Full text of The World's Principal Monetary Systems
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HH
The Bank of North America
(National Bank)
Philadelphia
NE
O
HUNDRED
AND
T H I R T Y -O N E CON
S E C U T I V E Y E A R S of
efficient service rendered its pa*
princi8H-1464 2M 3-50
BANK
C A in
tty that
adle of
ch suc-
C
inciples,
ai
courtesy
C<
, 000, 000.00
L.
D
Tearing House Ex
changes
Cash and Reserve Total
'
978,600.92
3,072,341.02
vided rronts
Circulation
Deposits Total
- $19,254,249.86
-
— 2,726,298.17
494,900.00
15,033,051.69
$19,254,249.86
Officers
H. G. MICHENER, President
S. D. JORDAN, Cashier
R. S. McKINLEY, Asst. Cash.
W . J. MURPHY, Asst. Cash.
C. M. PRINCE, Asst. Cash.
C H A R T E R E D 1822
The Farmers’ Loan and Trust Company
•
1 6 , 18 , 20 &
BRANCH
22 W I L L I A M
O F F I C E , 475
NEW
STREET
F IF T H
AVENUE
YORK
LONDON
PARIS
15 C O C K S P U R S T . , S . W.
2 6 O L D B R O A D S T . , E. C.
41
BOULEVARD H A U S S M A N N
H E Company is a legal depositary for moneys paid into Court,
and is authorized to act as Executor, Administrator, Trustee,
Guardian, Receiver, and in all other fiduciary capacities.
Acts as Trustee under Mortgages made by Railroad and other
Corporations,'•and as Transfer Agent and Registrar of Stocks
and Bonds.
Receives deposits upon Certificates of Deposit, or subject to check and
T
allow}- interest on daily balances.
Manages $.eal Estate and lends money on bond and mortgage.
W ill act as Agent in the transaction of any approved financial business.
Depositary for Legal Reserves of State Basks and also for moneys
of the City of New York.
Fiscal Agent for States, Counties and Cities.
Foreign Exchange, Cable Transfers.
Letters of Credit payable throughout the world.
BOARD
HENRY
CHARLES
HUGH
A. P E A B O D Y
W M. W ALDORF
OGDEN
ASTOR
M IL L S
F R A N K L IN
CLARK
D IR E C T O R S
H. DODGE
M OSES T A Y L O R
D . A U C H IN C L O S S
STEPHEN
D . H . K I N G , J r.
HENRY
H. V. R. K E N N ED Y
A. ROCKEFELLER
R. BACON
HENTZ
F R A N K A . V A N D E R L IP
AUGUSTUS V. H EELY
J A M E S A . S T IL L M A N
JO H N J. R IK E R
A R C H IB A L D
A. G. A G N E W
JO H N
PE R £Y CHUBB
SA M U EL SLOAN
THOMAS THACHER
GEORGE
F. B A K E R
PYNE
S. P A L M E R
PERCY
EDW ARD
D. L O C K E
J. W IL L IA M
OF
CLEVELAND
A . C. T A Y L O R
W . S T E R L IN G
E D W IN
D. RUSSELL
S. M A R S T O N
O F F IC E R S
E D W IN
S. M A R S T O N ,
C O R N E L IU S
R. A G N EW ,
P R E S ID E N T .
v ic e
SAM UEL SLOAN,
v ic e
v ic e - p r e s ’ t
F. H O W L A N D ,
ROBERT
E. B O Y D ,
-p r e s ’ t .
AS6T. SEC’ Y .
AUGUSTUS V. H EELY,
W IL L IA M
-p r e s ’ t .
HORACE
k sec’y.
ASST. SEC’ Y .
B. C A R D O Z O ,
W IL L IA M
V IC E - P R E i> ’ T .
A. D U N CA N ,
.
1
ASST. S E C *Y .
N 1810 when the M E C H A N IC S B A N K of N E W
Y O RK came into existence, the young Republic was
more in need of a credit system than a money system.
Its founders endeavored to render such service as to insure
the best possible results in the development of a credit
system and the country’s resources; and their successors
are as desirous now of being of equal service in securing
a sound monetary system. Correspondents have every
assurance they will receive the same courteous treatment
that patrons have received for over ONE H U N D RED
years.
I
The
Mechanics and Metals National Bank
New York
Capital, Surplus and Profits . $ 14 ,0 0 0 ,0 0 0
O F F I C E R S
GATES W. McGARRAH
President
ALEXANDER E. ORR
Vice-President
WALTER F. ALBERTSEN
Vice-President
JOSEPH S. HOUSE
Cashier
NICHOLAS F. PALMER
Vice-President
ROBERT U. GRAFF
Assistant Cashier
FREDERIC W. ALLEN
Vice-President
JOHN ROBINSON
Assistant Cashier
FRANK O. ROE
Vice-President
CHARLES E. MILLER
Assistant Cashier
ii
UuMtfedl Steves
©irttgsig®&Tu°iui§lt
Compaimy
NEW YORK
B’way at 73d St.
55 Cedar St.
125th St. at 8th Ave.
$6,000,000
Capital & Surplus,
Total Resources, - $76,000,000
O fficers
John W . Platten,
Calvert Brewer,
Carl G. Rasmus,
Frank J. Parsons,
Joseph Adams,
Alexander Phillips,
Henry L. Servoss,
T. W . B. Middleton,
Victor ‘Ehrlicher,
Harry W . Hadley,
Chauncey H. Murphey, .
W illiam T. Law,
President
Vice-President
V ice-President
V ice-President
T reasurer
Secretary
A sst. T reasurer
Asst. Secretary
Asst. Secretary
A sst. T reasurer
Asst. T reasurer
Asst. Secretary
Directors
C H A R L E S S. B R O W N , Douglas Robinson-Charles S.
Brown Company .
.
.
.
.
.
N ew York
A D O L P H L E W IS O H N , .
S o n s ..................................
B U R N S D . C A L D W E L L , President W ells Fargo &
C o m p a n y ................................................... New York
ROBERT O LYPH AN T
T H O M A S D E W IT T C U Y L E R , President Commercial
Trust C o m p a n y ...........................................Philadelphia
Brown Brothers &
New York
.
.
.
New York
Vice-President Penn. R . R .
Philadelphia
E B E N B. T H O M A S ,
Company
President Lehigh Valley R . R .
New York
G U Y E . T R IP P , Chairman of the Board Westinghouse
Electric and Manufacturing Company
.
New York
H E N R Y R. IC K E L H E IM E R
.
. Heidelbach,
Ickelheimer & Company................................ New York
W I L L I A M A. J A M IS O N , Arbuckle Bros., New York
L O U IS C. K R A U T H O F F
.
.
. Counsellor-atL a w ............................................................New York
A R T H U R *1U R N B U L L , Post & Flagg .
New York
C O R N E L IU S V A N D E R B IL T
New York
.
.
P A U L M . W A R B U R G , K uhn, Loeb & C o.,
J U L I U S K R U T T S C H N IT T .
.
.
Directorof
Maintenance and Operation, Union and Southern Pacific
S y s t e m s ................................................... New York
K uhn, Loeb
New Y o ik
H E N R Y T ATNALL,
Company
.
J A M E S T IM P S O N ,
Second Vice-Prest. and Financial
M gr. The M utual Life Insurance Company
New York
A L L E N B. F O R B E S , Harris, Foibes & Co., New York
R 6 B E R T A. G R A N N IS S
New York
President of the Company
M O R T I M E R L. S C H IF F
& Company .
L E W I S L . C L A R K E , President American Ex. National
B a n k ........................................................... New York
C H A R L E S D. D IC K E Y ,
Company
.
.
JO H N W . PLATTEN
J A M E S G. C A N N O N , President Fourth National
B a n k ........................................................... New York
Adolph Lewisohn &
N ew V'ork
G E O R G E G. W A R D ,
Cable Company
Member N. Y. Clearing House Association
III
New York
First Vice-Prest. Commercial
New York
The Seaboard National Bank
o f N e w Y o rk
with nearly thirty years of continued
and substantial growth, with no c o n
solidations or mergers with other banks,
with no single interest to serve, is c o n
fident that its excellent facilities will
meet vour requirements.
W e will demonstrate this to your
utmost satisfaction if you will give us
an opportunity.
Capital
.
.
.
.
Surplus and Profits (Earned)
Deposits
.
.
.
IV
.
$ 1,000,000
2, 183,000
3 7,000,000
F O U R T H STREET
N A T I O N A L BANK
Philadelphia
C a p ita l................................. $ 3,000,000
Surplus and Profits
.
.
6,500,000
Offers Unexcelled Facilities to Correspondents
OFFICERS
E.
F. S H A N B A C K E R , President
JA M E S H A Y , Vice-President
R. J. C L A R K , Cashier
B. M. F A IR E S , Vice-President
W . A. B U L K L E Y , Assistant Cashier
F R A N K G. R O G E R S , Vice-President
W . K. H A R D T , Assistant Cashier
C. F. S H A W , Jr., Assistant Cashier
DIRECTORS
S I D N E Y F. T Y L E R , Chairman
A R T H U R E. N E W B O L D ,
JA M E S HAY,
President Merchants Warehouse Co.
of Drexel & Co., Bankers
F R A N K T. P A T T E R S O N ,
IS A A C H . C L O T H I E R ,
North American Building
Eighth and Market Streets
A L B A B. J O H N S O N ,
C H A R L E S I. C R A G IN ,
Forrest Building
President The Baldwin Locomotive W orks
W I L L I A M A. D IC K ,
C. S. W . P A C K A R D ,
North American Building
President Pennsylvania Company for Insurances
E F F I N G H A M B. M O R R IS ,
on Lives and Granting Annuities
President Girard Trust Co.
E. F. S H A N B A C K E R ,
W M . R . N IC H O L S O N ,
President
J . M . W IL L C O X ,
President Land Title and Trust Co.
Vice-President Philadelphia Saving Fund Society
R U D U L P H E L L IS ,
T. C. du P O N T ,
President Fidelity Trust Co.
President E . I. du Pont de Nemours Powder
C L E M E N T A . G R IS C O M ,
Company
Land Title Building
E. W . C L A R K ,
F R A N C IS I. G O W E N ,
General Counsel Pennsylvania R . R . Co.
of E . W . Clark & Co., Bankers
The Girard National Bank
Philadelphia
,N E H U N D R E D Y E A R S A G O ,
in 1 81 2, Stephen Girard, w ho
was the most eminent merchant and
the wealthiest man in the U nited States,
established Stephen G ir a r d ’s Banking
House, on T h ird Street, in Philadelphia,
in the elegant building erected and
occupied from 179 5 to 181 1 by the
Stephen Girard
Born 1750
Died 1831
first B A N K
STATES.
OF
THE
UNITED
G eorge Simpson, w ho for
seventeen years was cashier o f the Bank o f the U nited States,
was M r. G irard ’s first cashier.
in D ecem ber 1 831 .
M r. G irard’s death occurred
Shortly thereafter in 1832, a number
o f Philadelphia’s most prom inent citizens organized T h e
G ir a r d B a n k , taking over the m agnificent building and
occup yin g it from that day to this.
GIRARD
N A T IO N A L
It becam e T H E
B A N K in 1864, and its success
can be attributed to the service it renders its patrons.
$ 2 ,000,000
Capital
Surplus and Profits
Deposits .
Resources
4,7 0 0 ,0 0 0
42 .0 0 0 .0 0 0
51 .0 0 0 .0 0 0
VI
Continental and Commercial
National Bank
O F C H IC A G O
Northeast Corner Adams and Clark Streets
Capital, Surplus and Undivided Profits, $30,000,000.00
O F F IC E RS
G E O R G E M . R E Y N O L D S , President
R A L P H V A N V E C H T E N , Vice-President
H A R V E Y C . V E R N O N , Asst. Cashier
A L E X . R O B E R T S O N , Vice-President
G E O . B. S M I T H , Asst. Cashier
H E R M A N W A L D E C K , Vice-President
W I L B E R H A T T E R Y , Asst. Cashier
J O H N C . C R A F T , V ice President
H . E R S K I N E S M I T H , Asst. Cashier
J A M E S R . C H A P M A N , Vice-President
J O H N R . W A S H B U R N , Asst. Cashier
W M . T . B R U C K N E R , Vice-President
W I L S O N W . L A M P E R T , Asst. Cashier
W M . G . S C H R O E D E R , Vice-President
D A N N O R M A N , Asst. Cashier
N A T H A N I E L R . L O S C H , Cashier
F R A N K L . S H E P A R D , Auditor
E D W A R D S. L A C E Y , C hairm an o f Advisory Com mittee
Continental and Commercial Trust
and Savings Bank
Capital and Undivided Profits, $4,300,000.00
O F F IC E R S
G E O R G E M . R E Y N O L D S , President
J O H N J . A B B O T T , Vice-President
G E O R G E B. C A L D W E L L , Vice-President
C H A R L E S C . W I L S O N , Cashier
F R A N K H . J O N E S , Secretary
W M . P. K O P F , Asst. Secretary
The Hibernian Banking Association
Capital, Surplus and Undivided
Profits, $2,900,000.00
O F F IC E RS
G E O R G E M . R E Y N O L D S , President
D A V I D R . L E W I S , Vice-President
H E N R Y B. C L A R K E , Vice-President and Manager Savings Dept.
L O U I S B. C L A R K E , Vice-President
J O H N W . M a c G E A G H , Cashier
F R E D E R I C S. H E B A R D , Secretary
E V E R E T T R . M c F A D D E N , Asst. Secretary
J O H N P. V . M U R P H Y , Asst. Cashier
G E O R G E A L L A N , Asst. Cashier
Combined Capital, Surplus and Undivided Profits
$3 7 ,000 ,000.00
Resources of Affiliated Institutions Over
One-Quarter Billion Dollars
VII
^ ^ ^ ^ ^ U IE T L Y
Jj|
b u t surely, in the last
fe w years, Chicago has been acq uiring approxim ately the same
relation to the W e s t e r n and
N o r t h w e s t e r n sections of the
co u n try th a t L ond on hears to w a rd the trade
of the B ritis h empire.
T h e money of the
western h a lf of this continent is employed in
c o m m e rc e , founded on a vast and grow ing
agriculture.
It
is not used in speculative
ventures h u t is at the call of all legitimate
enterprises in developing new areas and new
markets.
T o all this e x trao rdinarily rich,
though still young te rrito ry , the hanking pow
er of Chicago supplies strength and v ita lity ,
-
and w i ll continue to do so, keeping m the lead
of the g ro w th of populations and industries.
SF T h e vista is so broad, so far reaching and
so f u ll of grow ing influence th a t fe w of those
most actively concerned realize w h a t it means
no w , m uch less w h a t it means to the fu tu re
of a co u n try whose advance in w ealth and
p o w e r is one o f th e w o n d e r s o f h is t o r y .
R E P R O D U C E D FROM A R E C E N T P U B L IS H E D S T A T E M E N T OF
T
he
N
atio n al
B
ank
of th e
R ep u b lic
of
OFFICERS
JOHN A. L Y N C H ............................ President
W . T. F E N T O N ........................Vice-President
R. M. M cK IN N E Y ................................. Cashier
O. H. S W A N ................................. Asst. Cashier
JAMES M. H U R S T ....................... Asst. Cashier
W M . B. LA V I N A ........................Asst. Cashier
W . S. BISHOP................................. Asst. Cashier
V III
C
hic a g o
A concise re v ie w o f the m o n etary s y ste m s o f the
leading nations o f th e w o rld , illustrating the fu n d
am ental differences b etw een the v ario u s system s.
W ith a copy o f the c h arter o f the Second Bank o f
the U nited States, and a discussion o f the M on etary
Com m ission bill n ow before Congress.
B y M A U R IC E L . M U H L E M A N
American B ankers’ Association
Year-Book 1912
Published
by
T h e B a n k in g L a w J o u r n a l
U - B R 4 tR V f
The Merchants National Bank
of the
C i t y of N e w Y o r k
42 W a ll S tr e e t
T
H E Merchants National Bank of the
C ity of N e w Y o rk offers as a basis of busi
ness connection, a hundred years of success,
conservative
management,
com plete
banking
equipment, prompt and courteous attention, and
an independence w hich permits of all business
being considered strictly upon its merits.
D I R E C T O R S
JOH N A . ST E W A R T , Chairman Board of Trustees
United States Trust Co.
JOSEPH W . H A R RIM A N , Vice-President
Harriman & Co., Bankers
ELBERT A. BR1NCKERHOFF, Vice-President
J. Spencer Turner Co.
W ILLIA M A. T A Y LO R
Taylor, Clapp & Co., Dry Goods Commission
G U ST A V H. SC H W A B
Oelrichs & Co., Agents North German Lloyd S.S. Co.
G E O R G E ZABR1SK1E
Zabriskie, Murray, Sage & Kerr, Lawyers
ROBERT M. G A L L A W A Y , President
JAM ES N. W A L L A C E
President Central Trust Co. of New York
C H A R LE S D. DICKEY
Brown Brothers & Co., Bankers
C H ARLES A. BOODY
President The Peoples Trust Co. of Brooklyn
E D W A R D H O L B RO O K
President Gorham Manufacturing Co.
JAM ES C. C OLG AT E
James B. Colgate & Co., Bankers
Resources over $ 30 ,000,000
x
THE B A N K OF COMMERCE
NATIONAL ASSOCIATION
CLEVELAND
O R G A N IZ E D I X 1 8 9 9 . H A V IN G A C A P I T A L , SU R
P L U S A N D P R O F IT S O F T H R E E M IL L IO N S E V E N
H UN D RED T H O U SA N D D O L L A R S , A N D R E SO U R
CES
OF
TW ENTY
M IL L IO N
D O L L A R S , IT IS
TH O R O U G H LY E Q U IP P E D FO R T R A N S A C T IN G
ALL
BRAN CH ES
OF
L E G IT IM A T E
H A N K IN G ,
A N D C O R D IA L L Y IN V IT E S CO R R E SPO N D E N CE
W ITH O UT-O F-TO W N B A N K S ,T R U S T C O M P A N IE S,
C O R P O R A T IO N S A N I) F IR M S , R E Q U IR IN G A
C L E V E L A N D CO N N ECTIO N , C O N F ID E N T L Y B E
L IE V IN G IT CA N R E N D E R S E R V IC E T H A T W I L L
M E R IT T IIE IR P A T R O N A G E .
IT S D IR E C T O R A T E
IS CO M PO SED OF SOM E OF C L E V E L A N D ’S M OST
R E P R E S E N T A T IV E
BANKERS
M E N ; A N A SS U R A N C E
OF A
FO R M A N C E OF A L L T R U ST S.
XI
A N D B U S IN E S S
F A IT H F U L P E R
T
HE
Com ptroller of the Currency has assigned to the
First N a tio n a l S a n k of Cleveland the number seven,
its original charter number, w hich designates this in
stitution as one of the oldest national hanks in the country.
I t has had an uninterrupted period of healthy, permanent
grow th since its organization in 1863, from w hich it is safe
to conclude that the service rendered to its customers has heen
agreeable and satisfactory.
W i t h a capital and surplus of
more than $4,000,000, and total resources of $36,000,000,
it is prepared to grant such accommodation as m ay be w a r
ranted by the standing and responsibility of the depositor.
X II
F ir st N a t io n a l B a n k B u il d in g
M I L W A U K E E , W IS .
FUTURE HOM E OF
T H E F IR ST N A T I O N A L B A N K
OF
FIRST
SAVINGS
M IL W A U K E E
TRUST
X III
CO M PAN Y
Cleveland, Ohio,
E progress and su bs ta n tial growth
of the c i t y o f
and the success of its m a n y g r e a t
industrial and manufacturing enter
prises, can be attributed largely to its excellent
ba nking facilities.
The Union N ational B an k
of Cleveland
through strict adherence to up-to-date banking
m e t h o d s , has b e c o m e
b a n k in g institutions
o n e o f the f o r e m o s t
in
the
State .
Banks,
Corporations, Firms and Individuals desiring a
C leveland connection, can be assured o f every
courtesy
in
keeping
with
sound
banking
principles.
OFFICERS
G E O . H. W O R T H I N G T O N
E. R. F A N C H E R
G . A. C O U L T O N
W . E. W A R D
President
V ice-P resid en t
C ash ier
.
A ssistan t C ash ier
W . C. SAU N D ERS
A ssistan t C ash ier
E. E. C R E S W E L L
A ssistan t C a sh ier
XIV
O R G A N IZE D 1 8 5 0
MARINE
N A T I O N A L BANK
BUFFALO, N. Y.
.
Cap
\
Paid i n .................. $
( E a rn e d ..................
500,000.00
1,500,000.00
$ 2,000,000.00
..........................
1,500,000.00
Total Assets ( O v e r ) ............................................
36,000,000.00
Surplus and Profits (Earned)
The oldest bank of discount in Buffalo and the largest in the
State outside of New York City.
OFFICERS
STEPHEN M. CLEMENT. Pre*den»
CLIFFORD HUBBELL, Cashier
JOHN J. ALBRIGHT. Vice-President
HENRY J. AUER. Assistant Cashier
JOHN H. LASCELLES. Vice-Prewdent
NORMAN P. CLEMENT. Assistant Cashier
MERLE H. DENISON. Assistant Cashier
DIRECTORS
JOHN J. A LBRIG HT
STEPHEN M. CLEMENT
W A LT E R P C O O K E
W ILLIA M H. G R A T W IC K
A. C. G O O D Y E A R
EDMUND H AYES
W ILLIAM H. HOTCHKISS
CLIFFORD HUBBELL
E. H. HUTCHINSON
G E O R G E B M A T H EW S
CH ARLES H. KEEP
H U G H KENNEDY
JOHN H. LASCELLES
W ILLIAM A. R OG ERS
This Bank solicits the accounts of banks, corporations, firms, and
individuals. Every effort is made by courteous personal
attention to give customers the most
prompt and efficient service
C O R R E SP O N D EN C E INVITED
--------XVI
____
T
H E progress o f a banking institution in one o f
the great m oney centers, w here com petition is
extrem ely keen, depends upon its m anagem ent
and equipm ent for handling business.
The National City Bank
of Chicago
is
less than six years old, and its resources are now
T h irty-fo u r M illions w h ic h represent a record-breaking
grow th in A m erican B ankin g.
It opened for business
February 5, 1907, w ith deposits o f $ 2 ,19 8 ,3 3 7 .2 5 .
The
fo llo w in g table shows their g ro w th :
D ecem ber 3 1,
D ecem ber 3 1,
D ecem ber 3 1,
D ecem ber 31,
D ecem ber 3 1,
Ju n e 14, 1912
1907
1908
1909
19 10
19 11
Capital $2,000,000.00
.
.
.
.
.
.
$ 6 ,2 0 1,8 15 .8 7
12 ,3 4 4,12 5.8 8
15,243,602.94
22,965,928.59
27,524,223.90
3 1,0 4 1,0 4 6 .16
Surplusand Profits $603,771.99
O F F IC E R S :
D A V I D R . F O R G A N , President
A L F R E D L . B A K E R , Vice-President
H E N R Y M E Y E R , Asst. Cashier
H . E . O T T E , Vice-President
A . W . M O R T O N , Asst. Cashier
F. A . C R A N D A L L , Vice-President
W M . N . J A R N A G I N , Asst. Cashier
L. H . G R I M M E , Cashier
W A L K E R G . M c L A U R Y , Asst. Cashier
W . T . P E R K I N S , Asst. Cashier
R . U . L A N S I N G , M g r. Bond Dept.
W . D . D I C K E Y , Asst. Cashier
M . K . B A K E R , Asst. M g r. Bond Dept.
X V II
Fort
Dearborn
National
Bank
Fort
Dearborn
Trust and
Savin gs
B an k
United States Depositary —Security and Conservatism
Capital . . . .
$2,000,000.00
Surplus and Profits
600,000.00
Deposits . . . .
28,000,000.00
OFFICERS
Three per cent, interest on savings
accounts.
Deposits made on or before the tenth of
each month bear interest from the first.
WM. A. T I L D E N ......................President
NELSON N. LAMPERT . . Vice-President
J. FLETCHER FARRELL . Vice-President
HENRY R. K E N T ......................... Cashier
GEORGE H. WILSON . . . Asst. Cashier
CHARLES FERNALD . . . Asst. Cashier
THOMAS E. NEW COMER . Asst. Cashier
WM. W . LE GROS . . . .
Asst. Cashier
H A R R Y LAW TON . . Mgr. Foreign Dept.
Comparative Showing of
Deposits
T h e officers of the Fort Dearborn Trust
and Savings Bank offer their services to
clients who are seeking choice
high grade
bonds and seasoned securities.
A cts as Administrator, Executor, G uar
dian, C o n s e r v a to r ,
Assignee, Receiver,
Transfer A gen t and Registrar.
In fiduciary capacity as agent makes in
vestments, collections and disbursements.
February 14, 1908 .............. $9,887,954.84
February 5, 1909 .............. 11,617,691.24
March 29, 1910 .................. 15,041,357.21
March 7, 1911 ..................... 21,574,956.79
June 7, 1911 ......................... 23,137,746.88
September 1, 1911 .............. 24,500,075.82
December 5, 1911 .............. 25,445,199.89
February 20, 1912 .............. 26,207,446.32
April 18, 1912 ..................... 27,287,752.30
June 14, 1912 ..................... 28,433,836.35
OFFICERS
W M. A. T I L D E N ......................President
NELSON N. LAMPERT . . Vice-President
JOHN E. S H E A .............................Cashier
CHAS. A. T IL D E N .............. Asst. Cashier
STANLEY G. MILLER . . Mgr. Bond Dept.
E. C. GLENNY . . Secy, and Trust Officer
SAFE DEPOSIT VAULTS
HERBERT C. ROER, Manager
We invite the accounts of Banks, Individuals, Corporations and Firms
who appreciate banking efficiency. Personal and Courteous attention
MONROE AND CLARK STREETS
XV IU
Capital, $2,000,000.00
Surplus, $2,000,000.00
Deposits, $35,000,000.00
m
m
-
3
C t t i ,ts v *
ST.LO
C . H . H u ttig,
President
F . O . W atts,
Vice-Prest.
T h o s. W rig h t,
Vice-Prest.
R . S. H aw es,
Vice-Prest.
G . W . G albreath,
]. R . C o o ke,
Vice-Prest.
Cashier
D ’A . P. C o o k e,
Assistant Cashier
H . H a ill,
Assistant Cashier
E . C . Stuart,
x ix
Assistant Cashier
F irst N atio nal B ank
M inneapolis, M innesota
Capital
- $2,000,000.00
Surplus and Profits 2,500,000.00
Deposits 23,000,000.00
Officers
F. M. P R IN C E
President
C. T. J A F F R A Y
Vice-President
A. A. C R A N E
Vice-President
G EO. F. O R D E
Vice-President
D. M A C K E R C H A R
Vice-President
H . A. W IL L O U G H B Y
Cashier
G. A. L Y O N
Assistant Cashier
P. J. L E E M A N
Assistant Cashier
Established 1864
XX
The Corn Exchange National
Bank o f Chicago
Capital . . . .
$3,000,000.00
Surplus . . . .
5,000,000.00
Undivided Profits .
9 75 ,00 0.0 0
Officers
E R N E S T A. H A M IL L , President
C H A R L E S L . H U T C H IN S O N Vice-President
C H A U N C E Y J. B L A IR , Vice-President
D . A. M O U L T O N
.
.
. Vice-President
B. C. S A M M O N S
. Vice-President
F R A N K W . S M IT H
.
.
Cashier
J O H N C. N E E L Y
.
. Secretary
J. E D W A R D M AASS
.
Assistant Cashier
J A M E S G .W A K E F I E L D , Ass’t Cashier
L E W I S E . G A R Y , Ass’t Cashier
Directors
C H A R L E S H. W A C K E R
C H A U N C E Y J. B L A IR
E D W A R D B. B U T L E R
C L A R E N C E B U C K IN G H A M
C L Y D E M. C A R R
W A T S O N F. B L A I R
E D W A R D A. S H E D D
M A R T I N A. R Y E R S O N
CH A RLES H. H U LB U R D
B E N JA M IN C A R P E N T E R
E D W I N G. F O R E M A N
C H A R L E S L. H U T C H IN S O N
F R E D E R IC K W . C R O SB Y
E R N E S T A. H A M IL L
Foreign Exchange
Letters of Credit
Cable Transfers
XXI
Resources, $6,500,000.00
F intelligent handling o f items
I
O n n
send
ro
us
yo ur
f ^
to xryou
Buffalo
business.
A . D . BISSELL, President
C. R. H U N T L E Y , Vice-President
E.
J. N E W E L L , Cashier
H O W A R D BISSELL, Asst. Cashier
C. G . F E IL , Asst. Cashier
X X II
The First National Bank
o f Buchanan County
St. Joseph, M issouri
C A P IT A L
-
-
$500,000.00
SU R PLU S
-
-
300,000.00
T h is bank is located in the heart o f
the greatest agricultural district in
the w orld.
W e consistently fo llo w
a c o n s e r v a t iv e p o l i c y and i n v i t e
patronage, f e e l i n g c o n f i d e n t that
our facilities for rendering prom pt
and efficient service are unsurpassed.
