MR. MANUFACTURER: I understand that for such Bills of Exchange, those accepted by banks, there has grown up in London, Paris, Berlin, Amsterdam and many other European centers, a large market, known as a discount market. Indeed, that this form of paper constitutes a very essential feature of the commercial transactions of all European financial centers. MR. BANKER: That is true, and unless we follow them and adopt the same principle, and facilitate in the same way the protection, transportation and distribution of our commodities, needed for current consumption, we will continue to work under a very great handicap, as compared with our foreign competitors. Moreover, we will again find it difficult, if not impossible, to adjust ourselves to those periods of contraction which must come from time to time, without almost immeasurable losses, and the consequent stagnation in business that is sure to follow. MR. MERCHANT: I appreciate what Mr. Banker has just said. I am confident from my observation during the panics of 1893 and 1907 that our greatest injury came from the shock to business due to the fact that there seemed to be no real relief from the strain until there was an actual breakdown all along the line. Now it is evident that if a large amount of capital were employed in the economic titles, as it were, to our consumable commodities in the form of Bills of Exchange and the market for them extended to the financial centers of Europe, as seems probable, indeed certain, whenever the rate of interest was high enough, we should pass through any future strain, without the usual tragic results. Of course this added facility to the investment of our Bills of Exchange will not be a cure-all, but it will certainly correct an obvious and a very great defect in our present method of doing business. MR. BANKER: Certainly it will not be a cure-all, because it is only an added facility in our credit system, and therefore must be provided for precisely as a corresponding amount of loans should be. You see, don't you, that an acceptance by a bank is practically the same thing as a loan to the buyer and seller of the goods jointly, or to one of them with the other as an endorser. The only difference is this: that if a loan is made the money would be placed at once to the credit of one of them, subject to his check, while the acceptance is an agreement to pay the amount on a future day. The bank must take precisely the same precaution in securing or protecting itself, and should carry identically the same reserve against acceptances that it does against its deposits subject to check.