the place at which the merchandise is located may sell it, under suitable rules and regulations established for the government of such sales, and full credit for the proceeds of such sale shall be given to the party entitled thereto.

VIII. The treaties shall contain suitable rules and regulations for the taking of testimony in writing between the parties, and for the hearing of the parties either orally or in writing, as shall be most convenient. The treaties shall also contain suitable rules and regulations covering the payment of expenses and fees of the arbitrators. IX. The parties may designate in the contract the place whose laws, customs and usages shall govern in the event of controversy; but if no place be so designated, the contract shall be interpreted according to the laws, customs and usages of the place where the contract was made.

NOTES.

I. Such clauses as these are inserted now in some trade contracts. II. The importance of selecting in each community the Chamber, Board of Trade, Association or Exchange is obvious. It must be one of standing and responsibility, and make the awards of its arbitration tribunal respected.

III. The importance of agreements lies in the assurance of comity between Chambers, etc., of recognized standing. A judgment of a court of record is given full faith and credit by the international treaties of nations. Why should not merchants give full faith and credit to the judgments of the tribunals which they themselves designate and respect?

IV. This provision is based upon the theory that the man who will permit an award to go unobserved is not entitled to the credit of his fellow-men; yet it gives him full protection if he is justified.

V. In many States of the United States the award of the arbitrators is made the basis of a judgment duly entered in a court of record, and enforceable as such. (See Hand Book, Chamber of Commerce, State of New York.) Where analogous provisions exist, the suggestion is that the tribunal making the award should follow it up.

VI. This provision insures against the absentee blocking the award by remaining absent.

VII. The amount of the controversy is really the difference between the original amount and the value of the goods as they stand at the place of controversy. By disposing of the goods, the amount of the controversy is reduced to its lowest terms.

The ex

VIII. Testimony in other countries may be necessary. pense is almost prohibitive in some legal proceedings. It should be done by such tribunals as are here proposed with much less formality and expense

IX. This would make certain that the parties would consider in advance what customs or usages they desire should govern in case of controversy.

GENERAL.

This is a mere outline or draft presented for the consideration and criticism of commercial bodies throughout the world. Counter-suggestions will be gladly entertained.

The report was received with applause, and MR. Bernheimer's motion was adopted.

THE PRESIDENT.-I am glad to hear that applause. MR. BERNHEIMER has deserved applause for what he has done in the matter of arbitration within the Chamber, among its members. He has done a great work, a most beneficent work, and the farther that work can be extended the better it will be for the world.

REMARKS OF CHARLES L. BERNHEIMER, ESQ.

MR. BERNHEIMER.-Mr. President, perhaps it is pertinent at this moment that I draw attention to a paragraph which appeared last night in the New York Evening Post. It relates to litigation in our Supreme Court. It is headed as follows, "Seven Thousand Cases Await Opening of Supreme Court," and it closes with the following notation, "There are about one thousand cases in which partners disagree, and breach of contract is alleged, since last June."

I could naturally, as chairman of your committee on Arbitration, make some very telling remarks on this subject, drawing the attention of the merchants who are so uneconomical in the handling of that feature of their business as to let their cases drag on in the Courts for years, thus clogging up the Court machinery. I could also make Some very telling remarks, which would, I am quite certain, appeal to the legal profession, because I cannot hold them entirely innocent in

this regard.

But I will take this occasion to say to the Chamber that, the idea that has spread to some extent-at least there have been such notions noticeable in the press-that this Chamber's Arbitration Committee discourages the attendance of attorneys at their formal hearings, is an erroneous one. We have had attorneys at our hearings, and while we do not ask attorneys to appear, we are glad if they do; and, furthermore, we believe the legal profession to be wise enough to know that there are a great many cases which do not pay them to be handled in the Courts, and which might, with advantage to all, be steered to our Arbitration Committee. It should be remembered in connection therewith, that we are not dealing with matters of law, only with matters of fact. [Applause.]

THE PRESIDENT.-In other words, the Committee wants all the light it can get, whether from lawyers or from laymen, but it proposes to go, as far as it can, right to the heart of the matter, and give a decision, without the delays which usually attend judicial controversies.

The Chamber then adjourned.

Special Meeting, October 20, 1913.

A Special Meeting of the Chamber of Commerce was held in the Hall of the Chamber, Monday, October 20, 1913, at 12:30 P. M.

PRESENT.

JOHN CLAFLIN, President.
SERENO S. PRATT, Secretary.

And two hundred and fifteen other members.

The President announced that this meeting had been called by him in accordance with the authority given him at the last regular meeting, to act upon a report from the Committee on Finance and Currency in regard to the Federal Reserve Act which had passed the House of Representatives and was now pending in the Senate. At the same meeting the Chamber authorized the President to increase the membership of that committee temporarily, so that the fullest possible consideration might be given to the bill from a mercantile standpoint. The standing committee consists of seven bankers, one of whom happens at the present time to be out of the country. The President added to that committee ten merchants, and being ex-officio a member of the committee himself, the committee which actually considered this matter consisted of seventeen persons, six of whom are bankers, and eleven of whom are merchants.

REMARKS OF FRANK A. VANDERLIP, ESQ.

