The Stock Exchange has been defined as “a barometer of future business conditions,” and never did a barometer give clearer warning. It said in effect to all the banks of the country and to business men generally: “There has been a widespread over-expansion of credit; it must stop; we are doing our share here in New York to correct it; you must do likewise.” And, in order that there might be no failure to understand what was meant, New York City bank loans were reduced with drastic emphasis, months before the panic came, by nearly 35 per cent. “Without an exception,” writes Prof. S. S. Huebner, “every business depression in this country has been discounted in our security markets from six months to two years before the depression became a reality.”[61] Senator Burton, another authority, emphasizes the point further: “In addition to other influences which promote an earlier rise and fall, there must be mentioned the more careful study and attention to the financial situation which is given by dealers in the stock markets and in great financial centres. They often forecast the grounds for a rise or fall in prices before the general public is awake to the situation.”[62] This, then, was the situation in the summer of 1907. The Stock Exchange had “cleaned house,” and had liquidated thoroughly, warning the country to go slow. Why was not this warning heeded? I recall vividly the daily expression of surprise, on the floor of the Exchange, and throughout the financial district, in the months that elapsed between our March liquidation and the outbreak of the October panic, that the country should pay so little attention to “Wall Street’s” admonition; that it should continue its unprecedented boom despite the plain intimation that the funds to support it were exhausted, and despite the general knowledge of every tyro in business that future conditions are discounted in Wall Street as freely as promissory notes. Had the business interests of the country so much as inquired into that warning they would have found by turning to the Comptroller’s reports of the loans of national banks for the entire country that such loans had expanded from $3,726 millions in 1904 to $4,679 millions in 1907. They would have seen that whereas the New York City banks _contracted_ their loans by nearly $134,000,000 from August, 1905, to August, 1907, loans and discounts by the banks of the whole country in that period actually _expanded_ $700,000,000. Surely it will not be urged that Wall Street or the Stock Exchange had anything to do with bringing about this expansion. On the contrary, it shows that speculation in commercial lines, in new enterprises, in lands and in all the various forms that “out-of-town” banks are expected to finance, went on and on in vastly increasing volume long after the danger signal had been hoisted on the Stock Exchange, and in utter disregard of the warnings those signals conveyed.[63]