O F F IC E R S
R.
J.
R.
R.
T. FORBES E. C O M B S
S. B R I T T A I N
N . R ID G E -
-
President
Cashier
- Assistant Cashier
A uditor
-
X X III
-
The
National Bank of Commerce
in St. Louis
C a p i t a l .........................
. $ 1 0 ,0 0 0 ,0 0 0
Su rplus and P rofits
D eposits
.
.
.
2 ,0 0 0 ,0 0 0
.
.
5 7 ,0 0 0 ,0 0 0
A c c o u n t s of B a n k s , C o r p o r a t i o n s , M e r c h a n t s ,
Manufacturers, and Individuals solicited
u p o n fa v o r a b l e terms.
Officers
B. F. E D W A R D S
.
President
T O M RANDOLPH
. Vice-President
W . B. C O W E N
Vice-President
W . L. M c D O N A L D
.
. Vice-President
J. A. L E W IS
Cashier
C. L. M E R R IL L
F. W . W R IE D E N
Assistant Cashier
.
G. N . H IT C H C O C K
Assistant Cashier
.
Assistant Cashier
.
Assistant Cashier
.
Assistant Cashier
A. L. W E IS S E N B O R N
G E O R G E R. BA KER
Assistant Cashier
H . C. B U R N E T T .
W. M. CHAN DLER
Assistant Cashier
XX IV
The Capital National Bank
gf
ST. PAUL, MINNESOTA
QThis bank—conducted in a
broadly conservative manner—
offers every advantage in service
and every consideration consis
tent with sound banking. A
business connection with us
cannot fail to be of mutual
advantage and satisfaction.
Q Correspondence is invited.
JO H N R. M IT C H E L L
JE R O M E W . W H E E L E R W IL L IA M B. G E E R Y
JA M E S L. M IT C H E L L
.
E D W A R D H. M IL L E R
G E O R G E M. B R A C K
-
Capital and Surplus, $600,000.00
XXV
.
.
President
Vice-President
Vice-President
Cashier
Ass’t Cashier
Ass’t Cashier
Deposits, $5,500,000.00
NATIONAL BANK
OF COM M ERCE
IN N E W Y O R K
PO N the merit of its strong financial condition, as
evidenced by Capital, Surplus and Undivided Profits
of over Forty Million Dollars, and upon its successful
record since its organization, in 1839, the National Bank of
Commerce in New York solicits the accounts of banks,
bankers, corporations, firms, and individuals, and invites
correspondence from those who contemplate forming new
banking connections in New York. Besides a thorough
equipment for the transaction of all branches of domestic
banking, this bank has foreign correspondents at every
important commercial centre in the world.
U
President
JA M E S S. A L E X A N D E R
Vice-President
H E N R Y A. SMITH
Vice-President
R. G. HU T CH IN S, Jr.
Cashier
N EILSON OLCOTT
Asst. Cashier
O L IV E R I. PILAT
Asst. Cashier
FARIS R. RUSSELL
Asst. Cashier
A . J. O X E N H A M
STEVENSON E. W A R D
Asst. Cashier
J O H N H . STODDARD
Asst. Cashier
W IL L IA M M. St. JO H N
Asst. Cashier
F. BO RG E M E IST E R , Mgr. Foreign Department
NATIONAL BANK
OF COMMERCE
IN N E W Y O R K
XXV I
The Northwestern National Bank
of Minneapolis, Minnesota
is organized and equipped to give to its customers and corres
pondents the best banking service obtainable. €fl Being the
largest bank in its territory the Northwestern is able to offer,
through its many connections, unexcelled facilities, while its
office organization is designed to give to every patron’s affairs
the individual care and attention which they may require.
Capital and Surplus, $5,000,000.00
AFFILIATED W ITH
The Minnesota Loan and Trust Company
X X V II
Jffoelttp tErusit Company
C O R N E R OF C H A M B E R S S T R E E T & W E S T BROA DWA Y
J ^ e to
MEMBER
OF
THE
NEW
YORK
|9o rk
C L E A R IN G
CAPITAL
31, 000 , 000.00
HOUSE
A S S O C IA T IO N
SURPLUS
31, 000 , 000.00
S A M U E L S. C O N O V E R , President
W M . H. B A R N A R D , Vice-President
JO H N W . N IX , Vice-President
A N D R E W H. M ARS, Secretary
S T E P H E N L. V IE L E , Ass’t Sec’y A R T H U R W . M E L L E N , Ass’t Sec’y
Trust Officer
DIRECTORS
DIRECTORS
W IL L IA M H. B A R N A R D ,
Im p o rte r, R a w S ilk
JA M E S B U T LE R ,
Pres. Jam e s B utler, Inc., W h o le s a le a n d R etail
Groceries
J A M E S G. C A N N O N .
P resident, F o u r th N a tio n a l B a nk
S A M U E L S. C O N O V E R ,
P re sid e n t
S A M U E L CROOKS,
L a te o f Crooks, T hom as CBL Co.
W h o le s a le T eas a n d Coffees
W I L L I A M C. D E M O R E S T ,
P re siden t, R e a lty T rust
J A M E S M. D O N A L D ,
C h a ir m a n of B oard, H a n o v e r N a tio n a l B a n k
C H A R L E S F. D RO ST E,
D roste CBL S nyder, W h o le s a le B u tte r a n d E ggs
C H A R L E S F. M A T T L A G E ,
C has. F. M a ttla g e <3$, Sons, W h o le s a le P ro v i
sions
G E R R IS H H . M IL L IK E N ,
D eering, M illik e n CBLCo., D ry Goods C o m m issio n
V IN C E N T S. M U L F O R D ,
Jew elers’ C irc u la r P u b lis h in g Co.
J A M E S E. N IC H O L S ,
A u s tin , N ic ho ls CBL Co., W h o le s a le Grocers
J O H N W . N IX ,
Pres., Jo h n N ix
C om m ission
Co., W h o le s a le
P roduce
J O H N A . P H IL B R IC K ,
P resident, Jo h n A . P h ilb ric k CBL Bro.
A L E X A N D E R M. P O W E L L ,
/ C hocolate M a n u fa ctu re r
W . J. F U L L E R T O N ,
W ils o n CEL B ra d b u ry , D ry Goods C o m m ission
S T E P H E N K. R E E D ,
Vice-President, P e ttit CBL Reed, W h o le s a le B u t
ter, Cheese a n d Eggs
F R A N K A. H O R N E ,
P re siden t, M e rc h a n ts’ R e frig e ra tin g Co.
G E O R G E H. S A R G E N T ,
S argen t £8, Co., W h o le s a le H a rd w a re
E D W I N E . JA C K S O N , JR .,
Pres, a n d Treas. B o o ru m CEL Pease Co., B la n k
B ooks
A D O L P H KASTOR,
A . K a sto r CEL Bros.. W h o le s a le C utlery
JA M E S H . K IL L O U G H ,
J. H . K illo u g h CBL Co., W h o le s a le Produce C om
m issio n
H A M P D E N E. T E N E R ,
P resident, Ir v in g S av in g s In s titu tio n
E D W A R D H. T IT U S ,
L a te T reasurer L o rd CBL T ay lor, W h o le s a le CEL
R e ta il D ry Goods
L E E KOHN S,
L . S tra u s CBL Sons, P ottery , C h in a a n d G lass
w a re
D. W . W H IT M O R E ,
D. W . W h itm o r e CEL Co. AVholesale B u tte r a n d
Cheese
H E N R Y KROGER,
H e n r y K roger CBL Co., W h o le s a le L iq u o rs
J O H N O. W I L L I A M S ,
V o u g h t CEL W illia m s , Iro n a n d Steel
T H E O D O R E F. W H IT M A R S H ,
Vice-President, F. H. L e ggett CEL Co. W h o le s a le
Grocers
Correspondence w ith banks, tru s t com panies, corporations, firm s and
in dividuals is invited.
T he Com pany offers the service s o f a com petent organization, su p ple
m ented b y financial sec u rity and a determ ination to please.
REM EM BER T H E NAM E
I I
F I D E L I T Y
I J
S E N D U S YO UR C O L L E C T I O N S A ND RECEIVE T H E B E N E F I T OF SPECIAL
A TTE N TIO N AND QUICK RETURNS.
X X V III
O R G A N I Z E D
1903
u n i o n e x c h a n g e n a t io n a l b a n k
, g /*N E W Y O R ld .
AV L.
Capital
and Surplus
Q. l s i
S T >
H E N R Y S. H E R R M A N
President
D A V ID
$2,000,000
N E V IU S
Vice-President and Cashier
L O U IS J. W E I L
Total Resources
$ 14,000,000
Vice-President
G E O . B. C O N N L E Y
Asst. Cashier
<][ Located in the heart of the new textile manufacturing district, and many of our
clients being manufacturers and merchants whose business extends throughout the
country, w e receive a large amount of out-of-town checks.
Banks that can handle
to advantage the items payable in their locality are invited to correspond with us.
MEMBER NEW Y ORK CLEARING HOUSE
UNION N ATIO N AL B A N K
PHILADELPHIA
W. H. Carpenter
$500,000
President
Surplus
T. H. Condennan
Vice-President
$050,000
Louis X. Spielberger
Undivided Profits
Cashier
$90,000
John W. Mink
Deposits
Asst. Cashier
$6,500,000
ACCOUNTS OF BANKS, BANKERS, CORPORATIONS
AND INDIVIDUALS SOLICITED
X X IX
NEW HOME THE INTERNATIONAL TRUST COMPANY
DENVER
The International Tru& Company
D E N V E R , CO LO .
Capital and Surplus, $ 1,000,000.00
O F F IC E R S
.
D IR E C T O R S
H. M. B L A C K M E R
.
T H E O . G. S M IT H
. Vice-President
F. G. M O F FA T .
.
P. E. C L E L A N D
. . . .
. President
. Vice-President
Treasurer
H. H. B R O O K S . Sec’y C& Trust Officer
F. G. H A R R IN G T O N
.
Ass’t Sec’y
A. V. H U N T E R . Chairman of the Board
H. M. B L A C K M E R
T H E O . G. S M IT H
F. G. M O F FA T
M. D. T H A T C H E R
G E R A LD HUGHES
A LV A ADAMS
THOMAS KEELY
JO H N EV AN S
CH A S. M. M a c N E IL L
J. H . P. V O O R H IE S
JO H N H. P O R T E R
SPEN CER PEN RO SE
XXX
Emergency Door
Heaviest V ault Doors in the
W o r ld
built for
B
a n k e r s
C
o m
T
r u s t
p a n y
of N EW YORK
Main Door Closed
Entire vault and com plete
equipm ent constructed b y
H
e r r in g
H all
M a r v in
Sa f e
C om pany
Builders of Bank Vaults
Hamilton, O.
New York
Chicago
Boston
Cincinnati
St. Louis
San Francisco
Main Door Open
XXXI
.
*
The Mutual Benefit Life Insurance Company
_
1845
o f N e w a rk , N . T.
F
r e d e r ic k
F
r e l in g h u y s e n
,
P
1 91 2
r e s id e n t
The Leading Annual Dividend Company
Satisfactory Service to Policyholders for 67 Years
Paid Policyholders Since Organization in 1845 O yer $300,000,000
Purely M utual
Liberal Policies
Low Rates
Large Dividends
New Benefits as adopted are extended to old Policyholders
The M utual Benefit’s Accelerative Endowment Plan is absolutely unique
and is unequaled
Send f o r leaflet “ What Bankers Think o f the M utual B enefit.”
X X X II
A Trip Through Fairyland
From the Atlantic to the Pacific
One Hundred Golden Hours at Sea
ON E L E G A N T L Y E Q U IP P E D 10,600-TON S T E A M S H IP S
Along the Atlantic Coast, across the Mexican
Gulf—from the American Metropolis to the
Crescent City.
N E W YORK
NEW
ORLEAN S
A l o n g t he Ri o G r a n d e
IN T R A IN S O F S U P E R IO R E Q U IP M E N T
Through the vast cotton and sugar planta
tions of Louisiana and Texas, the old missions,
the historic Alamo, the great health resorts,
along the Rio Grande with a unique panorama
of two Republics — the United States and
Mexico, through New Mexico and Arizona to
The Road of a Thousand Wonders
Through that most wonderful of States, Cali
fornia — in full view of the Pacific Ocean on
one side and miles of blossoming orange trees
on the other, continuing over the world-famous
Shasta Route to Oregon and Washington.
Southern Pacific
Steamships
Sunset Route
N ew Y ork to N e w Orleans
N e w Orleans to San Francisco
Call or write to
L. H. Nutting, General Passenger Agent
366 B road w ay
a t F r a n k lin Street
1158 B road w ay
a t 27th Street
New York
X X X III
1 B road w ay
a t B o w lin g Green
C orner L ib e rty CS. W e s t Streets
The Coal & Iron National Bank
of the City of New York
C a p ita l
,$1,000,000.00
Surplus and Profits (Earned) - $493,000.00
D epositary of the United States, City and State of N e w York
Offers E v e ry P roper Banking Facility
Board of Directors
F r a n c is J. A re n d . . . . Treas. D e la v a l S e parato r Co.
W m . G . Besler, Vice-Pres. a n d Gen. M g r. C .R .R . o f N .J .
M . F. B u r n s ..................................... Pres. B u r n s B rothers
G eorge H . C a m p b e ll . . A sst, to Pres. B. C&. O. R . R. Co.
D a n ie l F . C o n n o r ...................O f W h it n e y C&> K em m erer
A lfred A. C o o k ...................L e v e n tr itt, Cook C& N a th a n
H e n r y L . de F o r e s t ....................... O f de F ore st B rothers
A llis o n D o d d ......................................D ir. B u r n s B rothers
H . W . D o u ty
.
.
R e a l E s ta te A g t. C. R . R . o f N .J .
Josep h A . F ly n n
. . V.-P. F id e lity a n d D ep. Co. o f M d.
W . J. H a r a h a n ............................ Vice-Pres. E rie R . R . Co!
George D . H a r r i s ........................George D . H a rr is £& Co.
H e n r y L . Joyce, V.-P. In te rs ta te L ig h te ra g e £& T ran s. Co.
J o h n C. J u h r in g . . .
Pres. F ra n c is H . L e g g e tt <351 Co.
A lb e rt B. K err . . . Z a b risk ie , M u rra y , Sage £85. K err
M EM BER N E W
E . E . L o o m is . . .
Jam e s H . M c G ra w .
Jo h n A. M id dleton
Jam e s H . P a rk er .
E d w in H . Peck • .
W m . B. R a n d a ll
Pres
Jo h n T .S p ro u ll
Jo h n W . S u lliv a n .
W m . H . T ay lo r
D a v id T a y lo r
Stephen H . Voorhees
G . O. W a te r m a n
S am u e l W e il
F ra n k D . W ils e y . .
W m . H . W o o d in A sst.
Vice-Pres. D ., L . £8 , W . R . R . Co.
Pres. M c G ra w P u b lis h in g Co.
V.-P. L e h ig h V a lle y R . R . Co.
Pres. M u tu a l A llia n c e T ru s t Co.
................... E . H . C& W . J . Peck
Secur. T ran s, a n d R e g istra r Co.
.............................. Pre siden t
Pres. J o h n W . S u lliv a n C o.
, . Pres. G o o d w in C a r Co.
...................V ice-President
A gt. R o y a l B a n k of C a n a d a
. .
T reas. C. R . R . o f N .J .
. . . S a m u e l W e i l <2S>Son
Pres. N e w Y o rk B o a t O a r Co.
to Pres. A m er. C ar a n d F d y . Co.
Y O R K C L E A R IN G H O U S E A S S O C IA T IO N
X X X IV
Merchants National
Bank, Burlington, Iowa
Capital,
Surplus
$100,000.00
and
Profits, 140,000.00
Officers
.
J. L. Edwards
W . E. Blake
James Moir
Alex. Moir
H. J. Hungerford
F. L. Houke
C. L. Fulton
m
President
Vice-President
Vice-President
Vice-President
_
t
Cashier
Ass’t Cashier
Ass’t Cashier
Directors
W . E. Blake, Chairman
H. A . Brown
James Moir
W . C. Tubbs
T. W . Barhydt
W . W . Copeland
Alex. Moir
N. S. Young
J. L. Edwards
XXXV
N Institution where Courtesy and
l Care in the smallest affairs have
gone hand in hand with Success in
the most important.
One which w ill appreciate an oppor
tunity to serve or to advise in any
financial or fiduciary matter and which
is especially equipped to act as your
agent in St. Louis and the Southwest.
A
Capital, Surplus and Profits
$8,500,000.00
XXXVI
The Chase National Bank
of the City of New York
U N IT E D ST A T ES D E P O S IT O R Y
(Clearing House Building)
Capital
Surplus and Profits
Deposits A. B A R T O N
$
(Earned)
HEPBURN,
5,000,000
9, 100,913
128,700,251
c h a ir m a n
--O---- -----A L B E R T H. W I G G I N ,
SAMUEL
HENRY
M. C O N K E Y , C A S H I E R
C H A R L E S C. S L A D E ,
a s s t
ALFRED
p r e s i d e n t
H. M I L L E R ,
vice
p r e s i d e n t
EDWIN
A. L E E, A S S T . C A S H I E R
W I L L I A M E. P U R D Y ,
, cashier
a s s t
, cashier
C. A N D R E W S , A S S T . C A S H I E R
D I R E C T O R S
HENRY
W. C A N N O N
JO HN
J A M E S J. H I L L
GRANT
B. S C H L E Y
A. B A R T O N
^
HEPBURN
I. W A T E R B U R Y
GEORGE
F. B A K E R
ALBERT
H. W I G G I N
GEORGE
FRANCIS
F. B A K E R , J r .
L. H I N E
W e receive accounts of Banks, Bankers, Corporations, Firms
and Individuals on favorable terms, and shall be pleased to
meet or correspond with those who contemplate
making changes or opening new accounts
Foreign Exchange Department
X X X V II
O R G A N IZ E D 1 8 3 8
N A T IO N A L IZ E D 1 8 6 5
The A m erican Exchange
N ational B an k
New York
C ap ital
/
A Su rp lu s and P rofits
$ 5 ,0 0 0 ,0 0 0
\
/
$ 4 ,5 2 7 ,0 0 0
L E W I S L . C L A R K E , President
E D W A R D B U R N S , Vice-President
W A L T E R H. B E N N E T T ,
A. K. de G U ISC A R D , A sst. Cashier
E . A. B E N N E T T , A sst. Cashier
Vice-President and Cashier
A R T H U R P. L E E , A sst. Cashier
G E O R G E C. H A IG H , A sst. Cashier
W h en you are form ing a banking connection,
we
ask your
consideration
o f our
74
years’
reputation, experience and ability to render you
personal and special service in all departments.
Depositary of the United States, State of New York and
City of New York
X X X V III
Detroit the Convention City, 1 9 12
HOTEL PONTCHARTRAIN
HEADQUARTERS:
American Bankers’ Association Convention, 19 12
ABSOLUTELY FIREPROOF
GEORGE II. WOOLLEY
a n d
W. J . CHITTENDEN. J
X X X IX
r..
M A N AG ER S
?£pip.
D E T R O IT
SK Y
L IN E .
V IE W FR O M
E T R O IT is one of the most ideal convention cities in the United States, owing to its many natural
attractions, its many excellent hotels, and its hospitable people.
It is a city of varied industries, having a greater variety and a larger number of manufacturing
establishments than any city of its size in this country. Sixty per cent, of all the automobiles manufactured
in the United States are made in Detroit. Ninety-five per cent, of all the adding machines made in this
country are made in Detroit, it being the home of the Burroughs Adding Machine. And it is also in the lead
in a number of other important manufactories.
W IN D S O R , C A N A D A
D E T R O IT ’S B A N K IN G IN T E R E S T S
Detroit has eighteen incorporated banking institutions. Three National banks, five State banks, three Trust
companies and seven Savings banks, with a total capital and surplus of $22,000,000, total deposits of about
$160,000,000 and total resources of about $188,000,000.
There are 521 incorporated banks in Michigan, but Detroit has one third of all the capital, one third of
all the savings deposits and nearly two thirds of the total deposits in the State. Detroit is a reserve city. Its
total clearings for 1911 were $968,647,059.
Hotel Pont:hartrain, Convention Headquarters
D E T R O IT ’S BU SIN ESS
XL
D IS T R IC T
XLI
X L II
t h e
l i r s t N a t io n a l B a n k
OF DETROIT.
E S T A B L I S H E D
1863
C a p i t a l a n d S u r p lu s , T h r e e M i l l io n D o l la r s
F IF T Y
Y E A R S
of
P R O G R E S S
ke F irst N a tio n a l B a n k o f D e tr o it
T
established m 1863, w as tke ninetyseventh kank organized in o u r national
hanking system.
I t w i l l in 1913 m ark its
F iftie th A n n iv e rs a ry of continued success.
Its development kas keen m arked k y a strict
adkerence to metkods of conservatism y et
progression.
T k a t it kas kuilded w e ll is
evidenced ky tke strengtk of its position in
tke kanking w o r ld and its far reackmg in
fluence in tke commercial life of tkis C it y
and State.
W i t k its unexcelled facilities,
it invites tke accounts of hanks, corporations
and
individu als
extending to
eack every
courtesy and consideration.
E M O R Y W . C L A R K ., President.
W I L L I A M J . G R A Y , Vice President.
W A L T E R G . N IC H O L S O N , Cashier.
M E R L E B. M O O N , Vice President.
W . A . M c W H IN N E Y , Assistant Cashier.
F R A N K G. S M IT H , Vice President.
J O S E P H G R I N D L E Y , Assistant Cashier.
J O H N W . S T A L E Y , Vice President.
F. F. C H R I S T I E , Assistant Cashier.
J O H N H . H A R T , Manager of Credits.
L. F. M E R Z , Manager Foreign Exchange Department.
I R V I N G H . B A K E R , Auditor.
X L III
PEN IN SU LA R STATE BANK
o f D E T R O IT , M IC H IG A N
Capital
.
$ 8 0 0 ,0 0 0
Surplus Fund .
.
$ 8 0 0 ,0 0 0
Deposits
$ 1 0 ,5 0 0 ,0 0 0
T otal Resources
$ 1 1 ,6 0 0 ,0 0 0
O F F IC E R S
J . H . JO H N S O N
P R E S ID E N T
FRANK
P. B Y R N E
V IC E -P R E S ID E N T
FRANK W. HUBBARD
V IC E -P R E S ID E N T
W . G. T O EPEL
C A S H IE R
H. H. ELLERTON
A S S IS T A N T C A S H IE R
MAIN BANKING ROOM .
XL1V
OPENING DAY.
DIME SAVINGS BANK BUILDING
The
DIME SAVI NGS BANK
D E T R O IT , M IC H IG A N
CA PITA L, $ 1 ,0 0 0 ,0 0 0
S U R P L U S AND P R O F I T S , $ 7 0 0 , 0 0 0
R E S O U R C E S , $ 13 ,0 0 0 ,0 0 0
OFFICERS
W i l l i a m L iv in g s to n e , President
George H . B a rb o u r, Vice-President
Joseph L . H u d s o n , Vice-President
C harle s A. W a r r e n , Cashier
F. F . T illo tso n , i4sst. Cashier
L . C. S herw ood, A sst. Cashier
XLV
D a v id S. C arnegie, A sst. Cashier
C h a rlto n E. P a rtrid g e , A sst.C a shier
George T. Breen, Auditor
XLVI
P E O P L E S S T A T E H A N K , D E T R O IT , M IC H .
D
E
T
R
O
I T
M
I
C
H
I
G
A
N
Capital, Surplus and Profits, $3,500,000.00
Deposits :: :: :: :: :: :: 37,000,000.00
O F F I C E R S
D I R E C T O R S
R u s s e l ..................................................... President
G eo. H .
R ussell A . A lg e r
G e o . E . L a w s o n ..........................................Vice-President
R . S. M
a s o n
F. A . S c h u
B.
S. C o
A u s tin
............................................... Vice-President
lt e
................................................Vice-President
l b u r n
............................................... Vice-President
W
n,
R .
A y e r s ..............................Assistant
i t
T. C u d m
T. C o u
Cashier
......................................... Assistant
*
F red.
r\
M c M il l a n
ason
T. M
w
oran
t w
J- I u r p h y
W . H o w ie M
•
D w yer
F ra n k J . H ecker
W. H
B. L edyard
R . S. M
am pbell
UCHARME
J e r e m ia h
F red.
Cashier
o r e ....................................Assistant Cashier
r t n e y ......................................................Auditor
h
'
H .
P. H .
B arbour
B . S . C olburn
E . W i n g ........................................................... C ashier
E noch S m
G eo.
T
H . M. C
H . P. B org m an
. . . Cashier Savings Department
R . W . S m y l ie . . . .
Manager Credits and Audits
J . R . B o d d e ............................................... Assistant Cashier
C harles H .
G e o. E . L aw son
G eorge H . B arbour
odges
C . H u t c h in s
J as. T. K eena
J.
G eo. H .
H en ry
u ir
R u ssel
R ussel
H ugo S c herer
F. A . S c h u l t e
A n gu s S m it h
Accounts of Banks, Bankers, Firms, Corporations
and Individuals received.
Excellent Collection
Facilities
X L V II
Union Trust Company Building
U N IO N T R U S T C O M P A N Y
D E T R O IT ,
Capital 1 1,000,000.
M IC H .
Surplus and Undivided Profits $500,000.
H E N R Y B. L E D Y A R D , Chairman
G E O R G E H E N D R I E , Vice-President
G E R A L D J . M c M E C H A N , Vice-Pres, and Sec.
O F F IC E R S
F R A N K W . B L A IR , President
A. E . F. W H IT E , Vice-President
C H A R L E S R. D U N N , Vice-President and Treasurer.
x l v iii
T
he
N
P ark B
OF NEW YORK
ational
ank
O R G A N IZ E D 1856
CAPITAL AND SURPLUS, $ 1 8 ,0 0 0 ,0 0 0
D E P O S I T S , J U N E 14, I9I2, $ 1 1 1 , 5 9 0 , 0 3 3
RIC HA RD DELAFIELD
PRESIDENT
G I L B E R T G. T H O R N E
J O H N C. M c K E O N
VICE-PRESI DENT
VICE-PRESIDENT
JOHN
C. V A N C L E A F
VICE-PRESIDENT
M A U R I C E H. EWER
CASHIER
W I L L I A M O. J O N E S
ASST.
W I L L I A M A. M A I N
CASHIER
ASST.
L O U I S F. S A I L E R
F R E D ’ K O. F O X C R O F T
CASHIER
ASST.
G E O R G E H. K R E T Z
MANAGER
ASST. CASHIER
CASHIER
FOREIGN
OEPT.
D I R E C T O R S
CORNELIUS VANDERBILT
JO S EP H T. MO ORE
S T U Y V E S A N T FI SH
I SAAC G U G G E N H E I M
CHARLES SCRIBNER
G I L B E R T G. T H O R N E
E D W A R D C. H O Y T
JOHN
W. R O C K H I L L P O T T S
RICHARD
AUGUST BELMONT
THOMAS
R I C H A R D D E L AF I E L D
E D W A R D C. WAL L AC E
F R A N C I S R. A P P L E T O N
JOHN
C. M c K E O N
H. W I L L I A M S
F. V I E T O R
E D W I N G. M E R R I L L
G. M I L B U R N
Directors:
HORACE
E.
ANDREW S
Capital and Surplus
P res. N e w Y o r k S t a t e R y s.
Directors:
F B A N K L IN
AU G U ST. BELM ONT
S. J E R O M E
Pres. F irs t N a t ’ l B a n k ,
N o rw ich , Conn.
$3,000,000
A u g u s t B e l m op t & Co.
THE
A U G U S T B E L M O N T , J B .,
A u g u s t B e lm o n t & Co.
D A N IE L
J.
CABBOLL
P r e s id e n t A lb e re n e S to n e Co.
H ARDEN* L . C B A W F O B D
Pres.
T h e C e n tu r y B a n k
N ew Y o rk .
of
CHAJhaN]
P . S. D U P O N T
p H E N I^
T rea s. E . I. D u P o n t de
N e m o u rs P o w d e r Co.
D ESM O N D
DUNNE
W IL L IA M
W ALDO
Pros.
P re s. D esm o nd D u n n e Co.
E L L IS
P.
R in g litig Bros.
H E N R Y P. SH O E M A K E R
H O T C H K IS S
Vice-Pres. & T reas.
L . C an dee R u b b e r Co.
ATio NA^
JO H N M. H A N SE N
W. H E B B IC X
3a n K-
C le v e la n d , O h io .
G E O A G E M . TT A TL-n
C h a ir m a n o f th e B o a rd .
J.
New York
Vice-Pres. E a s te rn S te e l Co.
H.
A. T IL N E Y
H a rv e y F is k & Sons.
D. U N D E R W O O D
Pres. E rie R a ilr o a d Co.
JOH N
D. V E R M E U L E
Pres. G o o dyear R u b b e r Co.
SAM U EL
H ECZSCH EB
R IC H A R D
Y o rk C ity .
