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The Bank of North America in Philadelphia, is the oldest Bank in America, having been chartered by Continental Con gress, Decem ber 31st, 1781, and was organized for the specific purpose of aiding the then struggling colonies in their fight for independence, and was of inestimable value in the accomplish 4- J T4- n U*nf r t v*« r fOT its 8H -1164 2M 3-50 ISIS :rn sinci men »so H an page a su ^ S ted* ^ '■ / l i e n a era n v absence of the word National, it is a National Bank, acting under a National charter, and alw ays has been, although it did not accept the provisions of the present law until 1864. Its director ate is composed of men, active in financial and commercial life, who devote sufficient of their time to the work of the Bank, to keep thoroughly in touch with its affairs. ThePhiladelphiaNational Bank P H IL A D E L P H IA ORGANIZED 1H(K1 I N 1803, when Philadelphia was the capi tal ot the nation, as well as its metropolis, its e x p a n d i n g tr a d e r e q u ir e d additional banking facilities. A t a meeting o f its promi nent citizens, in response to this demand, T H E P H I L A D E L P H LA. B A N K was organized. It at once took a foremost place among the financial institutions o f the country, and has al ways occupied this enviable position. Its directorate has ever b e e n s e le c t e d from Philadelphia’s best citizens and to day comprises men prominent not only in civic life but nat ional affairs. Original Building Capital, §1,500,000 Surplus and Protits, 53,500,000 The com m and that the B a n k has upon the public con fidence is evinced by the fact t h a t it has the largest line o f in Deposits, $4^,000,000 Resources, $50,000,000 d ivid u a l d ep o sits o f any bank in the State o f Pennsylvania. Dividends paid to shareholders, $14, 914, 372 Present Home OFFICERS L E V I L. R U E, . . . President L IN C O L N G O D F R E Y , Vice-President H A R R Y J. K E S E R , . . H ORACE FORTESCUE, D A V I D S. L U D L U M , . Cashier Asst. Cashier • Asst. Cashier N . P A R K E R S H O R F R ID G E , Chairman of the Hoard Erected a . d . 18 - . jointly by The Philadelphia 57 Kank and The Hank of the United States The Seaboard National Bank o f the Citv o f N ew \ ork t8 Broadway Capital, $ 1 ,0 0 0 , 0 0 0 Surplus and Profits (earned) $ 1 , 6 5 0 , 0 0 0 Especially equipped for handling out-of-town accounts S. G. NELSON W . K.. C LEV ER LE Y L. N . D eVA U SN E Y - - S. G. B A Y N E , President Vice-President C. C. TH O M PSO N Assistant Cashier J. C. E M E R Y . Assistant Cashier O. M. JEFFER DS W e invite correspondence . . - . . . - . Cashier Assistant Cashier Assistant Cashier THE CONTINENTAL NATIONAL BANK ' CHICAGO | ■ OF E invite Banks and Bankers, M anufacturers, Merchants and Individuals to open accounts with us and avail themselves of our superior facilities. W CAPITAL AND SURPLUS - $7,000,000.00 DEPOSITS $70,000,000.00 O F F IC E R S G EO RG E M. R E Y N O L D S A L E X . ROBERTSON W M . G. SC H K O ED ER B r N J S. M A Y E R HERM AN W ALDECK F. H E L M O R E W IL B E R H A T T E R Y J. R. W A S H B U R N - . - . - - - . - . - President Vice-President Cashier Assistant Cashier Assistant Cashier Assistant Cashier Assistant Cashier Assistant Cashier D IR E C T O R S JOHN C. BLACK, Chairman of the Board. J. O GD EN A R M O U R , I'resident, Armour & Co. A L B E R T J. E A R L IN G , President, Chicago, Milwaukee & St. Paul Ry. Co. H E N R Y BOTSFO RD, Packer B. A. E C K H A R T , President. Eckhart & Swan Milling Co. W M . C. SEIPP. Capitalist E D W A R D H IN E S , Piesident, Edward Hines Lumber Co. F R A N K H IBB AR D, Hibbard, Spencer, Bartlett & Co., Wholesale Hardware F. E. W E Y E R H A E U S E R , Lumberman and Pine Land Owner, St. Paul, Minn. S A M U E L M cROBERTS, Treasurer, Armour & Co. A L E X . R OB ER TSON , Vice-President GEO RG E M. R EY N O LD S. President Brown Brothers & Co. N ew York Philadelphia Boston Alexander Brown C Sons & Baltimore Issue Travelers’ and Commercial Letters of Credit and T ra n sact a G eneral B an k in g B u sin ess I n v e s tm e n t S e c u r itie s Bought and Sold Brown, Shipley & Company London T H E A M E R IC A N B A N K E R S C O N V E N T IO N Y E A R B O O K C O N TA IN IN G T H E BANKING SYSTEMS OF TH E By M AURI CE W ORLD L. MuHLEMAN A R E V IE W OF T H E B A N K IN G SYSTEM S, T H E IR M E TH O D S OF ISSU IN G NOTES, A N D SA FE G U A R D S P R O V ID E D T H E R E FO R : IN C L U D IN G AN A C C O U N T OF T H E FO R M ER CEN T R A L B A N K IN G SYSTE M IN T H E U N IT E D STATES IL L U S T R A T E D W I T H E X T E R IO R A N D I N T E R IO R V IE W S OF THE GREAT B A N K IN G I N S T I T U T IO N S OF PRODUCED THE FROM AND OLD F I N A N C IA L W ORLD RE O R IG IN A L PHOTOGRAPHS I III 111 D E S IG N E D A N D A R R A N G E D BY A lfred 1 F. W h ite i fill III P U B L ISH E D fill ON THE A SSO C IA T IO N iii 8 E1 IH ’f OF TH E T H IR T Y -F O U R T H AT D E N V ER , C O LO RAD O , SEPTEM BER 28 TO O CTOBER 2, 1908 II O C C A SIO N A N N U A L C O N V E N T IO N OF T H E A M E R IC A N B AN K E R S P U B L IS H E D THE BANKING b y LAW JOURNAL 27 T h a m e s S t r e e t , N e w Y o rk Copyright 1908 , by Alfred F. White FOUNDED 1803 has for over one hundred years given par ticular atten tion to com m ercial and bank accou n ts, and still desires to e x ten d to Mercantile and B a n k in g Institutions e v e r y fa cility in dom estic and foreign banking. Resources thirty millions of dollars. IH General Banking Room Ilnitcir S ta te s Jjto rtgage £ C r u s t C o m p n g Ne w York " Capital and Surplus, $ 6,000,(XX).(X) A C T S as Correspondent for Banks, Bankers and Trust Companies. Designated Legal Depositary for State, City, Court and Trust A - Funds. Prepares and Certifies to issues of Municipal and Cor porate Bonds and acts as Fiscal Agent. Foreign Exchange bought and sold. DIRECTORS W IL L IA M B. BOULTON DUM ONTCLARKE C. A. COFFIN H ON. GEORGE A. COX C. C. CL’ Y L E R CHARLES D. DICKEY W IL L IA M P. DIXON 73d St. & Broadway ROBERT A. GRANNISS C HARLES M. HAYS W IL L IA M A. JAMISON GUSTAV E. KISSEL L. C. K RAUTH OFF CLARENCE H . MACKAY ROBERT OLYPH ANT 55 Cedar Street JOHN \Y. PATTEN M ORTIM ER L. SCHIFF VA LE N T IN E P. SNYDER EBEN B. THOM AS JAMES TIMPSON AR T H U R TU R N B U LL CORN ELIUS VA N D E R B ILT l-25th St. & hth Avenue BANKERS TRUST COMPANY 7 W all Street, New York Surplus and Profits, $1,1 78,000 Capital, $1,000,000 Directors S T E P H E N B A K E R , President Bank of the Manhattan Co., New York. S A M U E L G . B A Y N E President Seaboard National Bank, New York. II E D W IN M . B U L K L E Y , Spencer Trask & Co., Bankers, New York. J A M E S G . C A N N O N , Vice-President Fourth National Bank, New York. E. C. C O N V E R S E , President, New York. H E N R Y P. D A V IS O N , Vice-Presiden, First National Bank, New York. W A L T E R E. F R E W , Vice-President Corn Exchange Bank, New York. FR E D ’K T . H A S K E L L , Vice-President Illinois Trust & Savings Bank, Chicago. A . B A R T O N H E P B U R N , President Chase National Bank, New York. T H O M A S W . L A M O N T , Vice-President, New York. E D G A R L . M A R S T O N , Blair & Co., Bankers, New York. GATE1S W . M c G A R R A H , President Mechanics’ National Bank, New York. G E O . W . PE1RKINS, J. P. Morgan & Co., Bankers, New York. W IL L IA M H . PORTE1R, President Chemical National Bar.k, New York. DANIILL G . REID, Vice-President Liberty National Bank, New York. E D W A R D F. S W IN N E Y , President First National Bank, Kansas City. J O H N F. T H O M P S O N , Vice-President, New York. G ILBER T G . T H O R N E , Vice-President National Park Bank, New York. E D W A R D T O W N S E N D , President Importers’ & Traders’ Nat. Bank, New York. A L B E R T H . W IG G IN , Vice-President Chase National Bank, New York. SAMUE1L W O O L V E R T O N , President Gallatin National Bank, New York. E D W A R D F. C. Y O U N G , President First National Bank, Jersey City. Particular attention is called to the personnel, character and strength of this Company’s directorate. Interest paid upon inactive deposits. E. C. C O N V E R S J . F. T H O M P S O N , V. P. D. E. P O M E R O Y , T r e a s . H. W. D O N O V A N , ASSt.Treas. E , P re s id e n t T. W. L A M O N T , V.P. B. S T R O N G J r . Sec'y. F. N . B . C L O S E , ASSt. Sec'y. III III! mi ORIGINAL CHARTER 1S29. THE CALLATIN N A T I O N A L BANK of th e c rrr of n e w y o r k . CAPITAL, . . . $1,000,000 SURPLUS AND PROFITS (Earned ) 2,400,000 OFFICERS. SAMUEL W00LVERT0N, Preiidtnt. ALEXANDER H. STEVEHS, Vice-Prttidwrt. 6E0R6E E. LEWIS, Cashitr. HOWELL T . MANSON, Assistant Cashisr DIRECTORS. ADRIAN ISELIN, JR . FREDERIC W. STEVENS. ALEXANDER H. STEVENS. W . EMLEN ROOSEVELT. CHARLES A. PEABODY. SAMUEL WOOLVERTON, CHARLES H. TWEED. THOMAS DENNY. T H K B A N K OF P IT T S B U R G H N A T IO N A L THE B AN K H IS T O R IC A L — F O U N D E D 1810— T H E CAPITAL AND A S S O C IA T IO N OLDEST BANK W EST OF S U R P L U S , $ 5,3 0 0,00 0.00 THE ALLEGHANY M O U N T A IN S G IR A R D N A T IO N A L BAN K Oldest Bank Building in the United States. Erected in 1795 for the First Bank of the United States For over three-quarters o f a century the G I R A R D N A T I O N A L B i\ N K o f Philadelphia has enjoyed the confidence o f the business community o f P hila delphia. Q Its long successful career bears evidence o f conservatism and progressiveness in its management and its name stands as a synonym for strength, safety and solidity throughout the entire country. Q Its equipment for handling bank accounts is unsurpassed. Capital, T w o M illion Dollars. Q Surplus and Profits; T hree M illion E ight Hundred Thousand Dollars. Deposits, Thirty-five M illion Dollars. F R A N C I S B. R E E V E S ................................. President R I C H A R D L . A U S T I N ........................V ice-President T H E O . E. W I E D E R S H E I M . . 2d Vice-President J O S E P H W A Y N E , J r ..........................................Cashier C H A S . M. A S H T O N ................................... Asst. Cashier For over twenty-four years the K E Y S T O N E N A T IO N A L BANK of P IT T S B U R G has enjoyed uniform patronage and prosperity. S T h e efficient service it renders its clientele, its F policy of liberality to legitimate enterprises, com bined with conservatism in the placing of its funds, has inspired confidence, not alone in the immediate vicinity, but throughout the banking and financial world. THE BANK OF COMMERCE, N A T I O N A L A S S O C IA T I O N OF CLEVELAND, WAS O R G A N IZ E D IN 1899. C .H A V IN G A C A P I T A L , S U R P L U S A N D P R O F IT S OF T H R E E SAN D M IL L IO N D OLLARS, E E N M IL L IO N E Q U IP P E D ES OF AND FOR O U T -O F -T O W N CLEVELAND M E R IT RECTORATE AND CAN T H E IR IS ALL BRANCH AND CORRESPONDENCE TRUST F IR M S , C O N N E C T IO N ; IT IS T H O R O U G H L Y B A N K IN G , BANKS, C O R P O R A T IO N S THOU R E SO U R C E S O F E I G H T T R A N S A C T IN G IN V IT E S B E L IE V I N G HUNDRED D O L L A R S , IT L E G IT IM A T E D IA L L Y W IL L FO U R RENDER W IT H C O M P A N IE S , R E Q U IR IN G A C O N F ID E N T L Y S E R V IC E PATRONAGE. COM POSED COR OF THAT C IT S SO M E D I 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 B A N K ERS A N D B U S IN E S S M E N ; A N A S S U R A N C E O F A F A IT H F U L P E R FO R M AN C E OF A L L TRU STS. Wt)e J fo u r tl) S t r e e t R a t io n a l Panfe of iPfnlabelpfna has unsurpassed facilities for exte n d in g every form o f financial service. A special ty is made o f bank accounts. Capital a n d surplus o v e r $9,000,000; total resources o v e r 850,000,000. C or respondence invited. R. H. R U SH T O N , President E. F. SH A N B AC K E R , 1st Vice-President B. M. FA IRES, 2nd Vice-President R. J. C LAR K , Cashier W . A. B U L K L E Y , Assistant Cashier F. G. ROGERS, Mgr. Foreign Ex. Dept. MARINE NATIONAL BANK OF BUFFALO Capital - $1,500,000.00 Surplus and Profits, 1,145,926.80 Deposits - 17,521,984.80 STEPHEN M . C LEM E N T JOHN J. A L B R IG H T JOHN H . LA SC ELLE S C LIFF O R D H U B B E L L . H E N R Y J. A U E R - - - . - . - President Vice-President Vice-President - Cashier Assistant Cashier Directors S T E P H E N M. C L E M E N T E. H . H U T C H IN S O N JOHN J. A L B R IG H T G EORGE B. M A T H E W S CHAS. W . G O O D YEA R CHARLES H. KEEP W M . H . G R A T W IC K JOHN H . LA SC ELLE S ED M U ND HAYES W M . A. ROGERS W M . H . H O T C H K ISS M OSES T A Y L O R C O R N E L IU S V A N D E R B IL T OLDEST COMMERCIAL BANK W E HAVE T H E WE FACILITIES FOR IN BUFFALO H AN D LIN G Y O U R B U S I N E S S INVITE C O R R E S P O N D E N C E FR O M BAN KS AND BAN KERS T H E N K W HOM E OK TH E FIR ST N A T IO N A L BANK The F I R S T N A T I O N A L B A N K of CLEVELAND is the largest N ation al B ank in the State o f O h io . C . It has a Capital o f $ 2 ,5 0 0 ,0 0 0 ; Surplus and P ro fits o f $ 1 ,1 0 0 ,0 0 0 , and T o t a l R esources o f $ 3 1 ,0 0 0 ,0 0 0 , CL It has a directorate com posed o f fo r ty -s ix representative business men and hankers w h o are a guarantee o f fid elity, and its steady substantial grow th indicates a successful management. C. T h e personal attention o f an official is given all correspondence o f a business nature. T h e fid e lit y TRUST t i t le COMPANY OF and P IT T S B U R G H , was incorporated in 1886. It was the first trust company in Pittsburgh organized under the general Trust Company A ct of 1874. S The substantial progress it has F made is due to the policy it has pursued in carefully conserving the best interests of its clientele. ^ Having a board of directors com posed of some of the leading bankers and busi ness men of Pittsburgh, a capital of two million dollars, surplus and profits over five millions and total assets seventy-three millions, its facilities for transacting a banking and trust company business are unsurpassed. OFFICERS John James John B. • M c G il l , T homas R. . . President Vice-President J. D onnell, J. A. Knox, . Jackso n , . . R o b in s o n , • Secretary Ass't Sec’y-Treas. . . Auditor C. S. Gray, . R o b e r t P it c a ir n , C. E. W il l o c k , Eugene M urray, . Vice-President . . . Treasurer Ass’t Sec’y-Treas. A. P. B exk art, f A „ t TnBt 0 IB cm M. ) M c G if f in , Vice-President and Trust Officer. COLORADO STATE C APITOL D EN VE R Denver, the Convention City, 1908 T H E thirty-fourth annual convention o f the American Bankers Association w ill be held in Denver, the week beginning Septem ber 28, 1908. T h e marvelous progress o f the banking business in the W est during the past ten years and the excellent banking facilities o f Denver, make it the most appropriate city in the country for the con vention o f 1908. T h e bankers o f Denver have prepared an elaborate programme for the entertainment o f the delegates and visitors. Denver is one o f the most modern cities in the world. It is situated in the “ Land o f Sunshine,” one mile above sea level. Government statistics say the sun shines on 304 days a year in Denver. Denver is one o f the four great natural distributing points o f Am erica. It has a population o f about 225,000. Its buildings are built o f stone and brick and are modern and up-to-date. It has two