Remedies and Preventives of Panic 253

point out the advantages of the option agreement to
them individually. But if this idea should gain
favor, we might hope to see agencies develop which
would handle this class of paper. They could probably
 simplify the type of agreement, work out the
risks attached, and charge a rate which would
absorb these risks and yield a profit.
The panic has shown this credit difficulty in our
banking system. The option agreement is offered
as one available solution of the problem. Should
it be found not satisfactory, I hope that other economists
 and bankers will continue to put forward
suggestions until some method is found which will
make impossible transfers by losses in such huge
totals of the country's invested funds.

Resolution of American Bankers’ Association
for Inquiry
Perhaps all these proposals, as well as other suggestions
 for a permanent control against the recurrence
 of panic, might properly await the inquiry
planned in the resolution passed by the American
Bankers’ Association in San Francisco, October 3,
1929. This inquiry would go into the whole subject
of brokers’ loans by the Federal Reserve Board,
in cobperation with Stock Exchange authorities and
bankers. It would investigate all underlying facts
in connection with brokers’ loans, study the possibility
 of effecting greater stabilization of the money
rate, and then recommend such changes in procedure
as might be found advisable. Such an investigation