ALBERT
F R ’D ’K
HEANEY
E v e re tt. H e a n e y Sc Co.
AUG UST
N ew
N V phenix^/ >
P res. S ta n d a r d S te e l C a r Co.
FRANK
SH EARSON
Sh ca rso n , H a in m ill & Co.
H. B A B Y
C h a ir m a n o f tht* B oard
U . S . S te e l C o rp o ra tio n .
PABM ELY
M ARSH ALL
R IN G L IN G
EDW ARD
O. O. F E S S E N D E N
H a y d e n W . W h e e le r & Co.
H. S T U A R T
H.
B ank
A m o ric a n L o co m o tiv e Co.
JOH N
EABLE
P r e s id e n t N lp is s in g M in e s Co.
ELBEBI
A. LAW
Vice-Pres. F ir s t N a t ’ l
o f P h ila ., Pa.
FRAN K
S.
W IT H E B B E E
Pres. W lth e rb e e , S h e rm a n & Co.
JO SEPH
H IG G IN S
W E IL
S a m u e l W e il & Son.
H.
W R IG H T
Pres. U. S . F in is h in g Co.
V ice - P residen t.
K A U F M A N , P r e s id e n t.
V ic e - P r e s id e n t .
R I C H A R D H . H I G G I N S , V ic e - P r e s id e n t
N , V ic e - P r e s id e n t .
A L F R E D M . B U L L , V ic e - P r e s id e n t.
B E R T L . H A S K I N S , C a s h ie r.
A s s is t a n t C a s h ie r . N O R B O R N E P . G A T L I N G , A s s t . C a sh ie r.
A s s is t a n t C a s h ie r . H E N R Y C. H O O L E Y , A s s is t a n t C a s h ie r.
G E O R G E M . H A R D , C h a irm a n .
L O U IS
F R A N K J. H E A N E Y ,
W I L L I A M H. S T R A W
H E N R Y L. CAD M U S,
W A L T E R B. B O IC E ,
G.
W e in vite th e A cco u n ts of B a n k s, B an k ers, M anufacturers, M erchants and Individuals.
_
E S T A B U S H E D 18oS
NATIONALIZED 1S)11
-CHARTER MEMBER NEW YORK CLEARING HOUSE
OFFI CERS
ED W A RD
J O H N
EARL,
M U N R O
p r e s i d e n t
H E N R Y
VICE-PRESIDENT
L A U R E N C E
H.
H.
M ILLER
VICE-PRESIDENT
H E N D R IC K S
NEWTON
VICE-PRESIDENT
A R T H U R
P. S T U R R , a s s ' t c a
C.
D.
ALLING
VICE-PRESIDENT
W.
s h i e r
GILBART, cashier
G. L. T H O M A S ,
a s s ' t
c a s h i e r
D I R E C T O R S
SA M U
J O H N
H E N R
A U G U
L A U R
E L
R. W E E D
M U N R O
Y
C. M I L L E R
S T I N E J. SMITH
E N C E
H. H E N D R I C K S
ED W A RD
F. M U N R O E
A R T H U R
C O
J. CH RISTY
D. H U N T E R
A R T H U R
C.
EA R L
DYER
P P E L L
B E L L
McALPIN
H A R R IS
TH E FOURTH
N A TIO N A L BANK
OF T H E
CITY
OF
NEW
YORK
This bank was founded in 1864 by a group of leading
New York citizens with the object of serving the
monetary and commercial interests of New York and
the country at large.
Throughout its history, a policy of safe, steady growth,
and association with some of the most eminent and
responsible factors in American financial and com
mercial life has been consistently maintained with
resultant success and satisfaction to its customers.
J A M E S G. C A N N O N ,
p r e s i d e n t
D A N I E L J. R O G E R S
S A M U E L S. C A M P B E L L
V I CE -P RE SI DE NT
C H A R L E S E. FOX
C H A S . H. P A T T E R S O N
V I CE -P RE SI DE NT
A S S T CAS HI ER
EDWIN T. ROSS
E R N E S T W. D A V E N P O R T
VICE-PRESIDENT
A S S ’T C A S H I E R
R A Y M O N D B. C O X
C H A R L E S E. M E E K
V I CE -P RE SI DE NT
CAPITAL
AND
SURPLUS,
XL1X
A S S ’T C A S H I E R
$1 0 , 0 0 0 , 0 0 0
T he C itizens C entral N ational B ank
OF NEW YORK
HE location of a banking institu
in New York City often
indicates the character of its
business; a bank situated in the
very heart of the great wholesale tex
tile district, and controlling a large
percentage of that class of trade, is
naturally in a position to extend outof-town clients unusual advantages.
T tion
T
he
C itizen s C e n t r a l N a t io n a l B a n k
is located on Broadway at Pearl and Worth Streets;
within a radius of a few blocks will be found a number
of the leading textile houses of the world, besides
hundreds of firms in other branches of trade, from
which this bank receives its patronage. The commer
cial character of its customers gives it a larger volume
of mercantile collection items on other cities and
towns than is handled by any other bank of its size
in New York.
This class of business makes it
profitable for banks throughout the country to carry
accounts with the C it iz e n s C e n t r a l .
C a p it a l
.
.
. $ 2,550,000
S u r p lu s a n d P r o f i t s
2,000,000
T o t a l R e s o u r c e s . 34,400,000
EDWIN S. SCHENCK, President
FRANCIS M. BACON, Jr.
Vice-President
ALBION K. C H A P M A N ............................................................. Cashier
L
Capital $1,0 00 ,0 00
Surplus $2,000,000
Profits $ 7 0 7 ,3 15 .7 0
The
Liberty National
Bank
o f N ew Y ork
139 Broadway, near Liberty Street
T h e h igh standing o f the men com posing the
Board o f D irectors o f this Bank is a guaran
tee o f its strength and ability to respond to
every reasonable demand that can be made
upon it.
D I R E C T O R S
Union N . Bechell
Howard W . Maxwell
V ice-P res. A m e ric a n T e l. and T e l. C o .
Newcomb Carlton
Vice-Pres. A tlas Po rtland C e m e n t C o .
Ambrose Monell
V ice-P res. W e ste rn U n io n T e l. C o .
George B. Case
President In te rn a tio n a l N ic k e l C o .
Daniel E. Pomeroy
W h i t e & Case
Edmund C . Converse
Vice-Pres. B ankers T r u s t C o .
Seward Prosser
President B ankers T ru st C o .
Otis H . Cutler
President
Daniel G . Reid
Pres. A m e r ic a n B rak e S hoe and F ’ dry C o .
Henry P. Davison
C h a ir . Board D ir e c ., R o c k Island System
Charles W . Riecks
J . P. M o rgan & C o.
Zoheth S. Freeman
V ice-P resident and C ashier
Charles H . Sabin
V ice-P resident
Samuel L. Fuller
V ice-P resident G u aran ty T ru s t C o .
Frederick B. Schenck
K isse l, K in n ic u t t & C o .
Thomas A . Gillespie
C h a ir m a n Board o f Directors
Charles H . Stout
President T h e T . A . G illespie C o .
Francis L. Hine
N ew Y o rk
Henry C. Tinker
Pres. First N a tio n a l B a n k , N e w Y o r k
Edward E. Loomis
N ew Y o rk
Charles H . Warren
V ice-P res. D e l. L a c k , and W e s t. R R . C o .
Arthur F. Luke
Treasurer M u t u a l L ife Insuranc e C o .
Albert H . Wiggin
L u k e , Banks & W eeks
President C hase N a tio n a l B a n k
Mercantile Accounts Invited
LI r
F O R E W O R D
□□□□□□ H E people of the United States today have before them the
□
□
h rt □
□ 1 D gravest problem s w hich have arisen in a generation. O f
□ JL □ these the m oney and banking question is regarded by m any
□
□
□□□□□□
of our m ost thoughtful men as the paramount one.
A plan
for the solution of this problem has been presented by the National
M onetary Commission, and is now before Congress and the people for
discussion.
Q l t is imperative that this problem be solved correctly, because it
involves the welfare of ev ery citizen, since every citizen uses m oney and
m ost of them use banks of one kind or another.
Q O u r m oney and banking system contains so m any defects that it can
not perform the functions properly, and the result is that w e have
periodic disturbances that destroy values and bring distress to the
m ass of our people.
Other people are not subject to the sam e condi
tions because th ey have m oney and banking system s w hich operate
properly and serve all interests.
Q It is obviously up to the bankers to see to it that the representatives
of the people in Congress are guided to a correct solution of the problem;
the bankers are supposed to know w h at is necessary.
Q A s a contribution to the study of the subject, the B A N K IN G L A W
J O U R N A L has undertaken to present a concise account of the m oney
system s of the principal civilized countries, in order that those w ho w ish
to learn how other people have solved the sam e or similar problems,
m ay do so.
A comparison of the means thus employed, and of the
resulting experience, w ill unquestionably be useful in reaching a conclu
sion as to our own needs.
G, It is proposed in this volum e to sh ow w hat w e have had in the past,
in the w a y of a m onetary system , w h a t w e now have, and w hat is
proposed for the future; discussing the proposed plans in the light of
the past experience both here and abroad.
Q Believing that the service thus tendered to bankers and others w ho
w ant to know h ow to m eet our problem intelligently, w ill be appre
ciated, the publishers of the J O U R N A L subm it this volum e, confident
that it w ill serve a useful purpose in the consideration of the subject.
W H E R E M O N E Y IS M A D E A N D W H E R E I T I S D E S T R O Y E D I N T H E B A N K O F F R A N C E .
i. W H E R E T H E N O T E S A R E P R I N T E D . 2 . C A N C E L I N G M A C H I N E S .
3. W H E R E T H E N O T E S A R E D E S T R O Y E D .
M O N E T A R Y
□□□□□□
□
□
□
A
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□
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S Y S T E M S
C O M P R E H E N SIV E study of Monetary Systems must include considera
tion of all the means of payment employed; hence not only coin and
paper-currency, but also checks— or more specifically deposit-currency—
must receive attention.
Coins
Excluding the subsidiary and minor coins from present consideration, the coin
systems of the world fall within one of the following classes :
1.
Gold Standard.
2.
Silver Standard.
3.
Gold and Silver Standard, but without coinage of silver.
4.
Gold Standard with Silver Currency.
Standard coins are those which are by law made legal tender in payment of debts
without limitation of the amount.
O f class one the chief examples are Great Britain and Germany, where gold
alone is standard money.
O f the second class China is the only important example; there gold is only
merchandise.
In the third class are included the United States and France; both gold and
silver coins are accepted as standard money.
In the fourth class Mexico and British India rank first; gold is the nominal
standard but silver is the actual money, at fixed value to gold.
In considering coinage the ratio between gold and silver was formerly an impor
tant point; it cuts no figure today, since standard silver coinage is not important.
The fineness of gold coins as well as their weight, are essential features in
determining value, because the grain (or gramme) of pure gold is the ultimate
measure thereof, at an equivalent rating throughout the world.
3
3
N O T E S O F T H E S E C O N D B A N K O F T H E U N IT E D ST A T E S
i. N O T E O F T H E P A R E N T B A N K , P H IL A D E L P H IA .
2. N O T E O F T H E N A S H V IL L E B R A N C H .
3. N O T E O F T H E N E W O R L E A N S B R A N C H .
THE
W O R L D ’S
PRINCIPAL
MONETARY
SYSTEMS
Paper Currency
Generally speaking the paper money of the world may be divided into three
classes:
1.
Bank Notes.
2.
Government Notes.
3.
Certificates of deposit for coin.
The fundamental reason for note-issues is the need for supplementing the coin
supply; when this purpose is adhered to, the use of notes is highly beneficial; when
it is not observed within proper limitations, evil results usually follow.
The United States has all three forms; most countries have only the first.
Bank notes are in most countries secured by reserves in coin, by law or practice.
Government notes are not always amply protected by coin. Coin certificates are
always fully covered.
Government notes are usually given full legal-tender power; bank notes possess
that power in a few countries.
Deposit Currency
In this category savings banks’ deposits are not included; only such deposits as
are subject to check must be considered.
Legal provisions calling for reserves against deposits exist in the United States,
Belgium, Austria-Hungary, and a few other countries.
In the other leading countries the practice is to hold reserves that are deemed
adequate for protection.
The need for such safeguards is evident, since the confidence of depositors must
be assured, to give the checks against deposits currency or debt-paying functions.
Reserve Requirements
Where reserve provisions exist, either pursuant to law or practice, and are con
sistently observed, the stability of the currency resting thereon is in large measure
assured. Nevertheless conditions bearing upon this feature of monetary systems
vary in different countries; and different methods are employed to bring about
such stability.
Stability is impossible where inflation is not adequately curbed, and undue
contraction is not properly prevented. The end to be attained is obviously to
adjust the volume of supply of both paper currency and deposit currency to the
demand. The rates for money here play an important role, and the less these
fluctuate the better will business interests be served.
5
C O N T IN E N T A L C U R R E N C Y 1776
F A C S IM IL E S O F C I R C U L A T IN G N O T E S O F T H E C O N T IN E N T A L C O N G R E S S . N O T E T H E S K E L E T O N O F L E A V E S
O N T H E B A C K T O P R E V E N T C O U N T E R F E IT I N G
Comparisons of Monetary Systems
F
undam ental
be
C
C
ond ition s
interest or discount rates v a r y quite exten
sively, the variation being properly char
acterized as geographic and seasonal.
A nother circum stance is th a t in the nature
of things our m ultitude of banks (27,000)
are in v e ry large part conducted b y men who
are not b y training or experience fu lly equal
to the requirem ents of the business in the
broader sense; in other countries where banks
are few, the m anagem ent is in the hands of
men specially trained to the duties.
In the developm ent of our system , such
as it is, there has been a decided leaning
tow ard preference to stock-m arket transac
tions, whereas in other countries com m ercial
needs are given m arked ad vantage. W e have
no organized m arket for com m ercial paper.
F in a lly we have as a handicap, conditions
created b y unwise legislation, both national
and state, producing confusion and erratic
results. O ur paper currency is hence lacking
in the chief essential to soundness, viz.:
e la sticity of volum e; and our credit currency,
represented b y deposits in banks, is so inade
q u a tely regulated th a t proper adjustm ent to
needs and conditions is impossible.
W e h ave thus, at tim es, inflation far beyond
reason; w hereas in other countries the adjust
m ent of sup ply to dem and is so m uch more
n early achieved, th a t there is brought about
a sta b ility of enorm ous service to trade.
It m ay hence be said th a t soundness and
sta b ility are the chief objects to be attained;
all other factors are sim ply contributory
thereto. E rra tic in sta b ility is the concen
trated result of the co-operation of all the
defects of our s y ste m ; unsoundness is a
necessary sequence. T h e correction thereof
should hence be our aim in devising measures
for the regeneration of the system .
No
plan which ignores this is w orth y of a tten
tion.
I t is to be added th a t since deposit-banking
is not extensive in a n y of the leading foreign
countries excepting G reat B ritain , C an ada
and A u stralasia, the problem s w hich arose
there related chiefly to currency issues, and
the ban k in g law s in those countries to d ay deal
p articu larly w ith th a t phase of the question.
In general it is essential to recognize the
close correlation of the note-issuing and
deposit-carryin g functions, giv in g due w eight
to differentiations due to local conditions.
T h e foregoing com m ents furnish a basis
fo r in telligent consideration of our problem
and of the means proposed for its solution.
to
onsidered
□□□□□□ N m akin g com parisons of the means
□
G
□ T C em ployed b y the nations of the
□
□
O w orld in the regulation of their
□
□ m on etary affairs, we m ust bear in
□□□□□□
I G
1
m ind those differences in fun da
m ental conditions which m ake the problem
of reform in the U n ited States one th at
differs essentially from those now or form erly
o btain in g abroad.
F irst and forem ost, the U n ited States is a
federated republic, in w hich 48 states are
possessed of co-ordinate pow er in the field
of ba n k in g legislation; hence there has grown
up a system of num erous sm all independent
banks, the like of w hich exists in no other
co u n try excep t Japan.
In alm ost e ve ry other im p ortan t coun try
bran ch b an k in g p revails, and the people of
e v e ry lo ca lity are thus w ell served, and pro
b a b ly m uch more econom ically than our
in d ivid u al b a n k system serves us.
I t thus happens th a t in m ost countries a
stron g central b an k w ith branches dom inates
the system ; th a t other banks are usually
la rg e ly cap italized and also operate through
branches. N o ta b le exceptions to this rule
are C a n ad a and M exico, b u t solely in the
p articu lar th a t no one b an k is leg ally con
stitu te d the dom inant one; a num ber of banks
w ith equal pow ers under the law s, m ake up
the system s, alth ou gh in each case one has
becom e the leader because of preponderance.
I t is fu rth er to be borne in m ind th a t no
co u n try excep t R ussia has a n y th in g like the
area and p o pu lation, and the diversified in ter
ests, th a t are found in the U n ited S ta te s; and
in the case of R u ssia this condition is not
significant.
I t is m anifest th a t needs are as diverse as the
conditions; v a s t regions still to be d evelop ed re
quire a different kin d of service from th a t w hich
is called for in the settled and developed ones;
agricu ltu re’s needs are not the sam e as those
of industrial and com m ercial interests.
I t is fu rth er to be considered th a t “within
the U n ited States the p ractice of fixed reserves
for banks is alm ost u n iversa lly app lied; this
exerts a pow erful influence upon conditions.
In other countries the p ractice varies, b u t it
is now here as rigid and as un iversally enforced
as our law s contem plate.
A n im p ortan t result of the conditions
a d verted to is th a t in the U n ited States
7
U N IT E D S T A T E S T R E A S U R Y , W A S H IN G T O N
The System of the United States
C
ting a mass of counterfeits) some $280,000,000.
Finally its value fell to one cent on the dollar.
It was unquestionably the worst currency the
country ever had. In 1790 Congress passed
an act offering to redeem this currency at the
rate mentioned (one per cent, of its face) but
it is not known how much was redeemed.
After the establishment of the Government
under the Constitution (1789) the currency
system had a checkered career. Beginning
with notes of a few state banks prior to 1791,
the United States provided for regulation by
creating a central bank in that year. It
served the purpose well, but as state banks
increased the regulative system chafed them
and when the charter of the United States
bank came to an end in 1811 renewal was
refused. This caused inflation of currency,
a crisis and distress; in 1816 the second
United States Bank was chartered, and in a
few years it had the currency well regulated.
Again this proper regulation proved irksome
to state banks, and the renewal of the charter,
expiring in 1836, was refused; inflation again fol
lowed when regulation disappeared, and the
crisis of 183 7 was the result. Political exigencies
defeated the carrying out of the people’s man
date in 1840 to create another central bank,
and for more than 20 years state banks furnished
all the paper currency, the greater part of which
was disgraceful, being depreciated and fluctuat
ing violently in value, often proving absolutely
worthless, because regulative reserve laws
were, in general, absent. Periodic inflation
and distressful results occurred.
The sub-treasury system under which the
Government held its own revenues and kept
its cash balances locked up, depriving the
people of the use of the money, was created
in 1840, perfected in 1846.
In the Civil War period the United States
undertook nationalization of the currency;
Government legal-tender notes were issued
in 1862, national bank notes were provided
in 1863-64; soon state bank notes disappeared
entirely. Having no reserve behind them
the Government notes depreciated, fluctuating
seriously; the bank notes being redeemable
in the “ greenbacks” also depreciated. But
in 1879 resumption of specie payments and
the creation of a $100,000,000 gold reserve
fund, brought them to par with gold.
For most of the period from 1836 to 1870
most of the currency of the people was as
unstable as water, giving no assurance of
value from day to day.
o in
H E coinage system of the United
States dates from the law of 1792
which established bi-metallism at
the ratio of 15 to 1; both gold and
silver were made legal tender. For
gold the British standard of .916 2-3 was
adopted; for silver the fineness was .892.4. In
1834 the gold coins were changed in weight.
In 1837 the silver dollar was changed in weight
to 4 1 2 ^ grains and the ratio to gold altered
to 15.988 (or nominally 16 to 1) and the
fineness of coins changed to .900. The change
in ratio was made to accord with the rest of
the world which had adopted higher rates.
An act of 1873 omitted the silver dollar
from the coinage without affecting its legaltender quality. In 1878 its coinage was
reinstated but in limited amounts. In 1890
the purchase of silver for coinage was in
creased, but repeated attempts to reach some
international agreement on silver having
failed, the acquisition of silver was stopped
in 1893. The bullion has been coined into
dollars, which now amount to $565,000,000.
In March 1900 an act was passed purport
ing to establish the gold standard, but it
merely decreed the maintenance of parity
between gold and silver and the silver dollar
remains a coin with full legal-tender powers.
A t present the standard is the theoretic
gold dollar of 25.8 grains .900 fine, hence
23.22 grains of pure gold, which gives a value
of $20,672 to the ounce of pure gold. The
silver dollar weighs 412.5 grains, and is also
.900 fine; the coinage rate for silver is thus
$1.2929 per ounce fine; but silver is worth
only 50 to 60 cents the ounce in the market.
Subsidiary silver is since 1853 coined at a
rating about 7 % below that of the standard
silver dollar, and is legal tender to $10 only.
P
aper
C
urrency
During the Revolutionary War both the
United States and the states (excepting New
Hampshire and Georgia) issued “ continental
currency,” or promises to pay, without any
coin behind them wherewith to redeem the
promises. In many states this currency was
made legal tender, and to refuse it in payment
was in some instances declared treason by
law. Nevertheless, it was issued so freely
that it depredated quickly and violently;
in all there was printed and circulated (omit
9
C O N T IN E N T A L C U R R E N C Y 1778
N O T E S O F T H E C O L O N Y O F N E W Y O R K 1776
THE
W O R L D ’S
PRINCIPAL
In 1864 the sub-treasury act was modified
so as to enable the deposit of the Treasury
balance in national banks, properly secured,
thus making the money available to trade.
Under an act of 1863, repeated in 1882
and in 1900, gold certificates, and in 1878
silver certificates, were provided for. In
1890 a new form of Treasury note to be
issued for silver purchases was authorized;
about $155,000,000 were issued; these have
since been almost entirely redeemed. In
1900 the gold reserve against greenbacks was
increased to $150,000,000.
The national bank notes are based upon
Government bonds; no reserve is held against
them; yet no one doubts their soundness.
The most far-reaching change in the original
law was that which authorized small banks
with minimum capital of $25,000 in 1900.
The direct money means hence consist of
gold, silver dollars and greenbacks, all full
legal tender; subsidiary silver of limited
tender; gold and silver certificates, not legal
tender but available for payment of all
Government dues and for bank reserves;
national bank notes, not legal tender but
receivable by the Government for internal,
taxes and by all banks; also available in
many of the states for reserves of banks.
The volume of silver dollars and certificates
and of greenbacks is now fixed by law; that
of national bank notes is determined largely
by the supply of bonds; gold (and gold cer
tificates) alone may be increased without
legal restrictions. It is noteworthy that the
legislation of 1900 served to bring us gold
so that the stock in the country increased
(1897-1912) by $1,000,000,000. Bank notes
also increased from $291,000,000 to about
$700,000,000 under the influence of that law.
D
e p o s it
C
urrency
Prior to the Civil War the character of
banking was largely currency-issuing; in more
recent years deposit-banking became domi
nant. It was imagined that state banks
deprived of note-issue powers (1865) could
not thrive; hence they nearly disappeared.
After 1874 a change took place and these
banks are now far more numerous than the
nationals. Still later trust companies as
sumed deposit-banking functions; and the
combined business of these two classes of
state institutions is today greater than that
of the national banks.
Since the reserve regulation of deposit
currency is an essential feature for safety and
stability, the fact that the vast amount of
MONETARY
SYSTEMS
this class of money-means is created under
48 different codes of laws, with equally variant
reserve systems, absolutely prevents that
uniformity which is necessary to a sound and
stable currency.
Inflation is the periodic result, and this
inflation of credit currency has been the main
factor in producing the crises from which the
people have suffered so severely.
Moreover the reserve laws, both national
and state, encourage the deposit of a large
part of the prescribed reserves of interior
banks in the banks in the centers; this causes
a congestion there, and incites improper stock
speculation, to the detriment of ordinary
commercial business. Hence when needs
arise the interior banks are short in their
means and the pressure for cash becomes
acute. Thus come our periodic panics, when
banks simply suspend cash payments, of
course in violation of law, and substitute
artificial currency of their own, (clearing
house certificates, etc.).
D
is c o u n t
R
ates
The discount rates in the United States must
be considered from two view-points: that
for “ call loans” generally secured by stock
exchange collateral ranging from Y2 Per cent,
per annum t o p e r cent, per day, or 182 per
cent.; and that for commercial loans and dis
counts, ranging from 4 per cent, to 12 per cent,
according to the distance from the financial
centers. In no other country is there such a
wide difference in normal periods, nor such a
violent fluctuation in abnormal ones.
After the panic of 1907 legislation was
enacted under which national banks may
obtain currency from the Treasury by de
positing commercial paper or securities and
paying a tax of 6 per cent. This would enable
them to continue discounting paper even in
case of a crisis. The measure has not been
availed of, and is concededly imperfect for the
complete regeneration of the system. A t the
same time (1908) a monetary commission was
created to study the subject and report adequate
remedies. This report, filed January 191 2,
recognizes the many defects in the system.
T
he
M
onetary
C
o m m is s io n
The Monetary Commission hence proposes
a comprehensive reform under which the
banks of the country, state and national, may
form district associations and become feder
ated in a National Association, through which
they may at all times be able to obtain cash
Courtesy of the Bank of N ew Y o rk , N . A .
C H E C K O F A A R O N B U R R , 1784
Cafhicr o f the Bank o f New-Tork,
Pay to
s:
_^____
N ew *Y ork, the.
f
,
!
C ourtesy of the Bank of N ew Y ork , N . A.
C H E C K O F T A L L E Y R A N D , 1795
A D t.
THE
W O R L D ’S
PRINCIPAL
upon commercial paper under certain regu
lations. It is in effect the creation of a central
bank with certain limited powers. Thus its
shares may be owned only by banks and it
may do business only with banks and the
Government, except as to international busi
ness, which is to be done mainly for the pur
pose of protecting the gold supply.
The purpose in view is to render impossible,
hereafter, the country-wide suspension of cash
payments by banks entirely solvent, in a
period of panic or other disturbance.
Briefly stated the individual banks are to
deposit cash reserve with the National Asso
ciation; national banks are to surrender their
note-issuing powers to the Association; it is
to hold 50 per cent, reserves against deposits
and notes, and to discount paper for the indi
vidual banks freely. It is also contemplated
that it shall fix the discount rate from time to
time, uniform throughout the land. To restrain
note-issues a system of graduated taxing of
notes is provided for, which may reach 5 per
cent, or even 9 per cent, in certain contin
gencies. This, it is assumed, will furnish the
restraint; .but it is also provided, as a final
safeguard, that when the reserves fall to 3 3 ^
per cent, all note-issuing shall cease until the
reserve is restored.
Fallowing this brief review of our monetary
tory, a discussion of details is in order.
A
n t e -Be l l u m
B
a n k in g
S
ystems
A critical examination of the Constitution
of the United States justifies the view that the
Federal Government has the sole power of
regulating all matters relating to money.
Congress has the exclusive power to “ coin
money, regulate the value thereof and of for
eign coin” and to “ fix the standards of weights
and measures” (Art. I, sec.-8, cl. 5); the states
I are prohibited from emitting “ bills of credit”
and making ‘ ‘anything but gold and silver a ten> der in payment of debts ” (Art. I, sec. 10, cl. 1).
Hamilton, the first Secretary of the Treas
ury, accomplished the purpose by establishing
the first Bank of the United States (1791),
despite opposition of Jefferson and his party,
who favored the state banking method. The
plan worked out so admirably that Gallatin
and many other Jeffersonians had to concede
the wisdom of Hamilton. Y e t the opposition
succeeded in defeating the continuation of the
Bank in 1811; then the state system proved its
total inadequacy and the second Bank of the
United States was chartered in 1816.
The constitutionality of the second charter
owas attacked, but the Supreme Court upheld
MONETARY
SYSTEMS
it. Later the right of states to charter issue
banks was questioned, but the Supreme Court
refused to deny them that power. That deci
sion brought vicious results.
A perusal of the history of state banking
brings home to us the remarkable incapacity
of the states to deal properly with the subject.
Thousands of banks were chartered to issue
notes in various ways, and only comparatively
few, in the early days, were anything but bare
faced swindling concerns, empowered to mulct
the people, under apparent obedience to socalled banking laws.
The only explanation of the tolerance of the
people of these conditions is found in the dire
need for currency of some sort, in the rapidly
developing new sections of the country. Any
thing that would pass was employed until the
value depreciated to a small fraction on the
dollar, or was lost entirely.
In many cases the people did resent the im
position; in the older states the laws were
gradually improved; in some of the others the
constitutions were amended to prohibit issue
banks, and other measures were adopted; but
the evil continued very largely until the statebank currency was taxed out of existence by
Congress in 1865-6; for while a considerable
proportion of the notes were by that time
really sound, there were millions of dollars of
fluctuating value, some worth only 50 per
cent, of their face.