hundred miles o f electric street car service, unsurpassed in the world. Its school system ranks highest in Am erica, and it is the most beautiful and comfortable residence city in the world. Denver’s banking facilities are unsurpassed in Am erica. It has seven national banks, with an aggregate capital o f $3,200,000 and sur plus $2,750,000, and fifteen state banks and trust companies with an aggregate capital o f $2,750,000, m aking a total banking capital and sur plus o f nearly $9,000,000, and deposits approximating $62,000,000. Colorado is the greatest mountain resort state on the American continent. Its scenic wonders are unequaled in the world. It is not only the greatest m ining state in Am erica, but its agricultural interests are far greater than its mineral resources. In 1 907 its mineral production was $48,780,745 w hile its farm products, including sugar beets, was $ 9 5 ,8 9 1,18 7, and its live stock products were $30,020,000. It also produced in refined sugar $20,000,000. Colorado’s population is 20% foreign and 80% native American. On the two follow ing pages w ill be found the leading financial institutions o f Denver, the First National Bank and the International Trust Company. U N IT E D ST A T E S M IN T , D E N V E R F S IR T NATIONAL B K AN he fir s t n a tio n a l B A N K o f D E N V E R is today one o f the strongest banks in the United States. Its extensive list o f correspondents throughout the country gives it unrivaled facilities for handling a l l business e n tru sted to it. C a p it a l , O n e M illio n D o lla rs Su rplu s, O n e M illio n D o lla r s T Officers I). H . M O F F A T F . G. M O F F A T . . . . President . Cashier TH OS. KEELY . Vice-President C . S. H A U G H W O U T , Asst.Cashier J. C. H O U S T O N , A sst.C ashier Directors D. H . M O F F A T F. G. M O F F A T L . II. E I C I I O L T Z C . S. H A U G I I W O U T J. A . M c C L U R G GERALD HUGHES THOM AS K EELY SPEN CER C . M. M a c N E I LL, Colorado Springs P E N R O S E , Colorado Springs T h e in te r n a tio n a l tr u s t C O M P A N Y IN D E N V E R , is the oldest and largest Trust company in the State of Colorado. S The substantial pro F gress it has made is due to the policy it has pursued in safeguarding the interests of its clientele. It Its directorate consists of leading bankers and financial men of the west. *F Every department is under the manage 1 ment of a highly specialized officer and its facilities for transacting a banking and trust company business are unsurpassed. ^ Capital and Surplus, Five hundred thousand dollars. D. H . M O F F A T - T H E O . G. S M I T H S. G. G I L L - - - Vice-President - Assistant Secretary - P. E . C L E L A N D President Secretary The Corn Exchange National Bank o f Philadelphia has the facilities for handling your business. Resources Eighteen Million dollars. j]j BENJAMIN G ITH E N S, . . . W M . W . SUPPLEE, . . Vice-President President C H A S. S. C A L W E L L , . . . M. N. W IL L IT S . J r . . . . Cashier Assistant Cashier T he u n io n BANK OF n a tio n a l CLEVELAND has the resources, organiza tion and connections which enables it to be o f the utmost service to Banks, Corporations, Firms and Individuals, whose business it desires, and to whom is ex te n d ed the facilities acquired th rou gh tw enty-five years ol service to the business com m unity. ^ Capital and Surplus, two million, five h un dred thousand d o lla r s ; fifteen million dollars. R esou rces, S S. W A L S H , Chairman o f the Board. B R E C K IN R ID G E JONES, TOM W . BENNETT, C. H U N T President. Real Estate Officer. Assistant Secretary. JO H N D. D A V IS , GEO. K IN G S L A N D , L O U IS W . F R I C K E , / 'ice-President. Assistant Real Estate Officer. A ssistant Secretary. S A M U E L E. H O F F M A N , J A M E S E. B R O C K , W IL L IA M I ’ice-President. Secretary. B ond Officer. H E N R Y SEM PLE AM ES, HUGH R. L Y L E , W M . M cC . M A R T I N , Assistant E xecu tive Officer. Assistant Secretary. Assistant B o n d Officer. F R E D E R IC K V IE R L IN G , HENRY Trust Officer. Assistant Secretary. C. IB B O T S O N , T U R N E R Jr., G. L A C K E Y , CH ARLES W . M O R A T1I Safe D eposit Officer. Directors JOHN' I. BEGGS, President United Railw ays Co. o f St. Louis. President Laciede (.ins L ight Co. W IL B U R F. BOYLE, Boyle Priest. JAM ES E. BROCK, Secretary. M U R R A Y C AR LE TO N , President Carleton D ry Goods Co. C H A R L E S C LAR K , H O R AT IO N . D A V IS , President Smith D avis M fg. Co. JOHN D. D AV IS, I 'ice-President. AU G U STE B. E W IN G , D A V ID R. FR A N C IS, F rancis B ro. & Co. A U G U ST G E H N E R . President G erm an-Am erican Bank. S. E. H O F F M A N , I 'ice-President. B R E C K IN R ID G E JONES, President. W . J. McBRIDE, * ice-Presuient H askell e~= Barker Car Co. N EL SO N W . McLEOD, ice-Pres. Grayson-M cLeod Lum ber Co. SA U N D ER S N OR VE LL, President A orvell-Shapleigh / / iliv. Co. ROBER T J. O 'R E IL L Y , M. D. W M . I). O R T H W E IN , President IVm. D . Orthwein Grain Co. H E N R Y W . PETERS, President Peters Shoe Co. H . C LAY PIERCE, Chairman B oard II ’aters-Pierce O il Co. JOSEPH R A M SE Y, Jr., AU G U ST SC H LA FLY, President Union Trust & Savings Bank. R. H . STOCKTON, President Majestic M fg. Co. JULIUS S. W A L S H , Chairman o f the Board. ROLLA W EL LS, M ayor o f City o f St. Louis. TH E COAL C b IRON N ATIO N AL BANK B O F T H E C IT Y O F N E W YORK Is located directly opposite to the downtown ferries of the Pennsylvania, Lehigh Valley, Baltimore C& Ohio and the N e w Jersey Central Railroads, which are the principal ap proaches to the downtow n commercial district. O ut-of- tow n bankers find it very convenient to deal with this bank which therefore makes a specialty o f serving the interests o f inland institutions w hose business alw ays receives personal attention. T h e Directors and Stockholders o f this bank con sist largely of men prominent in the great railroad, anthracite coal and manufacturing industries o f the East, in addition to a large representation from the diversified commercial interests o f N e w York City. It has a large official staff which has been identified with metropolitan banking and commercial interests for m any years and is thoroughly equipped to handle in its various departments both domestic and foreign banking. Its capital, surplus and profits aggregate over One Million T w o Hundred Thousand Dollars. Total Resources exceeding Six Million Five Hundred Thousand Dollars. T h e officers are M r. John T . Sproull, President; Anthony A . Lism an and David Taylor, Vice-Presidents; Addison H. D ay, Cashier, and H enry J. Dorgeloh, A ssistant Cashier. T HE Omaha National Bank o f Omaha is the largest bank in the State o f Nebraska. S For many years it has been closely F identified with the progress and develop ment o f the great business industries of Omaha, and its name has become a synonym for strength and conservatism throughout the W est. Sf It has an ex tensive clientele in the great agricultural district in which it is located and cor respondents throughout the W est to the Coast, which enables it to offer superior facilities for handling all business in this section. SFIt hasa Capital o f $ 1 , 0 0 0 ,0 0 0 . Surplus and Profits o f over $ 4 0 0 , 0 0 0 and Deposits of over $ 1 0 , 5 0 0 ,0 0 0 . Officers J. H . M I L L A R D , President W M . W A L L A C E , Vice-President C. F. M c G R E W , W. FRANK B. H. A. BUCHOLZ, W IL C O X , Asst. Cashier Cashier BOYD, Vice-President A sst. Cashier E Z R A M I L L A R D , Asst. Cashier Lobby of The Central National Bank Rockefeller Building, Cleveland, O. Statement of Condition, July 15, 1908 Loans and Discounts . . . $6,103,027.65 United States and Other Bonds . 1,215,932.98 22, 866.60 Overdrafts 50,000.00 Furniture and Fixtures Cash on hand Si ,06 0 ,7 9 1 .21 2,167,906.59 With Banks 50,000.00 With Treasurer of L . S. 3 ,2 78,697.80 $10,670,525.03 Capital Stock Surplus Profits Circulation . Bond Account Deposits $ 1,0 0 0, 000.00 500,000.00 130,430.67 1 , 0 0 , 0.00 0 00 548,500.00 7,491,594.36 $10,670,525.03 J .J . SULLIVAN, Pres. C. A. PAINE, Cashier E. W . O GLEBAY, Vice-Pres. L. J. C AM ERON, Asst. Cash. m THE CAPITAL N ATIONAL BANK O F ST. PAUL is the successor to the business of the Capital B a n k that w as organized in 1880, and the St. Paul National Bank that w as organized in 1883. T Having a directorate com p osed of prom inent bankers and business men and an official staff w h o are thoroughly versant w ith con di tions and credits as w ell as with the require ments of their custom ers, it offers unsurpassed facilities for handling all branches of the bank ing business throughout the Northw est. Every accom m odation and courtesy consistent with sound banking m ethods will be granted. HThe C a p i t a l N a t i o n a l B a n k has a capital of $500,000.00, surplus and profits approxim ately $100,000.00 and deposits o f over $4,000,000.00. Correspondence is Invited. OFFICERS J O H N R . M I T C H E L L , PRESIDENT W A L T E R F . M Y E R S . V IC E -PR E S. WM. H . E. H A L L E N B E C K , C A SH IER E D W . H . M I L L E R , A S S T . CASH IER B. G EERY, E. A . S C H R O E D E R , A S S T . CASH IER V lC E -P R E S. Hon. Hugh McCulloch the first Comptroller of the Currency, addressing the National Banks in 1863, said: “*mO nothing to foster and encourage speculation. Give facilities only to legitimate and prudent transactions. Dis tribute your loans rather than concentrate them in a few hands. Pursue a straightforward, up right, legitimate banking busi ness. Treat your customers liberally, bearing in mind that the bank prospers as its custom ers prosper.” Reproduced from a recent published statement of T he National B ank of the Republic of Chicago E D E S I R E TO IM P R E S S on every banker the fact that our ser vice in the collection of Buffalo items cannot be excelled; that w e are a strong, conser vative Bank governed by careful, prudent, yet p ro g ressive m an agem en t; and th at personal administration by our officers, courtesy, and faith fulness to details are large factors in our methods. C. Confidence, popularity, and steady growth have followed our effort to serve rightly. Entrust to usyour business and you will not regret it. C .W e welcome correspondence with a view to establishing perma nent relations. C. Capital, Surplus and Profits, Five Hundred and Sixty Thousand Dollars; Deposits, Four Million, Three Hundred Thousand Dollars. Officers A. D. B ISSELL, President C. R. H U N T L E Y , Vice-President H O W A R D BISSELL, A ss't. Cashier E. J. N E W E L L , C. G. FEIL, - - Cashier Asst. Cashier First National Bank Minneapolis, Minnesota Capital - - $2,000,000 Surplus and Profits Deposits - 2,062,602 15,000,000 Officers F. M. PR IN CE C. T . J A F F R A Y GEO. F. O R D E D. M A C K E R C H A R President Vice-President Cashier Asst. Cashier E R N E S T C. B R O W N , Asst. Cashier H. A. W IL L O U G H B Y , Asst. Cashier ss W ESTERN TRUST & SAVINGS BANK THE "ROOKERY” CHICAGO Established 1873. Capital, One Million Dollars. OFFICERS JO SEPH E. O TIS, . . President W A L T E R H . W ILSO N , Vice-President L A W R E N C E N ELSON . Vice-President W IL L IA M C. C O O K , . . Cashier A D D IS O N C O R N E A U , . Asst. Cashier A L B E R T E. C O E N , Auditor LO U IS H. S C H R O E D E R , Manager Bond Sales Department J. J. R A H L F , Manager Foreign Exchange Department 1 TRUST DEPARTM EN T W . G. W A L L IN G . . . . Secretary C L A R K S. JENNISON, Ant. Secretary DEPARTM ENTS II COMMERCIAL Accounts of Banks, Bankers, corporations, firms and individuals received on the most favorable terms. Loans made on approved notes and collateral. Time or demand interest bearing certificates of deposit issued. SAVINGS Interest at the rate of 3 per cent, per annum, compounded semi-annually, allowed on savings deposits. BOND Government, Municipal and Corporation bonds bought and sold. We at all times have in this department a choice line of high grade securities for sale. Advice to investors cheerfully given. FOREIGN Letters of Credit and Traveler's Checks issued, available all over the world. Foreign remittances and collections made. Foreign Exchange bought and sold at best rates. TR U S T W e are authorized by law, and are completely equipped, to act as Administrator, Executor, Guardian, Conservator, Assignee and Receiver. Also act as Transfer Agent and Registrar of stock and bond issues. Make investments and act as agent in the collection and disbursement of incomes. Trust funds and trust investments are kept separate from the assets of the Bank. III 111 III 111 III III The above departments are all managed by capable officers, especially qualified and selected with regard to the efficient and intelligent perform ance of the functions connected therewith, consequently giving our cus tomers the highest degree of service. The Peoples State Bank Detroit, Michigan Capital and Surplus, $3,000,000 Accounts of Banks, Bankers, Firms, Corpora tions and Individuals received. W ell established collection facilities. C o rre sp o n d e n ce invited Officers GEORGE H. RUSSEL, . President M. W . O’ BRIEN, Vice-Pres. and Chairman of Board H. C. PO TTER , Jr., . Vice-President GEO. E. L A W S O N , Vice-President R. S. M A S O N , Vice-President F A . SC H U L TE , Vice-President A U ST IN E. W I N G , Cashier H. P. BORGM AN, Cishier Savings Dept. R. W . SM Y LIE , Manager Credit Dept. J. R. B OD DE, . . Assistant Cashier GEO. T. C O U R T N E Y, Auditor Directors R. A . ALG ER GEORGE H. BARBOUR W . T . BAR BO UR H. M . C A M P B E L L B. S. C O L BU R N C. A. D uC H A RM E JEREM IAH D W Y E R H A L E Y FISKE F. J. H ECKER GEO. E. L A W S O N H. B. L E D Y A R D R. S. M ASON FR ED. T. M ORAN M. J. M U R P H Y P. H. M cM ILL A N M. W . O BRIEN H . C. PO T TER , Jr. LOUIS ROTHSCH ILD GEO. H. RUSSEL H E N R Y RUSSEL HUGO SCHERER F. A. SC H U L TE h e fid e lity t r u s t com pany of N ew York, is especially organized and equipped to provide all the facilities of a mod em Banking Institution, handling the accounts of Banks, Trust Companies, Individuals, Firms and Cor porations. S It seeks to transact business on legitimate, F straight forward up-to-date methods. The adoption and maintenance of this policy has gained for the com pany a prestige and standing worthy of an institution many years its senior. It opened for business M ay 22, 1907. On M ay 22, 1908, it had over one thousand accounts on its books, aggregating in deposits $4,208,172, and since that date these figures have shown a gratifying increase. The directorate is composed of thorough, practical business men and bankers whose prominence, strength and influence have ob tained for the company a marked degree of confidence in the business community. T All communications P relative to business receive prompt official attention. T Capital and Surplus, $1,500,000 Officers SA M U E L S. C ONOVER, President W M . H. B A R N A R D , JOHN W . N IX , Vice-Presidents * A N D R E W H. M ARS, Secretary STEP H E N L. VIELE, Assistant Secretary / The Peoples National Bank Pittsburgh, Pa. P I T T S B U R G H owes much o f its marvelous growth to a number o f prominent and successful merchants and manufacturers, who, in the early “ sixties” realized that the