And State Papers 617 



where it now is nominally, on the free list. This 

 would have no effect at all save in crises; but in 

 crises it might be of service to the people. 



Interest rates are a potent factor in business activ- 

 ity, and in order that these rates may be equalized 

 to meet the varying needs of the seasons and of 

 widely separated communities, and to prevent the 

 recurrence of financial stringencies which injuriously 

 affect legitimate business, it is necessary that there 

 should be an element of elasticity in our monetary 

 system. Banks are the natural servants of com- 

 merce, "and upon them should be placed, as far as 

 practicable, the burden of furnishing and maintain- 

 ing a circulation adequate to supply the needs of 

 our diversified industries and of our domestic and 

 foreign commerce; and the issue of this should be 

 so regulated that a sufficient supply should be al- 

 ways available for the business interests of the 

 country. 



It would be both unwise and unnecessary at this 

 time to attempt to reconstruct our financial system, 

 which has been the growth of a century; but some 

 additional legislation is, I think, desirable. The 

 mere outline of any plan sufficiently comprehensive 

 to meet these requirements would transgress the 

 appropriate limits of this communication. It is sug- 

 gested, however, that all future legislation on the 

 subject should be with the view of encouraging the 

 use of such instrumentalities as will automatically 

 supply every legitimate demand of productive in- 

 IO _VOL. XIV 



