US Presidency
1929

There has been a very great movement out of New York into the interior of the United States, as well as some movement out of New York into foreign countries. The incidental result of that is to create a difficult situation in New York, but also to increase the available capital in the interior. In the interior there has been, in consequence, a tendency for interest rates to fall at once because of the unemployed capital brought back into interior points. Perhaps the situation might be clearer on account of its parallel with the last very great crisis, 1907 - 1908. In that crash the same drain of money immediately took place into the interior. In that case there was no Federal Reserve System. There was no way to acquaint of capital movement over the country, and the interest rates ran up to 300 percent. The result was to bring about a monetary panic in the entire country.