city would eventually become a great industrial center, pro vided it was supplied with ample banking capital to meet its growing requirements.CflWith this in view they organized T H E P E O P L E S N A T I O N A L B A N K in 1864, with a Capital o f $ 1 , 0 0 0 ,0 0 0 —-w ith a u t h o r i t y to increase to $ 2,000,000 — thus showing their wisdom in preparing for the city’s future greatness as a manufacturing metropolis. •J A s an indication o f the B a n k ’ s successful management during the F O R T Y - F O U R Y E A R S o f its existence, it has paid dividends amounting to $ 3 , 80 5,0 00 — and accu mulated a surplus o f $ 1 ,800,000— out o f its earnings. T h e total resources now are $ 16,000,000. W h ile it has never departed from a conservative policy during its history, it has always been progressive and up-to-date in its methods, and today it stands as one o f the foremost banks in the National system. S. R. F L Y N N , P r e s i d e n t G. A . R Y T H E R , C a s h i e r J. A . SPOOR, V i c e - P G. F. E M E R Y , A s s ’ t r e s id e n t C a s h ie r D IR E C TO R S J. OGDEN ARM O UR JAMES H . ASHBY SA M UE L COZZENS S. R. FLYNN A. G. LEONARD EDWARD MORRIS G. A. RYTHER J. A. SPOOR B A N K ’S affiliations suggest its strength and its ability to bring about certain definite results. T H IS F A C T SP E A K S FO R A T H E LIVE STO CK EXCHANGE NATIONAL BANK OF CHICAGO whose close connections with great Live Stock interests make of it an effective vehicle for hand ling to your advantage your live stock funds. Capital Surplus and Profits - $1,250,000.00 350,000.00 Reserve agent for National Banks. Accounts of Banks, Bankers and Corporations Solicited. Located Center W orld’ s Great Live Stock Market Union Stock Yards, Chicago The First National Bank St. Joseph, Missouri C A P IT A L SU RPLU S - - §500,000.00 300,000.00 - This bank is located in the heart of the greatest agricultural district in the world. W e consistently follow a co n serva tive p o lic y and in v ite patronage, fe e lin g co n fid en t that our facilities for rendering prompt and efficient service is unsurpassed. OFFICERS C H A R L ES PASCHE J. T. T R E N E R Y E. C. H A R T W IC \V. F. M A X W E L L - - - President Vice-President Cashier Assistant Cashier HE MERCHANTS N A T IO N A L BANK ^ B U R L IN G T O N , IO W A, established in Eighteen Hun dred and Seventy. Sf Its Cap ital, Surplus and Undivided Profits o f two hundred and thirty thousand dollars with a record o f thirty-eight years o f ever increasing business, offers its services for your Iowa business. J. L. E D W A R D S, JAM ES M OIR, V F. L. H O U K E , W . E. BLAK E , V i c e - P r e s i d e n t A L E X M OIR, V i c e - P r e s i d e n t H. J. H U N G E R FO R D , C a s h i e r C a s h ie r C. L. FU LTO N, A s s t . C a s h i e r P r e s id e n t ic b A sst. - P r e s id k n t D IR E C T O R S T. W . B A R H Y D T , H. A. B RO W N W . E. BLAK E C h a ir m a n JAM ES M O IR W . C. TUBBS W . W . C O P ELAN D A L E X . MOIR N. S. YO U NG J. L. E D W A R D S The Northwestern National Bank Minneapolis, Minn. 11 Capital and Surplus, $4,000,000 Deposits . . . $20,000,000 O F F IC E R S President W M . H. D U N W O O D Y Vice-President M. B. KOO N . Vice-President E. W . D E C K E R . Vice-President JOSEPH C H A P M A N , Jr. Vice-President A . A. C R A N E . I. F. C O T T O N F R A N K E. H O L T O N . CHAS. W . F A R W E L L . W . F. M cL A N E R O B T .E .M AC G R E G O R S. S. C OO K . Assistant Cashier Assistant Assistant Assistant Assistant Cashier Cashier Cashier Cashier Cashier H A T they are Endowments in Chrysalis dis tinguishes the regular life policies of the Mutual Benefit Life Insurance Company, from those of all other companies. T Their Complete Metamorphosis from policies payable by their orig inal term s “ at death o n ly ” into Endow m ents payable at a certain and gradually diminishing age, or at prior death, results from their holders exercising their unique contract right of applying their annual dividends to the purpose of thus transforming them. T his “ Accelerative E n dow m en t” feature assures an Independent Old age to the Insured as well as an Independence to H is Family in the event of his early death, at the L o w est of Life Rates. The Vice-President of The Merchants National Bank of Cincinnati endorses this Accelerative Endowment Plan in the following letter: CAPI T AL, SI , 200, 000 S URPL US, *300, 000 fflrrrhants National IBank C IN C IN N A T I, O. M. E. I N G A L L S , P R E S I D E N T E. C. O O S H O R N . V I C E - P R E S . GE O. R. B A L C H , V I C E - P R E S . W. W. B R O WN , V I C E - P R E S . H. C. Y E R G A S O N . V I C E - P R E S . W. P. S T A M M . C A S MI E R C. A. S T E V E N S . A S S ’ T C A S H I E R M ay 4, 1908. Messrs. L. D. Drewry C8, Co., State Agents, The Mutual Benefit L ife Insurance Co. City. Gentlemen : I am today in receipt of your com pany’s check to cover the amount due me under m y policy No. 89,166, issued in 1877, at age 32, for $5,000, which has just matured as an enaowment. I am, naturally, pleased with the result o f this policy, as I took it upon the Ordinary Life plan to furnish me protection at the lowest rate, the pre mium on the $5,000 amounting to $118.50 per year. The dividends have been left with the company from the beginning, to convert the policy into an endow ment, and it matures in 31 years, giving me not only the insurance at the straight life rate, but better than two per cent, compound interest on the money paid in. Very truly yours, W . W . BROWN. T he Accelerative Endow m ent Plan is written only by tEfje illutual Peneftt Htfe 3n£. Co. of Newark, N e w Jersey F R E D E R I C K F R E L I N G H U Y S E N , President Cfje Jftrst J&ittonal panfe of jWtftoaufeee, with a capital and sur plus o f two and one-half million dollars and de posits o f fifteen millions, esteems the patronage o f 44o u t-o f-to w n 55 banks and accords them fair and liberal treatment. XLbe Glev>elanfc XLvu&t Company Cleveland, Ohio Capital, $2,500,000 Surplus, $2,500,000 E S E R V E accounts of Firms, Corporations, and Individuals cordially invited, and, if deposited under savings rules, they will draw 4 per cent, interest. Q Through our bond department, w e handle carefully selected issues of municipal and corporation bonds, yield ing the investor from 4 to 6 per cent, per annum. R Correspondence solicited NATIONAL COPPER BANK of New York Capital, - - $2,000,000 Surplus and Profits, Deposits, 2,38 2,0 0 0 18,000,000 July 15, 1908, Opened for business, May 1, 1907 Directors F. L O T H R O P A M E S , Boston JA M E S M . BECK , Former Assistant U. S. Attorney General JA M E S C. BISHOP, Redmond & Co. C H A R L E S F. B R O O K E R , President American Brass Co. W . R. C R A IG , Craig & Jenks, Cotton Commission Merchants H . O . H A V E M E Y E R , Jr., Brooklyn Eastern District Terminal H. H . H E W IT T , President Magnus Metal Co. JA M E S JO U R D A N , President Brooklyn Union Gas Co. A D O L P H L E W ISO H N , President United Metals Selling Co. W IL L IA M A . PA IN E , President Copper Range Consolidated Co. R O B E R T C. P R U Y N , Prest. Nat. Commercial Bank, Albany, N. Y. H E N R Y H . R O G E R S , Jr., Director Amalgamated Copper Co. F. W . RO EBL1N G , President J. A . Roebling Sons* Co. C H A R L E S H . SA BIN , President G E O R G E R. SH E L D O N , W . C. Sheldon and Co. R. M . S T U A R T -W O R T L E Y , Treasurer United Metals Selling Co. Officers C H A R L E S H . SABIN. JOHN D. R Y A N , - - T H O M A S F. C O L E , - - President Vice-President - Vice-President U R B A N H . B R O U G H T O N , Vice-President W A L T E R F. A L B E R T S E N , JOSEPH S. H O U SE , - - Cashier Assistant Cashier Depositary of the United States, State and City of N e w York T H E G IR A R D T R U S T C O M P A N Y C O R N E R B R O A D A N D C H E S T N U T STR E E TS, P H IL A D E L P H IA , PA. CHARTERED 1836 The i&rgtBlrar mb ®rattafrr (Emnpang of 35 Nassau Street, New York City, represents over T W O B I L L IO N S of capital and offers the best of facili ties as Transfer Agent or Registrar of listed or unlisted securities and attends to payment o f dividends. *][The Company also organizes cor porations under the laws of the lead ing charter granting States of the East, acts as Registered Agent and generally assists in all corporate matters. Transfer Agent Organization Registrar Payment of Dividends T HE NASSAU BANK is one of New Y o r k ’ s old conserva tive banking institutions. was estab lish ed in It 1 8 5 2 , and its founders made a rule, to always con serve the best interests of its clientele, which has been the policy o f each suc ceeding management. It transacts all business that lies in the channel of legitimate banking. of Credit and It issues letters Travelers’ II Hli I . 1' llll i|i] II I 111 III . j mi llll Cheques, available in all parts of the world. It is thoroughlv equipped to render firstclass service and invites the accounts of firms, corporations and individuals, offering them as liberal treatment as ll II n il 11 sate banking m e t h o d s w ill perm it. O F F IC E R S W I L L I A M H. R O G E R S - President J A M E S C. B E L L Vice-President JO H N M U N RO Vice-President E D W A R D KARL W . IS. N O B L E H. P. S T U R R D IR E C T O R S JA M E S C. B E LL W I L L I A M H. R O G E R S H E N R Y C. M IL L E R SAM UEL R W EE D JO H N M U N R O iif Cashier Assistant Cashier Assistant Cashier T H E location of the I R V I N G N A T IO N A L E X C H A N G E B A N K , at W est Broadway and Chambers Street, N ew York, in the very center of the great wholesale produce and commission district, naturally makes it S T R IC T L Y A C O M M E R C IA L BANK. <L W ith a directorate of unusual strength, composed of some of N e w Y o r k ’s most substantial business men and bankers, and an official staff of trained men who are familiar with every requirement of its large clientele, the IR V IN G E X C H A N G E is prepared to render such service to banks, merchants, manufac turers and individuals, that once a business relation is established it is seldom, if ever, changed. $2,000,000. €L Capital, Surplus and Profits, $1,290,000, and De posits aggregating $23,000,000. o f f ic e r s L E W I S E. PIERSON - JAMES E. NICHOLS Vice-President BENJ. F. W E R N E R President - Cashier * CHAS. L. FA R R E L L R O L LIN P. G R A N T D A V ID H. G. P E N N Y H A R R Y E . W A R D , Asst. Cashier - Vice-President - Vice-President - Asst. Cashier ^ k > u io m d ] m United States, State and C ity Depository Capital $ 1, 000,000.00 Earned Surplus $ 700,000.00 Officers John B. Purcell, . . . President John M. Miller, Jr., Vice-Pres’t and Cashier Chas. R. Burnett, J. C. Joplin, . W . P. Shelton, . . . . . . Ass’ t Cashier Ass’ t Cashier Ass’ t Cashier Alex. F. Ryland, . . Ass’ t Cashier Correspondence Invited T o Pittsburgh, Dr. V ast natural resources, busy industries, and capable financial management place the whole country in debt to Pittsburgh and pour a steady stream of gold into her coffers. A million dollars a day she pays her laborers,— and collects from the nation she enriches. Fifteen cars are filled with the product of her mines and mills each minute of time, and a waiting country gladly accepts the consignment. T o collect her bills and finance her immense industries she has a hundred banks,— strong, conservative, ably managed. In the front rank of these institutions stands the Mellon N ational Bank— one of the twenty big banks of the country— with its capital of $4,000,000 and resources exceeding $41,000,000. Its officers and directors have been, and now are, active in the organization and management of the principal industries of the C ity. T h e y are men of substance— creditors of the Creditor C ity. T h e Bank controls a large amount of desirable business, and can make an attractive proposition to other banks and trust companies, w ith due profit to itself. W rite for particulars. Mellon National Bank P IT T S B U R G H T H E F I R S T N A T I O N A L B A N K O F ST. P A U L , M I N N . C A P IT A L $ 1,000,000. SURPLUS 5 1,000,000. E. H. BAILEY, President E. N. SAUNDERS, Vice-President W . A. MILLER, Cashier F. A. NIENHAUSER, Assistant Cashier O. M. NELSON, Assistant Cashier The Merchants Exchange National Bank of New York O R three quarters o f a century F this substantial institution maintained the confidence of has the merchants and business men of N ew York from whom it has received its patronage. C. It is strictly a commer cial bank, having no stock brokers accounts or W all Street affiliations, and it has successfully passed through all of the great financial crises that has visited this country since 1 8 2 9 , the year it was organized, which is a g u a r a n te e o f c o n se rv a tism in management. C. It offers its services to o u t -o f -t o w n banks and bankers, assuring them they will receive as liberal t r e a tm e n t as is consistent with ca refu l b a n k in g m ethods. The Corn Exchange National Bank of Chicago Capital $ 3 ,0 0 0 , 0 0 0 . 0 0 Surplus 3 ,0 0 0 ,0 0 0 . 0 0 Undivided Pronts 1 , 7 5 0 ,0 0 0 . 