"There are then, in addition to all of the objections to the Bank of France, three other unanswerable objections to the establishment in this country of any central organization approaching in character the Imperial Bank of Germany:
"First: It would give us a financial and banking structure so weak that it could not stand any great strain such as necessarily comes with a great war, if, indeed, it were not so weak as to lead to a suspension of gold payments even in time of peace.
"Second: No thought whatever should be given to any suggestion that makes it possible for one bank credit to be used in the reserves of another bank and so substitute any form of credit for gold in our bank reserves.
"Unless gold alone is ultimately recognized as fit for bank reserves, we shall continue to pay dearly for our mistake until it is corrected.
"Third: No proposal whatever should be entertained by us that involves the possibility of the suspension of gold payments, for no country can become the clearing house of the world that is not a free market for gold. The United States and not England ought to be the clearing house of the world."
These words, as I have said, were spoken about two years before Mr. Aldrich attempted to import the German Bank into this country.
Mr. Banker: That is very interesting and prophetic, but not more so than his speech at the Republican Club of New York, January 20, 1912. Let me read that to you, gentlemen, by way of an exposition of the economic faults of the so-called Aldrich scheme. He said:
"I wish to speak purely from an economic point of view and to cover only one single phase of the proposal; its dangerous expansion, unbounded inflation and certain expulsion of gold from the country.
"'First: Nothing should ever go into the reserves of the banks of a country except what is coined out of its standard of value.
"'Second: The poorer money always drives out the better.'