During Mr. Ridgely's term of six and one-half years, he submitted seven annual reports to Congress, his first report covering eleven months of the term of his predecessor, Charles G. Dawes. In concluding this report Mr. Ridgely gave credit to his predecessor for many of the suggestions and much of the statistical information which the report contains, and commended him for the high state of efficiency in which he found the Currency Bureau when he took charge, and the thoroughness of its organization.

This worthy tribute to his immediate predecessor was characteristic of Mr. Ridgely's appreciation of merit and justice, and is in striking contrast with the attitude of his successor in office, as will appear later on.

In addition to the usual statistical information, Mr. Ridgely's reports contain many practical suggestions and recommendations for improvements in our banking and currency laws, and contribute a valuable addition to the literature of the Comptroller's office on these subjects, particularly in respect to the currency laws and their bearing upon bank panics.

Mr. Ridgely, like all of his predecessors, recognized the necessity for some important changes in the banking and currency laws, which, in his judgment, would have corrected some of the defects in the statutes and otherwise have improved the service.

Following the direction of the statute, he submitted in his annual reports to Congress a number of recommendations for amendments to the laws, many of which were not new, but were similar in thought and purpose to changes suggested from time to time by former Comptrollers, who were of the same opinion as to the necessity for such legislation and therefore his views on these subjects were entitled to additional weight. But the history of the Bureau shows that while the law required the Comptroller to recommend to Congress such amendments to the laws as experience in their practical operation and administration had shown to be necessary, very little attention was given such recommendations by the legislative branch of the Government.

This fact is particularly exemplified by the recommendations made for an amendment to Section 5200 of the Revised Statutes, in regard to the limit of loans that the banks might make. For more than thirty years Comptroller after Comptroller recommended, not only once but repeatedly, an amendment of this provision of law, but without effect, until the passage of the Act of June 22, 1906, during Mr. Ridgely's administration, which increased the limit of loans to ten per cent. of the capital and surplus of the bank. It required over thirty years to secure this amendment, and then the statute was not amended as it should have been.

The most important of the amendments to the law recommended by Mr. Ridgely, were the following:

A repeal of the provision of the Act of March 14, 1900, restricting the amount of national bank notes of the denomination of five dollars to one-third of the outstanding circulation of the issuing bank.

This limitation had not worked satisfactorily to the banks or to the Comptroller's office, and was opposed by the Comptroller before it became a law. After the bill passed the House of Representatives, containing this restriction, and while it was still pending in the Senate, the attention of Mr. Brosius, of Pennsylvania, who was then chairman of the Committee on Banking and Currency of the House of Representatives, was called to the provision and the objections thereto set forth. Mr. Brosius stated that this limitation was incorporated in the bill through inadvertence; that the intention was to restrict the issue of national bank notes of the denomination of five dollars to one-third of the total circulation outstanding of all the banks, and not to one-third of the outstanding circulation of each bank.

As a matter of fact the proportion of five-dollar national bank notes to the total national bank circulation outstanding had not exceeded thirty-one per cent. since 1874, so that there was no necessity for this restriction in the Act of March 14, 1900.

Mr. Brosius and a representative of the Comptroller's office had a conference with Senator Aldrich, chairman of the Finance Committee of the Senate, in regard to this provision, while the bill was still pending in the Senate, and the latter agreed to correct the objectionable feature in conference, but the provision remained in the bill as it passed the Senate and so became a law.

At the hearing before the National Monetary Commission on December 2, 1908, attention was again called to this feature of the law and to the fact that it was understood to have crept into the Act through inadvertence. But Senator Aldrich, chairman of the commission, stated that for twenty-four years preceding that time the legislation of Congress had been framed with a view to giving to the silver certificates, to the greatest extent possible, the field for notes of the denomination of one, two and five dollars, and he expressed the opinion that this policy should be adhered to. In the event of an insufficiency of silver certificates of the denominations stated, provision had been made for the issue of United States notes of the same denominations.

The purpose, then, of the restriction on national bank notes of the five-dollar denomination, according to Senator Aldrich, was to force silver certificates of the smaller denominations into circulation, notwithstanding his acquiescence in the statement of Mr. Brosius that this restriction crept into the Act of March 14, 1900, through inadvertence. But whether the provision was placed in the bill purposely or otherwise, the restriction should not have been made. The banks should have been free to issue circulation of any denomination they desired, and any restriction upon their right or privilege to do this simply added to the inelasticity of the bond-secured circulation so much complained of. As a further means of increasing the elasticity of bank circulation, Mr. Ridgely recommended the repeal of the three million limitation upon the amount of bond-secured circulation allowed to be retired during any one month. This feature of the law was amended during his administration by increasing the limit on bond-secured circulation to nine millions per month and permitting so-called emergency circulation to be retired without limit.