FRANK A. VANDERLIP, Chairman of the Committee on Finance and Currency, made the following statement:

MR. VANDERLIP.-The enlargement of the standing committee was most agreeable to its regular members. They thought it very desirable that the action of this Chamber should be taken largely from the merchants' point of view. At the first meeting for consideration of the matter, a special committee, consisting of President CLAFLIN, MR. WILLIAM SLOANE, MR. E. H. OUTERBRIDGE, MR. CORNELIUS N. BLISS, JR., and MR. AUGUSTUS D. JUILLIARD, was appointed. This special committee prepared a report. MR. OUTERBRIDGE had a large hand in the preparation of the report, and I shall ask him to present it to the Chamber, merely saying that the report as presented to the full committee by its sub-committee was very carefully considered, and in its final form unanimously agreed upon. I call upon MR. OUTERBRIDGE.

THE FEDERAL RESERVE ACT.

MR. EUGENIUS H. OUTERBRIDGE thereupon presented and read the following report and accompanying preamble and resolutions, and moved their adoption :

To the Chamber of Commerce:

Your Standing Committee on Finance and Currency, composed of seven bankers, having been enlarged by the addition of eleven merchants, for the purpose of the consideration and report upon the Federal Reserve Act (H. R. 7837) now pending in the United States Senate, has made careful study of this important bill; and now respectfully submits its report. This report was first adopted by a subcommittee of five merchants, and later by the full committee of eighteen. Its conclusions are based upon an independent study of the provisions of the bill, which study was illumined by the instructive discussion of the measure at the recent conference conducted by the Academy of Political Science. The two sessions of the conference held in the Hall of the Chamber, were attended by hundreds of the members of the Chamber, who listened with the deepest interest to the statements of Chairman OWEN of the Senate Committee on Finance and Currency and Representative BULKLEY of the House Committee on Finance and Currency, and the debate which followed. In order that our membership might be further prepared to act intelligently upon this measure, a copy of the Federal Reserve Act was mailed to each member; and moreover a copy of this report has been sent to the members in advance of the special meeting called to pass upon it.

Your committee believes that experience is the greatest asset as it is also the surest guide to wisdom and the best preventive of errors in judgment, in professional, political, commercial and industrial life. If there is one phase of the complex conditions of modern business in which more than another the wisdom gained by experience should obtain and be expressed it is in the Currency and Banking system of any great nation and in its administration.

For reasons which it is not necessary to discuss or review here, the United States has long rested under a system unscientific, if not indeed unsound, which has proven inadequate to stand the strain of stressful material progress in spite of, rather than because of the structure of

its financial system.

Yet all the while we have had the example of other great nations pursuing their way through wars and pestilence, through fire and floods, through collapse of unwise speculation and shrinkage of security values with no disastrous disturbance or serious interruption to the progress of their productive energies and the interchange of com

modities.

Experience, therefore, lies ready at our hand. Shall we avail ourselves of it?-and grasping the fundamental principles which underlie needs and conditions with equally beneficent results? all successful systems, differing only in details, apply them to our own

It is the conviction of your committee that such has been the intention of the Federal Congress and Administration, and if we differ with them in our views as to the methods to be employed it is because we believe that some of the provisions in the present bill will not permit of the free play and influence of some of those principles which it has attempted to recognize and which experience has proved are fundamentally necessary to security, flexibility and fluidity of credit and exchange.

We should be untrue to ourselves and to the record of this Chamber on the Banking and Currency question if we failed to point out what we believe to be the ideal solution, and frankly recognizing, that, because of the complex conditions in our country, the ideal may be unattainable at this time, to suggest such changes in the present Bill as we believe of vital importance to accomplish the ends which the needs of our commerce demand and which the security and advancement of our industrial and financial existence require.

The ideal solution, in our judgment, would be one Central Reserve Association dealing only with member banks and the government; issuing currency against commercial notes having a definite and limited maturity, redeemable in gold and protected by an adequate gold reserve, this currency to be the obligation of the Central Reserve Association issuing it and not involving the credit of the Government for its guarantee or redemption; other outstanding forms of currency to be gradually retired; the Government to use the Reserve Association as its depository and fiscal agent and to be adequately represented on its Board of Management; its operation generally to be under Government supervision but not under absolute political control.

If this solution is not attainable at this time, recognizing that the present Bill contains some features greatly superior to the existing system, your committee urges amendments to the proposed Act in the following particulars:

1. The reduction in the number of Federal Reserve Banks to not exceeding four, with powers to operate branches within their own Federal Reserve District.

NOTE. If the desired strength resulting from the concentration of reserves is really to be obtained, and if in times of emergency there is to be a greater strength by unity of action of the reserve banks, with a small number of Federal Reserve Banks, co-operation tending to approximate the advantages of a single Reserve Reservoir might be possible. With twelve or more we believe that would be difficult and improbable and that there would in emergencies be likely to develop the same individual struggle for reserves that we have seen cause disaster before. The fewer their number, the greater their strength would be in proportion, and the greater therefore the sense of security in the minds of all the people in their respective districts, a factor which must not be overlooked, for timidity and fear breed panics.

With too many districts it is entirely possible that in some of the larger centers there would be a number of joint stock banks and possibly even of private banks of greater financial power than the Federal Reserve Bank of that district, which, in itself, would deprive the