[united B A N I: i n g of international banks and bankers subscribed for another million dollars paid in, and assets of 168 millions ; while issue of Government bonds, with the condition that the the Chemical National Bank, also of New ork, had 38 syndicate would protect the Treasury against the with- millions of assets, at the same time reporting a capital drawal of gold for export purposes. These operations, stock of $300,000, with a surplus of undivided profits of extending through the years 1895 and 1896, together with $6,697,000, or over 22 times the amount of the original the check given to the increasing amount of silver by the capital, this surplus making it the richest bank of the repeal in 1893 of the Silver Purchase Law of 1890, had U.S. in point of book value of capital stock. From the inception of the National Bank plan, the the effect of restoring public confidence in the Government’s ability to redeem its obligations in gold at any State banks began to withdraw their circulating notes, a time. Since 1895 banking has not experienced startling national law having been passed making their state Banks. changes, bearing up well under the Venezuelan difficulties notes subject to a prohibitive tax of 10 per of that year, the outbreak of the Spanish war in 1898, cent, on the average annual circulation. By 1873 the aggregate of notes outstanding on account of all and the flurry in the money market in December 1899.. Some tendencies have shown themselves. Following the State banks was only about $200,000, some of them other lines of business, consolidation of banks has increased having a few scattered notes in circulation at the present as bankers have become impressed with the advisability of time. The laws in all the forty-four States differ to some having larger financial institutions. In the same way extent, but the following chief distinctions from the many banks have increased their capital, so that larger National Bank plan may be observed, the excellent laws amounts could be lent at one time, and that larger of New York State being taken as fairly representative of depositors might be attracted by the added security. In the regulations in all the States. A State superintendent April 1899 the New York banks, acting through the of banks is appointed by the Governor for a term of three Clearing House, agreed upon a schedule of charges for the years. This official exercises a control over the banks, incollection of out-of-town cheques deposited with them in cluding savings banks and loan and trust companies, the course of business, such cheques having been collected similar to that of the National Comptroller of the currency. gratis. The custom has been growing of requiring state- Reports are rendered to him every half-year; and in New ments of financial condition from merchants and corpora- York State, as in most of the other States (Rhode Island tions when asking for loans or offering for sale single- being an exception to the general rule), an examination of name commercial paper. The formation of the large in- each bank is made by his department at irregular intervals, dustrial companies has tended to take from the banks the but at least once in each year. Loans may not be made smaller loans made heretofore to the individual concerns to any one person, firm, or corporation in excess of 20 absorbed, and to substitute the lending of large sums to per cent, of a bank’s combined capital and surplus. Notes the industrial combinations themselves, the latter plan or other evidences of debt shall not be purchased for less than the amount due according to the face of the same. involving more of the principles of corporation financing. In March 1900 certain of the provisions of the National Loans may be made upon mortgages, but except for owning Banking Act were amended as follows :—The ratio of a banking-house, real estate may not be acquired except population to capital of new banks in places for debt. A money reserve of 15 per cent, is required National of lesg than 3000, to be $25,000; in places of in New York city, and of 10 per cent, in other cities in aa " not more than 6000, not less than $100,000. New York State. Stockholders are responsible for the Old and new banks to be allowed circulation up. to the debts of the bank to the extent of the par value of their full par of bond deposited with the Treasury, while such stock, in addition to the amount invested in such stock. bonds shall remain at or above par in the market. Not Under the New York law 6 per cent, is the legal rate of more than one-third of each bank’s circulation to be in interest, but demand loans secured by collaterals may be denomination of five dollars. Each bank to be permitted made at higher rates. Since 1895 it has been lawful in to obtain circulation on deposit of new 2 per cent, New York State for banks in the same municipality to bonds authorized under the same Act. The average circu- consolidate, as agreed upon by their respective directors lation to be taxed per cent, each half-year. The bonds and subject to the approval of the superintendent of banks. thus authorized were designed to refund former issues at This privilege has been utilized in several cases, one large higher rates, and from the first, large exchanges of the New York city institution, the Corn Exchange bank, new bonds were effected, the latter being much esteemed as having in three years absorbed five smaller State banks. a basis for national bank circulation, particularly as touch- In 1863 the State banks numbered 1466 throughout the ing newly-organized banks in small towns and cities. On United States. Five years later they had decreased to 13th February 1900, the national banks of the U.S. 247 ; but in subsequent years they grew very rapidly in numbered 3604; their total assets were $4,674,910,713, number, aggregating 620 in 1880, 2101 in 1890, and inclusive of about 550 millions of dollars due to and from 4191 in 1899. The assets of these latter aggregated in the banks themselves. Among their assets were the 1899, $1,636,000,000, including the following in millions following, in millions of dollars:—loans and discounts, of dollars:—Loans on real estate, 51; other loans, 857 ; 2481 ; U.S. bonds for circulation, 236; stocks, securities, stocks and bonds, 172 ; due from banks, 255 ; real estate, &c., 330; banking houses, 79; other real estate and 68; cash and cash items, 216. Among their liabilities mortgages owned, 28; specie, 339; legal tender notes, also in millions of dollars were :—Capital stock, 233; 122. Among the liabilities were, also in millions of surplus and undivided profits, 113; deposits, 1164; due dollars:—capital stock paid in, 613 ; surplus and un- to banks, 108. The greater proportion of failures on their divided profits, 363; circulating notes, 204; due to state part, as against failures of National Banks, should be banks and bankers, 318; individual deposits, 2481 ; noted. In the six and a half years beginning with the U S deposits, 103. Of the above assets New York city panic year of 1893 and ending 30th June 1899, 283 State banks comprised $1,107,000,000, including loans and banks failed, having assets, according to their books, discounts of 499 millions; their capital stock was 56 amounting to $62,739,332. Of these sums there had millions; their surplus and undivided profits, 68 millions; been recovered from shareholders $1,517,1/8, and fioni their circulation outstanding, 17 millions; their individual the liquidation of assets $32,925,233, or about 56 per deposits, 475 millions. The National City Bank of New cent, of the total assets. The total failures of National York, the largest bank in the U.S., had a capital of 10 Banks during thirty-six years, from 1864-99 inclusive, were 120