In some of the states note-issues on the simple
credit of the banks was permitted; in others
securities had to be deposited. In some cases
the amounts were limited to capital; in others
the amount might be several times the capital.
In most cases where credit-backing alone ex
isted it proved useless; there was no compul
sory redemption of notes actually enforced in
most of the states. Capital was frequently
not paid in with money. Securities deposited
were frequently partly or wholly valueless.
In many cases the states endeavored to
remedy matters by creating state-controlled
banks, but few of these were successful. Of
exceptional merit was the Indiana State Bank.
In Massachusetts leading banks established
what was known as the “ Suffolk Bank System
by which the banks themselves provided regu
lation which the law failed to give; they re
quired banks to redeem their notes or take the
consequences of being placed in default. It
was the regulative principle applied to that
section of the country and made New England
currency sound and stable.
It is noteworthy that no actual reserve laws
were passed anywhere until 1842, and Louisiana
Courtesy of the Girard National Bank
B U I L D I N G E R E C T E D BV T H E F IR S T B A N K O F T H E U N IT E D S T A T E S 1795
Now t h e H o m k o f t h e G ir a r d N a t io n a l B ank.
O n e o f P h il a d e l p h i a ’s H is t o r ic a l S p o t s .
THE
W O R L D ’S
PRINCIPAL
has the credit for this first law; and the results
thereof were also creditable.
T
he
C
entral
R
e g u l a t in g
F
SYSTEMS
charge, and regulated the foreign exchanges so
as to protect the coin reserves. The appended
statement of its condition in 1832, shows that
had it been continued, with such changes in
its charter as were found desirable, it would
today be the greatest financial institution in
the world; and it may safely be said that it
would have provided us with a system under
which the panics that destroyed thousands of
millions of dollars of values would have been
obviated.
A statement of the condition of the Bank
of Eiigland of almost identical date, follows,
amounts converted into dollars.
The banking power of the United States in
1832 was about $250,000,000; today it is nearly
$20,000,000,000. The Bank of England in
1832 reported $220,000,000 of resources; today
it reports $680,000,000. It is obvious that if
the central-bank system here had developed
with the country, our Bank would have been a
larger and stronger institution than Great
Britain’s central bank.
eature
The destruction of the central bank regu
lation was an economic blunder, attributable
to President Jackson, who killed the second
Bank of the United States (1836) despite the
fact that committees in Congress, then dom
inated by his own party, showed conclusively
that the Bank was furnishing the best possible
currency system; indeed, the country has never
had so sound and stable a system since.
But the wrong done the people by President
Tyler was more grave; he refused to approve
bills passed by Congress pursuant to the vote
of the people in 1840 for the re-establishment
of the system, although he had been elected
upon a platform pledging such action.
The only step taken by the Federal Govern
ment was to protect its own cash, with which
it would not trust the state banks after losing
millions in the defaults of 1837; it provided the
sub-treasury system, made its revenues payable
in coin, and often had so much coin thus locked
up that the banks could not get the cash for
their reserves.
In order to show how the central regulation
was provided for, the charter of the second
bank of the United States is presented upon
other pages. That of the first Bank was quite
similar in form. It will be noted that the
Government had a direct interest in the capital
and the management.
The operations of the Bank were in general
conducted for the benefit of the whole country.
Its notes alone were receivable for Government
dues, but it arranged to receive the notes of the
state banks for such payments (which were
for that time very large), at its branches all
over the country, provided that the state banks
kept the notes good; that is to say, redeemed
them on demand and for that purpose kept
some coin on hand. Some of the state banks
rebelled against this; they wanted to redeem
their promises to pay or not redeem them, as
they pleased; but business judgment finally
brought them around and so the currency be
came sound.
The Bank made it a special duty to issue
notes freely in those sections of the country
not supplied with banking facilities; thus, by
far the greater part of its circulation was in the
new South and West, and it helped to develop
those regions as they were never helped before,
and relatively speaking they have not had
similar help since.
It did the Government’s business free of
MONETARY
O
p in io n s
B
ank
of
the
of t h e
U
U
t il it y
n it e d
of
the
S tates
Secretary of the Treasury, 1828.
(Whig).
It is the preservation of a good currency
that can alone impart stability to prosperity
and prevent those fluctuations in its value,
hurtful alike to individual and to national
wealth. This advantage the Bank has secured
to the community. The state banks following
or controlled by its example have shaped their
policy towards the same salutary ends, adding
fresh demonstrations to the truth that under
the mixed jurisdiction and powers of the state
and national systems of government, a national
bank is the instrument alone by which Con
gress can effectively regulate the currency of
the Nation.
S e n a t e C o m m itte e , 1829. (Democrat).
This seems to present a state of currency
approaching as near to perfection as could be
desired; for here is a currency issued at twentyfour different parts of the Union, obtainable by
any citizen who has money or credit. It is not
easy to imagine, it is scarcely necessary to
desire, any currency better than this.
H o u s e C o m m itte e , 1830. (Democrat).
One of the most important purposes which
the Bank was designed to accomplish, and
which it is confidently believed no other human
agency could have effected, under our federa
tive system of government, was the enforce
ment of specie payments on the part of the
numerous local banks, deriving their charters
R ic h a r d R u sh ,
*5
B U I L D I N G E R E C T E D B Y T H E S E C O N D B A N K O F T H E U N I T E D S T A T E S IN 1823,
W ALL STREET, N EW YORK
S E C O N D B A N K O F T H E U N IT E D S T A T E S , P H I L A D E L P H I A
B U I L D I N G E R E C T E D J O I N T L Y B Y T H E S E C O N D B A N K O F T H E U N IT E D ST A T E S
A N D T H E P H I L A D E L P H I A B A N K I N 1837.
THE
W O R L D ’S
PRINCIPAL
from the several states, and whose paper, irre
deemable in specie and illimitable in quantity,
constituted the almost entire currency of the
country. Their bills, in the respective spheres
of their circulation are of equal value with gold
and silver.
G a lla tin
{then president of a state bank),
MONETARY
SYSTEMS
that a single solvent bank has been injured by
that of the United States.
In gh a m ,
Jackson's Secretary of Treasury,
1832.
(Democrat).
The Bank has purified one of the worst cur
rencies that ever infested any country or people,
has given us the best currency known among
nations, equal with gold and silver in every
part of the Union. It preserves a uniform
value in the paper of the local banks, gives
stability to the value of all property, to the
incalculable benefit of commerce; maintains
domestic exchanges at less premium than it
would cost to transfer specie.
1830.
(Democrat).
The general complaint on the part of many
of the state banks that they are checked and
controlled in their operations by the Bank of
the United States is the best evidence that its
general operation is such as had been intended.
It was for this very purpose that the Bank
was established. We are not aware, however,
STATEMENT OF THE BAJtfK OF THE UNITED STATES
M a r c h 2, 1832
A ssets
L ia b il it ie s
Capital stock.......................................
Notes issued........................................
Discount, exchange and interest..........
Foreign-exchange account....................
Due foreign bankers............................
Dividends unclaimed...........................
Profit and loss.....................................
Contingent fund............ $5,613,346.20
Less losses chargeable to
contingent fu nd .. 3,477,737-29
Bills discounted on—
Personal security. .$45,850,367.27
620,766.14
Bank stock...........
Other stocks......... 2,145,895.20
48,617,028.61
Domestic bills of ex
change..................... 20,354,748.79
---------Foreign bills of exchange...................
$68,971,777.40
91,238.23
Due from—
Bank United States
and offices......... 29,288,810.19
State banks.......... 3,752,822.73
—-------------
United States.............................
Real estate.........................................
Deficiencies............. .......................
Banking houses..................................
Expenses............................................
Cash, viz:
Notes of bank Uni
ted States......... 18,401,011.03
Notes of state
banks................ 2,836,900.40
Specie................... 6,799,753.63
---------Mortgages........................................
Navy agent, Norfolk.........................
$35,000,000.00
42,118452.13
855,958.17
371,610.55
1,876,802.39
166,432.73
1,750,263.52
2,135,608.91
Due to—
Bank United States
and offices........... 28,461,352.88
State banks............
2,600,270.50
33,041,632.92
31,061,623.38
5,267.32
2,131,359.64
122,973.18
1,163,691.92
106,720.02
Fund for extinguishing cost of banking
houses.......................................
Redemption of public debt..................
551,292.05
857,613.12
Deposits, viz:
On account of Treas
urer U. S............. 6,781,114.55
Less overdrafts and
special deposits...
260,976.99
28,037,665.06
89,573-78
40,144.17
Of public officers. ..
Of individuals........
6,520,137.56
1,719,489.32
8,816,759.81
17,056,386.69
$133,802,043.64
$133,802,043.64
N o t e .—The items due from the Bank and its offices, and notes on hand in cash, are in a sense duplications ;
so that the net total would be about $82,800,000.
STATEMENT
O F THE BANK O F
F e b r u a r y 29, 1832
A sset s
ENGLAND
L ia b il it ie s
Advances to Government—Ordinary.......... $20,675,000
—Special.............
54,489,000
45,834,000
Discounts and loans...................................
Government securities................................
73,434,000
Cash...........................................................
26,465,000
Capital........................................................ $72,765,000
Surplus........................................................ 13,189,000
Notes.......................................................... 90,258,000
Public deposits............................................ 15,993,000
Private deposits.......................................... 28,692,000
Total................................................$220,897,000
Total................................................ $220,897,000
17
THE
W O R L D ’S
PRINCIPAL
D a n i e l W e b s te r , 1836. (Whig).
It has reformed the currency, sustained it
when reformed, and upheld a system of internal
exchange, safe, cheap, and of unprecedented
and unparalleled facility. No country has
seen the like; nor shall we see it soon again
when the operations of the Bank shall cease.
L in c o ln , 1839. (Whig).
We do not pretend that a national bank can
establish and maintain a sound and uniform
currency in the country in spite of the national
government, but we do say that is has estab
lished and maintained such a currency, and
can do so again, by the aid of that government;
and we further say that no duty is more im
perative on that government than the duty it
owes the people of furnishing them a sound and
uniform currency.
T
he
N
a t io n a l
S
ystem
The nationalization of our currency during
the Civil War period was a wise policy poorly
executed. The issue of United States legaltender notes, without providing for redemption,
was the worst featuYe; it was followed after the
War by a repudiation of distinct pledges for
their redemption. Thus the fluctuating, hence
cheating, currency of the ante-bellum period
was continued in another form until resump
tion in 1879. These “ greenbacks” continue
part of our currency today although clearly
improper; they are rendered fairly safe by the
$150,000,000 reserve fund, as the amount is
limited by law to $346,616,000; nevertheless
they constitute a possible menace to the sta
bility of the system.
While the national bank system was largely
created to help the Government sell its bonds,
it has distinctly admirable features justifying
its creation, in the absence of central bank
regulation. It provided bank notes of uniform
value, although they were also depreciated
until 1879, being redeemable only in depre
ciated greenbacks. The bonds required to be
deposited to secure notes assured their redemp
tion in case of failure. But since the profit
depends upon the price of Government bonds,
note-issuing has never been in response to
business needs; the system lacks elasticity; of
ten more notes are issued when business needs
are slack, and vice versa. The only sound
theory of bank-note issues is that they shall
come into existence as business needs arise, and
be withdrawn when the needs pass. As our
system does not so respond, it causes periodic
inflation.
It was attempted to correct some defects in
the legislation of 1900; small banks, with cap
MONETARY
SYSTEMS
ital $25,000 were authorized for smaller com
munities; a 2 per cent, bond issue was provided
for, but in a manner that has proved unsatis
factory. The net result has been to extend
the national banking system— a good feature—
and to inflate the currency— a bad one.
But as a banking instrumentality the na
tional system is entitled to high credit; it em
bodies the best principles to govern the business
yet devised for the country. The defects there
in relate almost entirely to the reserve require
ments. Thus the provision that “ country”
banks, by far the most numerous, must have
15 per cent, reserves but may have 9 per cent,
in “ reserve” banks; that reserve banks except
those in the three chief centers must hold 25
]per cent, but may have half thereof on de
posit in the “ central reserve” banks where 25
per cent, all in cash must be held, operates de
fectively.
On the one hand it tends to concentrate cash
in the centers under conditions that make it
imperative to loan the greater part in the spec
ulative market; on the other hand by holding
a rigid “ dead line” on the banks, loaning is
curtailed at the very times when it is needed
most.
It thus happens that in case of stress many
banks, entirely solvent, are compelled to sus
pend operations; unable to get their cash back
from the centers without great pressure, result
ing in a stock market “ squeeze,” and unable
to use their unquestionable assets by way of
rediscounts, as is done in Europe, they are tied
up.
The practice, unauthorized by law, of using
such assets with clearing-house associations to
serve as backing for the issue of a quasi-cur
rency (clearing-house certificates), suggested
(1) the law of 1908, under which national banks
may obtain currency from the Government on
deposit of commercial paper and securities
other than Government bonds; and (2) the
Monetary Commission’s plan already referred
to.
If we can thus substitute for the present
bank-notes, almost fixed in amount, an issue
which will adapt itself as to volume to the
changing needs; and if we regulate the reserve
to be held by the central issuing institution so
that instead of being rigid it will be sufficiently
elastic to adapt itself to conditions; and if we
thus make available an ample supply of cur
rency to meet the call of all our banks; we shall
have solved the problem before us. But there
are still many features in the measure proposed
for the solution that do not serve the end in
view, hence the plan requires amendment.
THE
D
W O R L D ’S
PRINCIPAL
SYSTEMS
lars where necessary to accomplish the purpose.
It is definitely set forth that there is to be no com
petition with individual banks, for business in
any sense, on the part of the central institution.
A further purpose in view is the equalization
of discount rates by empowering the central
institution to fix a uniform rate. This may
eventually be accomplished, but the extent of
the country, the diversified interests, the un
equal distribution of the supply of capital and
banking facilities, will prevent the realiza
tion of this desirable end for some time.
e p o s it -Cu r r e x c y
It is within the mark to say that this form
of our money-means requires the closest atten
tion in devising correctives for existing evils.
The Comptroller of the Currency’s reports in
dicate that the commercial deposits of the
country have grown to $12,500,000,000; mu
tual savings banks’ deposits aggregate $3,500,000,000 more; against all this vast liability the
cash reserves are $1,451,000,000, or an average
of a trifle over 9 per cent. When by reason of
business expansion, proper and improper, the
volume of these obligations expands without
a corresponding increase in cash, the result un
der the existing system is certain to be dis
astrous, as was shown in 1907. In that year
the deposits aggregated $13,100,000,000, and
the cash $1,113,700,000, or only 8 per cent.
It is not contended that the reserve cash of
the country is too slender if other conditions
prevailed; but with 27,000 individual, and for
the most part isolated, banks, it is not adequate
for a crisis. Therefore the problem involves
the utilization of the country’s reserves so as
to effectively protect the credit of the banks.
This the reform plan proposes to do by con
centrating a substantial part of the reserve
gold and issuing the central institution’s notes
to double the amount of this gold, which notes
are to be available for reserves, and in case of
need the volume of notes may be expanded to
three-fold the gold reserve.
But an equally important feature is that
which contemplates that local banks’ reserves
shall be made uniform by legal regulation,
instead of having 48 different regulative codes.
Moreover, the central institution as the creditextender to the individual banks, is to exercise
a certain degree of supervision over them; this
is calculated to restrain undue expansion of
liabilities through the creation of loans beyond
the proper commercial demands; it being, how
ever, recognized in the plan that all such proper
demands are to be met without question, as
the prime function of the reformed system.
In order to accomplish the purpose in view
it is obviously necessary to include in the
regulation all banking institutions; for since
those of them chartered by the states are at
present preponderant, so far as their deposit
functions go, the country would not be ade
quately served if more than half of the depositcurrency were outside the regulative influences
designed to bring about uniformity.
Hence it is contemplated to extend the system
proposed over all institutions, ignoring for the
specific end in view all state lines and state laws;
yet superseding the latter only in those particu
MONETARY
T
he
M
onetary
C
o m m is s io n
B
il l
In principle the bill of the Monetary Com
mission manifestly offers the correct solution
to our problems. As it stands, it is, however,
defective in these particulars:
1. It excludes thousands of small banks, which
need its support as much as the larger ones.
2. It calls for too large capital contributions
from the banks.
3. It does not permit sufficient participation
to the Government, i. e. the people, in
the management.
4. It does not adequately prevent undue
expansion, the chief present danger.
5. It provides for fixing a uniform discount
rate, which is impracticable.
6. It does not firmly place the central insti
tution upon the gold basis.
7. It imposes an unreasonable burden upon
the banks to retire the 2 per cent, bonds
now held to secure note-issues.
A very important function not yet referred to is
that of regulating the foreign exchanges,for which
the central institution is given ample powers.
This will result in affording adequate protection
to our gold supply upon which the reserves, and
hence the stability of the structure, depend.
If the plan is properly perfected it is quite
certain that it will provide practically insurance
to all solvent banks against suspension in
panicky periods and enlarge their capacity for
service in their communities; yet this may not
constitute sufficient inducement to bring all
the banks into the association.
Since, however, such a plan will unquestion
ably be of enormous service to the Nation, not
merely to business, but to all the people, it is to
be hoped that aside from altruistic, patriotic
motives, there may be other inducements which
will serve to assure its adoption when perfected.
It should be said that the practice of
branch banking, so generally and successfully
conducted in other countries, is out of the
question here, as it would destroy the system
of individual banks, which has come to stay.
*9
TH E
W O R LD 'S
PRINCIPAL
MONETARY
SYSTEMS
BANKING STATISTICS, UNITED STATES
i.
D e p o s it s a n d C a s h i n A l l B a n k s ,
1861-191 i
1861
Private Banks.........................................................
Total............................................................
Cash.....................
..................................
( in M il l io n s o f D o l l a r s )
1871
1881
1891
1901
1535
557
355
95
2941
1611
1271
119
1911
296
602
100*
150*
S° I
190*
1032
261
112
242
446
942
651
1647
892
2542
1655
5942
147
2518
11694
4212
593
1593
2539
4197
8460
15906
9° t
*5
194
12.2
11.6
479
795
9-4
1545
295
11.4
5478
2778
3296
142
9.7
* No statistics; amounts estimated.
t Includes stock savings banks part of which are commercial deposits.
£ This included cash reserves against notes also, hence the high ratio.
The decrease in the ratio of cash is quite marked.
II.
S ig n if ic a n t
F e a t u r e s , in
1901
and
1911
(A m o u n t s in
M il l io n s o f
D ollars)
These figures are from mid-year reports.
1901
State
Batiks
Trust
Co.’s
4,983
1911
National
Banks
Totals
State
Banks
Trust
Co.’s
National
Banks
334
4,165
9,482
12,864
1,251
7,277
21,392
137
646
2,942
1,207
319
1,038
4,824
453
5,478
1,330
3i 9
145
386
3,296
319
1,020
2,778
” 5
1,271
8
2,147
682
1,859
i i ,552
2,611
682
Aggregates..............................
2,161
1,615
5,676
9,452
3,748
4,665
10,383
18,796
Loans......................................
Securities................................
Due from Banks.....................
Cash........................................
1,184
242
3i 4
940
2,957
876
788
2,439
192
5,o8i
i, 5i 4
1,284
175
25
536
736
2,429
1,115
618
270
5,6n
i ,753
1,377
949
10479
3,183
2,521
Number..................................
Capital....................................
Deposits..................................
Due Banks..............................
Notes....................................
255
1,611
396
The increase in the trust companies’ business is noteworthy.
20
I
j
!
315
526
237
Totals
1,453
THE
W O R L D ’S P R IN C IP A L
B A N K IN G
III.
N a tio n a l
Banks
by
MONETARY
STATISTICS, U N IT E D
Classes, 1901
and
191 i
SYSTEMS
STATES — Continued
(A m o u n ts
in
M illio n s
July, 1901
Due to Banks.
Securities...........
Due from Banks.
Cash...................
Reserve
Banks
Central
Reserve
1,468
127
1,523
i, 3 i 5
476
707
446
1,006
1,081
634
I
797
845
;
212
270
129
2,460
1,515
8 . 7%
12.9%
D o lla r s )
June, 1911
Country
Banks
396
133
of
Reserve
Banks
767
188
122
25-4 %
1,05°
3.091
242
3,i6o
2,776
1,014
618
244
i ,337
856
1,849
1,496
406
246
456
i
4,903
2,880
2,600
!
7-7%
274
1,700
Central
Reserve
557
13-3%
1,049
1,680
i ,339
333
202
27-1%
*
“ Net Deposits” signifies deposits plus amounts due banks, less amounts due from banks (not reserve agents)
and checks on other banks; this is the basis for the reserve calculation under the law.
Charter of the Second Bank of the United States
[Fourteenth Congress, first session, chapter 44.
1816.]
An act to incorporate the subscribers to the Bank of the United States.
A bank of the
United Stales,
with a capital of
$35,000,000, etc.
Places, etc., for
receiving sub
scriptions.
Places, etc., for
receiving sub
scriptions, etc.
Be it enacted by the Senate and House of Representatives of the United States of America, in
Congress assembled, That a bank of the United States of America shall be established, with a
capital of thirty-five millions of dollars, divided into three hundred and fifty thousand shares,
of one hundred dollars each share. Seventy thousand shares, amounting to the sum of seven
millions of dollars, part of the capital of the said bank, shall be subscribed and paid for by the
United States, in the manner hereinafter specified; and two hundred and eighty thousand shares,
amounting to the sum of twenty-eight millions of dollars, shall be subscribed and paid for by
individuals, companies, or corporations, in the manner hereinafter specified.
Sec . 2. And be it further enacted, That subscriptions for the sum of twenty-eight millions of
dollars, towards constituting the capital of the said bank, shall be opened on the first Monday in
July next, at the following places: that is to say, at Portland, in the District of Maine; at Ports
mouth, in the State of New Hampshire; at Boston, in the State of Massachusetts; at Providence,
in the State of Rhode Island; at Middletown, in the State of Connecticut; at Burlington, in
the State of Vermont; at New York, in the State of New York; at New Brunswick, in the State
of New Jersey; at Philadelphia, in the State of Pennsylvania; at Wilmington, in the State of
Delaware; at Baltimore, in the State of Maryland; at Richmond, in the State of Virginia; at
Lexington, in the State of Kentucky; at Cincinnati, in the State of Ohio; at Raleigh, in the
State of North Carolina; at Nashville, in the State of Tennessee; at Charleston, in the State of
South Carolina; at Augusta, in the State of Georgia, at New Orleans, in the State of
Louisiana; and at Washington, in the district of Columbia. And the said subscriptions shall be
opened under the superintendence of five commissioners at Philadelphia, and of three commis
sioners at each of the other places aforesaid, to be appointed by the President of the United
States, who is hereby authorized to make such appointments, and shall continue open every
day, from the time of opening the same, between the hours of ten o’clock in the forenoon and four
o’clock in the afternoon, for the term of twenty days, exclusive of Sundays, when the same shall
be closed, and immediately thereafter the commissioners, or any two of them, at the respective
places aforesaid, shall cause two transcripts or copies of such subscriptions to be made, one of
which they shall send to the Secretary of the Treasury, one they shall retain, and the original
they shall transmit, within seven days from the closing of the subscriptions as aforesaid, to the
commissioners at Philadelphia, aforesaid. And on the receipt of the said original subscriptions,
or of either of the said copies thereof, if the original be lost, mislaid, or detained, the commis
sioners at Philadelphia aforesaid, or a majority of them, shall immediately thereafter convene,
and proceed to take an account of the said subscriptions. And if more than the amount of
twenty-eight millions of dollars shall have been subscribed, then the said last mentioned com
missioners shall deduct th£ amount of such excess from the largest subscriptions, in such manner
as that no subscription shall be reduced in amount, while any one remains larger: Provided,
That if the subscriptions taken at either of the places aforesaid shall not exceed three thousand
shares, there shall be no reduction of such subscriptions, nor shall, in any case, the subscriptions
taken at either of the places aforesaid be reduced below that amount. And in case the aggregate
THE
R eg u la tion s
concerning sub
scriptions and
payments
on
them, etc.
April 10, 1806,
ch. 22.
.R easonable
compensation to
the commissioners.
The United
States may redeem
the funded debt,
etc., and the bank
may sell for gold
and silver, etc.
W O R L D ’S
PRINCIPAL
MONETARY
SYSTEMS
amount of the said subscriptions shall exceed twenty-eight millions of dollars, the said last men
tioned commissioners, after having apportioned the same as aforesaid, shall cause lists of the
said apportioned subscriptions, to be made out, including in each list the apportioned subscription
for the place where the original subscription was made, one of which lists they shall transmit to
the commissioners or one of them under whose superintendence such subscriptions were originally
made, that the subscribers may. thereby ascertain the number of shares to them respectively
apportioned as aforesaid. And in case the aggregate amount of the said subscriptions made
during the period aforesaid, at all the places aforesaid, shall not amount to twenty-eight millions
of dollars, the subscriptions to complete the said sum shall be and remain open at Philadelphia
aforesaid, under the superintendence of the commissioners appointed for that place, and the
subscriptions may be then made by any individual, company, or corporation, for any number
of shares not exceeding, in the whole, the amount required to complete the said sum of twentyeight millions of dollars.
Sec . 3. And be it further enacted, That it shall be lawful for any individual, company, cor
poration or state, when the subscriptions shall be opened as herein before directed, to subscribe
for any number of shares of the capital of the said bank, not exceeding three thousand shares,
and the sums so subscribed shall be payable, and paid, in the manner following; that is to say,
seven millions of dollars thereof in gold or silver coin of the United States, or in gold coin of
Spain, or the dominions of Spain, at the rate of one hundred cents for every twenty-eight grains
and sixty hundredths of a grain of the actual weight thereof, or in other foreign gold or silver coin
at the several rates prescribed by the first section of an act regulating the currency of foreign
coins in the United States, passed tenth day of April, one thousand eight hundred and six, and
twenty-one millions of dollars thereof in like gold or silver coin, or in the funded debt of the
United States contracted at the time of the subscriptions respectively. And the payments made
in the funded debt of the United States, shall be paid and received at the following rates: that is
to say, the funded debt bearing an interest of six per centum per annum, at the nominal or par
value thereof, the funded debt bearing an interest of three per centum per annum, at the rate of
sixty-five dollars for every sum of one hundred dollars of the nominal amount thereof, and the
funded debt bearing an interest of seven per centum per annum, at the rate of one hundred and
six dollars and fifty-one cents, for every sum of one hundred dollars of the nominal amount
thereof; together with the amount of the interest accrued on the said several denominations of
funded debt, to be computed and allowed to the time of subscribing the same to the capital of
the said bank as aforesaid. And the payments of the said subscriptions shall be made and
completed by the subscribers, respectively, at the times and in the manner following; that is
to say, at the time of subscribing there shall be paid five dollars on each share, in gold or silver
coin as aforesaid, and twenty-five dollars more in coin as aforesaid, or in funded debt as afore
said; at the expiration of six calendar months after the time of subscribing, there shall be paid
the further sum of ten dollars on each share, in gold or silver coin as aforesaid, and twenty-five
dollars more in coin as aforesaid, or in funded debt as aforesaid; at the expiration of twelve
calendar months from the time of subscribing, there shall be paid the further sum of ten dollars
on each share in gold or silver coin as aforesaid, and twenty-five dollars more, in coin as afore
said, or in funded debt as aforesaid.
Sec . 4. And be it further enacted, That at the time of subscribing to the capital of the said
bank as aforesaid, each and every subscriber shall deliver to the commissioners, at the place of
subscribing, as well the amount of their subscriptions respectively in coin as aforesaid, as the
certificates of funded debt, for the funded debt proportions of their respective subscriptions,
together with a power of attorney, authorizing the said commissioners, or a majority of them,
to transfer the said stock in due form of law to “ the president, directors, and company of the
bank of the United States, ’ ’ as soon as the said bank shall be organized. Provided always, That
if, in consequence of the apportionment of the shares in the capital of the said bank among the
subscribers, in the case, and in the manner, herein before provided, any subscriber shall have
delivered to the commissioners, at the time of subscribing, a greater amount of gold or silver coin
and funded debt than shall be necessary to complete the payments for the share or shares to
such subscribers; apportioned as aforesaid, the commissioners shall only retain so much of the
said gold or silver coin, and funded debt, as shall be necessary to complete such payments, and
shall, forthwith, return the surplus thereof, on application for the same, to the subscribers law
fully entitled thereto. And the commissioners, respectively, shall deposit the gold and silver
coin, and certificates of public debt by them respectively received as aforesaid from the sub
scribers to the capital of the said bank, in some place of secure and safe keeping, so that the same
may and shall be specifically delivered and transferred, as the same were by them respectively
received, to the president, directors, and company, of the bank of the United States, or to their
order, as soon as shall be required after the organization of the said bank. And the said com
missioners appointed to superintend the subscriptions to the capital of the said bank as aforesaid,
shall receive a reasonable compensation for their services respectively, and shall be allowed all
reasonable charges and expenses incurred in the execution of their trust, to be paid by the presi
dent, directors, and company, of the bank, out of the funds thereof.
