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 period of liquidation and distress and had opportunity to observe on the ground exactly what was transpiring. It has frequently been said that the percussion cap which started distress in Japan was the sudden cessation of the demand for silk in the United States. I do not think that is quite accurate. The Japanese exporters had suffered misfortune through various causes and a very wide and effective propaganda in China, boycotting Japanese goods. And I was told of vessels that were held up in Chinese ports, not being able to unload their goods; and that was also coincident with the cessation of the buying of silk in this country. This reaction extended from Japan into China, the Dutch Indies, India and Egypt, and the same conditions prevailed generally throughout the East."

This evidence given by the Governor of the New York Federal Reserve Board is, in fact, by far the most interesting and effective defence of the monetary policy which was followed at this critical period, both by the American and British financial authorities. It was usually asserted in the City that New York led the way and that London supported and followed its policy, but I have always inclined to the belief that New York and London acted in