0 0 O # cers -i E R N E S T A. H A M IL L , President C H A U N C E Y J. B L A IR Vice-President C H A RLES L. H U T C H IN S O N Vice-President JOHN C. N E E L Y Secretary D. A. M O ULTO N Vice-President B. C. SA M M O N S Assistant Cashier FR A N K W . SM IT H Cashier JA M ESG . W A K E F IE L D A ss’t Cashier J. E D W A R D M AASS Assistant Cashier Directors C H A R L ES H. W A C K E R C H A U N C E Y J. BLAIR E D W A R D B. BUTLER C LAR E N C E B U C K IN G H A M W A T SO N F. BLAIR C H A R L E S L . H U T C H IN SO N E D W A R D A. SH E D D M A R T IN A. R YE R SO N C H A RLES H. H U L B U R D B E N JA M IN C A R P E N T E R ISAAC G. LOM BARD E D W IN G. F O R EM A N F R E D E R IC K W . CROSBY E R N E S T A . H A M IL L H E C O M M E R C IA L T R U S T C O M P A N Y OF N E W JERSEY T is located in the Commercial Tru st Company Building, adjoining the Pennsylvania Railroad Ferries, Jersey City, N ew J e r se y ; practically within the banking district of N e w York, and affords customers equal facilities and greater advantages than the N e w York banks and trust CL W it h a Capital, Surplus and companies. Profits of over $ 3 ,000,000 and a Board of Directors co m posed of som e of the m ost prominent bankers and business men of this country, it offers to custom ers the advantages o f a general banking and trust company business, together with the m ost m odem Safe Deposit accommodations to be found in the State. The Com pany has special facilities for collecting checks on any part o f the country. Cl Bank accounts and other personal property of corporations of States other than N e w York, doing business in N ew York, and of individuals, are taxable when kept in N e w York. It is therefore evident that it is of great advantage both to individuals and corporations to have Safe Deposit accom modations and Bank Accounts in the Commercial Trust Company of N e w Jersey. Officers JOHN W . H AR D E N BE R G H ROBERT S. ROSS W I L L IA M J. FIE LD JAY S. PERKINS J. RICHARD T E N N A N T President Vice-President Sec’y and Treasurer A ss't Treasurer A s s ’t Secretary Executive Committee C. C. C U Y LE R JOHN W . H AR D E N B E R G H JOHN A. M ID D L E T O N MOSES T A Y L O R P Y N E ROBERT S. ROSS M Y L E S T IE R N E Y JOHN J. VOORHEES GEORGE W . Y O U N G (I mgr & (Hantjm ttg, H5ankm M embers N e w York Stock E xc ha nge Mutual Life Building, 59 Cedar Street, N ew York IN V E S T M E N T BONDS IN V E S T M E N T STOCKS W e buy and sell listed and u n lis t e d securities, and give particular care and attention to the orders of individual, National and State Banks, Savings Banks, T ru st Companies and o th e r in v e sto rs. We Invite Your Business T he Chase National Bank of the City of N ew York Capital - $5,000,000 Surplus and Profits Deposits, $5,104,992 (E a m «o - July 15, 1908, $104,558,678 Officers: A. S. C. E. B. H. C. A. H E P BU R N President M IL L E R Cashier SLAD E - Assistant Cashier LE E Assistant Cashier A. H . W IG G IN W . E. PURDY H. M. C O N K E Y A. C. A N D R E W S Vice-President Assistant Cashiei Assistant Cashiei Assistant Cashiei Directors: H. W . C A N N O N , Chairman G eorge F. B aker G ran t J am es B . Sch ley J. H il l A lbert A . Barton H . W ig g in H epburn G eorge John I. W aterbury F. B aker, Jr. W e receive accounts of Banks, Bankers, Corporations, Firms a Individuals on favorable terms, and shall be pleased to meet or correspond with those who contemplate making changes or opening new accounts. Cmpirc Crust Company N ew York City W e grow by doing Note the comparative growth of this Company since its organization. March 19, 1904 December 31, 1904 December 31, 1905 December 31, 1906 December 31, 1907 June 30, 1908 . August 20, 1908 - - - . $1,915,587.18 3,195,465.56 6,551,035.57 6,184,955.78 6,421,510.76 9,632,229.13 12,520,175.32 . - - T h is showing is the result of conservative banking and care ful attention to the business intrusted to us. Our policy has been, and is now, to firmly establish a reputation for safety and conserva tism and to refuse all propositions involving a risk as an inducement to an extensive showing. Our assets are all readily convertible into cash. N e w York is the financial center o f the United States if not of the W o r ld and a correspondent at that center is not only desirable but alm ost a necessity for the satisfactory conduct of banking and fiduciary business. Select your banking institution w isely and then give it your confidence and assistance. It is not only the balances maintained with us by our friends which gives us prestige but it is also the outside influences exerted by them in our favor which benefit us largely. Capital, Surplus and Undivided Profits $ 1,600,000 N E W Y O R K , M a in O ffice, L E ROY W . B A L D W I N , President Br an c he s: 487 Fifth A ve nu e ; 42 Broadw ay H. M. GOUGH, Secretary 242 E. Houston Street L O N D O N , F o r e i g n O f fi c e , 9 N e w B r o a d S t r e e t W . H. PAR KER, London Secretary. H E National Bank of Commerce in N ew Y ork has a thoroughly up-to-date organization and equipment for the transaction of all branches of foreign and domestic banking, and solicits co rrespondence from banks and bankers contemplating opening new or additional accounts in the metropolis. C ,W ith an intimate knowledge of the N ew Y ork requirements of banks throughout the country, assurance is given of fair, intelligent and courteous consideration. C^The combined Capital, Surplus and U ndivided Profits of the Bank is over Forty M illion Dollars. N a t io n a l B a n k of C o m m er ce in N ew Y o rk The Fort Dearborn National Bank of Chicago Totalresources of $ i 3 , 5 0 0 ,0 0 0 , adirectorate composed of p ro m in e n t, suc cessful business men and bankers, and an official staff o f experienced, practical men who make every effort, by cour teous, personal attention, to give cus tomers the most prompt and efficient service, solicits the accounts o f Banks, Corporations, Firms and Individuals. C A P IT A L SURPLUS and $ 1 ,0 0 0 , 0 0 0 P R O F IT S, $ 400,000 OFFICERS W M . A. T IL D E N N EL SO N N . LA M P E R T , Vice-Pres. C H A R L ES F E R N A L D , - Asst. Cashier President H E N R Y R. K E N T , Cashier C O L IN S. CAM PB ELL, Asst.C'ash. THE FOURTH NATIONAL BANK OF T H E OF NEW OFFERS CI TY YORK TO DE PO SITO RS EVERY FACILITY W HICH THEIR BALANCES, BUSINESS AND RESPONSIBILITY WARRANT. T he Phenix National Bank o f the C ity o f N ew Y o rk Directors Directors A u g u s t B e lm o n t Robert P. Perkins August Belmont & Company President Hartford Carpet Corporation E. W . Bloomingdale Capitalist Henry K . Pomroy Pomroy Brothers Alfred M . Bul l Vice-President G eo.CoffingW arner Attorney D . Crawford Clark Clark, Dodge & Company George E. R oberts E dw in A . P otter President Commercial Nat ional Bank. Chicago President, American Trust & Savings Bank, Chicago F r e d e r i c k D. U n d e r w o o d W i 1 1 r, a m Pierson H am ilton President Erie Railroad Co. J. P. Morgan & Company Richard H . Higgins Irving A . Stearns Harvey Fisk & Sons Capitalist, Wilkes-Barre, Pa. Elbert H. G a r y Finis E. M arshall Chairman Board, United States Steel Corporation President Capital, - $ 1 ,0 0 0 , 0 0 0 Surplus, - 500,000 Officers: Finis E . Marshall Alfred M . Bull B. L. Haskins H . C. H ooley President Vice-President Cashier Assistant Cashier FREDERICK P. M cGLYNN, Asst. Cashier H E N R Y S. B A R T O W , Asst. Cashier HENR Y P. D A V IS O N , Chairman Executive Committee Capital Surplus ■ - - Undivided Profits - $1,000,000 1.500.000 900,000 BOU RSE, P A R IS T HE N E W E N G LA N D N A T IO N A L B A N K of Kansas City, Missouri, con fines itself strictly to co m m ercial banking, believing that by so doing it can 1S5 1 II best safeguard the interests o f its clientele. C. It has no interests to conserve, save those o f its patrons. II In its directorate are men who control some o f the principal industries o f Kansas Citv and the great Southwest. C, Its equipment for prompt, reliable and efficient service in all departments is first class. Capital and Surplus, $1,000,000.00 Deposits 11,000,000.00 N ew accounts invited Introductory N examination of the monetary and banking systems of the world, brings into prominence the fact that in all the principal countries and in a great majority of the lesser ones, the paper money is issued almost exclusively by central banks, which also act as the depositaries or treasuries of the respective Governments, and each of them serves as the heart of the banking and credit organization. While, as will be seen, there is a marked difference between the charter powers and methods of conducting business in the central institutions of the several countries, the general principles governing the systems are strikingly similar; showing conclusively that the world’s experience has demonstrated the superiority of this plan of centralizing the paper-money issuing powers and the regulation of monetary affairs in general. In only a few instances of importance are Govern ment notes made use of. In Germany and Italy a few other banks are still permitted to issue notes; in Scotland, Ireland and Canada there are a number of such banks without a central institution, but cooperating. In every case branches of the main banks provide for the distribution of the facilities to all parts of the several countries. The Governments retain a greater or less degree of control over these banks; in Russia, Sweden and Bulgaria the institutions are actually owned by the Govern ments; in France, Germany and elsewhere generally, the banks are privately-owned stock corporations, but in numerous instances the principal officers are appointed by the Governments; in England, and in a few other countries, there is no direct official control, but the Governments exercise a supervision, and the banks are conducted in harmony with the governmental policies. In all countries the banks receive and disburse the Government revenues, the public deposits being treated practically the same as other deposits in the banks are; thus the countries have their entire money supply always available for business purposes (loans and discounts), instead of having large amounts period ically locked up idle in the public treasuries, (as is the case in the United States), causing a contraction of the money-means. Since every million dollars of cash stands, under reserve provisions, for about eight millions of deposits (or loans), the importance of this feature to the business interests is apparent. Central banks do not generally receive deposits of individuals or make loans to them; but they do such business for the other banks, holding reserves for them and furnishing them with cash by re-discounting their commercial paper, when needs arise. (Hence such an institution is frequently called a “ bank of banks”.) They also deal in bullion and foreign exchange, and exercise other minor functions. Central banks are usually largely capitalized and carry substantial surpluses: these, with the other funds, give them very considerable primary financial strength, which they are permitted to increase by note-issues under varying regulations. Thus equipped with dominant financial power and the capacity to increase the local money-supply by issuing currency, they are able to determine the current, local discount (interest) rates. The rates fixed by them are those which they exact from the other banks in rediscounting. The usual course pursued is for the other banks, when they have reached the limit of their loaning power, as indicated by their reserves, to resort to the cen tral bank with some of their discounted negotiable paper, duly indorsed by them, and obtain the cash needed to enable them to continue lending. It is a general rule that such paper have not longer than 90 days to run. Thus when business is active and expanding, the central banks in most cases increase their note-issues to meet the additional demand for loans. The discount rate is in general the indicator of the supply of money-means relative to the demand; yet it is to be borne in mind that local conditions affect the local rates; and each country may be said to have its own normal rate. For example Germany’s rate is usually higher than that of England and France; Russia’s is higher than Germany’s. Bulgaria has a normal 7% rate, whereas that of Belgium is nearer 3 ^ % ; Bulgaria is far less developed, has less capital, and hence less banking facilities. It is also to be noted that the quoted rates of central banks are the minimum rates; they may exact more in special cases, and they frequently do so to restrict demands. The note-issuing power, so important in this connection, is regulated sub stantially by the amount of coin (usually gold) in the bank; the rule and prac tice varies quite materially. When, then, a pressure of demands reduces the reserve ratio, (the proportion of coin to notes and deposits), more coin must be obtained and central banks endeavor to obtain it in the markets where the new gold from the mines is purchasable, or from each other, by raising discount rates. Gold usually flows from a place where rates are low to a point where it can earn relatively higher rates; relatively because of the difference in normal rates; thus the 6% rate at St. Petersburg will not necessarily bring gold from Paris where the 3% rate prevails; conditions are adjusted to the normal rates. Discount rates at other banks, (known as “ open market rates”) are usually lower than those at the central bank; they are in competition for individual business. Y e t the rates rise and fall, in general, with the central bank rates. It is obvious that the great banks have, under their charters, important pub lic duties to perform. They are the instrumentalities by means of which the Governments provide the people with tools of exchange and credit facilities. Profit-making is usually regarded as a secondary consideration. Y et the func tions are in most cases so nicely adjusted, that shareholders receive satisfactory dividends. In the following pages the varying systems are discussed; this enables a comparison to be made between them and with the unique system in use here; and there is finally presented an account of our former central bank, in order to recall that at one time our system was in practical harmony with the world’s best. The British Banking System T H E BANK OF EN G LAN D The Bank of England, while not the oldest bank, is the most ancient of the important issuebanks of the world. It is a privately owned stock corporation, first chartered July 27, 1694, upon lines devised by a Scotchman, William Paterson. bullion; but it may increase its bond-secured notes from time to time to the extent of twothirds of the amount of the notes of the other banks permanently retired. The act of 1844 also required the separation The initial capital was £1,200,000 of the note-issuing business of the Bank and and that sum was loaned at 8 % to the Royal its banking business; and a public weekly Treasury, by Paterson and his associates, who report of its condition was prescribed. were then authorized to issue circulating notes The bond-secured notes now amount to £18,450,000; so that the Bank has, since 1844, upon this “ public debt.” The note-issuing power, however, was not exclusive; other banks acquired the right to issue about £4,450,000, exercised this function also. The Bank grew in importance with the devel by means of the discontinuance of the issue of opment of the nation,although not without meet other banks; these latter have still about £500,000 of notes in use at this time. Thus ing reverses in the earlier years. Its capital was the Bank of England notes issued otherwise increased and its charter modified, as occasion required; thus by 1708 the capital stood at have been gold certificates, there being no £4,400,000 and in 1711 it was authorized to authority under the law to increase the amount of paper money except on deposit of coin or issue notes beyond that sum. bullion. By 1816, when But the Government has, upon occa the gold standard was adopted, the capital had sions of trouble, temporarily given the Bank the reached the present figure of £14,553,000. The right to increase the issue beyond the limit (on increased capital was usually loaned to the its credit), in order to stay panics; in 1847, 1857 and 1866 the restriction of the bank act Government, and the great needs of the country during the Napoleonic wars compelled theGovemment to permit the Bank to suspend specie was thus suspended. payments from 1797 to 1821. Notes were at a to allay distrust in the two other years. discount during this period. Troubles also occurred in 1825, 1826, and 1837. Actually the power was used only in 1857; the mere authority served The Bank acts as the Treasurer of the Gov ernment; it holds other (private) deposits as These disturbances led to the revisions of the paper currency laws of the Kingdom; the well, but rather limited in amount, except for first (1829) was to prohibit the issue of notes there; it deals in bullion and foreign exchange; under £ 5 in England; the second (1833) made and is compelled by the act of 1844 to pay £ 3 , other banks, which carry large reserve balances the Bank’s notes legal tender in England and 17s. 9d per ounce for gold of the British stand Wales, (except as to payments by the Bank ard ( .9 1 6 ^ fine) to anyone bringing it to its itself,) so long as they continued redeemable in gold; weekly