Sec . 5. And be it further enacted, That it shall be lawful for the United States to pay and
redeem the funded debt subscribed to the capital of the said bank at the rates aforesaid, in
such sums, and at such times, as shall be deemed expedient, anything in any act or acts of Con
gress to the contrary thereof notwithstanding. And it shall also be lawful for the president,
directors, and company, of the said bank to sell and transfer, for gold and silver coin, or bullion,
the funded debt subscribed to the capital of the said bank as aforesaid: Provided always, That
22
THE
The Secretary
of the Treasury to
subscribe on behalf
of the United
States, etc.
The subscribers
to the bank incor
porated, etc.
Corporate name
Twenty-five
directors;five to be
appointed by the
president, etc.
Regulations
concerning the di
rection ofthe bank,
etc.
Manner a n d
time of the banks
going into opera
tion, etc.
W O R L D ’S P R I N C I P A L
MONETARY
SYSTEMS
they shall not sell more thereof than the sum of two millions of dollars in any one year; nor
sell any part thereof at any time within the United States, without previously giving notice
of their intention to the Secretary of the Treasury, and offering the same to the United States
for the period of fifteen days, at least, at the current price, not exceeding the rates aforesaid.
Sec . 6. And be it further enacted, That at the opening of subscription to the capital stock
of the said bank, the Secretary of the Treasury shall subscribe, or cause to be subscribed, on
behalf of the United States, the said number of seventy thousand shares, amounting to seven
millions of dollars, as aforesaid, to be paid in gold or silver coin, or in stock of the United States,
bearing interest at the rate of five per centum per annum; and if payment thereof, or of any part
thereof, be made in public stock, bearing interest as aforesaid, the said interest shall be payable
quarterly, to commence from the time of making such payment on account of the said sub
scription, and the principal of the said stock shall be redeemable in any sums, and at any periods,
which the Government shall deem fit. And the Secretary of the Treasury shall cause the certi
ficates of such public stock to be prepared, and made in the usual form, and shall pay and deliver
the same to the president, directors, and company, of the said bank on the first day of January,
one thousand eight hundred and seventeen, which stock it shall be lawful for the said president,
directors, and company, to sell and transfer for gold and silver coin or bullion, at their discretion:
Provided, They shall not sell more than two million of dollars thereof in any one year.
Sec . 7. And be it further enacted, That the subscribers to the said bank of the United States
of America, their successors and assigns, shall be, and are hereby, created a corporation and
body politic, by the name and style of “ The president, directors, and company of the bank
of the United States, ” and shall so continue until the third day of March, in the year one thousand
eight hundred and thirty-six, and by that name shall be, and are hereby, made able and capable,
in law, to have, purchase, receive, possess, enjoy, and retain, to them and their successors,
lands, rents, tenements, hereditaments, goods, chattels and effects, of whatsoever kind, nature,
and quality, to an amount not exceeding, in the whole, fifty-five millions of dollars, including
the amount of the capital stock aforesaid; and the same to sell, grant, demise, alien or dispose of;
to sue and be sued, plead and be impleaded, answer and be answered, defend and be defended,
in all state courts having competent jurisdiction, and in any circuit court of the United States;
and also to make, have, and use, a common seal, and the same to break, alter, and renew, at
their pleasure; and also to ordain, establish, and put in execution, such by-laws, and ordinances,
and regulations, as they shall deem necessary and convenient for the government of the said
corporation, not being contrary to the Constitution thereof, or to the laws of the United States;
and generally to do and execute all and singular the acts, matters, and things, which to them
it shall or may appertain to do; subject, nevertheless, to the rules, regulations, restrictions,
limitations, and provisions, hereinafter prescribed and declared.
Sec . 8. And be it further enacted, That for the management of the affairs of the said cor
poration, there shall be twenty-five directors, five of whom, being stockholders, shall be annually
appointed by the President of the United States, by and with the advice and consent of the
Senate, not more than three of whom shall be residents of any one state; and twenty of whom
shall be annually elected at the banking house in the city of Philadelphia, on the first Monday
of January, in each year, by the qualified stockholders of the capital of the said bank, other
than the United States, and by a plurality of votes then and there actually given, according to
the scale of voting hereinafter prescribed: Provided always, That no person, being a director
in the bank of the United States, or any of its branches, shall be a director in any other bank;
and should any such director act as a director in any other bank, it shall forthwith vacate his
appointment in the direction of the bank of the United States. And the directors, so duly
appointed and elected, shall be capable of serving, by virtue of such appointment and choice,
from the first Monday in the month of January of each year, until the end and expiration of the
first Monday in the month of January of the year next ensuing the time of each annual election
to be held by the stockholders as aforesaid. And the board of directors, annually, at the first
meeting after their election in each and every year, shall proceed to elect one of the directors
to be president of the corporation, who shall hold the said office during the same period for which
the directors are appointed and elected as aforesaid: Provided also, That the first appointment
and election of the directors and president of the said bank shall be at the time and for the
period hereinafter declared: And provided also, That in case it should at any time happen that
an appointment or election of directors, or an election of the president of the said bank, should
not be so made as to take effect on any day when, in pursuance of this act, they ought to take
effect, the said corporation shall not, for that cause, be deemed to be dissolved; but it shall
be lawful at any other time to make such appointments, and to hold such elections, (as the
case may be,) and the manner of holding the elections shall be regulated by the by-laws and
ordinances of the said corporation; and until such appointments or elections be made, the di
rectors and president of the said bank, for the time being, shall continue in office: And provided
also, That in case of the death, resignation, or removal of the president of the said corporation,
the directors shall proceed to elect another president from the directors as aforesaid: and in
case of the death, resignation, or absence, from the United States, or removal of a director from
office, the vacancy shall be supplied by the President of the United States, or by the stock
holders, as the case may be. But the President of the United States alone shall have power
to remove any of the directors appointed by him as aforesaid.
Sec . 9. And be it further enacted, That as soon as the sum of eight millions four hundred
thousand dollars in gold and silver coin, and in the public debt, shall have been actually received
on account of the subscriptions to the capital of the said bank (exclusively of the subscription
aforesaid, on the part of the United States) notice thereof shall be given by the persons under
23
THE
W O R L D ’S
PRINCIPAL
MONETARY
SYSTEMS
whose superintendence the subscriptions shall have been made at the city of Philadelphia, in
at least two newspapers printed in each of the places, (if so many be printed in such places,
respectively,) where subscriptions shall have been made, and the said persons shall, at the
same time, and in like manner, notify a time and place within the said city of Philadelphia,
at the distance of at least thirty days from the time of such notification, for proceeding to the
election of twenty directors as aforesaid, and it shall be lawful for such election to be then and
there made. And the President of the United States is hereby authorized, during the present
session of Congress, to nominate, and, by and with the advice and consent of the Senate, to
appoint, five directors of the said bank, though not stockholders, anything in the provisions
of this act to the contrary notwithstanding; and the persons who shall be elected and appointed
as aforesaid, shall be the first directors of the said bank, and shall proceed to elect one of the
directors to be President of the said bank; and the directors and president of the said bank
so appointed and elected as aforesaid, shall be capable of serving in their respective office, by
virtue thereof, until the end and expiration of the first Monday of the month of January next
ensuing the said appointments and elections; and they shall then and thenceforth commence,
and continue the operations of the said bank, at the city of Philadelphia.
The directors
Sec. io. And be it further enacted, That the directors, for the time being shall have power
empowered to ap
to appoint such officers, clerks, and servants, under them as shall be necessary for executing
point
officers,
the business of the said corporation, and to allow them such compensation for their services,
clerks, servants, etc. respectively, as shall be reasonable; and shall be capable of exercising such other powers and
authorities for the well governing and ordering of the officers of the said corporation, as shall
be prescribed, fixed, and determined, by the laws, regulations, and ordinances of the same.
Fundamental
Sec. ii . And be it further enacted, That the following rules, restrictions, limitations, and
articles, etc.
provisions, shall form and be fundamental articles of the constitution of the said corporation,
to wit:
First. The number of votes to which the stockholders shall be entitled, in voting for directors,
shall be according to the number of shares he, she, or they, respectively, shall hold, in the
proportion following, that is to say; for one share and not more than two shares, one vote;
Rides concern
for every two shares above two, and not exceeding ten, one vote; for every four shares above
ing voting for di
ten, and not exceeding thirty, one vote; for every six shares above thirty, and not exceeding
rectors.
sixty, one vote; for every eight shares above sixty, and not exceeding one hundred, one vote;
and for every ten shares above one hundred, one vote; but no person, co-partnership, or body
politic, shall be entitled to a greater number than thirty votes; and after the first election, no
share or shares shall confer a right of voting, which shall not have been holden three calendar
months previous to the day of election. And stockholders actually resident within the United
States, and none other, may vote in elections by proxy.
A part of the
directors a p
pointed by the
stockholders and
president, alone
eligible a second
year successively.
President always
eligible.
Stockholders,
citizens, may be
only appointed di
rectors. Directors
to have no com
pensation, other
than the president.
Seven directors,
including the pres
ident may consti
tute a board.
How his place is
supplied in case of
absence or sickness.
General meeting
of the stockholders
—how to be called.
Cashier to give
bonds and secu
rity.
Limitation con
cerning,and a des
cription of the real
Second. Not more than three-fourths of the directors elected by the stockholders, and not
more than four-fifths of the directors appointed by the President of the United States, who
shall be in office at the time of an annual election, shall be elected or appointed for the next
succeeding year; and no director shall hold his office more than three years out of four in suc
cession: but the director who shall be the president at the time of an election may always be
re-appointed or re-elected, as the case may be.
Third. None but a stockholder, resident citizen of the United States, shall be a director;
nor shall a director be entitled to any emoluments; but the directors may make such compensa
tion to the president for his extraordinary attendance at the bank, as shall appear to them
reasonable.
Fourth. Not less than seven directors shall constitute a board for the transaction of business,
of whom the president shall always be one, except in case of sickness or necessary absence: in
which case his place may be supplied by any other director whom he, by writing, under his
hand, shall depute for that purpose. And the director so deputed may do and transact all the
necessary business, belonging to the office of the president of the said corporation, during the
continuance of the sickness or necessary absence of the president.
Fifth. A number of stockholders, not less than sixty, who, together, shall be proprietors of
one thousand shares or upwards, shall have power at any time to call a general meeting of
the stockholders for purposes relative to the institution, giving at least ten weeks’ notice in
two public newspapers of the place where the bank is seated, and specifying in such notice the
object or objects of such meeting.
Sixth. Each cashier or treasurer, before he enters upon the duties of his office, shall be re
quired to give bond, with two or more sureties, to the satisfaction of the directors, in a sum
not less than fifty thousand" dollars, with a condition for his good behaviour and the faithful
performance of his duties to the corporation.
Seventh. The lands, tenements, and hereditaments, which it shall be lawful for the said
corporation to hold, shall be only such as shall be requisite for its immediate accommodation
in relation to the convenient transacting of its business, and such as shall have been bona fide
24
THE
estate which may
be held by the cor
poration.
M axim um of
debts which the
corporation may
at one time con
tract.
Remedy against
the directors under
whose adminis
tration an excess
of debt shall be
created.
Directors absent
or dissenting ex
empted.
In what the cor
poration
m ay
transact business
and trade.
Loans exceeding
certain sums not
to be made the
United States or
particular states,
or foreign states,
but by acts of Con
gress.
Rules to be pre
scribedfor making
the stock assign
able.
The bills, obli
gatory and of cred
it, under the seal
of the corporation;
how assignable.
Proviso.
Proviso.
Half yearly di
vidends to be made.
A statement of
the affairs of the
company to be laid
before the stock
holders.
Delinquent sub
scribers to lose the
benefit of divi
dends.
W O R L D ’S PRIN CIPAL
MONETARY
SYSTEMS
mortgaged to it by way of security, or conveyed to it in satisfaction of debts previously con
tracted in the course of its dealings, or purchased at sales, upon judgments which shall have
been obtained for such debts.
Eighth. The total amount of debts which the said corporation shall at any time owe,
whether by bond, bill, note, or other contract, over and above the debt or debts due for money
deposited in the bank, shall not exceed the sum of thirty-five millions of dollars, unless the
contracting of any greater debt shall have been previously authorized by law of the United
States. Tn case of excess, the directors under whose administration it shall happen, shall be
liable for the same in their natural and private capacities: and an action of debt may in such
case be brought against them, or any of them, their or any of their heirs, executors, or admin
istrators, in any court of record of the United States, or either of them, by any creditor or
creditors of the said corporation, and may be prosecuted to judgment and execution, any
condition, covenant, or agreement, to the contrary notwithstanding. But this provision shall
not be construed to exempt the said corporation or the lands, tenements, goods, or chattels of
the same from being also liable for, and chargeable with, the said excess.
Such of the said directors, who may have been absent when the said excess was contracted
or created, or who may have dissented from the resolution or act whereby the same was so
contracted or created, may respectively exonerate themselves from being so liable, by forth
with giving notice of the fact, and of their absence or dissent, to the President of the United
States, and to the stockholders, at a general meeting, which they shall have power to call for
the purpose.
Ninth. The said corporation shall not, directly or indirectly, deal or trade in anything
except bills of exchange, gold or silver bullion, or in the sale of goods really and truly pledged
for money lent and not redeemed in due time, or goods which shall be the proceeds of its lands.
It shall not be at liberty to purchase any public debt whatsoever, nor shall it take more than
at the rate of six per centum per annum for or upon its loans or discounts.
Tenth. No loan shall be made by the said corporation, for the use or on account of the
Government of the United States, to an amount exceeding five hundred thousand dollars, or
of any particular state to an amount exceeding fifty thousand dollars, or of any foreign prince
or state, unless previously authorized by a law of the United States.
Eleventh. The stock of the said corporation shall be assignable and transferable, according
to such rules as shall be instituted in that behalf, by the laws and ordinances of the same.
Twelfth. The bills, obligatory and of credit, under the seal of the said corporation, which shall
be made to any person or persons shall be assignable by endorsement thereupon, under the hand
or hands of such person or persons, and his, her, or their executors or administrators, and his,
her, or their assignee or assignees, and so as absolutely to transfer and vest the property thereof
in each and every assignee or assignees successively, and to enable such assignee or assignees,
and his, her, or their executors or administrators, to maintain an actigp thereupon in his, her,
or their own name or names: Provided, That said corporation shall not make any bill, obli
gatory, or of credit, or other obligation under its seal for the payment of a sum less than five
thousand dollars. And the bills or notes which may be issued by order of the said corporations
signed by the president, and countersigned by the principal cashier or treasurer thereof, promis
ing the payment of money to any person or persons, his, her, or their order, or to bearer,
although not under the seal of the said corporation, shall be binding and obligatory upon the
same, in like manner, and with like force and effect, as upon any private person or persons,
if issued by him, her or them, in his, her or their private or natural capacity or capacities, and
shall be assignable and negotiable in like manner as if they were so issued by such private
person or persons; that is to say, those which shall be payable to any person or persons, his,
her or their order,’ shall be assignable by endorsement, in like manner and with the like effect
as foreign hills of exchange now are; and those which are payable to bearer shall be assignable
and negotiable by delivery only: Provided, That all bills or notes, so to be issued by said cor
poration, shall be made payable on demand, other than bills or notes for the payment of a sum
not less than one hundred dollars each, and payable to the order of some person or persons,
which bills or notes it shall be lawful for said corporation to make payable at any time not
exceeding sixty days from the date thereof.
Thirteenth. Half yearly dividends shall be made of so much of the profits of the bank as
shall appear to the directors advisable; and once in every three years the directors shall lay
before the stockholders, at a general meeting, for their information, an exact and particular
statement of the debts which shall have remained unpaid after the expiration of the original
credit for a period of treble the term of that credit, and of the surplus of the profits, if any,
after deducting losses and dividends. If there shall be a failure in the payment of any part
of any sum subscribed to the capital of the said bank by any person, co-partnership, or body
politic the party failing shall lose the benefit of any dividend which may have accrued prior
to the’time for making such payment, and during the delay of the same.
Fourteenth. The directors of the said corporation shall establish a competent office of dis
count and deposit in the District of Columbia whenever any law of the United States shall
25
THE
Offices to be es
tablished in the
District of Colum
bia and the several
states when au
thorized and re
quired by law.
Proviso.
Secretary of the
Treasury author
ized to call upon
the bank for a
statement not ex
ceeding a weekly
one, ofits concerns.
Proviso.
No stockholder
but a citizen of the
United States may
vote in choice of
directors.
No smaller notes
than five dollars
to be issued.
Penalties for
dealing in a way
or in articles in
terdicted.
Penalties for
making unlawful
loans to the United
States or particu
lar states or to for
eign governments.
Notes of the
bank receivable in
payments of all
dues to United
States, until, etc.
Repealed, 1836,
ch. 97.
The bank to
give the necessary
facilities without
any charge, for
transferring the
funds
of the
United States to
different quarters.
W O R L D ’S
PRINCIPAL
MONETARY
SYSTEMS
require such an establishment; also one such office of discount and deposit in any state in which
two thousand shares shall have been subscribed or may be held, whenever, upon application
of the legislature of such state, Congress may by law require the same: Provided, the directors
aforesaid shall not be bound to establish such office before the whole of the capital of the bank
shall have been paid up. And it shall be lawful for the directors of the said corporation to
establish offices of discount and deposit, wheresoever they shall think fit, within the United
States or the territories thereof, and to commit the management of the said offices, and the
business thereof, respectively, to such persons and under such regulations as they shall deem
proper, not being contrary to law or the constitution of the bank. Or instead of establishing
such offices, it shall be lawful for the directors of the said corporation, from time to time, to
employ any other bank or banks, to be first approved by the Secretary of the Treasury, at
any place or places that they may deem safe and proper, to manage and transact the business
proposed as aforesaid, other than for the purposes of discount, to be managed and transacted
by such offices, under such agreements, and subject to such regulations, as they shall deem
just and proper. Not more than thirteen nor less than seven managers or directors, of every
office established as aforesaid, shall be annually appointed by the directors of the bank to
serve one year; they shall choose a president from their own number; each of them shall be
a citizen of the United States, and a resident of the state, territory, or district wherein such
office is established; and not more than three-fourths of the said managers or directors, in
office at the time of an annual appointment, shall be re-appointed for the next succeeding
year; and no director shall hold his office more than three years out of four, in succession; but
the president may be always re-appointed.
Fifteenth. The officer at the head of the Treasury Department of the United States shall
be furnished, from time to time, as often as he may require, not exceeding once a week, with
statements of the amount of the capital stock of the said corporation and of the debts due to
the same; of the moneys deposited therein; of the notes in circulation, and of the specie in
hand; and shall have a right to inspect such general accounts in the books of the bank as shall
relate to the said statement: Provided, That this shall not be construed to imply a right of
inspecting the account of any private individual or individuals with the bank.
Sixteenth. No stockholder, unless he be a citizen of the United States, shall vote in the
choice of directors.
Seventeenth. No note shall be issued of less amount than five dollars.
Sec . 12. And be it further enacted, That if the said corporation, or any person or persons,
for or to the use of the same, shall deal or trade in buying or selling goods, wares, merchandise,
or commodities whatsoever, contrary to the provisions of this act, all and every person and
persons by whom any order or direction for so dealing or trading shall have been given; and all
and every person and persons who shall have been concerned as parties or agents therein, shall
forfeit and lose treble the value of the goods, wares, merchandise and commodities in which
such dealing and trade shall have been, one half thereof to the use of the informer, and the
other Jialf thereof, to the use of the United States, to be recovered in any action of law with
costs of suit.
Sec . 13. And be it further enacted, That if the said corporation shall advance or lend any
sum of money for the use or on account of the Government of the United States, to an amount
exceeding five hundred thousand dollars; or of any particular state, to an amount exceeding
fifty thousand dollars; or of any foreign prince or state, (unless previously authorized thereto
by a law of the United States), all and every person and persons, by and with whose order
agreement, consent, approbation and connivance such unlawful advance or loan shall have been
made, upon conviction thereof shall forfeit and pay, for every such offence, treble the value or
amount of the sum or sums which have been so unlawfully advanced or lent; one-fifth thereof
to the use of the informer, and the residue thereof to the use of the United States.
Sec . 14. And be it further enacted, That the bills or notes of the said corporation originally
made payable, or which shall have become payable on demand, shall be receivable in all pay
ments to the United States, unless otherwise directed by act of Congress.
Sec . 15. And be it further enacted, That during the continuance of this act, and whenever
required by the Secretary of the Treasury, the said corporation shall give the necessary facilities
for transferring the public funds from place to place, within the United States, or the territories
thereof, and for distributing the same in payment of the public creditors, without charging
commissions or claiming allowance on account of difference of exchange, and shall also do and
perform the several and respective duties of the commissioners of loans for the several states,
or of any one or more of them, whenever required by law.
26
THE
Deposits of the
public moneys to
be made in the
bank
or
its
branches, or the
reasons to be laid
before Congress by
the Secretary of
the Treasury for
its not being done.
Co rporation
prohibited from
suspending pay
ments in specie,
by being made
chargeable with
the payment of
interest at the rate
of 12 per centum
per annum.
Proviso.
Penalties for
forging, counter
feiting, etc.
Proviso.
For engraving
after the simili
tude of the plates
used for the bank,
any plates, etc.
Punishment.
Bonus to be
paid
to the
United States for
this Charter.
W O R L D ’S
PRINCIPAL
MONETARY
SYSTEMS
Sec. 16. And be it further enacted, That the deposits of the money of the United States, in
places in which the said bank and branches thereof may be established, shall be made in said
bank or branches thereof, unless the Secretary of the Treasury shall at any time otherwise
order and direct; in which case the Secretary of the Treasury shall immediately lay before
Congress, if in session, and if not, immediately after the commencement of the next session, the
reasons of such order or direction.
Sec. 17. And be it further enacted, That the said corporation shall not at any time suspend
or refuse payment in gold and silver, of any of its notes, bills or obligations; nor of any moneys
received upon deposit in said bank, or in any of its offices of discount and deposit. And if the
said corporation shall at any time refuse or neglect to pay on demand any bill, note or obliga
tion issued by the corporation, according to the contract, promise or undertaking therein ex
pressed; or shall neglect or refuse to pay on demand any moneys received in said bank, or in
any of its offices aforesaid, on deposit, to the person or persons entitled to receive the same,
then, and in every such case, the holder of any such note, bill, or obligation, or the person or
persons entitled to demand and receive such moneys as aforesaid, shall, respectively be entitled
to receive and recover interest on the said bills, notes, obligations or moneys until the same
shall be fully paid and satisfied, at the rate of twelve per centum per annum from the time of
such demand as aforesaid; Provided, That Congress may at any time hereafter enact laws
enforcing and regulating the recovery of the amount of the notes, bills, obligations or other
debts, of which payment shall have been refused as aforesaid, with the rate of interest above
mentioned, vesting jurisdiction for that purpose in any courts, either of law or equity, of the
courts of the United States, or territories thereof, or of the several states, as they may deem
expedient.
Sec. 18. And be it further enacted, That if any person shall falsely make, forge, or counterfeit,
or cause or procure to be falsely made, forged or counterfeited, or willingly aid or assist in falsely
making, forging or counterfeiting, any bill or note in imitation of or purporting to be a bill or
note issued by order of the president, directors, and company of the said bank, or of any order
or check on the said bank or corporation, or any cashier thereof; or shall falsely alter, or cause
or procure to be falsely altered, or willingly aid or assist in falsely altering any bill or note issued
by order of the president, directors, and company of the said bank, or any order or check on the
said bank or corporation, or any cashier thereof; or shall pass, utter or publish, or attempt to
pass, utter or publish as true any false, forged, or counterfeited bill or note purporting to be a
bill or note issued by order of the president, directors and company of the said bank, or any false,
forged or counterfeited order or check upon the said bank or corporation, or any cashier thereof,
knowing the same to be falsely forged or counterfeited; or shall pass, utter or publish, or attempt
to pass, utter or publish as true, any falsely altered bill or note issued by order of president,
directors and company of the said bank, or any falsely altered order or check on the said bank
or corporation, or any cashier thereof, knowing the same to be falsely altered with intention to
defraud the said corporation or any other body politic or person; or shall sell, utter or deliver,
or cause to be sold, uttered or delivered, any forged or counterfeited note or bill in imitation, or
purporting to be a bill or note issued by order of the president and directors of the said bank,
knowing the same to be false, forged, or counterfeited every such person shall be deemed and
adjudged guilty of felony, and being thereof convicted by due course of law shall be sentenced
to be imprisoned and kept to hard labour for not less than three years, nor more than ten years,
or shall be imprisoned not exceeding ten years, and fined not exceeding five thousand dollars:
Provided, That nothing herein contained shall be construed to deprive the courts of the individual
states, of a jurisdiction under the laws of the several states, over any offence declared punish
able by this act.
Sec. 19 . And be it further enacted, That if any person shall make or engrave, or cause, or
procure to be made or engraved, or shall have in his custody or possession, any metallic plate,
engraved after the similitude of any plate from which any notes or bills issued by the said cor
poration shall have been printed, with intent to use such plate, or to cause, or suffer the same
to be used, in forging or counterfeiting any of the notes or bills issued by the said corporation;
or shall have in his custody or possession, any blank note or notes, bill or bills, engraved and
printed after the similitude of any notes or bills issued by the said corporation, with intent to
use such blanks, or cause, or suffer the same to be used, in forging or counterfeiting any of the
notes or bills issued by the said corporation; or shall have in his custody or possession any paper
adapted to the making of bank notes or bills, and similar to the paper upon which any notes or
bills of the said corporation shall have been issued, with intent to use such paper, or cause, or
suffer the same to be used, in forging or counterfeiting any of the notes or bills issued by the
said corporation, every such person, being thereof convicted, by due course of law, shall be
sentenced to be imprisoned, and kept to hard labour, for a term not exceeding five years, or
shall be imprisoned for a term not exceeding five years and fined in a sum not exceeding one
thousand dollars.
Sec. 20. And be it further enacted, That in consideration of the exclusive privileges and
benefits conferred by this act, upon the said bank, the president, directors, and company there
of, «ha11 pay to the United States, out of the corporate funds thereof, the sum of one million and
five hundred thousand dollars, in three equal payments; that is to say: five hundred thousand
27
THE
Congress to es
tablish no other
bank except in
the District of
Columbia.
’ Authority to use
the name of the
corporation, etc.,
for two years after
the charter shall
expire.
Limitation
of
time prescribedfor
the bank going in
to operation.
Committees of
either House of
Congress may in
spect the books,
etc., of the bank.
For what pur
pose.
Proviso.
W O R L D ’S
PRINCIPAL
MONETARY
SYSTEMS
dollars at the expiration of two years; five hundred thousand dollars at the expiration of three
years; and five hundred thousand dollars at the expiration of four years after the said'bank
shall be organized, and commence its operations in the manner hereinbefore provided.
Sec. 2 1 . And be it further enacted, That no other bank shall be established by any future law
of the United States during the continuance of the corporation hereby created, for which the
faith of the United States is hereby pledged. Provided, Congress may renew existing charters
for banks in the District of Columbia, not increasing the capital thereof, and may also establish
any other bank or banks in said district, with capitals not exceeding, in the whole, six millions
of dollars, if they shall deem it expedient. And notwithstanding the expiration of the term for
which the said corporation is created, it shall be lawful to use the corporate name, style, and
capacity, for the purpose of suits for the final Settlement and liquidation of the affairs and
accounts of the corporation, and for the sale and disposition of their estate, real, personal,
and mixed: but not for any other purpose, or in any other manner whatsoever, nor for a pe
riod exceeding two years after the expiration of the said term of incorporation.
Sec. 22 . And be it further enacted, That if the subscriptions and payments to said bank shall
not be made and completed so as to enable the same to commence its operations, or if the said
bank shall not commence its operations on or before the first Monday in April next, then, and,
in that case, Congress may, at any time within twelve months thereafter, declare, by law this
act null and void.
Sec. 23. And be it further enacted, That it shall, at all times, be lawful for a committee of
either House of Congress, appointed for that purpose, to inspect the books, and to examine into
the proceedings of the corporation hereby created, and to report whether the provisions of this
charter have been, by the same violated or not; and whenever any committee, as aforesaid, shall
find and report, or the President of the United States shall have reason to believe that the charter
has been violated, it may be lawful for Congress to direct, or the President to order, a scire facias
to be sued out of the circuit court of the district of Pennsylvania, in the name of the United
States, (which shall be executed upon the president of the corporation for the time being, at
least fifteen days before the commencement of the term of said court,) calling on the said cor
poration to show cause wherefore the charter hereby granted, shall not be declared forfeited;
and it shall be lawful for the said court, upon return of the said scire facias, to examine into
the truth of the alleged violation, and if such violation be made appear, then to pronounce and
adjudge that the said charter is forfeited an annulled. Provided, however, Every issue of fact
which may be joined between the United States and the corporation aforesaid, shall be tried by
a jury. And it shall be lawful for the court aforesaid to require the production of such pf the
books of the corporation as it may deem necessary for the ascertainment of the controverted
facts; and the final judgment of the court aforesaid, shall be examinable in the Supreme Court,
of the United States by writ of error, and may be there reversed or affirmed, according to the
usages of law.
