Financial Legislation and its Limitations. 27 



universal experience with a due regard for the traditional national 

 prejudices. 



Thus, he proposes to concentrate the bank-note control into a 

 Reserve Association with elastic power of issue, but forbidden to 

 deal in the unpopular Wall Street collateral loans, and, perhaps 

 unfortunately, hampered by 'the rule of uniform discount rates. 

 It is to deal both directly and through local, subordinate associa- 

 tions, with the banks of the country, so as to afford them ample 

 elasticity of loans and deposits in times of pressure and crisis. 

 The underwriting business, so much practiced in Europe, and, 

 as experience shows, essential to the completion of the banking 

 structure, is to be recognized sufficiently to bring it within the 

 national control through the creation of a separate class of 

 nationally chartered trust companies. 



The plan is along the lines of development traced in this 

 chapter : a further definition of social function and thereby a 

 greater activity, adaptability, and sureness in individual enter- 

 prise, which is socialized while intensified. Business promises 

 will be made more freely, while pernicious epidemics of the crowd 

 mind will receive their needed prophylaxis.-^ 



REFERENCES ON THE BANKING PRINCIPLE 



Adam Smith, Wealth of Nations, bk. II, ch. II (vol. I, pp. 293-322, cf. p. 

 309, Bohn ed.) ; Jevons, Mechanism, chs. XVIII, XX, XXII, The Cheque 

 Bank, pp. 291-300; Conant, Modern Banks of Issue, ch. I; Conant, 

 "Banking upon Business Assets," Sound Currency, vol. IV, no. 23; Co- 

 nant, " The Principles of a Bank Currency," Sound Currency, vol. VI, no. 

 9, September, 1899; Greene, "A Proper Paper Currency," Sound Cur- 

 rency, vol. IV, no. 22; "Fowler Plan," Sound Currency, vol. IV, no. 20; 

 Laughlin, Principles of Money, ch. VII, § 6 (at p. 264) ; Kelley, " Pro- 

 posal for Currency Reform," Sound Currency, vol. Ill, no. 22; Price, 

 Currency and Banking, ch. Ill, pp. 96-172, ch. II, §§ I, II; Warner, " Prac- 

 tical Bank Currency," Sound Currency, vol. IV, no. 6; Tooke. II, p. 369; 

 see discussion in the Annals of the American Academy of Political and 

 Social Science, March, 1893; Mill, bk. Ill, ch. XIX, §4; J. D. Warner, 

 "Currency Famine of 1893," p. 4 (failure of National Bank Currency 



^ For interesting accounts of the plan, see articles by Cooke, Scott and 

 Sprague, Bulletin of the American Economic Association, Fourth series, 

 No. 3, June, 191 1. 



141 