statements also began at this time offices; it has the right to establish branches, but has, in fact, only eleven. Its loans are chiefly made by re-discounting for other banks. The gold-purchasing function is important, since the money supply can be increased only but were not published. Finally, in 1844, the other banks in England were prohibited from increasing their note-issues and the Bank’s issue power was limited. The restriction is as fol lows: The Bank may have out notes based on public debt to the amount of £14,000,000, or by gaining gold. The absolute Mint price for the metal is £3 17s. io£ d. per oz., ordinarily ex pressed 77s. io£, and this price may be obtained about the extent of its capital; any issues in by any seller of gold at the Mint if he be content excess thereof must be covered by coin and to await his turn in the coining process. The BANK OF ENGLAND difference of i^d. per oz. in the Bank price is the charge exacted for immediate payment. The The ratio of gold to notes was thus fully 67 per cent. It is to be observed that as note issues in Bank may, of course, pay more, and frequently crease the ratio of gold grows larger, since the ad does. ditional issues are allowed only on gold, pound Its price for gold is, in general, indicative of the status of the supply and demand in the world at large. for pound. (The £ is $4.86§.) British colonial possessions pro duce the greater part of the world’s annual out B a n k in g D e p a r t m e n t put of gold; this has contributed largely toward Capital making London the primary market for the metal. Surplus There is no legal reserve requirement for any of the banks. As the reserve depository for the other British banks, the Bank endeavors to main tain in gold and notes 40 per cent, of the deposit liabilities in the banking department; when the ratio falls below that figure it curtails loans by increasing the discount rate; this results in the payment of existing loans and the borrowing elsewhere, which tend to increase the coin in hand. Instead of raising rates the Bank may, if conditions favor, increase its price for gold, thus . £14,553,000 3*167,653 Public Deposits 10,170,059 Other Deposits 46,167,208 Other Items 64,878 Total £74,122,798 Government Securities ^15,237,531 Other Securities and Loans 30,023,299 Bank Notes 27,308,870 Gold and Silver Coin 1,553,098 Total £74,122,798 enabling it to secure the new supplies arriving in London, or drawing it from such other money The Bank’s reserve thus stood at over 51 per centers as show a lower price for the metal. cent.; this is reached by contrasting the notes Sometimes both these devices for protecting its and coin on hand with the total of the two classes reserves are employed. of deposits. Upon the whole this seems a clumsy and ex The size of the reserve ratio obvi ously determined the low discount rate; in fact, pensive method of increasing the money supply; money was so plentiful, in the absence of active for it is obvious that the higher discount rates demand, that it was at the time regarded as cer and the premium upon gold, must be paid by tain that the Bank would soon reduce its rate to a those who are at the time compelled to borrow; point nearer the open market rate, which is prac this operates as a tax upon trade and industry. tically regulated by the other banks. Yet the British appear to be, in general, well sat The Bank is managed by a board of twenty- isfied with their system. Below are given statements of the condition of four directors, who, with the chief officer (gov ernor) and his deputy (not directors), are all the Bank on June 24,1908, at which time its dis chosen by the shareholders. The capital stock count rate was 2% per cent.; in the open market is divided into £100 shares. The voting is not rates were below i£ per cent.; the price of bar by shares; gold was 77s. io^d. the oz. It will be seen that vote, no matter how many shares he may hold; the report of the banking department is rather but no voting right accrues until the holder .has meagre in details. five shares. no shareholder has more than one The Government thus exercises only a very limited supervision over its affairs. There is no further liability upon shareholders Issu e D e p a rtm e n t than the amount of their stock. Notes Issued ^56,3011,515 Government Debt £11,015,100 Dividends have been paid uninterruptedly; prior to 1903 the rate was 10 per cent, for a period covering fourteen Other Securities Gold Coin and Bullion 7,434,900 37,851,515 years; since then it has been 9 per cent. The shares are quoted at about 290. The Bank pays no interest upon deposits; never permits an overdraft; never loans on realestate security of any kind. It manages the pub- lie debt for the Government (for a compensation), leaving £603,800,000 for those of London and and buys and sells Government securities for its making the banking power of the city about customers; it acts as the settling office for the £732,600,000 or approximately $3,600,000,000. London Clearing-House. It never reissues a It is questionable if the London joint-stock and note, no matter how clean and crisp it may be; private banks have more than 5 per cent, of and the notes are printed in its own shop in the actual cash reserves; or, say, £27,000,000; the head office in Threadneedle Street. Bank had £30,746,000; An important factor in the British banking system is the branch-bank feature. While the Bank itself has only eleven branches, the other banks in England and Wales, of which there are 68, have over 5,000 branches. This shows great it would thus appear that the cash held by all of the English banks was not greater than £62,000,000, or less than 9 per cent, upon the deposits reported. It must be borne in mind that the use of checks is much more extensive in Great Britain than concentration in recent years, for in 1896 there anywhere else in the world; hence actual cur were still 144 individual banks; many of them rency (coin and notes) is not required in such have been merged. large volume; the “ deposit-currency” is, hence, the important feature, and adequate coin for re serves against the deposits is essential. T h e O th er B anks Obvi ously the bulk of the business is done by the joint- We must now consider the other banks, which stock banks, and owing to their inadequate pro in fact constitute the major part of the British tection, they fall back upon the Bank in periods system, of which the Bank is the central organ. of pressure for discounts. There are two classes of reporting banks, the count rates are not nearly as stable as they might The result is that dis joint-stock (incorporated) and private; (there be, were the system devised to provide larger re are, of course, many private bankers who do not serves and greater flexibility to note-issues. report). Two of the private banks date from the In the period from 1888 to 1907 the Bank’s 17th century; they are gradually being merged discount rate fluctuated between 2 and 7 per or incorporated, yet their resources at last report, cent., the last-named rate having been compul early in 1908, amounted to over £32,000,000. sorily reached by the Bank during the panic of In the following table the joint stock banks of 1907, when the imperative demand for gold from the country are included with those of London. New York caused a depletion of the Bank’s re Reports are published twice a year of all of serves. This maximum rate had not been these banks, and some furnish more frequent quoted since 1873, when similar disturbances in statements; only a very few, however, report the the United States affected London. actual cash carried, usually including the sums twenty-year period named the changes in the rate During the held at bankers and often money “ on call ” ; thus numbered 115; in only one year, 1895, was there the true net reserve position is not given. no change; the 2 per cent, rate then prevailing In fact the cash reserves of the London joint-stock lasted from February, 1894, to September, 1896, banks is known to be relatively small, which the period of abundant banking means through causes an added burden to the central bank. out the world, consequent upon the greatly di O f the joint-stock banks’ resources £179,000,000 are to be credited to the country banks, thus minished demands due to the depression in busi ness following the panic of 1893. During the B r i t i s h B a n k i n g P o w e r , M a y , 1908 ( I n T h o u s a n d s o f P o u n d s ) Bank of England Capital, Surplus, etc. Deposits Net Circulation Other Items Totals 17^36 49^31 29,514 Other Joint Stock Private Total English Scotch Irish, etc. Total British 107,550 724,684 30,193 167,269 137,743 891,953 353 4,156 26,957 75 29,942 14,060 44,002 81 48,307 1,050 49,438 7,370 56,808 96,562 782,814 32,238 911,614 218,892 1,130,506 85,558 648,596 two years after the Baring failure (1890-91), the tenance of higher rates both for discounts and changes numbered 23; in 1893 there were 12 for gold for the remainder of November and the changes; in most of the years since 1888 there greater part of December, forcing Germany to were 6 or more. give up more of its yellow metal; on December Clearly the discount rate responds to condi 12 the Bank’s gold stood at $166,000,000; loans tions reflected in the banking status; the supply were reduced some $23,000,000; the reserve of metal is generally not so large that a loss of reached 47 per cent. $10,000,000 can be sustained without creating a another $17,000,000 of gold was lost to New’ disturbance in the credit market. York; loans expanded by $13,000,000, leaving The point to In the following fortnight be noted is, however, that the increase in rates the reserve at 40 per cent. constitutes a tax upon business and the insta by this time satisfied; the price of gold was re bility of rates is very undesirable. duced to 77s. iod. If fluctua But New York was tions could be limited, both as to range and fre In Europe banks are required to make special quency, the general welfare would be promoted. arrangements at the end of the year to provide Serious critics in London have for years urged for the annual settlements; they hence expand that the joint-stock bank reserves should be ma loans and deposits very largely, and in some in terially increased, as a partial remedy for the stances note-issues as well. evil. A concrete illustration of the operation of the named course is not usually followed. In England the lastWith an increase of $9,000,000 in gold in the last week of Bank is afforded by the record made during the December, and the demand upon it abating, the New York panic of 1907. Immediately preced Bank reduced its discount rate to 6 per cent., ing the crisis (about the middle of October), the swelled its loans by $39,000,000, and deposits Bank held over 49 per cent, of reserves, with even more, bringing the reserve to less than 36 $169,000,000 of gold, and its discount rate was per cent. 4^ per cent.; yet it was bidding for gold, having (its own parity) and the Bank was getting all the raised the price for the yellow metal to 77s. iofd., new metal coming to the market. The price for gold stood at 77s. 9Jd. By the end of During the week of January 9 the gold stock the month, with its gold reduced by $15,000,000, was back to $169,000,000, the extraordinary or slightly above the Mint parity. its reserve was slightly under 40 per cent., the loans were repaid, deposits fell $48,000,000, and discount rate advancing to 5^ per cent., and the the reserve ratio rose to 48 per cent. bid for gold was 78s. In the first week of N o abundant precaution the discount rate was not vember $14,000,000 more gold left the Bank, and reduced, although gold bars were quoted below Still out of the reserve fell to nearly 35 per cent., which was the Bank’s par. followed by a double rise in the discount rate, gold gain continued and the discount rate was first to 6 per cent., then to 7 per cent.; the price reduced first to 5 per cent, and then to 4 per cent., of gold was raised to 78s. $d. for the reserves were placed at considerably This latter move brought gold from Germany, and thus, despite some shipments to New York, the reserve was increased by $15,000,000. In In the following two weeks the above 50 per cent. London had shipped about $100,000,000 of gold to New Y ork; it recouped itself by drawing the following week, by means of friendly nego half the amount from Berlin, obtaining $16,000,- tiations, gold was obtained from France, but the 000 from Paris, and about $34,000,000 in the demand continued and the $16,000,000 thus open market. added and $6,000,000 of the previous stock went premium for gold (probably something more than out of the Bank. 3 per cent.) the British needs were not supplied The price for gold fell off a While New York paid a heavy Up without a relatively higher interest charge, owing to this time the Bank had not decreased its loans; to the pressure upon the Bank; this was unques little, but discounts remained at 7 per cent. indeed, from October 17 to November 7, these tionably chargeable to the fact that the expansion had grown $42,000,000, but clearly subject to of money and credit is possible only through the higher rates imposed. Pressure from New York compelled the main disturbance gold is in universal demand, and acquisition of gold. During a period of financial SCOTLAND therefore more costly; hence a system resting ex clusively upon gold and providing inadequately for reserves, is more expensive to the people. It was suggested, during the 1907 crisis, that the Government again come to the Bank’s relief, by suspending the restriction upon the note-issue, permitting an expansion by means of credit pa per money. But this step was not taken, prob ably because the open market rate for money (at the other banks), continued considerably below the Bank’s rate; on December 12, for example, it was 5I per cent, or 1J per cent, below the “ offi cial” quotation; indicating that, in the absence of reserve restraints, the joint-stock banks were expanding local credits sufficiently to meet de mands. has a unique system with ten banks of issue, of which the Bank of Scotland, chartered in 1695, is the chief one. The note-issues are regulated by a law of 1845, practically as in England; a fixed amount (£2,676,350) may be issued upon securities; any excess must be backed by coin. Notes may be of denominations as low as £ 1 . Actually, however, the greater part of business is carried on by means of bank credits (checks), which system is more highly developed, so far as the general population is concerned, than elsewhere. The banks are all private corporations; their capital aggregates £9,241,000. There are nearly It is certain that this most recent experience 1,200 branches, by means of which every com of the operation of the system, under special munity, no matter how small, is within easy pressure, was far from satisfactory to the most reach of banking facilities, and the Scotch enlightened practical bankers in England; they people are served as well as human ingenuity have publicly voiced the opinions that there is can devise. need for improvement, particularly to obviate notes are not redeemable at the branches. the disturbances resulting from the operations of the heterogeneous system of