Approved, April 10, 1816.
28
Great Britain’s System
C
o in
HE British coinage system is unique
among civilized countries in that it is
the only one absolutely ignoring the
decimal method of notation, and continues in
a sense the ancient practice of weight designa
tions for the money-metals. For the pound
sterling of 480 pence retains the characteristic
of the pound Troy of 480 penny-weights. The
fineness of its gold is still measured by carats,
the standard being 22 carats giving the rate
.916 2-3.
Originally the pound was literally a pound
of “ sterling silver,” which means silver .925
pure. The value was reduced from time to
time until 1816, when it was fixed at £3
6 shillings. But since that date silver has
been used only as subsidiary, gold being the
sole standard coin.
Gold of 22 carats fine yields £46 14 sh.
6d. to the Troy pound, making the ounce
worth 77sh. io ^ d . The sovereign, as the
£ is colloquially called, weighs 123.274 grains,
of which 113.001 grains is pure gold; the
United States dollar contains 23.22 grains
of pure gold, hence the £ is equal to $4.8665.
It is divided into 20 shillings of 12 pence each,
the latter being divided into 4 farthings each.
The law provides that any one having gold
of approximately standard fineness may take
it to the Mint and have it coined free; but
as this involves delay, a further provision
compels the Bank of England to buy the
gold at 77sh. 9d. or i}^d. below the Mint
price. This creates a quick, open market
for gold, and London has become the chief
center for the buying and selling of the yellow
metal.
Among the British possessions only Aus
tralasia, South Africa and a few small islands,
have the system of the mother country
complete.
The stock of gold in Great Britain is
estimated at about $650,000,000 and despite
the great use of checks, more than half of
the gold is assumed to be in circulation. The
coin and currency supply works out a per
capita of $19.60.
T
P
aper
C
urrency
The paper currency consists entirely of
bank-notes, issued in England and Wales by
the Bank of England, in Scotland by nine
and in Ireland by six local banks. (A very
small amount of notes of other English banks
are still used, but these are of no consequence).
The issue system provides, since 1844, for
a fixed sum upon securities, and beyond that
only pound for pound for gold actually re
ceived and held; hence a large part of the
issue is equivalent to gold certificates. No
reserves are required by law to be held against
notes, and only those of the Bank of England
are legal tender, but in England and Wales
only.
The Bank of England dominates the sys
tem, and is indeed generally regarded as the
dominant financial institution in the world.
It was originally chartered in 1694, with a
capital of £1,200,000 which it loaned to King
William at 8% ; upon the public debt thus due
to it a note-issue was based. Capital was
increased from time to time, chiefly by
lending to the Government, until in 1816 the
present capital of £14,553,000 (about $70,800,000) was reached. Notes were issued
against the government debt and also on
the Bank’s own credit. Other banks, both
chartered and private, many of which were
established, also issued notes on credit.
There were no reserve laws, and the country
frequently experienced the troubles of depre
dated currency; specie payments were sus
pended continuously from 1797 to 1821,
again in 1825, 1826 and 1837.
The charter was originally for eleven years;
it was renewed periodically the Government
always reserving the right to change it or
repeat it at ends of periods on a year’s notice.
It was in 1844 that the Government revised
the banking system as to England and Wales,
by a law which made the Bank of England the
dominant factor. It was given the monopoly
of currency-issuing for the future; it was
permitted to continue the note issues upon
government securities, then equal to the
amount of its capital, and to increase such
issues by two-thirds of the amount of issues
which the other banks voluntarily surren
dered; beyond this sum issues were permitted
only upon actual deposit of coin and bullion,
one-fifth of which might be silver. The Bank
was required to keep its banking business
strictly separate from its note-issuing, and to
report its status briefly each week. No
reserve requirements were imposed. The Bank
is not subject to Government examination.
A prior law had prohibited the issue of
notes under £5 in England and Wales, and
made the Bank’s notes legal tender there,
29
BANK OF EN G LA N D , LONDON
THE
W O R L D ’S
PRINCIPAL
except in payments by the Bank, but only if
coin redemption was continued. Under the
operation of the law the Bank’s notes based
on securities have reached £18,450,000; other
English banks have still out about £500,000.
The Bank is a private corporation, none of
its stock being owned by the Government.
Voting is limited to holders of £500 of stock,
but no stockholder has more than one vote.
The Bank is the treasurer of the Govern
ment; the other banks keep deposit accounts
with it, and it rediscounts their commercial
paper when they need cash; it fixes the dis
count rate weekly when its report is published
(Thursdays) and by reason of its being the
depositary of the other banks the discount
rate governs the market, in large measure.
MONETARY
SYSTEMS
their deposits, depending upon the Bank of
England for help in time of need. This
condition has recently led to an agitation for
larger gold reserves.
The Bank has not exercised its right to hold
silver in its note-fund for probably half a cen
tury.
SCOTLAN D has a system of its own, regu
lated by a law of 1845; the Bank of Scotland
is the leader among nine issue banks which
operate 1242 branches. The amount of notes
permitted to be issued on securities was fixed
by the law at £2,676,350; all additional issues
must be covered by coin, but there is no limit
to that sum. The peculiar credit-giving sys
tem of Scotland obviates the need for large
note-issues, hence the limitation upon circula
tion is not onerous. There is no reserve re
quirement.
IR E LA N D also has a semi-independent sys
tem created by the law of 1845; the Bank of
Ireland is the chief institution. There are 695
branches. The banks are permitted to issue
on securities £6,354,494 of notes, and of course
without limit on deposits of coin. A larger
issue on securities is permitted because the
credit system is not developed. No legal re
serve provision exists.
Both Scotch and Irish banks may issue notes
as low as £ 1; the notes have no legal-tender
power.
It allows no interest on deposits, but will
discount paper for anyone having an account
with it, which is not difficult to obtain.
Branch banking is highly developed through
out Great Britain; while the Bank of England
has only 11 branches the other banks have
very many, aggregating 5,257 for the English
ones alone. From a system of many inde
pendent banks there has developed one of
44 large ones, and the concentration still goes
on. Ten years ago there were 77.
All the banks of the United Kingdom are
required to report semi-annually to a depart
ment of the Government, but these reports
are not very detailed. Indeed the joint stock
banks (as they are called,) carry on their
business quite largely without much restraint,
excepting the usual laws governing commer
cial transactions; there are no specific laws
relating to bank supervision. Hence only a
few of them report their reserve cash; and
it is generally assumed that they hold not
more than about 5 per cent, of gold against
D
e p o s it
C
urrency
As already intimated, Great Britain uses
checks against bank deposits very extensively;
in no other country has the check system been
so highly developed. The statistical table
herewith shows the volume of deposits of all
the. banks in 1911. An estimate of the coin
reserves against them is also given. Since the
STATISTICS OF BRITISH BANKS, JUNE, 1911
(In £,
Capital,
; Surplus,
Profits
000s
Omitted)
Deposits,
Current
Accounts
63,042
761,482
40,438
22,000*
62,438
6,000*
3,600*
Bank of England..... ..............................j
Other English.........................................j
17,728
86,891
29,43i
All English.............................................
Scotch...................................................
Irish....................................... .............
104,619
18,748
12,015
29,638
7,126
7,” 4
824,524
106,633
65,418
All British.............. ...............................
135,382
43,878
: 996,575
207
♦Estimated.
Gold
in
Reserve
Net
Circula
tion
3*
72,038
Loans,
Dis
counts
36,356
All
Re
sources
110,214
492,813
894,351
529,169
70,663
1,004,565
45,812
84,996
| 645,644
137,833
1,227,394
THE
W O R L D ’S
PRINCIPAL
MONETARY
SYSTEMS
discount market; but there are qualifications
to that statement. Usually the open market
rate is below the Bank rate, which is its
minimum. Thus in 1911, the open market
was continuously below at one time a full 1 per
cent. Yet when the Bank advanced the rate
the other banks quickly followed and kept very
near to that of the Bank. While the Bank
does not go into the market and buy bills, it
may do so. Actually the same purpose is
accomplished by permitting individuals to open
accounts with it and obtain loans.
The real point to be considered is that the
Bank’s rate in three years fluctuated between
2^2 per cent, and 5 per cent, and was changed
twenty times. In 1909 it was at 2% per cent, for
189 days, in 1910 it was at 3 per cent, for 147
days, in 1911 at 3 per cent, for 196 days. This
is far from the stability exhibited by the Bank
of France, although perhaps better than that
of any other country.
Following is the official report required of
the Bank weekly, for a recent date; it is sub
mitted in two parts. The “ consolidated
statement” is appended for comparative pur
poses.
The statement being for January 3rd shows
a small reserve ratio because of the expansion
for the “ annual settlements;” soon thereafter
the liabilities diminished and the ratio rose.
It is interesting to note that, other things
equal, the reserve ratio calculated in the man-
Bank of England alone is required to publish
actual figures of the coin held, the amount of
gold held by the remainder is merely a close
guess. It is fair to say, however, that the
conservatism of the bankers -prevents undue
inflation as a rule; the exceptional instances are
nevertheless sufficient to disturb the whole
structure, when they occur. The advantage
of stability is easier of attainment because there
are so few individual concerns to deal with,
viz.: for Great Britain entire only 74 banking
concerns, with 7214 branches. Hence the reg
ulation is simple and in addition thereto, every
one of the banks is managed by a corps of
trained men, providing the most careful man
agement for even the smallest of the branches.
It should be said here that the other banks
reported £250,000,000 of “ Cash on hand, at
bankers and at call on short n o t ic e the bulk of
this was evidently “ on call” because it was
not in other banks as cash.
The aggregate deposits thus figure out less
than $5,000,000,000.
Calculating the gold against notes and de
posits combined, the reserve ratio is about 7
per cent. But in practice no one considers the
ratio except that of the Bank of England, which
was upward of 43 per cent. The safety line is
regarded to be at 40 per cent, and when that is
reached the bank begins to think of raising its
discount rate.
In general the Bank’s rate dominates the
BANK OF ENGLAND RETURN, JANUARY 3, 1912
B a n k in g D e p a r t m e n t
I ssu e D e p ar t m e n t
L ia b il it ie s
L ia b il it ie s
Capital.......................................................£14,553,000
Notes Issued....... .................................... £52,085,000
Rest (Surplus, &c.)..................................... 3,252,000
Public Dq>osits.......................................... 16,677,000
A ss e ts
Other Deposits.......................................... 49,352,000
Seven Day Bills, &c...................................
20,000 jj Government Debt...................................... 11,015,000
-------------- jj Other Securities.......................................... 7,435,000
Total............................................... £83,854,000 Gold Coin and Bullion................................. 33,635,000
i|
A ss e t s
Total........... ...................... ...........£52,085,000
Government Securities............................... £15,270,000
Other Securities.............................. ......... 44,902,000
Notes......................................................... 22,895,000
Gold and Silver Coin..................................
787,000
Total............................................... £83,854,000
C o nsolid ated S t a t e m e n t
Deposit Liability........................................ £66,019,000
Net Note Liability..................................... 29,190,000
Total............................................... £95,209,000
Notes in hands of public.............................£29,190,000
Reserve*. . ................................................. 23,862,000
35.85%
Ratio to deposits........................................
Coin Held.................................................. £34422,000
Ratio of Coin.............................................
36.16%
* Notes and coin in banking department.
32
THE
W O R L D ’S
PRINCIPAL
ner shown in the consolidated statement, rises
as note-issues increase, because for every mil
lion of notes emitted 100 per cent, in coin
must be deposited.
The issue department return shows that on
the date named the credit notes constituted
nearly 36 per cent, of the total, and that the
gold reserve was 64.68 per cent. As the noteissue increases the ratio rises; if the issue were
to fall to £36,900,000 the reserve ratio would
be exactly 50 per cent.
The foregoing review indicates that Great
Britain passed through experiences not unlike
our own early in the last century and was
forced to find a remedy in the central bank
plan. While the one adopted, which differs
from almost all the others, is claimed to have
served admirably, there is no disguising the
fact that it operates defectively at critical
periods. Obviously the system provides for no
elasticity in note-issues; an unexpected in
creased demand for currency can be met only
by importing gold, and this must then be at
additional cost. The only other alternative is
for the Government to suspend the Bank Act
and permit note-issues without full coin cover.
This was actually done on three occasions,
1847, 1857, 1866, when crises occurred. The
power to issue notes was actually availed of
only in 1857 and then only to a limited extent.
In the other two years the mere fact that the
power existed served to allay fears, which in
MONETARY
SYSTEMS
fact constitute an important part of the trouble
in a crisis.
Upon two other such occasions at least (1890
and 1907), the Government stood ready to
suspend the Act, but assistance was obtained
from the Bank of France, which rendered the
suspension unnecessary. This suggests that
the British system is defective, owing to its
rigidity, and that a modification would prove
desirable. Many bankers there believe, how
ever, that the provision of larger gold reserves
in the other banks would meet the require
ments.
The fundamental theory of the system is
that the individual banks keep balances with
the Bank of England, to which they can resort
when they need cash; or they may rediscount
paper with the Bank to obtain cash; that when
demands for such cash are heavy, compared
with the supply, the Bank will discourage the
operation by raising the price for money, i. e.,
its discount rate. This has the effect of bring
ing gold into the country because it is practi
cally offering a higher price for the metal than
other countries are bidding. But when cash
is badly needed this operates as a tax upon
business, whereas if credit-notes could be issued
the discount rate would not have to be raised.
Still the policy is to restrain demands, no mat
ter what the conditions may be, and the British
public appear satisfied with it, just as they are
with their duodecimal coinage system.
The French System
C
o in
H E coinage system of France, which
has been adopted b y a very large num
ber of other states, is decimal as to
notation and founded in the metric
system as to weight.
During the period prior to the 15th century,
when the country consisted of numerous prin
cipalities, various money systems existed; after
the consolidation into a kingdom, a uniform
system was established, in which the livre or
pound was the important element. (This
pound was not the same as the British).
Near the end of the 18th century the franc
became the unit, and by a law of 1803 the
present system was finally adopted. It was
bi-metallic with silver at a ratio of 1 5 ^ to
gold; and the silver 5-franc piece is today still
a standard coin although coinage thereof ceased
in 1876. Standard coins are all .900 fine; sub
sidiary silver is only .835 fine.
T
The chief silver coin weighs 25 grammes, or
385.8 grains, containing 347.22 grains of pure
silver; at the ratio to gold this gives the 5-franc
gold-piece 22.4 grains of pure metal, against
23.22 grains in the United States dollar; the
5-franc piece is hence valued at 96.47 cents,
which gives the franc a rating of 19.29 cts.
The metric gramme equals 15.432 grains; a
kilogram is 1,000 grammes; the kilogram of
pure gold is worth $664.60.
P
aper
C
urrency
Prior to 1848 France had a number of char
tered banks issuing currency largely on credit
all over the country. It was at about this
time that the troubles similar to those experi
enced in other countries, led to the concen
tration of the function in the Bank of France.
This institution was created in 1800 b y the
first Napoleon, who with his family and friends
continued for some years to control the capital
33
T H E F R E N C H M I N T , P A R IS
THE
W O R L D ’S
PRINCIPAL
thereof. The shares passed into private hands
'w ith the disappearance of the great emperor,
and have remained there ever since. Originally
the amount was 30,000,000 francs (nearly $6,000,000). This has been repeatedly increased,
until the present figure of 182,500,000 francs
was reached in 1857. A substantial part of the
increase was made to acquire other note-issuing
banks so as to concentrate the function. There
are 32,500 share-holders, but only the 200
largest holders vote for members of the govern
ing board.
The law has always limited the gross amount
of the note-issues. A t first this was 350,000,000 francs; it is now 5,800,000,000 francs.
There is no provision in the law prescribing
a specie cover for notes, the sole requirement
being that the notes “ shall be so proportioned
to the reserve cash in the vaults of the Bank,
that the Bank can at no time be exposed to
danger of delaying payment of its obligations
when presented. ” Bearing in mind that this
law is over n o years old, the wisdom thereof
is striking.
Y et the policy of the management has been
so sound that the Bank has survived the many
political changes in the country without diffi
culties except during the acute revolutionary
conditions in 1848 and. 1871; and has given the
world the most striking example of how to
provide a stable money system.
The actual management is in the hands of a
governor and two deputy governors who are
appointees of the Government. It holds the
public money; it operates through 78 branches
•and some 350 agencies throughout the republic.
The charter is always for a term of years and
is regularly renewed, but usually some addi
tional conditions are included, such as increas
ing the tax, making loans to the Government,
and enlarging the maximum of note-issues.
Y et the taxation is not onerous; 1-10 of 1 per
cent, on notes issued on discounts, 1-50 of 1
per cent, on the rest of the issues and 1-8 of
average discount rate on the first-named item.
The tax in 1910 amounted to $1,395,000.
The chief point recognized by all, is that the
Bank is a great public institution, serving the
people as a whole more adequately than any
other similar institution in the world.
The notes of the Bank of France are legal
tender; they are redeemable either in gold or
in silver 5-franc pieces, at the pleasure of the
Bank; but the right to redeem in silver is not
often exercised, and only for the purpose of
discouraging gold exports at times when the
policy of the Bank so dictates.
France has the largest per capita supply of
money, $41.
MONETARY
D
e p o sit
SYSTEMS
C
urrency
The French do not transact any considerable
part of their business by means of checks; thus
the deposit-currency is insignificant. Bank
notes and coin are used almost entirely. But
the public are afforded remarkable facilities
through the discount system; even the smallest
tradesman may have his paper discounted by
the Bank; the statistical return shows that
nearly half of the paper thus handled by the
Bank consists of bills for 100 francs (say $20)
or less. Here is the chief source of the great
public benefit, made possible by the use of
credit-notes, not requiring a coin deposit before
the Bank can issue the currency. The dis
count system is briefly as follows: Commer
cial paper of any amount, bearing three names,
and having not more than 90 days to run, may
be discounted.
Most of the paper so far as amount goes is
rediscounted through the other banks, which
are not numerous but have very many branches.
These banks keep balances with the great
Bank, but do not carry large reserves.
The ready negotiability of small commercial
paper actually takes the place of checks in a
large measure. The small tradesman pays his
bills with a draft or note and it becomes current
paper available at the Bank for its notes. In
order to provide a third endorser, an inter
mediary institution was created for this specific
purpose some years ago.
Paris also has an open market for money;
the rate quoted there is generally somewhat
below that of the Bank. It is noteworthy that
the rates for loans upon collateral, i. e., stocks
and bonds, are usually a trifle higher than for
commercial paper. This is a normal condition
due to the proper development of a discount
market.
R
esults in
O
p e r a t io n
The table accompanying this chapter shows
that the Bank held a very large reserve of gold
against its notes. The ratio has been growing
in recent years. Thus in 1896 it was 56.7 per
cent., in 1908 it was 60 per cent., in 1911 it
was 57.2 per cent. This makes for stability.
A t no time was there need for any inordinate
strain to increase the reserve and the sen ice
to business was uninterrupted.
The great stability is more definitely shown
in the discount rates. Since 1888— a period
of 23 years, the rate changed only twenty
times. From 1900 until our panic of 1907 the
rate stood at 3 per cent, without change; it
then rose to 4 per cent, but went back to
3 per cent, in January 1908. When the recent
35
B A N K O F F R A N C E , P A R IS
BANQUE D E FRANCE
1
■
i
THE
W O R L D ’S
PRINCIPAL
troubles with Germany over Morocco became
acute, the rate again rose to 4 per cent, for a
short period.
The steadiness of the discount rate, and also
the lowness of the rate, is a boon to business
that can hardly be over-estimated. It means
a value-measure as nearly steady as can be
devised. It is hence a proper subject for care
ful consideration, why the same results should
not be attained elsewhere. While conditions
in France with its limited area, are in some
respects peculiar, the fact that her mechanism
for regulating monetary affairs is so far superior
in results to any other, should direct attention
to the study thereof in every detail.
There are no rigid reserve requirements, yet
the reserve is larger than that'of the Bank of
England; there is no tax on note-issues,
except a very small excise rate on the uncov
ered notes, yet the elasticity of volume is
greater than in Germany.
France has also seasonal demands for cash
which require expansion; but the Bank has
furnished as high as $70,000,000 a week for
such purposes without a tremor in the ordinary
course of business. Here such a draft on New
York's reserves would shake the stock market.
MONETARY
SYSTEMS
It is further to be said that the Bank’s
policy has rarely been a narrow one in the
international field. When legitimate demands
for gold arise and manifest themselves in
Paris, she lets gold go freely, so long as the
domestic business is not in any way jeopardized.
It thus has repeatedly happened that the Bank
of France has, in an unobtrusive fashion
taken the dominant position in the world’s
money markets, displacing the British insti
tution. But the policy has been not to seek
such dominance, since the domestic business
needs are regarded as paramount.
Nor has there been, except upon rare occa
sions of grave national import, any inter
ference with the management b y the Govern
ment. It actually has the ruling power, in the
appointment of the managers; having'exer
cised that it keeps its hands off.
It should finally be said that the Bank’s
shares pay dividends as high as 17 per cent.
The Bank makes a report weekly and a
comprehensive statement at the end of the
year.
Following is a condensed report of the Bank
for Nov. 2, 1911, the amounts being stated
in francs.
BANK OF FRANCE
A ssets
L ia b il it ie s
Capital.................................................... 182,500,000
Surplus and Profits..................................
42,530,000
Notes.......................................................5,493,620,000
Public Deposits..............
..................... 358,010,000
Other Deposits......................................... 575.124,000
Other Items................................. ..... . 320,216,000
Total...................................... .
Gold...... .................................................3,144,160,000
Silver...................................................... 789,724,000
Discounts................................................ 1,724,385,000
Loans on Securities.................................. 672,175,000
Loans to Government.............................. 199,980,000
Other Items................ ....... .................. 441,576,000
Total....................................
.6,972,000,000
..... 6,972,000,000
The returns of the other reporting banking institutions of France show the following items in
francs:
Capital and Surplus................................. 1,320,000,000
Deposits.................................................. 2,200,000,000
Current Accounts..................................... 2,700,000,000
Acceptances............................................. 700,000,000
Other Liabilities....................................... 280,000,000'
Bills Discounted...................................... 3,100,000,000
Loans...................................................... 750,000,000
Current Accounts.....................................1,900,000,000
Cash*..... ................................................ 520,000,000
Securities, etc..... ..................................... 930,000.000
7,200,000,000
7,200,000,000
* In hand and at Bank of France.
Of the total thus shown three institutions with about 1,000 branches have fully 66 per cent.
There is a mortgage hank with over 5,000,000,000 francs of assets.
The savings banks show deposits of 5,500,000,000 francs.
37
R E IC H S B A N IC , B E R L IN
IM P E R IA L B A N K O F G E R M A N Y
The German System
C
o in
E R M A N Y has a unique coinage system
based upon the ancient mark. Prior
to the unification under the Empire
in 1871, there were numerous small
states, each with its own system. There had
been some uniformity developed out of the
ancient heterogeneous money regulations dur
ing that long period when Austria dominated
in the electoral empire. But even then there
was much confusion.
Silver had been the prevailing standard
money metal for centuries. The laws of 1871 and
later years, established the gold standard, but for
a time permitted the existing thalers (dollars) or
largest silver coins to continue full legal tender.
They have been recoined from time to time
and have now practically disappeared.
The mark is the unit, but is too small to be .
coined in gold, being only 6.15 grains in weight,
and valued at 23.8 cents. The metric system
prevails. The 10-mark piece weighs 3.982
grammes; all coins are .900 fine. The silver
mark contains 5 grammes of pure metal. The
divisional piece is the pfennig of which 100 go
to a mark.
G
P
aper
C
urrency
Here as in other countries many individual
banks formerly issued notes; at the date of
the creation of the Empire there were about 33;
then the Imperial Bank was established (1876)
and gradually the others gave up note-issues;
there are now only four, one each in Baden,
Bavaria, Saxony, Wurtemberg; but their
emissions are not large.
Although the Imperial Bank is a private
stock corporation, the Government appoints
the managing board; the Imperial Chancellor
is chairman; it thus has virtual control, and
under the charter may buy the stock at the
end of any ten-year period, that being the
term of its existence, usually renewed, with
fresh conditions.
It is interesting to note that the Bank is
really the successor of the Royal Bank of
Prussia which dates from 1765.
The capital, originally 120,000,000 marks, is
now 180,000,000 (say $42,850,000). There are
about 19,000 shareholders; one vote is allowed
each share, but no one may have more than
300 votes. They elect an advisory board only.
Dividends are primarily limited to 3 ^ per
cent., except that if profits exceed that rate the
surplus is divisible, four-fifths to the Govern
ment and one-fifth to shareholders. The
latter actually get as high as 7 per cent, which
would mean that the Government gets 15 per
cent. The Bank has some 500 branches and
sub-branches throughout the Empire.
The note-issue function is uniquely regulated.
A fixed amount of about 9 marks per capita
may be issued on credit; this sum, called the
“ contingent” is 618,000,000 marks for all of
the five banks, the Imperial’s share being
550,000,000 marks. They may then issue
further sums to the amount of cash on hand;
and finally an unlimited amount on credit
subject to a tax at the rate of 5 per cent', per
annum; but at least one-third of the “ cover”
for notes must be in cash, the balance in com
mercial paper discounted, having not more
than ninety days to run.
In order to provide for the seasonal demands
for more money the law has been amended
recently so as to permit the enlargement of the
untaxed credit issues at the end of each quarter,
if necessary, to 750,000,000 marks.
Silver, and notes of the other issue banks
may be treated as part of the cash reserve.
There are also Imperial Treasury notes, issued
against 120,000,000 marks of gold in the “ War
Chest,” which may be so held, although these
. notes are irredeemable.
If the Bank has 1,500,000,000 marks of notes
in circulation, and 939,000,000 cash on hand,
the 561,000,000 marks of credit notes would
include 550,000,000 marks untaxed and 11,000,000 marks taxed, except at the quarter-days.
The taxing device is manifestly to restrain
inflation; if the tax were added to the dis
count rate the cost of loans would be dis
couraging. Actually it is not added in full and
often the Bank makes no addition; for it is of
record that the rate stood a t p e r cent, when
the tax had to be paid on a substantial part
of the notes.
The Bank discounts two-name paper for
any one having an account with it ; the limit
of time for the paper is three months.
The system provides for far greater elasticity
than that of England, but not as much as that
of France.
The Bank makes a brief report four times a
month and a very full one annually.
D
e p o s it
C
urrency
Checks are used more freely in Germany
than in France, but not nearly as generally as
in Great Britain. Hence deposit-banking is
39
THE
W O R L D ’S
PRINCIPAL
esu lts
in
O
SYSTEMS
the discount rate was under the 5 per cent,
tax rate.
Great flexibility is of course possible under
the system, but subject to the tax. During
our panic of 1907 the expansion in three weeks
exceeded $100,000,000 and the subsequent
contraction in a month was $140,000,000.
About 60 per cent, of the discounting is for
the hanks. The rule is to exact higher rates
for loans on collateral, usually about z per cent.
The Bank makes free transfers of balances
on its books between branches and agencies;
this is a boon to the business men, for payments
at a distance can thus be made without ship
ment of cash. These transactions in domestic
exchange constitute the chief business of the
Bank, so far as volume goes; and it takes the
place of check transactions in large measure.
We do not find in the German system the
same degree of adaptability to business needs,
with a stability to the value-measure, that is
found in France. This is partly due to the
great needs of the evolutionary period through
which Germany has passed in .the 40 years
since it began to shake off medieval methods.
In some respects the conditions are similar
to those in the United States; enormous
capital demands for industrial purposes coin
cident with the commercial needs growing
almost as rapidly. Germany is the marvel of
Europe in this development; yet she might
have accomplished this at far less cost with a
better system.
France on the other hand, has always a large
surplus of capital available for investment
abroad after providing for all home needs. It
is worth while comparing the economic de
velopment of these two countries since their
war of 1871; France paid $1,000,000,000
indemnity in cash and lost territory; but
to-day she lends money to Germany by the
hundreds of millions. Who will say how far
the stable value-measure has helped the
French and the unstable one injured the
Germans?
not of dominant importance, but there is
evidence of an increase in the volume. The
accompanying tables reflect the conditions.
Clearings are large, having increased from
42,000,000,o<x>marks in 1906 to 63,000,000,000
in 1911; but chiefly in large checks.
There are no reserve requirements against
deposits, which is a defect now that deposits
are growing.
Germany actually uses more coin than
paper currency or checks. This circumstance,
due to habit and the absence of small notes,
has often deprived the Bank of the power over
gold. It is estimated that the stock of gold is
$1,100,000,000 of which $800,000,000 is in the
people’s hands; and the money of all kinds
per capita is given at $23.49.
The Imperial Bank allows no interest on
deposits, although permitted to do so by its
charter to a limited extent.
While Germany has quite a large number of
commercial banks, the bulk of the business is
done by a few very large instutitions with
numerous branches; some of these also control
many local banks. They all keep accounts
with the Imperial Bank and discount paper
there. They regulate the “ open market” for
money, and are permitted to conduct stockbrokerage business. This has been one of the
features operating to forward Germany’s
industrial development, which has called for
corporations with share-issues. As a result
the preference given commercial loans in
London and Paris is not so marked in Berlin.
