicago exchange. The result was that your bank had a credit in a Texas bank, which was of no use to it whatever. You had to have your money and you went, therefore, to your bank and really forced it to make you a loan, doubling its obligations, responsibilties and distress. That condition paralyzed business after the panic of 1907, and that is exactly what we can avoid if we will take suitable action.

I am not one of those who, without limit, condemn our National banking system. In the past it has served its purposes wonderfully well in most respects; it was a necessity fifty years ago and it took careful consideration and great ability to formulate and develop the system. It supplanted a currency system in this country which was perfectly hopeless, a currency which was fluctuating from day to day, which had different values in different parts of the country, and it has furnished a currency which has been not only good in this country, but good all over the world ever since. In addition, it made a market for our Government bonds at a time when we were confronted by serious difficulties in that regard, and, while I have not undertaken to go into exact figures—and indeed it is impossible to do so I believe that the banks, having made a market for Government bonds from Civil War days down to this time, have saved the Government as much in interest as our total National debt is to-day, or very nearly $1,000,000,000. We save, for instance, on the bonds which the banks are now holding for circulation purposes, substantially I per cent., which is $7,000,000 a year. The rate of interest on these bonds is too low, and that is one of the embarrassing questions of to-day, as Secretary MacVeagh could tell you this low rate of interest on bonds which we have outstanding, and the necessity, if we are going to sell bonds in future, of their carrying a higher rate of interest. The whole question is intricate and involved, and one of the best points in Senator Aldrich's plan is that it takes the 2 per cent. bonds, which are almost entirely in the hands of the banks, off their hands and places them where they will not embarrass the Government's financial policies, this being done in a way which seems to me to show great ingenuity.

When we came back to Congress in 1907 everybody expected we were going to do something with the currency, and we tried to do it. There were many men of many minds at that time, but after many months of work we finally brought forth the Aldrich-Vreeland Bill, and it is worthy of note that the names which that bill bore are the names of the Chairman and the Vice-Chairman of the

Monetary Commission. It is not claimed that that bill is a perfect measure. It is an unscientific measure-a cumbersome measure, in a way-and yet I want to say that I believe if we had a panic to-day, that under its provisions there could be supplied to the business men of this country sufficient currency to carry them over any unusual conditions, and so prevent the currency distress which existed in 1907. It is a good anchor to windward; when it was prepared, knowing that it was not final legislation, and ought not to be, we provided for the Monetary Commission, to consist of nine members of the Senate and nine members of the House. It is worth while for you to note, as an indication of the changes going on in public life, that of those eighteen men there will be but two Senators and but six members of the House, or eight of the eighteen members, in Congress after the fourth of next March. That is a distinct handicap in effecting the passage of any monetary legislation, because the men who are going out of Congress had a following and an influence which would have been of the greatest value on the floor of the Senate and House when any proposed legislation is considered.

There has been some criticism because the Monetary Commission has not acted more quickly. Possibly there may have been a little reason for this criticism, but, on the other hand, there were good reasons for not acting hastily. It is considering a most important subject, which cannot be treated in a haphazard way.

The authorization for the commission was not made until May, 1908, two and one-half years ago. We were just then entering on a great political campaign. One of the principal things to keep out of this whole question is politics, so it was not only impractical, but impossible to take it up until after the election. Then we had the extra session of Congress to revise the tariff the next summer. The members of this commission hold responsible places in Congress, and their entire time is taken up while Congress is in session. Then there was the long session of Congress last winter, extending into the summer, followed by the political campaign last fall. As will be seen, these periods

have substantially covered the life of the commission. Yet, during this time, we have prepared the best library on this subject which has been prepared since the beginning of time; the preparation of this library was not only necessary on our own account, but it will have a great influence in developing and determining public sentiment on this question.

The steps taken by the commission have been as follows: First, to have prepared and put in suitable form the best up-to-date information; second, for the individual members of the commission to thoroughly study this information; third, to make some recommendation to the public based on and as a result of this study. It now becomes your duty, and the duty of the men whom you represent, to take up this question and to criticise, favorably or otherwise, the plan which Senator Aldrich has proposed. Any amount of criticism which is logical and reasonable will be welcomed, for I believe I can say for Senator Aldrich that, while it represents his views at this time, he expects that such changes will be made in it as public discussion demonstrates to be well advised.

I do not know that I entirely agree with every part of it myself. I certainly prefer to see the suggestions which he has made regarding the establishment of three kinds of National banks (that is, commercial banks, trust companies and savings banks) merged into one bank, having the functions of all three, but with separate departments, and run so that the business of each department will be distinct from the others. The main features of the report, however, are entirely in accord with my own judgment, and I believe will satisfy the ideas of any students of this question who are honestly studying it and basing their conclusions on what is for the best interests of our country, always taking into consideration our peculiar conditions, the habits of our people and the prejudices and methods which have been the development in banking business since the organization of this Government.

I assume that as soon as this session of Congress is over the commission will take up this subject deliberately and will carefully consider every suggestion made which pertains