because to leave them as they are means to incur liability of business disaster. Since your body adjourned there has been a fluctuation in the interest on call money from 2 per cent. to 30 per cent., and the fluctuation was even greater during the preceding six months. The Secretary of the Treasury had to step in, and by wise action put a stop to the most violent period of oscillation. Even worse than such fluctuation is the advance in commercial rates and the uncertainty felt in the sufficiency of credit, even at high rates. All commercial interests suffer during each crop period. Excessive rates for call money in New York attract money from the interior banks into the speculative field. This depletes the fund that would otherwise be available for commercial uses, and commercial borrowers are forced to pay abnormal rates, so that each Fall a tax, in the shape of increased interest charges, is placed on the whole commerce of the country. The mere statement of these facts shows that our present system is seriously defective. There is need of a change. Unfortunately, however, many of the proposed changes must be ruled from consideration because they are complicated, are not easy of apprehension, and tend to disturb existing rights and interests. We must also rule out any plan which would materially impair the value of the United States Two per Cent. Bonds now pledged to secure circulation, the issue of which was made under conditions peculiarly creditable to the Treasury. I do not press any especial plan. Various plans have recently been proposed by expert committees of bankers. Among the plans which are possibly feasible, and which certainly should receive your consideration, is that repeatedly brought to your attention by the present Secretary of the Treasury, the essential features of which have been approved by many prominent bankers and business men. According to this plan, national banks should be permitted to issue a specified proportion of their capital in notes of a given kind, the issue to be taxed at so high a rate as to drive the notes back when not wanted in legitimate trade. This plan would not permit the issue of currency to give banks additional profits, but to

meet the emergency presented by times of stringency. I do not say that this is the right system. I only advance it to emphasise 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 favouritism. 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 and 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.

NECESSITY FOR IMMEDIATE LEGISLATION

I again urge on the attention to this matter. our currency, provided, of course, that we recognise 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 guarantee and upon conditions carefully prescribed by the Government. Such emergency issue must be based on adequate securities approved by the Govern

Congress the need of immediate
We need a greater elasticity in

This

ment, and must be issued under a heavy tax. would permit currency being issued when the demand for it was urgent, while securing its retirement as the demand fell off.

MR. W. J. BRYAN BEFORE THE ECONOMIC CLUB

(The Commoner, Lincoln, Nebraska, February 21, 1908)

The Economic Club gave a dinner at Hotel Astor, New York, February 5. There were seven hundred guests, among them many New York bankers and capitalists. Mr. Bryan was one of the speakers. Victor Morawetz, Andrew Carnegie, and Lyman J. Gage, former Secretary of the Treasury, preceded Mr. Bryan on the programme. Mr. Baker, who took part in the dialogue, is President of the First National Bank of New York City.

Mr. Bryan: Mr. Chairman and gentlemen, I have had a number of delusions shattered here to-night. I had understood that for the last forty-seven years our financial affairs had been in the hands of men who possessed all the qualities that Mr. Gage has suggested a commission should possess. And now to learn from excellent American and Scottish authority that we not only have the worst system in the world, but worse than he, with his fruitful imagination, could imagine, what shall I say to my people when I go back home? How shall I explain that three conspicuous financiers who have given this subject great thought, and who know all the intricacies of finance, should be agreed upon but one proposition, and that is, that they do not know what ought to be done. (Applause and laughter.)

I am assured by one of them that that is not a fair statement. I will withdraw any statement that is considered unfair, although it seems to me that after I have travelled 1500 miles to drink in wisdom from authoritative sources, it is a breach of promise, at least—(laughter)—not to give me some information. And yet as each one approached

the important part of the subject, he concluded that we ought to have a commission to consider the matter. . . .

The time allotted to me is not sufficient to answer all of the financial fallacies that have been advanced to-night. I, the champion of sound money-(great laughter)—have not time to defend the honest dollar from the attacks that have been made upon it. (Laughter.) And as I listen to those from whom I expected some clear, specific remedy, I was reminded of the words of the great apostle, and I do not know but I might paraphrase those words and say, “That sound finance which we ignorantly worship, that come I to declare unto you." (Great laughter and applause.)

When I defend anything that we have in finance, you will not accuse me of defending anything with which I have had any connection. These greenbacks that have been described in uncomplimentary language were not issued by me or by my party. (Laughter.) But it seems to me that it is straining a point to denounce the Government for issuing 346 millions of promises to pay, bearing no interest, when he (Ex-Secretary Gage) does not denounce the issue of 700 millions of bank promises to pay, that bear no interest. If a bank's promise to pay, bearing no interest, is fit to serve as money, why should not a government's promise to pay, bearing no interest, be fit to serve as money?

I understood that the subject to-night is the currency question as it presents itself at this time, and, therefore, it is not necessary to discuss our whole financial system. I do not want to enter into the discussion of a subject as large as our financial system. But I remind you that, if we follow the suggestion that nothing but gold be considered good for reserves, then we will either have to stop making deposits in the banks, or increase our gold so that we can keep in the banks a reserve large enough to protect the banks in the doing of their business. (Applause.) We have not the gold in this country, and we cannot get it without drawing gold from countries that need it. If we draw the gold from other countries, and discard the use of money that serves to-day in the place of gold, then the

effect must be to diminish prices in foreign countries, and lessen their ability to trade with us.

To-day we hold in our reserves not only gold, but silver and silver certificates and greenbacks. And the silver and silver certificates and greenbacks amount to 946 millions600 millions of silver and 346 millions of greenbacks. We have about 1200 millions of gold in the country; that is the best estimate that I have been able to get. Now if we are going to discard, as has been suggested, the use of silver and greenbacks, we must go somewhere and get 946 millions of dollars of gold, and it will not be an easy matter. How can we get it? I will tell you one way to get it: make the farmer sell his foreign export for less, and lay upon him the burden of getting the money to substitute for silver and the greenback.

It is not my business to explain this panic.

If I were a financier and my word was good on finance, I would say that instead of locating the blame on too large an issue of paper money, it ought to be located on the issue of stocks and bonds that do not represent value or even honesty in business. (Great applause.) The gentleman (Ex-Secretary Gage) did me the honour to quote something that I said last night. I am glad that he quoted; I was afraid it would not get into the papers. The fact that he quoted it shows that it appeared in print, and I am gratified. And, my friends, I do not overstate it. In fact, knowing that I was where language was carefully examined, I was especially cautious as to the use of language, and I shall not put this Government, which bought silver at sixty cents and coined it into a dollar, in the same category or company with those who floated the billions of dollars of stocks and bonds that represented nothing but the expectation that those who issued them would, unmolested, reach their hands into the pockets of the people and draw from them dividends to which they were not entitled. The Government did buy silver at sixty cents and coin it into a dollar, and no man who took the dollar ever lost one cent, and that cannot be said of the men who took the securities