R
MONETARY
p e r a t io n
Germany’s discount rate ranges higher than
that of England and France, and is also much
more erratic. It is not an infrequent event to
have a 7 per cent, rate recorded. In the twenty
years from 1888 there were 69 changes in the
rate, the range being between 3 and 7% per
cent. In every one of these years taxed notes
were necessary, although in eight of the years
IMPERIAL BANK OF GERMANY, RETURN FOR DECEMBER 30, 1911
L i a b il it ie s
A
Capital..................................................... 180,000,000 j
Surplus, profits.........................................
64,814,000 j
Notes....................................................... 2,250,564,000 :
Deposits................................................... 710,481,000 !
Other.......................................................
56,239,000 |
-----------------j
ssets
Gold and silver......................................... 1,007,838,000
Notes..................................................
40,753,000
Securities.................................................. 148,880,000
Bills discounted........................................ 1,792,646,000
Loans on Collateral................................... 117,243,000
° ther....................................................... 154,738,000
3,262,098,000
3,262,098,000
The taxed notes at this date amounted to 451,973,000 marks; the discount rate was 5 per ™>wt,
40
THE
W O R L D ’S
PRINCIPAL
The fact that within the past year Germany
has borrowed heavily in the New York market,
is taken as evidence that her system has broken
down. Certain it is that it has proved in
adequate and requires improvement.
It would appear, however, that the absence
of all tax upon notes in Germany would have
been dangerous, looking back upon the specu
lative era. It is now worth considering whether
a tax graduated by conditions, would not be
better than the arbitrary fixed rate of 5 per
cent. What is equally important to consider
is the increase in gold in reserves; this has
now been taken into serious consideration by
the Government and results may soon be
looked for.
A recent statement of the Imperial Bank
is appended, the amounts being given in
marks.
MONETARY
SYSTEMS
The banks which do not issue notes are not
required to state their actual cash holdings;
they usually report “ cash on hand and at
banks” and sometimes include “ cash items.”
The figures thus reported make up about
1.000.000.000 marks. The cash estimates in
the table are based upon the actual return of
the Deutsche Bank, the greatest of them,
which shows a ratio of about 6 per cent.
Measuring the total cash against total notes
plus deposits and current accounts, it will be
seen how heavily the other banks rely upon
the Imperial Bank, whose own cash stands at
about 34>£ per cent.
None of the banks except the issue-banks
are subject to examination or to reporting,
except the annual reports required by the laws
of all corporations.
Germany has very old and successful
mortgage banks, which have loaned out
9.000.000.000 marks; also small local institu
tions for assisting agriculture, which show
4.500.000.000 marks of loans.
Savings banks show deposits of 3,700,000,000 marks.
A statement of the banking power follows,
amounts again in marks; the Berlin banks are
the nine great institutions which have helped
the Imperial Bank build up Germany’s in
dustries:
GERMANY’S BANKING POWER, IN MARKS
i
1
Capital and Surplus..................................... :
5 Issue Banks
g Berlin Banks
!
Securities, &c...............................................
Other Debtor Accounts................................
Totals...............................................
* Partly approximated.
j
j
1,954,417,000
|
160,524,000
168,355,000
J
*
AU
■
315,343,000
Deposits...................................................... j
765»730,ooo
Notes........................................................... 2.404.013.000
Acceptances................................................. 1
...............
Other Creditor Accounts ........................... |
81,492,000
BOls Discounted...........................................
412 Others
3,565,578,000
j
1,640,300,000
2,061,000,000
1,880,000,000
800,000,000
1,252,000,000
2,908,600,000
1.020.000.000
1.980.000.000
3.835.543.000
3.626.730.000
2.403.013.000
2,272,000,000
4.970.092.000
360,000,000+
1,698^00,000
*,517,400,000
907,300,000
3,378,800,000
220,000,0001
1.250.000.000
900.000.000
490.000.000
2.820.000.000
1.709.398.000
4.902.717.000
2.570.384.000
1.557.824.000
6.367.155.000
7,861,800,000
5,680,000,000
17,107,378,000
f Estimated; see text.
The System of Austria Hungary
C
had its own coins. The silver standard domi
nated until 1892, when, in fact, a radical
change took place. The former unit (the
florin) was worth 48.2 cents, or exactly 2%
francs; the present unit (krone) is valued at
20.26 cents and has no relation to any other
unit of coinage. In this particular a step
backward was taken when the gold standard
was adopted.
The gold crown is theoretically .3387 of a
gramme, equal to 5.228 grains, hence too small
o in
R IO R to the union of the two mon
archies which constitute the chief parts
of this Empire, Austria was a German
state and the money system was much
the same as that of the earlier days of the
other sections of Germany. When the present
Empire was constituted (1867) the Austrian
system, somewhat developed, was imposed
on the other states; but Hungary has always
P
4*
A U S T R O - H U N G A R IA N * B A N K , B U D A - P E ST
O E S T E R R E IC H IS C H - U N G A R IS C H E
BANK
THE
W O R L D ’S
PRINCIPAL
to be coined; gold coins are 900 fine. The
silver crown weighs 5 grammes, and is also
.900 fine.
P
aper
C
MONETARY
SYSTEMS
But the tax is not usually added to the dis
count rate, the Bank paying it out of its profits
as a public service. Since the Government
shares in the profits this is a proper policy.
Thus shareholders first get 4 per cent, divi
dends; any further profits are divided equally
with the Government, after putting 10 per
cent, thereof in the surplus fund; after share
holders have had 6 per cent, .dividends, the
Government gets two-thirds of the excess.
Actually the shareholders get about 7 per
cent.
The Bank’s notes are legal tender, and are
issued in small denominations; thus fully half
the issue is in notes of 50, 20 and 10 crowns.
This has helped the Bank to obtain gold. Of
$357,000,000 of gold in the country only
$85,500,000 is estimated to be in circulation.
The per capita money supply is $12.47.
urrency
The reform of 1892 also extended to the
paper currency. Both government notes and
bank notes were in use up to that date, and both
had been for many years sadly depreciated,
not only because they were payable in silver,
but because in the absence of adequate re
serves, the notes were irredeemable. The bank
note issue had for a number of years priori
been concentrated in one bank; hence the
reform of 1892 had to deal only with thiat
institution. The reform is to be recorded as a
highly creditable undertaking, accomplished
only after much sacrifice and tribulation; for
the plans did not work out as rapidly and as
fully as had been hoped. The Government
retired its notes with the help of the Bank and
the latter’s issues have finally been brought
to par in gold. But compulsory redemption
is not yet legally fixed.
The Austro-Hungarian Bank is the successor
of the Austrian National Bank, founded in
1816. The charter has been repeatedly re
newed by special legislation, since 1878, when
the present title was adopted. The capital,
210,000,000 crowns, or about $42,000,000, is
all privately owned, but the Government
appoints the chief officers and half the direc
tors, and maintains careful supervision. It
operates through 250 branches, and is pre
eminently an institution for public service.
In 1890 the plan for note-issuing was altered
to correspond with that of Germany. Credit
notes may be issued to the extent of 470,000,000 crowns; beyond that sum notes issued
without full coin cover pay a tax of 5 per cent,
per annum; the reserve in gold must equal 40
per cent, of both notes and deposits; the notes
not covered by coin must have commercial
paper and securities behind them. Elasticity
is thus amply provided for, subject to the tax;
the fact that the tax is usually paid during cropmoving periods, shows the utility of the plan.
D
e p o s it -Cu r r e n c y
Checks are not extensively used, yet other
banks, which are quite numerous, carry fairly
large deposits. They are not required to hold
fixed reserves and in fact do not carry large
sums in cash, depending upon the central bank
for means when needed. The result is that the
note-issues are quite large*, usually exceeding
2,000,000,000 crowns. Against this there is
always a substantial reserve. But a very large
part qf the check business is done by the trans
fers of credits by the central banks and by
the highly developed postal savings bank
system.
Discount rates are usually lower than in
Germany, ranging between 3 K and 5 per cent,
and are fairly steady. The money market is
not so largely influenced by speculative loans
as in Berlin; for Austria has not had such a
period of industrial development.
With parity restored to the paper currency
the system is operating with great practical
benefit.
Some of the principal items in the Bank’s
statement appear below, the amounts being
given in kronen:
AUSTRO-HUNGARIAN BANK
Capital......................... ................. ....... 210,000,poo
Surplus....................................................
16,000,000
Notes........ ............................................. 2,320,000,000
Deposits.................. ................................ 254,000,060
Mortgage Bonds...................................... 292,000,000
|i Gold.......................... ............................1,308,000,000
|i Sflver....................................................... 282,000,000
| Bills Discounted........................................1,013,000,000
HLoans.......................................................
85,000,000
1 Mortgages................................................. 300,000,000
Total resources arc nearly 3,30,0000,000 kr.
43
T H E S T A T E ( I M P E R IA L ) B A N K O F R U S S IA , ST. P E T E R S B U R G
GOSU DARSTW EN N YJ BANK
THE
W ORLDS
PRINCIPAL
Other reporting banks show total resources
of over 4,700,000,000 kr., but this does not
represent the full commercial banking power,
as the statements of some 2,500 small banks
are not available.
MONETARY
SYSTEMS
Savings banks of the several classes show
deposits of fully 7,500,000,000 kr. Some of
the postal savings banks carry checking
accounts.
Russia’s System
C
the new regime, it will be necessary to provide
a more elastic system for regulating issues.
The Bank discounts freely for other banks
and merchants, and regulates the discount
rate. It has about 100 branches.
The notes of the Bank are legal tender.
o in
H E coinage system of Russia rested on
silver until 1899 and hence the money
was depreciated and fluctuating. The
adoption of the gold standard made
the unit the {ruble of 100 copecks) 13.27 grains
of gold .900 fine, value 51.456 cents. (Thus
7y i rubles = 20 francs.) Subsidiary silver is
coined at .900 fine for the larger pieces, but
only .500 fine for the smaller. A large amount
of silver is used, since the gold stock, though
very large, is chiefly in bank. The estimated
total gold in the country is $761,400,000;
with 154,000,000 population the money per
capita is reckoned at $6.75. This is very small.
T
P
aper
C
D
e p o s it
C
urrency
Checks are not largely used; but antici
pating development there have been enacted
laws to regulate the other commercial banks
which will have a salutary effect. Thus
individual loans are limited to 10 per cent, of
capital and total liabilities to five times the
capital; reserves of 10 per cent, against
deposits, in cash or in balances at the Imperial
Bank, and annual reports, are prescribed;
examinations are also provided for; loans to
directors are prohibited and directors of one
bank may not be such in any other.
There are many small municipal banks for
local business, and several large ones for the
foreign trade.
F inland has a money system and a
central bank of its own.
Discount rates are higher than in most
European countries, having ranged from 4 ^
to 8 per cent, in recent years; 5 to 6 per cent,
is normal.
Statistics following show banking items in
rubles.
A partial return of commercial and municipal
banks yields a total of resources aggregating
2,000,000,000 rubles.
Mortgage banking is well developed, show
ing about 800,000,000 rubles of assets.
Savings banks show about 1,560,000,000
rubles of deposits.
urrency
The paper currency is all issued by one bank,
established in i860, which has a capital of
50,000,000 rubles all owned by the Govern
ment; hence the Bank is virtually a part of
the Finance Department, but the note-issuing
is now conducted on strict banking principles.
For many years the currency was sadly de
preciated, but with the great reform coin
cident with the adoption of the gold standard,
gold was acquired by bond-issues and the
reserve fortified. The currency thus became
sound.
The note-issues of the Bank are permitted
to exceed the coin on hand by 300,000,000
rubles; but gold held abroad may also be
included as reserve. Except in case of great
stress the issue has always been well within
the limit. For present Russian conditions the
reserve provision appears satisfactory; but as
the country develops under the influence of
BANK OF RUSSIA
L ia b il it ie s
A ssets
Capital.....................................................
50,000,000
Note-issues.............................................. 1A 28,000,000
Deposits...................................................
42,000,000
Government Funds..................................
456,000,000
Current Accounts.....................................
184,000,000
Special Deposits.......................................
296,000,000
Other.......................................................
68,000,000
Gold........................................................ 1,300,000,000
Gold Abroad............................................ 170,000,000
Silver,&c.................................................
62,000,000
Bills discounted........................................ 442,000,000
Loans.. .................................................... 388,000,000
Securities................................................. 122,000,000
Other.......................................................
40,000,000
Total............................................. 2.524,000,000
Total............................................. 2,524,000,000
45
B A N K O F IT A L Y , R O M E
B A N C A D ’lT A L I A
Italy’s System
C
belongs to shareholders until they have 6 per
cent.; any excess is equally divided between
shareholders and Government. Actually the
shareholders have not had the higher dividend
because the Bank had many burdens to
liquidate. Furthermore, the Government gets
a substantial income from a note-tax.
The two other issue banks (Naples and
Sicily) have no share-capital in the usual
sense, having bought out the shareholders
long ago.
o in
T A L Y has a coinage system identical with
that of France; the franc is called the
lira (plural lire) and is divided into 100
centesimi.
I
P
aper
C
urrency
Paper currency is issued by the Government
and by three banks; but of these banks two
are relatively unimportant to the system; the
Bank of Italy is to all intents and purposes
the central bank, with a 30-year charter from
1893. It was created by merging a number of
others.
The Government currency consists in part
of small silver notes; it is not fully covered by
coin and is purely for domestic use, hence plays
no important part in the general conditions;
yet if the country could afford it the people
would be better off without this currency.
For many years prior to the establishment
of the present system (1893) there'was a long
era of badly depreciated currency. It will be
recalled that the present union of Italian
states dates from about 1861; before that each
had its banks of issue, many poorly regulated,
although Italy had the earliest experience with
banks, Venice having had one as early as the
twelfth century and Genoa following some
what later; the present Bank of Naples dates
from 1539.
After the union the central government
undertook to unify the bank-note system and
in part succeeded; but the plan was so de
fective that failure followed. Sound prin
ciples dictated the plan of 1893, but the labor
of regeneration was slow and it has been only
within a decade that the currency has be
come sound.
The capital of the Bank of Italy is 240,000,000 lire, but only 180,000,000 is paid up.
It is all privately owned; shareholders have
one vote for each 20 shares, but none may cast
more than 50 votes, no matter how many
shares are held. The shareholders elect the
22 directors, and these choose the general
manager and submanagers, subject to approval
of the Government. The Bank operates
through 102 branches and agencies. There are
about 10,000 shareholders.
The Government shares largely in the
profits. Thus dividends are limited primarily
to s per cent., then out of further profits onethird goes to the Government, two-thirds
N
o t e -Is s u e s
Note-issues are regulated thus: the chief
Bank may issue 666,000,000 lire on 40 per cent,
reserves; the other two 248,000,000 lire;
beyond these sums the issues must be fully
covered by coin; but for emergencies the chief
Bank may issue 150,000,000 lire, on a 40 per
cent, reserve if it pays a tax, graduated by
amount. On part of the issues in excess of the
fixed sum, the Bank pays the Government
one-third of the discount rate which it earns
thereon; on a second part the exaction is twothirds; on the third part all of the discount
rate earned goes to the Government. This
obviously influences the discount rate.
One-fourth of the note-reserves may be in
silver.
In fact the Bank of Italy frequently exceeds
the “ normal” or fixed issue amount. Yet
discount rates have in recent years been quite
steady, ranging from 3 ^ to
per cent.
Changes are infrequent and must be approved
by the Minister of Finance.
Private deposits may be taken, but interest
may be allowed only to one-third the dis
count rate.
D
e p o s it
C
urrency
The use of checks has not developed ma
terially and deposits do not therefore play an
important part in the system. There are
numerous commercial banks. The regulation
of these by the Government is not serious;
they make annual reports the same as other
corporations; there are no reserve laws. A
bureau of the Treasury examines the issue
institutions, and all savings banks.
The system of rediscount and transfers of
funds partly makes up for the absence of
checks. Two-name paper having not more than
four months to run is available for rediscount
at the Bank at any time, and special provi
sion is made for the facilitation of commerce
and industry on a large scale; yet the small
47
THE
W O R L D ’S P R I N C I P A L
MONETARY
SYSTEMS
H ie two other issue banks have about
500.000.000 lire of notes, 350,000,000 lire of
coin reserve; total resources about 800,000,
000 lire. Other commercial banks have about
1.700.000.000lire in resources,and savingsbanks
report deposits of nearly 4,000,000,000 lire.
There are a few large mortgage banks with
about 1,500,000,000 tire in assets; also agri
cultural credit banks for small borrowers.
tradesman is also accommodated, as in France.
The money supply is estimated at $13.88 per
capita.
In the past ten years the reform has un
questionably improved conditions enormously,
due to the centralized system and able management.
Statistics of banking, amounts stated in
lire, follow:
BANK OF ITALY
L ia b il it ie s
A ss e t s
Cash........................................................1,510,000,000
Capital.................................................... 180,000,000
Surplus.................................................... 120,000,000 Bills discounted....................................... 724,000,000
Notes.......................................................1,931,000,000 ;j Advances.................................................. 167,000,000
Deposits and Current Accounts................ 305,000,000 j! Due from Banks...................................... 118,000,000
Switzerland’s System
managers of the several branches. The headoffice for discounting is in Zurich, the chief
dty; but that for the note-issuing is in Berne,
the capital. There are six other branches and
thirteen agencies.
Note-issues are limited only by the require
ment that there must be a 40 per cent, gold
reserve, and the balance of the cover in com
mercial paper. No stock collateral loans are
permitted and no investments in bonds except
governments; loans on government and muni
cipal bonds are permitted. Commercial paper
discounted must not run more than 90 days,
and bear two names.
Payment of interest on deposits (except
government funds) is prohibited. Dividends
are limited absolutely to 4 per cent. Further
profits go to surplus (10 per cent, thereof) and
the rest to the Government, which pays over
two-thirds thereof to the cantons to reimburse
them for the loss of revenues from the old
system.
It may discount for any one, may buy
bullion and foreign exchange and issue bullion
certificates. Its notes are legal tender only in
payments to it or to the Government.
Besides the examination^ prescribed by a
committee of the board there is a govern
mental examination provided for. A short
weekly report and an extended'annual report,
are also prescribed.
Discount rates are fairly stable, 1% to 4 #
per coat, being the usual rate; during our
panic in 1907,6 per cent, was recorded: There
have been twelve changes in the rate in three
years. Rates for collateral loans are always
slightly higher.
HE coinage system of Switzerland is
identical with that of France; the
unit is also the franc of 100 centimes.
Paper currency was for many years issued
by banks chartered by the several cantons
(states) and the system operated defectively.
In most cases the cantons owned the banks;
in others they provided more or less super
vision; but uniformity was lacking. After a
fruitless endeavor on the part of the Federal
Government to regulate these institutions, by
prescribing uniform reserve requirements and
minor regulations, the present central bank
system was adopted in 1905 and established in
1907; under it the forty-two individual banks
have been deprived of note-issuing powers,
but continue to carry on all other kinds of
banking business.
Other commercial banks exist, a few of them
quite important. Deposit-currency is not
extensively employed, since the habit of using
checks has not developed materially. Money
per capita is estimated at $31.39. Clearing
houses were established in 1907.
T
T
he
S w is s N
a t io n a l
B
ank
The Bank has a 20-year charter; the capital
is 50,000,000 francs but only half is paid up.
The shares are. owned thus: 16 per cent, by
the former issue banks, 39 per cent, by
die cantons, and 45 per cent, by about 10,000
individuals or firms. No shareholder can have
more than 100 votes. Of the 40 directors the
Government appoints 25; the chief officers are
appointed by the Government on recom
mendation of the board; so also the local
4«
THE
W O R L D ’S
PRINCIPAL
This is the most recent example of the
establishment of central regulation of banking,
and in circumstances somewhat similar to
those existing in the United States. It is to
be noted that the central organization was not
effected until July, 1907, and thus the new
system was subjected to the severe test of a
world-wide financial crisis before it was four
months old. It stood this test, and when the
crisis passed the execution of the purpose for
which it was created,— regulation of the cur
rency and the discount rates, with uniformity
of action throughout the republic,— was satis
factorily realized.
Under the provisions of the law, the Bank
assisted the former issue banks to withdraw
their notes from circulation within the period
fixed, which expired in 1910.
The volume of currency is adapted to the
MONETARY
SYSTEMS
needs almost automatically; the discount
rates are uniform throughout the land, and
relatively low. An adequate gold reserve has
been created and well maintained; the out
flow of the yellow metal has been regulated
by the Bank, through the possession of a
continuously replenished supply of foreign
bills of exchange, which the country’s export
trade furnishes.
Following are statistics of banking, amounts
in francs.
The former issue banks, capitalized at about
250.000.000 francs show deposit liabilities of
1.600.000.000 francs and a total of resources
about 2,000,000,000.
Savings bank deposits amount to about
1.500.000.000 francs. The aggregate banking
resources are thus approximately 6,800,000,000
francs; the population is 3,559,000.
SWISS NATIONAL BANK
Capital................................... ................
Notes................ ........................... .......
Deposits.......................................... .......
Coin .......................................................
Loans.........................................................
Securities...................................................
25,000,000
266,000,000
182,500,000
173,000,000
139,000,000
6,000,000
The totals are about 500,000,000 francs.
SEVENTEEN COMMERCIAL BANKS
Cash..........................................................
Discounts...........................................
Loans.........................................................
Securities, &c.............................................
Capital...................................................... 390,000,000
Deposits.....................................................1,076,000,000
Acceptances.................... .......................... 308,000,000
Obligations............................ ................ 870,000,000
49,345,000
445,000,000
198,000,000
653,000,000
The accounts balance at 2,820,000,000 francs.
Sweden’s System
of the gold must be on hand; and a 30 per
cent, metallic reserve must be established
against any credit notes above 60,000,000 kr.
Notes not thus covered must have securities
or bills of exchange behind them.
A monthly report and a comprehensive
annual statement are required.
Prior to 1903, twenty-eight other banks also
issued notes, under old charters and ineffective
regulation; they issued more than the chief
institution; results were so unsatisfactory, since
uniformity was lacking, that the power was
concentrated in the year named. The central
bank assisted the others in gradually liquidat
ing their note liabilities.
H E Scandinavian coinage system, of
which the unit is the kroner of 100
ore, prevails in Sweden; the standard
is gold. Theoretically the unit is 6.914
grains of gold .900 fine, value 26.8 cents.
Paper currency is now issued only by the
Royal Bank (founded 1668) which is owned
by the Government entirely. The governor
is appointed by the king, the six directors by
the parliament. Profits go to the Treasury—
average about 11 per cent, on the capital of
50,000,000 kroner, after placing 10 per cent, in
the surplus fund.
Its notes are legal tender. The issue is
limited to 100,000,000 kr. beyond the gold on
hand or in foreign banks, but 40,000,000 kr.
T
49
M A IN B A N K IN G R O O M
S V E R IG E S R I K S B A N K
THE
W O R L D ’S
PRINCIPAL
D eposit-currency is not exten sively em
ployed ; m oney per cap ita is $12.18.
Since the reform there has been a m arked
im provem ent. In the first place, the B a n k
keeps the currency well protected, y e t dis
counts v e ry freely, two-nam e pap er w hich m ay
run up to six m onths. E xpansion and con
traction of volum e are adap ted to the needs.
T h is w as well exhibited when in the p a n ick y
period of 1907 the discounts were fu lly equal
to the note-issues.
T h e discount rate has ranged from 4
to
7 per cent, in recent years, b u t the high rate
MONETARY
SYSTEMS
w as in the 1907 panic. N o rm ally it is about
5 per cent, and there have been less than three
changes per y ea r since 1901.
O ther com m ercial banks are now required to
lim it individual loans and prohibited from
tak in g one-name paper. M o n th ly reports and
periodical inspection are prescribed.
T h e follow ing statem en t gives the item s in
the B a n k ’s account in kroner.
O th er com m ercial banks show 307,000,000
kr. capital, and 2,400,000,000 kr. resources.
Savin gs
banks have 920,000,000 kr. on
deposit.
BAN K OF SW ED EN
L
ia b il it ie s
Capital............................................................. 50,000.000
Surplus............................................................. 12.400,000
Notes................................................................ 100,000,000
Due Banks....................................................... 50,000,000
Public Deposits...............................................
8,000,000
Other................................................................
5,600,000
A
ssets
Gold......................................... ....................... 40,000,000
Other Cash....................................................... 52,000,000
Discounts......................................................... 101,000,000
Loans and Securities....................................... 25,000,000
Due from Banks.............................................. 75,000,000
Other................................................................ 23,000,000
Total..................................................... 316.000.000
Total..................................................... 316,000,000
Belgium’s System
D ividen ds are p rim arily lim ited to 4 per
cent. Excess profits are allotted as follows:
25 per cent, to the G overnm ent, 10 per cent, to
surplus, 5 per cent, to the m anagers, 60 per
cent, to shareholders. A s the dividends a ver
age about 15 per cent, the profits are evid en tly
large. Y e t the G overnm ent gets other revenues.
T hus, if the discount rate is raised above
$X
A per cent, the profit derived from the excess
rate goes to the T reasu ry; and if the noteissue exceeds 265,000,000 francs the T reasury
imposes a tax of a q uarter per cent, on the
excess. It gets no interest on its deposits w ith
the B an k , b ut a n y surplus revenues m ust be
invested and the income thereon goes to the
T reasury.
T h e notes of the B a n k are legal tender; the
issue is lim ited b y the coin reserve, w hich m ust
be at least one-third of all demand liabilities.
In fact, how ever, this provision m ay be sus
pended b y the G overnm ent and this is fre
q u en tly done, p articu larly when the B an k has
a large am ount of foreign paper p ayab le in
gold (in London and Paris, ve ry near by)
w hich is regarded a satisfactory" reserve asset.
T h e B a n k discounts freely for all, on threename paper h avin g not more than 100 days
to run; two-nam es o n ly are necessary on
com m ercial paper, when accom panied b y
E L G I U M has a coinage system identical
w ith th a t of Fran ce; the franc of 100
centim es is the unit. P ap er currency
is issued only b y the N atio n al B a n k ;
there are, how ever, special conditions govern
ing the B a n k ’s operations w hich are w orth y
of notice.
T h e B a n k is a p rivate stock corporation,
created b y special charter soon after the
kingdom separated from the N etherlands
(1851). T h e charter now runs for 29 years
from 1900. C a p ita l is 50,000,000 francs, all
p aid in; no one w ith less than ten shares m ay
vo te, b u t no one m ay h ave more than five
votes, either d irectly or as proxy.
T h e shareholders elect six directors and
seven censors, who w ith the governor, ap
pointed b y the king, con stitute the council of
the B ank.
T h e directors have, under the
governor the active m anagem ent; the censors
h ave auditing and supervisory functions. T h e
kin g also appoints the d ep u ty governor, from
am ong the directors, and the m anagers of the
branch a t A n tw erp and of the 39 agencies.
T h ere is also a G overnm ent official charged
w ith supervision and exam ination.
C h ecks are not extensively' used.
The
m on ey-supply is estim ated a t $23.91 per
capita.
B
51
B A N K OF JA P A N , T OK YO
N IP P O N G I N K O
P U B L IC O F F I C E , B A N K O F JA P A N
THE
W O R L D ’S
PRINCIPAL
documents or Government bonds. Loans on
collateral are permitted, but are not nearly as
large as discounts of bills, other banks doing
more of that business; loans to other than
merchants must be registered.
Discount rates are usually low, about 3 and
3 ^ per cent. A 6 per cent, rate was fixed
temporarily during the 1907 panic; but in
ten years the rate has altered only 22 times.
The Minister of Finance has a voice in fixing
the rate.
It is clear that the system makes for stability,
and Belgium thus has as stable conditions as
France, although not nearly as strong. The
influence of the Government unquestionably
contributes to the condition and the elasticity
of the system makes it adaptable to the needs
MONETARY
SYSTEMS
at any time. Efficient administration is en
titled to a large share of the credit.
A statement of the Bank is appended,
amounts in francs.
The Bank also carries on a sort of safe
deposit business in which it reports some
3.500.000.000 francs of assets.
It will be noted that the coin and bullion in
the statement does not equal 20 per cent, of
the liabilities; it is frequently the case, but
when foreign bills are included the legal ratio
is reached.
Other reporting commercial banks have about
2.000.000.000 francs assets; private banks are
numerous and important; savings banks, chiefly
governmental, show 930,000,000 francs of de
posits. There are also agricultural loan banks.
NATIONAL BANK OF BELGIUM
A ss e ts
L ia b il it ie s
Capital....................................................
Surplus....................................................
Notes.......................................................
Deposits and Current Accounts................
Other..................................................
50,000,000
28,000,000
900,000,000
110,000,000
137,000,000
Coin and Bullion............ .......... ...........
Forejfen Bills............................................
Bills Discounted......................................
Loans................................ ...................
Other......................................................
203,000,000
145,000,000
525,000,000
215,000,000
137,000,000
Total............................... .......... 1,225,000,000
Total...... ...................................... 1,225,000,000
The Japanese System
C
the other banks without note-functions. It has
proved remarkably successful. A powerful
bank to regulate foreign trade was then also
created with very satisfactory results. The
government notes have been retired.