the United States. An important feature is that the The margin of note-issues is rarely exhausted and the discount rates, only slightly affected by the fluctuations in London, are quite steady at 4 per cent. Other British Banking Interests In addition to the Scotch and Irish banks, discussed below, British influence is extensively employed in banks in the colonies and depend The condition of the banks early in 1908 was as follows: encies of the empire: India and other Far East ern points, South Africa, Australasia, Canada Capital and Surplus and minor possessions in America. Notes The sys £18,230,000 7.410.000 tems vary to render them adaptable to the con Deposits and Current Accounts ditions in each case. Acceptances 4.623.000 Other Items 2.065.000 Total £141,051,000 The colonial banks which are conducted 108,723,000 largely by means of British capital are specific ally referred to elsewhere. It is here proper to say that reports of thirty-one of these, with about 2,200 branches, show £37,570,000 of Cash in Hand, at Banks, etc. capital and £357,306,000 of resources. Investments There £26,973,000 31.953.000 are also banks under British control operating Discounts 15.970.000 largely in foreign countries; seventeen of these Advances 57.053.000 show capital about £12,000,000 and assets fully Other Items 9.102.000 £125,000,000, the greater part being employed in South America. The ramifications of these banks and their The cash in hand amounted to about£5,400,000. The Bank of Scotland had fully one- branches bring about a very important increase sixth of the aggregate resources. of power to British banking resources and are manifestly not large in ratio, but it is to be hence profits, aiding her foreign and colonial remembered that Scotland is not exposed to in trade enormously. ternational demands for money. The reserves BANK OF IR E L A N D , C O LLE G E IR E L A N D G R E E N , D U B L IN , IR E L A N D The non-issue banks have about £12,000,000 Here, too, a similar system prevails, six banks of the resources; the Bank of Ireland has fully issuing paper money, the chief one being the one-fourth of the aggregate. Bank of Ireland, chartered in 1783. held by issue-banks was about £3,600,000, private corporations, and They are their note-issuing powers are regulated by the law of 1845. They The actual cash showing a low ratio of cash reserves, and that one-half of the notes are credit issues; but the may issue £6,354,494 of notes (as low as £1), law affords a large margin of expansion. upon securities; any excess must be covered by nine banks have more than 600 branches. coin. Balance sheet of the Bank of Ireland for June 30, 1908: The check system is less prevalent than in other parts of the United Kingdom. Notes Capital are redeemable at the branches. There are also three other banks of discount Rest (Surplus) and the aggregate returns of all of them show as Undivided Profits follows, early in 1908: Notes in Circulation Capital and Surplus Deposits and Current Accounts Notes £11,779,000 57,486,000 Public Deposits Deposits and Current Accounts The £2,769,230 1,034,000 179,133 2,594,548 2,915,312 11,084,738 6,582,000 Other Items Total Cash on Hand, at Banks, etc. Investments 678,000 £76,525,000 land Cash at Call 19,665,000 Discounts 6,178,000 38,047,000 £20,576,961 Cash on hand and at Bank of Eng- £11,528,000 Advances Other Items Total 1,107,000 £i> 593> 389 1,276,215 Loans and Discounts 9,549,795 Securities 8,041,490 Real Estate, etc. 116,072 T H E R E IC H SB A N K , BERLIN The Imperial Bank of the German Empire The German Banking System T H E IM PE R IA L BANK OF G E R M A N Y (D IE R E IC H SB A N K ) The Imperial Bank of Germany was estab lished soon after the unification of the Empire and the adoption of the gold standard; it was designed with the purpose of assisting Ger many’s industrial and commercial develop ment. Its charter dates from March 14, 1875; it was, however, the natural successor of the old Bank of Prussia, which had been in exist ence since 1765. It actually began business January 1, 1876. Each of the confederated' states then had its own banks, with note-issuing powers, and it was provided that as these sur rendered their rights of emission they accrued to the central institution. O f thirty-three local banks only four continue at this time to issue notes, one in each of the following named states: Baden, Bavaria, Saxony, Wurtemberg. The Imperial Bank is a privately-owned stock corporation; the management is arranged as follows: a board of curators of Government officials, with the Imperial Chancellor as Chair man, exercises general supervision; a board of directors, (including the President,) appointed by the Emperor, for life, have the immediate direction of the business, in co-operation with a committee chosen by the shareholders. This scheme of management makes it practi cally a Government institution. Shareholders’ representatives have no voice in its policy. The charter is now given for ten-year periods; it expires again in 1911. The Government reserves the right to acquire all the shares at “ book-value ” at the end of any period, in lieu of renewing the charter. The capital of the bank is 180,000,000 marks, divided into 1,000-mark and 3,000-mark shares; it was increased from the original sum of 120,000,000 marks, to 150,000,000 marks in 1901, and to the present sum in 1904. The note-issuing power is regulated in a unique manner; all the (5) banks are permitted to issue notes upon credit to the total amount of about nine marks per capita of population, which sum was last fixed at 541,600,000 marks; in addition they may issue to the amount of gold, silver, treasury notes and other bank notes held; furthermore notes may be issued upon credit to any amount called for by business, sub ject to payment of 5 % tax to the Government, calculated weekly. The amount of the untaxed credit notes allotted to the Imperial Bank is 472,829,000 marks, or say $112,500,000. Thus if the Bank has 1,500,000,000 marks of notes in circulation, and its coin and other notes in reserve amount to 939,000,000 marks; it will have 561,000,000 marks of credit notes, of which 88,171,000 marks would be subject to the tax. O f course a ll notes not covered by cash must be covered with commercial paper having not more than ninety days to run; and at least one-third of the “ cover” must be in cash. In theory the tax rate influences the dis count rate; for there would obviously be no profit in loaning money (notes) at \ % % , and paying a tax upon the notes of 5 % . Yet the Bank, as a public duty, frequently issues taxed notes when its discount charge is less than the tax rate, in order to accommodate business demands. The occasions for the emission of taxed notes come usually in the fall, for crop-moving, and at the end of the year, when annual settlements are made.' Prior to 1895 there were only 16 weeks in which taxed notes were used; subsequently, owing to the expansion of business, the use was much more frequent; thus in 1898 for 16 weeks and in 1899 and 1900 for 20 weeks each; since then the occasions have again been less until the panic period of 1907. The maximum over-issue was 626,000,000 marks at the end of December 1907. The system obviously provides for greater flexibility than that of England, but not as freely as that of France. The bank notes are not legal tender, but are accepted everywhere in the Empire; they are now issued in denomination of 100 and 1,000 marks only. A comparative statement of the Bank’s condition, to illustrate its business, follows, being the average weekly condition for 1896 and the actual condition on February 17,1908: OPEN DEPOSIT ROOM IM P E R IA L B A N K OF G E R M A N Y (in Resources: m ark s, equ al to 23.8 c e n t s ) 1896 1908 891,988,000 928,219,000 Capital 120,000,000 180,000,000 22,235,000 74,089,000 Surplus 30,000,000 64,814,000 Notes of Other Banks 11,083,000 28,749,000 Circulation Coin and Bullion* Treasury Notes Loans and Discounts 752,333,000 1,039,188,000 Securities 6,959,000 38,433,000 1896 Liabilities: 1908 1,083,497,000 i , 3S9,292,ooo 83,188,000 ,7 3 4 ,8 i 6 , ooo 2,218,765,000 Fixed sum of untaxed credit notes permitted 293,400,000 472,829,000 Margin of untaxed notes 135,209,000 144,574,000 50,218,000 O O Other Items 00 531,471,000 17,060,000 W IH 484,259,000 Deposits Other Items Totals i * Partly silver, as explained below. (To estimate amount of untaxed notes de excellence a currency-issuing institution. Its duct from amount of circulation the totals of deposits aside from those of the Government coin, bullion and other notes, then find the and other banks are not very large. difference between the result and the fixed amount of credit notes given above.) The details of the reports of the Bank are not very full; thus, Government deposits are not The Treasury notes referred to are irredeem given separately. able Government issues based upon a gold “ war- The Bank is permitted to carry in its cash a chest” fund held in the fortress atSpandau; substantial amount of silver coin, but it reports they amount to only 120,000,000 marks. the sum only at the end of each year. They are legal tender for all purposes. At the end of 1905 it had 207,000,000 marks out of a The taxing feature provides elasticity to the total of 703,500,000 marks; at the end of 1907 volume of money, since there is no limit within, the silver was 206,600,000 marks and the total reasonable demand, that cannot be supplied at coin 704,000,000. This shows about 26 per the price of the tax; and the tax operates to cent, silver in the reserves, a circumstance not limit demand and to cause contraction when generally given full weight in the discussions of proper needs have been met. the Bank’s condition. To illustrate: Treasury notes and in the statement for the 7th of February, the notes of the four other banks are also available amount of the taxed notes shows 54,000,000 for reserve. marks, so that the contraction in the ten days The Bank has its principal office in Berlin; intervening (to the date of the statement for branches and agencies exist in every section of February 17, 1908, given above) amounted to the empire; in all there are about four hundred about 198,000,000 marks. From December 11, and eighty places of business, at some of which, 1907, to the end of that month, the expansion however, only certain specific lines are trans had been 431,000,000 marks; during the month acted. of January following, the reduction of taxed at branches unless these have the requisite cash notes amounted to 588,000,000 marks (say on hand to spare. $140,000,000). This is clearly a large range of expansion and contraction. For example, notes are not redeemable Dividends may be paid to shareholders up to 3^ per cent.; out of any further divisible profits The use of checks in Germany, while greater shareholders may have one-fourth, the Govern than in France, is far less general than in Great ment taking three-fourths. Britain and the United States. (A recent law were divided 25,406,000 marks, of which the designed to extend their use is about to be put shareholders received 11,076,600 marks, giving into operation.) them a little more than 6 per cent. For this reason the Bank is par Thus in 1905 there In 1906 they received 8.2 per cent., in 1907 nearly 9.9 per ranged between 3 and 7^ per cent., the latter cent. There are nearly 19,000 shareholders,giving being the maximum in its record, made during an average holding of less than 10,000 marks each. the panic of 1907. There were sixty-nine An extensive and most useful branch of the changes in the period; in only two of the years business of the Bank is the free transfers of was there only one change, the average number funds for its customers, from place to place in being over three annually. the Empire, largely by means of book-credits; rate fluctuated between 3.12 and 6.03 per cent., domestic exchange, in other words. The annual average The sum and the mean rate for the double decade was 4.06 handled on this account in 1907 was over 130,- per cent. In twelve of the years the rate reached 000,000,000 marks; this shows an increase of or exceeded 5percent.,thetax limit. Taxed notes 100 per cent, in the eight years ending with that were issued in each of these twelve years, but year. also in the remaining eight when rates were lower. Of the gross business (“ turnover”) of that year, reported as having been 299,000,000- The average rate for 1907 compared with 000 marks, the transfers for the public, counted other chief centers is given as follows: Berlin, upon both sides of the ledgers, obviously con 6.03 per cent.; London, 4.92 per cent.; Paris, stituted over 80 per cent, of the total. 3.46 per cent.; Brussels, 4.94 per cent.; Amster The most interesting question turns upon the dam, 5.10 per cent. discount rate, and the influence thereupon of the unique paper currency system. In general the charge is higher in Germany than in either The Bank reports its condition, briefly, four times each month (not weekly). Reviewing the periodical statements for the dates antecedent England or France, and the fluctuations are to the panic of 1907 and subsequent thereto, we much more numerous than in France, though shall have a pertinent illustration of the manner not nearly as frequent as in England. In the twenty-year period, from 1888 to 1907, the rate in which the system operates. In the table pre sented the statistics are given in millions 0} dollars: Reserves* Note Issue Gold 9 407 128 129 IS 23 1907, Oct. Deposits 380 138 143 131 134 131 133 31 Nov. 8 IS 23 Dec. 30 7 14 Other Cash Loans Reserve Ratiof Discount Rate 72 79 343 37- 6 % 321 4 0 .9 % 141 82 130 123 73 78 79 309 338 33° 319 129 124 80 310 360 I l6 113 72 349 35i 373 449 113 114 4 0 -5 % 129 117 73 75 330 3i 5 43 - 8 % 39 - 3 % 39*5% 4i - 4% 43 - 2% 39 - 7% 54% 5i % 5i % 320 40 - 5% 120 76 34i 3 8 -6 % ■ Il8 69 442 30 - 9 % 39 - ° % 45 - i % 366 385 372 357 343 122 7 408 134 157 I25 132 72 i5 3 66 136 146 80 35i 302 23 34i 136 163 81 271 23 3i 1908, Jan. * Gold is estimated in part. 51 - 1 % Taxed Notes 94 56 3i 6i % 69 7i % 7i % 60 7i % 7i % 7i % 7i % 7i % 7i % 7i % 6i % 6% 42 26 62 48 46 64 149 87 28 none t Reserves of all cash against notes and deposits. The reserve ratio is calculated upon the basis ury notes and notes of other banks held in the of all cash against the notes outstanding and reserves, approximately $30,000,000 in amount, deposits; were the ratio based upon gold alone, were not to be reckoned quite equal to gold. it would obviously be much smaller at each The increase in the discount rate to the highest period, since the Bank held $40,000,000 to $47,- point in the Bank’s record was obviously due to 000,000 of silver continually, and this coin has its serious loss of gold; while it became possible only a limited legal tender power. at the high price offered for money, to recoup The Treas- somewhat from Russia and other points on the serves; for Germany has the largest estimated continent, the drain to London for New York amount of gold in actual use by the people, partly continued so long, that the falling of reserves because no notes are issued below 100 marks. could not be checked. In all, Germany fur The present inactivity in money should also en nished $50,000,000 of its