"I assert that the plan of the so-called reserve association is in direct violation of the first of these laws, and will put the second law into operation to a dangerous and destructive degree.
"Every intelligent student knows that the plan proposes to transport to this country the German system of banking, which I assert has completely broken down at home during the past six months. Now, if this system has broken down in Germany, where there are a few great banks with hundreds of millions of assets and not more than 500 banks all told, what can you expect it to do here with more than 25,000 individual, independent banks, directly responsible to their depositors?
"The following letter was given to me by an officer of one of our largest banks, accompanied with these words:
"'I realize that in giving you this letter I am, in a way, betraying a business confidence, but I regard it as my patriotic duty to give it to you, to use in any way you may see fit. For what would happen to this bank if we should send out such a letter to our depositors? Our doors would be closed inside of twenty-four hours.'"
The letter referred to was written by the Deutsche Bank of Berlin, which has assets approximating $500,000,000, and is as follows:
"'In consequence of the restrictions recently made by the Imperial Bank, with regard to the supply of money at the end of every quarter of the year, we are, to our regret, compelled to ask you, when drawing against your account with us upon our head office and our branches by mail, kindly to advise us by cable of such drafts on them as are likely to come forward for payment during the last three working days of the quarter and the following two working days, so as to enable us to provide from here especially the necessary funds at the office drawn upon.
"'As to cable transfers which, during the five days in question, you may have to order on our head office or branches, to the debit of your account with us, we shall feel obliged by your ordering them only if you can advise us by cable one day before, the amounts to be placed by us to your debit on receipt of such advice, or ordering upon us for mail transfer from here.
"'The foregoing, of course, does not apply to small amounts.'
"As a further proof that the system has broken down at home, let us see what has been going on in Germany during the past six months to further demonstrate the weakness of their system.
"The great banks of Germany have been scouring the markets of the world, going into every nook and corner, hunting for gold. At what price? Was it at 5 per cent, 6 per cent, 7 per cent, 8 per cent, 9 per cent, 10 per cent? No. The New York Evening Post, in its annual review, says it was from 12 per cent to 20 per cent. I have been credibly informed that the great banks of Germany, with hundreds of millions of assets, were borrowing money in our own markets at 7½ per cent and 1½ per cent for three months, or upwards of 13 per cent.