The Bank of Japan has an authorized capital
of 60,000,000 yen, paid up 37,500,000 yen; the
Government took part thereof to help it start,
and it has always maintained a direct influence
in the control. Thus it appoints the chief
officers; also the directors from among nomi
nees of the shareholders, and it retains the
power of vetoing any acts of the managers
regarded detrimental to it.
Note-issuing is modeled somewhat on the
German plan. Thus the Bank may issue to
any amount upon coin in bank; 120,000,000
yen upon securities or commercial paper dis
counted; beyond that to any sum subject to a
tax of 5 per cent, per annum. There is no
fixed reserve requirement.
The Bank rediscounts for others and
dominates the rate for loans. It reports
briefly each week and comprehensively at the
end of the year.
o in s
A P A N adopted the gold standard for coin
age in 1897. The unit is the yen of 100
sen. Prior to that change in standard
the bi-metallic system rated the yen at
99.7 cents; as silver had declined about onehalf, the value of the unit was cut in two, to
49.8 cents. In gold it weighs 12.86 grains .900
fine, too small to be coined; silver for sub
sidiary coin is .800 fine.
J
P
aper
C
urrency
In some respects Japan’s experience with
paper has been very like our own. She com
plimented us mistakenly in 1872 by adopting
our national banking system; there were also
other banks without issue power, like our
state banks; and the Government also issued
notes. B y 1882 the system was found very
unsatisfactory.
T o provide elasticity of currency and thus
reduce discount rates, the reform took the
shape of a central bank of issue, continuing
53
THE
D
W O R L D ’S
eposit
C
PRINCIPAL
MONETARY
SYSTEMS
tics appended show that the other commercial
banks are important and increasingly so.
As an example of the effect of the system
upon discounts, the reduction of the average
rate at Tokio from 9.7 per cent, in 1902 to
5.8 per cent, in 1911 is cited. The Bank’s
rate has been at about 5 per cent, in recent
years.
urrency
Checks are coming into greater use, as
indicated by the clearing-house returns;
8,211,000,000 yen cleared, 1910, compared
with 5,532,000,000 yen in 1905. In view of
this, a law of 1890 provided for some regulation
of banks, but not as to reserves. The statis
B a n k in g S t a t is t ic s , I n Y
en
BANK OF JAPAN
LiABumzs
Assets
Capital......
.......................................
Surplus.................. —
....................
37,500,000
26,560/500
Deposits......... ...... ..................................
280,800,000
Gold , ,
,
Securities.............
...........................
.............................
927,4<tt,,00O
179,200,000
H ie deposits are largely government funds.
ONE THOUSAND, SIX HUNDRED AND FIVE COMMERCIAL BANKS
Capital............. ....................................... 316,700,000
Surplus.............. ..................................
96,800,000
Deposits...................................... .........1,141,400,000
Loans............ .......................................
536,000,000
The separate bank for foreign trade shows its status as follows:
YOKOHAMA SPECIE BANK
Capital...................... ..........
Surplus and Profits................. ................
Deposits.................................
Acceptances, Asc. —
.........
Discounts...................................
B0b Receivable, ftc.............
Securities....................................
Cash and Due from Banks____
20,800,000
. . . . . . .
There are mortgage, agricultural, industrial and colonial banks.
Savings banks show deposits nearly 300,000,000 yen.
Canada’s System
C
cent, gold, and 85 per cent. Dominion
bonds; beyond that sum gold, 100 per cent.
There are about $100,000,000 of these notes
out, of which 70 per cent, are accordingly,
gold certificates. The notes are used largely
by banks in reserves, and are redeemable in
gold.
The bank-note system is in almost every
respect most perfectly adapted to needs; but
this excellence was reached only after much
tribulation. Prior to the federation of the
provinces (1867) there had existed local
chartered banks which issued notes largely
without due restraint, as in the United States;
then the bond-security plan was adopted; it
was also contemplated at one time to supersede
oin
T
H E actual standard coin of the Dominion
is the gold dollar identical with that of
the United States, although British gold
coin is also legal tender; since there
has been no mint until quite recently, the gold
coin in use has been actually that of the
United States; subsidiary silver pieces were
coined in Great Britain for special use of the
colony.
P
aper
C
urrency
The Dominion issues legal-tender notes,
something like the greenbacks in the United
States, against whidi there is a coin reserve:
up to $30,000,000 there must be 15 per
54
THE
W O R L D ’S
PRINCIPAL
the banknotes with Dominion notes, but the
banks refused to surrender their privileges.
Sundry patchwork laws followed in the 70s
and 80s, during which periods the banks them
selves corrected many defects, developing the
present elaborate branch-bank system, which
was finally legally established by an act of
1890, perfected by several statutes since, the
latest in 1911.
There are now 28 banks having some 2300
branches, every hamlet in the Dominion being
thus served in a satisfactory and most econo
mical manner.
The salient provisions of the law are:
Minimum capital $500,000, half paid in;
$250,000 cash deposited with Government;
approval of Treasury board.
Note-issue allowed up to amount of paid-up
capital purely on credit; denominations not
under $5; must redeem notes at head office
and at branches in chief commercial centers.
No reserves required against either notes or
deposits, but a 5 per cent, redemption fund for
notes is required to be deposited with the
Government.
Notes are a first lien on assets, and share
holders are doubly liable.
Monthly reports are required, but no exam
ination is provided for by law.
A general supervision is exercised by the
Canadian Bankers’ Association, an incor
porated body.
Since 1908, an act permits issues of “ emer
gency currency” from Oct. 1 to Dec. 31 each
year, to 15 per cent, in excess of capital and
surplus, taxed at 5 per cent, per annum.
It is thus a system of purely asset currency,
with only slight Government supervision.
Charters are for 20 years. Loans are not
restricted, but banks are peculiarly well
protected by the law respecting liens on pro
perty of borrowers.
D
e p o s it
C
R
esults in
SYSTEMS
O
p e r a t io n
Canada is thus provided with a system
which assures soundness and elasticity of
volume to the currency; the supply is auto
matically adapted to the needs, the value
measure is rendered stable. These results are
accomplished, first, by the practice of issuing
notes only as demands for loans and discounts,
or needs of depositors, arise; second, by the
practice of each bank to promptly return for
redemption all notes of every other bank;
third, the mutual guarantee of notes by all the
banks through the redemption fund; finally,
the conservative and expert management.
Not in twenty years has there been a call
for the redemption of a single note from the
guarantee fund.
No bank can keep out its notes in excess of
the demand, because, when not in actual use
the notes reach other banks and are at once
sent for redemption in specie or Dominion
notes; this redemption is apt to cost more than
the gain derived from any attempt to force
the notes into circulation; such forcing is,
moreover, regarded there as a violation of
cardinal principles of banking.
Discount rates are in general lower than in
the United States, but what is more important,
the variation between the rate in the money
centers and the distant towns is trifling,
whereas in the United States the variation is
very great. Y et conditions are strikingly
similar; there is a great territory to be served;
diverse interests with agriculture dominant;
seasonal demands for cash are the same. The
contrast in results is due solely to the difference
in the monetary and banking systems. It may
be said that on one side of the boundary line
between the countries 12 per cent, is charged,
while on the other the rate is 6 per cent.
The currency supply is always lowest about
February 1, and highest about Novemeber 1,
corresponding to the crop needs.
The Bank of Montreal, established 1817, has
for years been the leader among the banks,
but in recent years the Bank of Commerce has
grown to a very good second in assets, which
are now within $8,000,000 of those of the older
bank. Together they hold 32 per cent, of the
resources of all.
While the ratio of cash to notes and deposits
is only about 13 per cent., it is to be observed
that the banks regard their loans on call as
almost equal to cash; and it is also to be borne
in mind that nearly half the liabilities are in
time deposits, which makes the call loans
fairly liquid assets for their protection.
Counting notes, public deposits due to banks,
urrency
In Canada checks are used extensively,
hence, deposit-currency plays an important
part in the system, and is well regulated despite
the absence of reserve laws; in practice each
bank fixes a reserve ratio for itself and holds
to it. The managers are all trained bankers,
and, thus, are considered to need less fixed
restraint.
The per capita money supply is placed at
$30.92; deposits in the 28 banks run to $156
per capita. The gold supply is figured at
$110,000,000, almost all of which is in the
banks, or in the Treasury behind Dominion
notes.
MONETARY
55
THE
W O R L D ’S
PRINCIPAL
and demand deposits as immediate liabilities,
the ratio of cash is over 27 per cent.
It is interesting to learn that a very sub
stantial part of the call loans abroad will be
found in the New York stock market.
MONETARY
SYSTEMS
In Canada trust companies are not per
mitted to conduct banking business. Savings
banks are both private and governmental;
the former hold about $36,000,000, the latter
about $57,000,000 of deposits.
STATEMENT OF CANADIAN BANKS, MARCH, 1912
A ssets
L ia b il it ie s
Capital, paid up.....................................
Surplus..................................................
Notes in circulation................................
Public Deposits......................................
Deposits, Demand..................................
Deposits, Time.......................................
Deposits, Abroad....................................
Due to Banks.........................................
Other.................................... >...............
Capital Subscribed, Unpaid....................
$111,173,000
99,234,000
95,918,000
36,818,000
331,896,000
606,045,000
84,737,000
20,103,000
13,203,000
1,455,000
Excess Assets..............................
14,277,000
Specie....................................................
Dominion Notes.....................................
5% Redemption Fund........... ..............
Notes and Checks on Other Banks..........
Securities...............................................
Due from Banks.................. ..................
Loans, Current, Canada.........................
Loans, Current, Abroad.........................
Loans, Call, Canada...............................
Loans, Call, Abroad................................
Real Estate, & c .....................................
Other.....................................................
$1,414,859,000
Total Assets.................................$1,414,859,000
Mexico’
C
o in
A F T E R having been a silver-standard
country for centuries, as the greatest
producer ofUhe white metal, Mexico
in 1905 adopted the novel system
of having a gold standard with silver cur
rency for the people; establishing a sub
stantial gold redemption fund to enable the
exchange of silver for gold at the fixed valua
tion, so as to prevent depreciation and fluctua
tion, which had been the condition prior to
the reform.
The unit of coinage is the peso containing
12.85 grains of gold .900 fine, hence, valued
at 49.8 cents.
P
aper
C
urrency
Prior to 1897 there was a lack of uniformity
in the constitution and regulation of issue
banks. Then the Federal Government under
took central regulation. Notes are now issued
by 24 banks located in the several states;
but the National Bank is by far the most
important and the leader in the system.
The issue banks must have at least 1,000,000
pesos capital, half paid up; they must deposit
20 per cent, of the capital in Government
bonds; charters may not run for more than 30
years. In fact, however, this “ free-banking”
law is suspended until 1822, as there was a
disposition to increase the number unduly.
$36,028,000
96,735,000
5,818,000
50,751,000
93,989,000
63,121,000
818,287,000
34,209,000
69,846,000
94,667,000
36,280,000
15,128,000
System
They may issue notes to thrice the paid-up
capital, but must have a reserve of 50 per cent,
against both notes and other demand lia
bilities, including deposits. A government
official is located in each bank’s head office;
he keeps check on the note-issues, and counter
signs the notes, so that the law is carefully
observed. The notes are not legal tender.
The banks operate through brandies, and
are under strict supervision by the Govern
ment. Monthly statements and full annual re
ports are required.
D
e p o s it
C
urrency
is an insignificant factor; the commerdal
development of the country has been slow;
yet it has prepared for such an evolution in its
laws, as the reserve requirement mentioned
above, and the inspection system, show. The
money supply is estimated at $9.98 per
capita.
Separate banks are created under the law
for mortgage loans and another class for
finandng purposes. There are also numerous
private banks.
The National Bank has about 40 per cent,
of the total business. Promotion banks have
about 130,000,000 pesos of resources, mortgage
banks, 55,000,000. There are no savings hanks.
The issue banks show debts and means
approximately as follows, amounts being
given in pesos:
THE
W O R L D ’S
PRINCIPAL
MONETARY
SYSTEMS
MEXICAN BANKS
Capital.......................................................118,000,000
Surplus....................................................... 55,000,000
Demand Deposits....................................... 70,000,000
Term Deposits............................................ 60,000,000
Notes......................................................... 112,000,000
Current Accounts....................................... 50,000,000
Other.................. .................................... 40,000,000
- ........................................... 5S,ooo,ooo
Utner Cash................................................ 35,000,000
Discounts.................................................. g2,000,000
If03118......................................................... 60,000,000
Securities................................................... 60,000,000
Current Accounts.........................................70,000 000
Other......................................................... 33,000,000
Total............................................... 505,000,000
Total...............................................505,000,000
Illustrative Comparative Statements
T
O illustrate the working of the systems
of the four chief countries of Europe,
the following figures are presented, the
amounts being stated in millions of
dollars. The period covered is from Septem
ber, 1911 to March, 1912. The discount rate
reflects changes in condition.
The tables show the quarterly (and par
ticularly the annual) settlement needs; note
the expansion in December in each case.
It should be borne in mind that the Austrian
Bank is not compelled to redeem notes in
gold coin.
The sharp advance in the discount rate in
October was due to the political crisis between
Germany and France over Morocco. France
withdrew funds loaned in Germany, which
then resorted to London, and finally to New
York. Altogether France exhibits the greatest
stability.
BANK OF ENGLAND
End of
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
c h
....................................
Gold
Notes
207
182
185
172
191
200
191
145
146
143
145
141
139
143
j
1
j
BANK OF FRANCE
Rate %
Deposits* Reserve*
279
248
258
329
246
33i
325
3
4
4
4
4
3#
3#
155
128
i 35
118
142
153
141
Gold
i1
j
622
629
642
634
639
646
650
|
|
i
j
Notes
Loans
1066
1099
1090
1145
1093
1016
1051
282
343
319
279
309
285
380
Rate %
l lA
!
3M
3X
j
3 K
3 #
s'A
V
AUSTRO-HUNGARIAN BANK
BANK OF GERMANY
End of
!
Sept.
! Coinf
i
Notes
Loans
Rate %
558
466
427
547
418
39i
5i i
456
349
311
464
286
285
429
4
5
5
5
5
5
5
Taxed
Notes
Coinf
Notes
Loans
j
!
324
318
318
3 i9
322
324
i
319
504
521
485
5i 5
474
459
467
239
268
237
269
213
215
212
J Rate %
|
Oct.
Nov.
Dec.
Jan. .......
Feb.
: h ...................j
1
242
255
269
245
288
297
280
i
'
126
65
i
.
114
’38
;
!
4
s
5
5
4
5
5
* Deposits and reserves shown, as more significant than loan items, which are not distinctly reported,
t A substantial part of the coin is silver, not separately stated in the case of Germany.
the following table is given, the amounts being
stated in millions; of dollars:
For a comparison between United States
national banks and Canadian banks, at dates
nearest the calls of Comptroller of Currency,
57
THE W O R L D ’ S P R I N C I P A L M O N E T A R Y S Y S T E M S
UNITED STATES
Notes
1911
Deposits
681
682
697
703
Sept. 1.
Dec. 5.
191:
1912
Feb.:
. 30.
CANADIAN
;
'•
704
! Reserves.
Notes
Deposits
Loans
Reserves
908
946
89s
863
80
82
9«
102
888
932
959
871
888
<100
5536
5558
5611
5663
5659
1004
*969
no
1x8
121
138
5630
5810
950
89
1003
989
«34
5305
5478
932
To illustrate how the three chief systems
act under the influence of panic, the following
tables are presented, amounts being again
stated in millions of dollars. The period cov
ered is from October, 1907 to January, 1908.
Panic conditions first manifested themselves
in the United States about the middle of
October, but the great banks had anticipated
them in a measure.
Maximum Canadian note-issue in October,
107 millions; then began to diminish.
Under the Canadian system it is not neces
sary to curtail loans because the reserves are
reduced. The greatest absurdity is shown,
however, in the movement of the volume of
notes in the United States, compared with that
in Canada. Note particularly the increase in
the former in February, when demands
slacken, and the decrease in the latter.
BANK OF ENGLAND
Loans.
ftc*
Date
Oct. 19........... ; 169
Nov. 2 . . . . . . . . j 154
Nov. 30........... j 156
Dec. 28........... ..... 149
Jan. 4........... ..... iS7
Jan. s8 ........... ..... 174
U$
Reserve
339
*43
*41
*44
144
138
M4
408
101
387
392
4i 5
xo6
London’s free market for gold causes a
concentration of demand upon its Bank,
and hence rates are necessarily raised to
points beyond those of the Bank of France.
Note the substantial accumulation of gold
after the crisis passed.
sX
7
7
95
6
104
126
332
Rate, %
5
* The item includes discountsas well as loans on securities, the former not being separately stated.
BANK OF FRANCE
Date
Gold
Notes | Discount [ Rate, %
Oct. 3......................... ! 535
Oct. 31......................... .....538
Nov. 28— : ................. < 521
Dec. 26......................... ..... 519
Jan. 2......................... ; 5x6
Jan. 23......................... ; 5x8
948
358
359
346
927
968
943
The Bank had raised its rate from 3%
before October 10, anticipating trouble: it
came back to this rate immediately after
the crisis subsided, even though the gold
reserves were not materially increased.
$H
3X
350
965
930
4
4
4
3
416
345
BANK. OF GERMANY
Date
j Disc’ts
. Coin* ] Notes
i
Oct- 9 ........... ;
Oct- 3* ...........
Nov. 30........... ;
Dec. 23............
Dec. 3 * ........... |
Jan. 23........... j
•'
*>i
*3
185
196
*87*
244
|
j
•
j
!
|
\
407
3f 5
360
373
449
341
I
;
j
I
i
j J g * i Rate,% I
!
'
343
338
330
34*
44*
271
!
j
[
j
j
94
69
62
64
149
...
I
I
\
i
* Indudes s&ver, amount not separately stated.
S»
f"
sH
6H
7#
iH
7K
$
! Despite the great increase of coin and
> decrease in notes and discounts in January,
the Bank was constrained to keep the rate
f at 6% for the time being. Note the move1 ment of taxed notes.
i
THE
W O R L D ’S
PRINCIPAL
The strain at the turn of the year is the note
worthy feature; France accomplished it with
out going above a 4 per cent, rate, increasing
discounts 70 millions; Germany had to impose
a 7^2 per cent, rate to expand 101 millions, and
Great Britain’s expansion of 83 millions was at a
MONETARY
SYSTEMS
7 per cent, rate, the lower figure having been fixed
after the turn of the year. The raising of dis
count rates unquestionably restrained expan
sion, even at the turn of the year. The Bank
of England lost 20 millions gold, net; the Bank
of France, 22; the German Bank, 16 millions.
Summary of Special Features
O central bank has a capital as high as
100 millions, that of the Bank of
England, about 7^2 millions, being
by far the largest. None of the oth
ers exceed 40 millions.
Russia, Sweden, and a few minor states own
the entire stock of their central banks. In all
the, others there is a restriction upon voting
power to prevent concentration of control.
In all except England the governments exercise
the power of appointment of the management,
particularly the chief officers, in a greater or
less degree. In Switzerland the Government
appoints five-eighths of the directors.
Charters are never for as long as 50 years;
in almost all cases the term is 20 years or less,
thus reserving the power to the governments
to make terms for renewals in accordance with
altered conditions.
In almost all cases profits to shareholders
are limited, and the governments participate
therein. In several cases the governments go
so far as to exact the major part of profits
derived from the raising of discount rates.
This tends to keep rates lower than might
otherwise be the case. In a few instances the
consent of the governments must be had to
raise rates.
In order to enable the banks to make the
discount rates fixed by them effective, they are
not prohibited from discounting for individ
uals as well as banks. The usual practice is to
permit individuals first to have deposit ac
counts with the central banks, to entitle them
to discounts.
It is almost universal that no interest is
allowed on deposits in central banks, except
as to government funds in a number of cases.
While in the case of the most successful
central bank (the French) no rule as to a
reserve ratio on liabilities exists, most of the
charters require fixed minimum reserves; but
the rigidity of such reserve requirements is in
most cases relieved by the power to issue notes
in excess of the limit by paying a tax or
otherwise.
The notes of the central banks, as well as
deposits with these by other banks, are avail
able as reserves for the latter; only very few
of the latter are required legally to hold specific
reserves, even where the checking system is
highly developed.
All central banks operate through branches
and agencies; transfers of funds for other banks
and individuals at small charge (or without
charge in some cases) are prescribed and con
stitute a large part of the business in many
of them.
Central bank notes are in many cases made
legal tender. They are all redeemable in coin
on demand and generally speaking in gold,
penalties being imposed in most cases for
failure to redeem.
Discounting of bills of exchange is univer
sally a far more important part of the business
than loaning on collaterals; and rates for the
former are always lower than for the latter.
The concept that a central bank is a public
service institution, created for the benefit of
the whole people and not only for the banks,
prevails everywhere. The nations realize that
their trade as a whole is to be served to assure
prosperity, and this purpose is the chief end of
the systems.
N
59
...................
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N e w Y o r k C e n t r a l L in e s
T h e G r e a t e s t R a il w a y T e r m in a l in t h e W o r l d , a W o n d e r f u l C iv ic I m p r o v e m e n t
The Estey Piano
ACK of the Estey Piano
is over sixty-five years
ot conscientious effort
in the making of musical
instruments. Every one of
those years of endeavor has
been one of betterment,
though the underlying prin
ciple has not changed. That
principle has been applied to
pianos — the determination
to build as good as any in
the world — to make them
honest without stinting or
cheapening in material or
workmanship — to put con
science into them, as well as
wood, and strings, and felt
S T Y L E L O U IS X V T I N Y G R A N D
Length, 5 feet. W idth, 4 feet 8 inches. M ade in M ahogany.
— and to sell them at a
O ther woods to order.
moderate price.
For over sixty-five years the Esteys have been building musical
instruments, and building better every year!
To-day the Estev Piano and the Estey Player Piano reflect not
only the highest integrity in making, but the result that commends
itself to the iudgment of the careful, conservative, discriminating
buyer.
B
Warerooms:
New York, 23 West 42nd Street
Philadelphia, corner Walnut and 17th Streets
St. Louis, 1 116 Olive Street
Brattleboro, Vt.
London, 12 Rathbone Place, Oxford Street
Factory:
1 12-124 Lincoln Avenue and 271-289 East 133d Street
New York City
A Year of Remarkable Growth
H I S Com pany’s business has received a splendid impetus during
the past year. The great plant at Niagara Falls, although less than
two years old and noted for its size and completeness has been found
inadequate to meet the growth o f the business.
W ith in ninety days the
floor space and capacity have been doubled.
A new product for the automobile field has been brought out— an
Electric Starter and Lighter. This new product fits in perfectly with the
class of engineering and manufacture carried on heretofore.
A trade name has been adopted for common application to all our
products which are now widely advertised and sold under this trade-mark.
T
f
Products for Railway Field
Axle Equipment for Electric Light on Cars — over 6000 of these
are now in service.
Storage Batteries to operate Automatic Safety Signals used in B lo ck
System s.
T h e Storage B attery m ethod is now recogn ized as the best.
Products for Automobile Field
Electric Starter and Lighter for Gasoline Automobiles.
The
U - S - L equipm ent is the one w hich does aw ay with the fly-w heel.
It has
taken autom obile m anufacturers b y storm — adopted as standard equipm ent
for m any leadin g m akes. W e have sold our capacity.
Storage Batteries to drive Electric Cars and Commercial Trucks.
O ur cities are due for a revolution in transportation m ethods and electric
tru cks are fast com ing into fav o r becau se of econom y. T h is line is
ga in in g steadily.
.
Products for Power Installations
A great m any classes of power plants require storage batteries. U-S-L
Batteries have dem onstrated their superiority for this w ork and their sale
is grow in g rapidly.
%
U - S - L Products Excel and U -S -L Business Grows.
W e w ould be gla d to h ave you visit our factory.
The
U. S. Liight
& Heating Co.
G e n e ra l O ffice#:
F actory:
30 Church Street, New York
N iagara Falls, N. Y.
B ra nch O ffices an d Service Stations
B o sto n
B u ffa lo
C le v e la n d
D e tro it
N ew Y o r k
C hicag o
St. Louis
S a n F rancisco
I r v in g Na t io n a l B a n k
NEW YORK
STATEMENT, July 31, 1912
ASSETS
Immediately available
Cash in V a u lt and Checks for Clearings
D ue from Correspondents and Dem and L oan s -
$12,049,509.18
15,302,351.82
$27,351,861.00
Available within 30 days
L oa n s D ue in 30 D a y s .................................................... ....... 4,965,875.95
U nited States B o n d s .................................................... ..1,527,752.20
O ther B ond s and Investm ents
.
.
.
2,479,043.82
8,972,671.97
Other loans and discounts
D ue W ith in 4 M o n t h s ..........................................
D ue A fter 4 M o n t h s ....................................................
13,267,076.40
3,357,757.94
LIABILITIES
16,624,834.34
$ 5 2 ,9 4 9 ,3 6 7 .3 1
C A P I T A L .................................................
SURPLUS AND PROFITS
C irculation.................................................
n « w a i K individual
.
.
.
.
$23,330,363.06
p
I B a n k s ................................. 21,468,872.31
$4,000,000.00
3,071,331.94
1,078,800.00
44,799,235.37
$ 5 2 ,9 4 9 ,3 6 7 .3 1
DIRECTORS
L E W I S E. P IE R S O N , P resident
F. A. M. B U R R E L L
Vice-Pres. C h arle s A. Schieren
Co., Le ath e r
M . M . B E L D IN G , Jr.
P re siden t B e ld in g Bros. CBl Co.,
M frs. S e w in g S ilk
W IL L IA M H. B A R N A R D
Treas. Mason-Sea m a n T ra n s
p o r ta tio n C o m p a n y
W I L L I A M C. B R E E D
o f Breed, A b b o tt C&L M o rg a n ,
Connseilors-at-Law
W A R R E N C R U IK S H A N K
P re sid en t C ru ik s h a n k C o m p a n y
JA M E S M. D O N A L D
C h a ir m a n H a n o v e r N a t. B a n k
R O B T . L . G E R R Y , N e w p o rt, R . I.
W M . H A L L S . Jr., S u m m it, N . J.
L E E KOHNS
o f L . S tr a u s £& S ons, A r t P ottery
a n d G la s s w a re
J O H N G. L U K E
Pre siden t W e s t V ir g in ia P u lp
a n d P ap er Co.
G E R R IS H H . M IL L D C E N
o f D eering , M illik e n
Co., C om
m is s io n D r y Goods
S I D N E Y Z . M IT C H E L L
Pres. E lectric B o n d £& S hare Co.
D A N I E L P. M O R S E
Pres. Morse
R ogers, W h o le
sale Boots a n d Shoes
R O L L I N P. G R A N T , Vice-Pres.
DIRECTORS
J A M E S E . N IC H O L S .
o f A u s tin , N ic h o ls Sr C o., W h o le
sale Grocers; Vice-President.
OFFICERS
L e w is E . Pierson, President
Jam es E. Nichols, Vice-President
Rollin P . X ira^ , Vice-President
W $ is G ^ fa s h , Vice-President
Benj. F. W ern er, Vice-President
Charles H. Imhoff, Vice-President
E m il Klein, Vice-President
H arry E . W a rd , Cashier
D. H. G. Penny, /Iss’f. Cashier
Richard J. F aust, Jr., Ass’t. Cashier
J. Franklyn Bouker, Ass’t. Cashier
Sam uel R edfem , Ass’ t. Cashier
C H A R L E S E . P E R K IN S ,
Pre siden t J. T. P erk in s C o .,Y arns
JA C O B H . SC H O O N M A K E R.
Secretary B u tler Bros., In c .,
W h o le s a le G e neral M e rchandise
E D W A R D R . S T E T T IN IU S ,
P re s id e n t D ia m o n d M a tc h Co.
W I L L I A M S K IN N E R ,
o f W i l l i a m S k in n e r k , Sons,
S ilks.
JO H N H . SE E D ,
B ro o k ly n , N e w Y o rk
S. F R E D E R IC T A Y L O R
P re sid en t B ordens C ondensed
M ilk Co.
W I L L I A M A . T IL D E N ,
Pre siden t F o rt D ea rbo rn N a
t io n a l B a n k , C hicago, Illin o is .
G U S T A V V IN T S C H G E R ,
Pre sid en t M a rk t & H a m m a c h e r
Co., Im p o r t a n d E x p o rt.
T H E O D O R E F . W H IT M A R S H ,
Vice-President F . H . L e g g e tt &
Co., W h o le s a le Grocers.
D A N I E L W . W H IT M O R E ,
o f D . W . W h it m o r e fit Co.,
W h o le s a le D ia r y Produce.
FRANK W . W O O L W ORTH ,
P re siden t F . W . W o o l w o rth Co.
F iv e a n d T en C en t Stores.
W I L L I S G. N A S H , V ice-President
S TRI CTL Y A C O M M E R C I A L BANK
Our new location will be in the W OOL WORTH BUILDING
@FedFRASER