own and the otherwise able the Bank to acquire a large part of the acquired gold, to satisfy the New York demand, world’s new product. via the British center. open to question whether the Bank could succeed Upon the other hand, it is The statements indicate that discounts were in holding the metal, under its present system, materially checked, at a period, too, when they upon occasions when imperious demands arise. were probably needed; almost at the climax of Yet the French Bank did so. the movement of gold outward, the amount of As an additional protection to its gold, the taxed notes outstanding reached the minimum Bank makes it a special feature of its business In practical op to carry a considerable amount in foreign bills eration, under this severe test, the taxed-note for the period (November 23). of exchange, which can manifestly be used to feature clearly failed to provide means for relief; remit in case of demands, say from London; money at 7^ per cent, at the Bank and at 7 per and the purchase of these bills is so arranged cent, in the open market, did not in that week that the maturity dates are graduated, from one bring into use the expansion of notes. to six weeks, for example. It is In times of ordinary probable that the pressing needs for discounts demands this is very useful; but under great were largely satisfied by other banks. pressure for actual gold, this substitute will not The usual annual settlement period was, how suffice; a postponement of the remittance of ever, met in the customary manner; the reserve actual metal, in such circumstances, merely was permitted to decline below 31 per cent., and compels the advance of discount rates (or the the untaxed notes were largely increased; loans price offered for the gold) at the point of expanded more than $100,000,000 during that demand. last week of the year, even at the high rate. It has been suggested that the increase in the Within a fortnight thereafter the reserve was margin of untaxed notes would be an improve speedily replenished and the discount rate began ment. to fall; the taxed notes were retired and there tion, but it must be borne in mind that the re There is some merit in this recommenda was a margin of $15,000,000 of free notes issu serves would have to be increased proportion able, with reserves at 51 per cent., on January 23. ately. Still appreciating its weakness the Bank held zation the untaxed notes allowed amounted to It should be recorded that at its organi rates high to attract gold, for some time there 272,720,000 marks; in 1890 the sum was 288,- after. The experiences of this period made manifest 025,000; in 1900 it was still only 293,400,000 that the system is not perfect in operation. mitted, which soon reached the present fixed Ger marks; in 1901 a material increase was per many requires ample banking facilities and these sum of 472,829,000 marks. should be supplied in a manner which obviates population since the opening of the century has The increase in such disturbances, generated by the defective been considerable; and since the allowance is system in the United States. A commission based upon population, it is not likely that there was therefore appointed by the Government to would be much opposition to the increase of the consider the subject and recommend such untaxed notes by 100,000,000 marks at this time. No re It is proper to note that Germany has experi port has, as yet, been published of the action of enced an enormous expansion of bank credits, this body, which began its sessions in May, 1908. not unlike that which took place in the United changes as might be deemed advisable. The data given indicate insufficient reserves States. Her expanding commerce and indus for a central bank in one of the chief commercial tries have been served in a fairly satisfactory centers of the world. It is probable that this de manner, not the least of the advantages gained fect could be remedied by providing means to through the establishment of the Bank being the gather more of the gold in the country into re uniformity and lower general range of discount rates throughout the empire. But in this age of portant ones, report for the end of 1907 a large intense competition and diminution of the profit volume of means and business. margins, it is imperative that the f l u c t u a t i o n s is over $620,000,000, and the aggregate resources Their capital be also kept within more reasonable range. amount to $2,800,000,000. Rates which would appear moderate in the tions carry nearly one-half these resources, the Five of the institu United States could not be borne, in the long Deutsche Bank heading the list with $445,000,- run, by Germany’s industries, operating as they 000. are, upon a lower profit-margin basis. Hence counts; they rely for rediscounts upon the Im These banks carry the large deposit ac the 7J per cent, rate, which lasted over two perial Bank and have very considerable sums on months at the end of 1907, was a most serious deposit with it as part of their reserves; they re handicap. port about $200,000,000 of cash in hand and at In the discussion of the taxed-credit-note banks and bankers. Even if the major part of system of bank issues, that of Germany has been this sum is cash, the reserves are obviously not the example most prominently before us. large. The merits of her fixed rate have been brought into Included in the above statement are those of contrast with a proposed graduated charge. The the four other issue banks; they have 72,000,000 theory is that when an expansion of notes is marks of capital and issue about 148,000,000 requisite by reason of normal business needs, marks of notes; they had 81,000,000 marks of the tax should be moderate to the end that in cash on hand; deposit liabilities are placed at dustry be not burdened too heavily; but that the 66,000,000 marks. tax should be increased to induce a contraction 68,771,000 marks of notes on credit untaxed, of note-issues when the demands have lessened. paying 5 per cent, on any excess issue over this Such an increase could be regulated either in sum and the cash on hand. accordance with the amount of notes issuable, or in the measure of the time during which notes are permitted to be used, progressing weekly or monthly. They are authorized to issue These returns indicate a banking power of commercial banks of about 14,000,000,000 marks, or approximately $3,300,000,000, or less for the entire country than that of the city of Such a provision would probably be desirable where the banks themselves determine the volume of emissions; but where, as in Germany, the Government, through its officials, controls the volume, it is questionable if the graduated plan would prove more advantageous. T h e O th er B anks London alone. Germany provides by means of separate insti tutions for mortgage loans. Seven of these re port over 3,400,000,000 marks of assets. them dates from 1835. One of For small borrowers, chiefly agricultural, another class of institutions exists. The other banks in the Empire, which are quite numerous and include several very im The balance sheet of the Deutsche Bank for the end of 1907 follows in marks: Capital 200.000.000 Cash Surplus Funds 100.000.000 Due from Banks 56,959,955 Deposits 476,104,010 Securities, Coupons, etc. 95,001,501 Current Accounts 788,301,712 Bills Discounted 786,395,205 Acceptances Advances and Current Accounts 686,852,320 Other Items 263> 537>867 43,788,265 Syndicate Interests 135,000,078 Total 1,871,731,854 It will be observed that the cash holdings are not very large. For the rapidly developing foreign business Other Items 86,228,077 25,294,718 banks have been established to operate in Asia, in Brazil, in Chile and other parts of South America. Their assets are fully 450,000,000 marks. The French Banking System T H E BANK OF FRANCE (L A B A N Q U E D E F R A N C E ) The great French banking institution dates second Empire the communists controlled from 1800, although its powers respecting note- Paris, the Bank issues were not important until made so by the although it was compelled to suspend coin pay law of 1803; Napoleon I. receives the credit ments of its notes. for its creation. continued doing business The charter at first ran to The provisions of law governing note-issues 1818, then to 1843, then renewed in 1867, and include no specific restrictions as to reserves; finally in 1897. The capital originally 30,000, the maximum amount of notes issuable is fixed 000 francs was increased from time to time, by law and has been increased as business reaching the present figure 182,500,000 francs needs developed; the original law prescribes that in 1857; shares are 1,000 francs each. Not the notes “shall be so proportioned to the re until 1848 did the actual monopoly of noteissuing center in the Bank; and it was necessary serve cash in the vaults of the Bank and with such regard for the maturing of negotiable in order to acquire this power, to purchase a paper held by the Bank, that the Bank can at number of other banks which had ancient no time be exposed to danger of delaying pay privileges to emit paper money. ment of its obligations when presented.” But The stock of the Bank is all in private hands, it is to be said that France is a bi-metallic but the Government appoints the chief official country; since the law of 1803 both gold and and his immediate assistants; the direction is silver five-franc pieces, are full legal tender; entrusted to a “ general council” of seventeen hence the Bank may redeem its notes in either and three “ censors,” chosen by the share class of coin. holders; but the chief official (governor) has the power to veto the council’s acts. The notes are a legal tender. The discount of notes and bills is limited to paper containing at least three names, and in Having in mind that France has changed general having not to exceed ninety days to run; its form of government many times since the in fact the bulk of the business consists of re establishment of the Bank, the fact that it con discounts for other banks. tinues to exist, more useful and powerful than Following are comparative statements of the ever, is a tribute to the wisdom of its founders condition of the Bank in July 1896 and inJanuary and managers. 1908, showing a marked growth in operations: When after the fall of the B A N K OF FR AN C E — Resources Gold Silver Loans and Discounts Securities Other Items Totals, Liabilities Capital Surplus Circulation Government Deposits Other Deposits Other Items (I n francs equal to 19.3 cts .) 1896 1908 2,050,000,000 1,248,200,000 1,177,200,000 212,600,000 68,900,000 2,676,200,000 917,500.000 4,756,900, ooo 6,349,800,000 1896 1908 182,500,000 42,500,000 3,615,900,000 203,800,000 619,400,000 92,800,000 182,500,000 42,500,000 5,066,900,000 246,100,000 581,100,000 230,700,ooo 2> 345 > 00> 5 000 212,600,000 198,000,000 BANK OF FRANCE, PARTS LA B A N Q U E D E F R A M C E The ratio of gold to notes, in 1896, was fully The marked difference between the constitu 56.7 per cent.; in 1908, being immediately a ft * tion, operation and condition of the Bank of the drain for New York had been experienced, France and of that of England, obviously con and note-issues had reached the maximum, it tributes largely to the stability of the discount was under 53 per cent.; soon after the opening rate. of 1908 the ratio rose to nearly 60 per cent. It that the rate had to be raised to protect reserves. is worth noting that the silver holdings were Thus, in the period of twenty years (1888 to materially lower in 1908 than in 1896. It has seldom happened in recent years 1907) there have been only sixteen changes in the f A glance over these statements illustrates the rate; in twelve of the years there was no change, difference in character between the French and and there was no change whatsoever from May, the British systems; note-issuing for rediscounts 1900, to March, 1907. is the chief function of the Bank of France; to furthermore, the rate rose above 3 per cent, only that end expansion of circulation is freely per during three periods of special pressure: in 1888, mitted, yet the coin in reserve is kept large in when it reached 4^ per cent., in 1899, when it proportion. reached the same maximum, and in 1907, when It is true that deposits in other During the twenty years, banks are more important than those in the 4 per cent, was reached. central institution; but in the aggregate they are out a parallel. The rate fell below 3 per cent, on a number of far less than those in Great Britain. The maximum of notes issuable is now 5,800,000,000 francs, a much larger amount of paper currency than is permitted anywhere else ; but since the use of checks in France is exceedingly limited, more actual money is requisite. For example, the per capita supply is $41, against about $17 in Great Britain. In other words, France uses very little “ deposit money.” The Bank generally does not find it necessary to curtail discounts to maintain its reserve, since it may issue notes so extensively to ac complish the purpose. For that reason the dis count rate has been kept low and remarkably steady. Moreover, in order to protect its gold reserve the Bank may refuse to pay gold upon notes; it may tender silver and exact a premium for gold demanded on notes. T o show how largely distributed the discount operations of the Bank are, the fact may be cited that in one year over 19,000,000 pieces of paper were discounted and rediscounted, nearly half of which consisted of paper of 100 francs or under; and some were as low as 5 to 10 francs each (say $1 and $2), This is a record with The average period of maturity of the paper was twenty-three days. occasions: in 1888 it was at 2\ per cent, for a short period; again at the same figure from 1892 to 1895, falling then to 2 per cent., at which it was quoted until 1898, during the period of world-wide depression in business. Since the latter year it never went below 3 per cent. This stability is obviously another great benefit to the people of France. Even during periods of dis turbance elsewhere, the aberration has been either absent or relatively insignificant. There is in Paris also an “ open market” rate for loans, almost always slightly lower than the official Bank rate. There is a Bank rate for loans upon collateral which, it is noteworthy, is slightly higher than the ordinary rate. It is to the credit of the management that con sideration for the general welfare is the chief mo tive in the conduct of the business; nor is this consideration confined solely to French affairs; for, appreciating that undue disturbances else where would ultimately react upon her own peo ple, the Bank is also conservative in its inter national relations. Upon three occasions has it helped out the London money market when in distress, letting it have gold from its reserves. There is nothing in financial history to com With such a stock of metal and the legal power pare with this in the way of public service; and to control the same, it follows that the Bank is when in addition it is borne in mind that rates sufficiently strong to dominate the foreign ex for discounts are usually lower than in other changes, at times even against London. countries, the extent of the benefit to the people frequently shifted a demand for gold coming of France may be appreciated. from New York, by altering the price of the It has The par of exchange according to the amount of the “ productive” upon the British capital is 25.22$ francs, i.e., the circulation, i.e., the notes not covered by gold exact amount required to equal the £ . and silver; in amount this tax is about 7,000,000 “ Paris-London cheque.” By de pressing the rate sufficiently to cover the cost of francs annually. transfer of the metal and leave a margin for per cent, in 1905 and prior years to 17$ per cent, profit, it brings about a flow to Paris. for 1907. The Bank reports its condition weekly; the head office is in Paris and it operates through 423 Dividends have risen from 13 There are over 29,000 shareholders, so that the average holdings are less than 7 shares. In the following table the operations of the Notes are now issued Bank prior to, during and immediately after, the only in denominations of 50 francs and upward; panic of 1907 are presented to illustrate the fa but there are still some of the smaller notes, for cility with which it adapts itself to conditions. merly permitted, unredeemed. The Bank pays The amounts are expressed in millions of dollars; a very small tax to the Government, regulated the reserve is calculated upon notes and deposits: branches and agencies. Note-issue 948 Deposits Discounts Gold Silver 3 136 358 10 942 130 328 943 932 322 i 8t 3i 965 137 139 155 7 522 523 180 4 8 .5 % 521 180 5 959 943 930 93® 947 535 534 534 537 538 53i 185 182 17 24 142 526 12 928 I 36 19 26 928 2 1907, Oct. 335 927 144 144 968 *55 9 962 16 , Nov. 385 350 355 339 359 355 339 348 346 963 943 14 21 28 Dec. 1908, Jan. 23 142 IS® 148 174 l 8l Gold Reserve 49 - 3 % 49 *8 % 49 - 4 % 181 5 0 -1 % 4 8 .0 % 180 4 8 .3 % 180 47 - 9 % 179 47 - 4 % 47 - 8 % 5i 9 179 4 9 .0 % 520 179 4 8 -6 % 5i 9 179 4 8 .5 % 426 516 176 130 377 361 176 ” 5 345 5i 5 5i 5 5i 8 176 117 45 *9 % . 