MR. MANUFACTURER: But this kind of a transaction constitutes a comparatively small part of the commerce of the country. MR. BANKER: Yes, that is true, and if credit was limited to such transactions, credit crises would be very few, indeed, probably never would arise as a result of over trading under such circumstances; trade would be greatly hampered, and business curtailed to a destructive degree. MR. MANUFACTURER: That is certainly true. You men all know that I am a manufacturer of high class clothing. I want to give you an illustration of how business is being carried on today in the way of multiplying credit. A manufacturer of woolen goods at Lancashire, England, sold to a wholesale merchant on the other side, $10,000 worth of goods on three months' time. The wholesale merchant sold the goods for $12,000 to an English exporter on three months' time. The English exporter sold the goods to an American importer for $20,000, duty paid; the importer sold them to an American jobber for $22,000; the jobber sold them to me for $24,000. All these sales occurred within thirty days, and not a single man paid a cent of money on account of his purchases. By way of payment, this is what happened. I gave my note due in ninety days to the jobber, and he discounted it at his bank. The jobber gave his note due in ninety days to the importer, and the importer discounted it at his bank; the English exporter sent over a draft upon the American importer at ninety days sight, and he accepted it and it was returned to England, where the exporter discounted it at his bank. In the meantime, the wholesaler drew a draft on the exporter at ninety days sight, and he accepted the draft, whereupon the wholesaler discounted the draft at his bank. At the same time the manufacturer drew on the wholesaler at ninety days sight, and the draft was accepted by the wholesaler, and was discounted by the manufacturer at his bank. Thus we see that goods which sold originally for only $10,000 went through five different hands and became the basis upon which credits were granted for $88,000, and debts were created for $88,000. Every single debt was sold just as though it was so much woolen goods. Every man had his money and not one of them had paid his debt, and yet every transaction was legitimate and in the ordinary course of business.