47 - I %* 47 - 7% 176 4 8 .5 % The Bank anticipated disturbances and had, pansion of credits. Discount Rate 3* % 3i % 3* % 3* % 3* % 3* % 4 % 4 % 4 % 4 % 4 % 4 % 4 % 4 % 3* % 3i % 3 % Actually the reserve position earlier in the year, placed its rate slightly above is much stronger than is shown, since the silver in the 3 per cent, which had ruled for seven years the Bank is also available for the purpose. previous. The panic came in New York on October 21. In the last week of that month the Bank increased its discounts $63,000,000, in part by expanding note-issues, in part by the increase in deposits. It was early in November that the advance of $16,000,000 in gold was made to the British market, and on the 14th of that month the Bank was constrained to raise the rate to 4 per cent., in view of the falling reserve ratio. It appears as if the management regarded 48 per cent, the line of apprehension respecting gold reserves; this is very high against both notes and Financing the end of the year needs of the country for settlements, led to an expansion of discounts by $70,000,000 in the last week of 1907, of which fully $41,000,000 was accom plished by means of notes. The reserve ratio fell below 46 per cent., but the Bank can always cotint upon a speedy repayment of loans after New Year’s D ay; and so by the 9th of January, deposit liabilities declining, the rate was reduced to 3$ per cent, and fell to the normal point two weeks later, when the reserve was 48.5 per cent. deposits, yet the policy doubtless serves a useful The noteworthy feature is that the two expan purpose in restraining the tendency to over ex sion operations mentioned were effected without , an increase of specie; indeed, the end of the year generally. operation was carried through with a declining follows: coin balance, both gold and silver having fallen off $3,000,000 each during the operation. Nor was the discount rate altered in the periods. The provision for elasticity of note-issues is clearly en titled to credit for this facility. It is also to be noted that note-issues contract as soon as needs abate; thus, there is no vicious piling up of Capital and Surplus in the United States; in fact, as before stated, speculative loans are charged a higher rate by the Bank than the ordinary mercantile borrowings. The deposit business of the Bank is not large, relatively; and, as the statement shows, public moneys constitute a very substantial part of the amount held. Yet any one may open a deposit account, not less than 500 francs in amount; but the Bank pays no interest and therefore the bulk of the business goes to other institutions. O th er B anks O f these latter no complete official returns are available; yet the reports lacking are those of minor institutions, so that the figures which we have fairly represent the banking power outside the great savings banks. The capital of the re porting commercial banks is given at 930,000,000 francs, their total resources at 6,865,000,000 francs; against this there is cash on hand and at the Bank, only about 402,000,000 francs; a rather slender reserve, but for the constantly available power to rediscount paper at the Bank. T o show the concentration, it is to be remarked that three great institutions, the Credit Lyonnais, the Society GtnJrale and the Comptoir National d’Escomfte, have fully 4,900,000,000 francs of the aggregate resources. These have about 1,200 branches and agencies, some of them abroad. For mortgage loans France provides one great institution, which has nearly 4,600,000,000 francs in assets, the Credit Foncier. French Colonial Banks 44,079,000 Notes 142,428,000 Government Accounts 108,079,000 Deposits and Current Accounts Due to Branches 56,560,000 378,012,000 Other Items 5,725,000 Total means by which the discount rate is inordinately depressed, stimulating speculation, as is the case Its condition, given in francs, is as 734,883,000 Cash 44,020,000 Securities 31,860,000 Loans and Discounts 182,778,000 Current accounts 47,813,000 Due from Branches 382,672,000 Other Items 45,740,000 This shows a small ratio of cash against notes. In T u n is there is a bank created in 1906 with 1.000.000 francs capital and 9,000,000 resources; but the branch of the Bank of Algiers does a larger business. M o r o c c o has a French bank, with capital paid up of 7,700,000 francs, and resources 23,580,000, established in 1907. It issues no notes. For I n d o - C h i n a a bank was organized in 1875 which has 9,000,000 francs of paid-up capital and carries resources of over 200,000,000 francs, of which cash in hand and at banks 35,300,000. It operates throughout the Orient, where its notes, amounting to nearly 53,000,000 francs, circulate quite freely, side by side with those of other banks. R e u n i o n , a small island east of Africa, has a similar bank since 1851; with 3,000,000 francs of capital, its aggregate means reach nearly 18.000.000; it uses over 11,000,000 francs of notes, against which it has 3,800,000 cash. For the other African possessions there is a bank with home office in Paris, capitalized at 1,500,000 francs, total resources about 14,000,000. It uses over 6,000,000 francs of notes in Senegal, Dahomey, Guinea, etc. Cash in hand is in excess of 5,000,000 francs. French interests also extend banking facilities In her growing colonial possessions France has to foreign countries; thus the Imperial Ottoman established banks modeled upon the lines of the Bank (mentioned elsewhere) is partly owned by great Bank. French; and there are several in South America, A l g e r i a has a substantial institution, estab the most important of which is in Argentina, capi lished in 1851, with 25,000,000 francs of capital, talized at 60,000,000 francs gold and having re which does a large business in Northern Africa sources of over 200,000,000 francs gold. THE AUSTRO-HUNGARIAN BANK, BUDA-PEST Oesterreichisch-Ungarische Bank Austria-Hungary’s System THE AU ST R O -H U N G A R IA N BANK (O E S'I'E R R E I C H I SC H -1TN ( 1A R I SC H E B A N K ) The Austro-Hungarian Bank became the suc may be issued in excess of gold reserves to the cessor, in 1878, of the Austrian National Bank, amount of 470,000,000 kr., and beyond that sum founded in 1816. subject to a 5 per cent. tax. Its special importance dates The gold reserve from the monetary reform of the Empire in 1892, must be not less than 40 per cent.; commercial under which the gold standard was adopted, paper and securities cover the rest. provision made for the retirement of Govern gold in hand amounts to 400,000,000 kr., notes ment notes, and the paper currency, long de may be emitted to 1,000,000,000 kr., of which preciated, restored to parity. The money unit Thus, if 600,000,000 kr. upon credit, but 130,000,000 was then changed from the florin (or gulden) of thereof must pay the tax. 48.2 cts. to the krone (crown) of 20.26 cts. It elasticity; and the fact that the tax is usually This provides for took some years to complete the reform, and paid during crop-moving periods shows wherein there was hence a slight premium on gold up to the plan is useful. a few years ago. The services of the Bank were and are not yet absolutely redeemable in gold. indispensable to the consummation of this re More than half the issue is in 50, 20 and 10 kr. form. The notes are legal tender The Bank rediscounts for other banks freely; Its charter runs to 1910. Its capital is 210,000,000 kr. and its resources but none of the paper may run for more than aggregate 2,800,000,000 (or say, $567,000,000); three months. nearly 2,000,000,000 kr. are held against note- steady, ranging in a series of years from 3^ to 5 Rates for money are fairly issues,the deposits beingrelatively small. The cap per cent.; during our panic they rose to 6 per ital is privately owned, but the emperor appoints cent. the Bank’s governor; the two deputies and half shown by the fact that the rates are often under But the regard for the general welfare is the directors are also Government appointees, 5 per cent, even when the Bank has taxed notes Austria naming part of them, Hungary the other outstanding; thus the tax is not always a charge part. In addition there is close governmental in upon business. spection. Branches exceed 250 in number, being were issued fifty-five times, in amounts ranging located at every important place in the Empire. between 45,000 kr. and 90,000,000 kr. The head offices are in Vienna and Buda-Pest. The note-issuing function is now similar to that of the Imperial Bank of Germany; notes Capital and Surplus 225,305,349 2,028,024,110 Notes Due Abroad Mortgage Bonds Deposits and Current Accounts Other Liabilities Total i 77> i 6> 76 3 6 292,671,800 , In eighteen years taxed notes The Bank is authorized to loan upon mort gages to a limited amount. Coin and Bullion Gold Abroad 60.000.000 748,068,094 Mortgages 299,993,894 125 340,400 Advances on Securities 31,290,269 Government Loan About 280,000,000 kr. of the coin consists of 1,380,878,620 Discounts 91 383,971 2,845,992, i 75 A balance-sheet for December 31, 1907, follows, in kronen: Other Assets , 60 . 0 0 0 , c o o 171,7!1,i67 per cent.; then two-thirds of any further excess; silver, which has only a limited legal-tender but 10 per cent, of the profits must go to surplus power. before the second division. The ratio of gold to notes was hence Dividends have re considerably in excess of 50 per cent. The Government shares in the profits of the cently increased from about 4J to 7\ per cent. Bank, receiving one-half the excess over a 4 ports are available; these show capital 430,000,- per cent, dividend, until shareholders have 6 000 kr. and resources 3,850,000,000 kr. Only part of the other discount banks’ re THE STATE (IM P E R IA L ) BANK OF R U SS IA , GOSUDARSTWENNYJ HANK. ST. PETERSBURG Russia’s System THE STATE (IM PERIAL) BANK O F RUSSIA The Bank of Russia, established i860, is cess of the gold on hand; but in the course of owned by the Empire, and is operated as part of financing the recent enormous outlays, gold held its finance department. in foreign banks has also been included as base The capital is 50,000,- 000 rubles, say $25,750,000. The gold standard for notes. While the fixed limit would appear to was adopted in 1897 with a ruble of 51.5 cts., preclude a large measure of elasticity, the foreign in place of the former nominal valuation of 77.2 balances actually help out very materially to cts. increase notes in case of need. legal tender. Actually under the old silver standard the paper currency was for many years depreciated. The notes are By means of large bond-issues the Government From the accompanying statement of condi accumulated a vast hoard of gold which enabled tion, it will be seen that the deposit accounts are the Bank to carry through the reform, and also relatively larger than in most of the other to finance the Empire in its war with Japan. central banks; but rediscounts are quite exten It operates through about 100 branches, the head sive. office being in St. Petersburg. other chief centers; covering a period of years Discount rates range higher than in the While the Bank is thus a State institution, the the range has been from 4^ to 8 per cent.; in the note-issuing function is regulated by law founded panic period in the fall of 1907 the rate rose upon currency-banking principles. (For Finland to 7^ per cent., to restrain exports of gold to notes are issued by another bank.) The normal Germany. limit of note-issues is 300,000,000 rubles in ex tion, in rubles, is for March, 1908: 55,000,000 Capital and Surplus 1,160,000,000 Notes The following statement of condi Specie on Hand and Abroad Notes on Hand 1,209,243,772 77,512,496 233 j* 3 2>™4 Deposits and Current Accounts Accounts of Branches Discounts 219,378,576 416,112,126 Advances on Securities, etc. 261,345,698 354,107,619 Government Account Investments 33,812,678 Other Liabilities 2,252,164,537 Total 96,376,023 Accounts of Branches Other Assets 331,653,070 56,654,902 Of the specie, reports indicate that the Bank designed for the promotion of foreign trade, and held very nearly 1,000,000,000 rubles in gold and one particularly for the business with China. 75,000,000 rubles in silver in its vaults; a very Aside from these, special mortgage banks exist, strong reserve position. Other reporting banks show about 1,800,000,- one class for the nobility and one class for the peasants. 000 rubles of resources. One of these is specially FINLAND F in la n d has its own monetary system, the mark equal to the franc being the unit; hence of March, 1908, shows 194,000,000 resources. mk. of It has a central Notes amounted to 96,296,000 mk. and coin bank, established in 1811, owned by the Govern on hand to 24,971,000 mk.,with over 50,000,000 ment, capital 25,000,000 markka; note-issues due from abroad. for expansion. 20 markka are worth 7^ rubles. are limited to 35,000,000 mk. in excess of gold in hand and due from abroad, the This showed a large margin Discount rates are fairly steady, although high, amount in hand not to fall below 20,000,- ranging from 5 to 6£ per cent. 000 mk. report resources about 550,000,000 markka. The Bank’s statement at the end Other banks THE BANK OF JAPAN , TOKYO Nippon Ginko PUBLIC OFFICE, BANK OF JAPAN Japan’s System THE BANK (N IP P O N OF JAPAN G IN K O ) When Japan emerged from her isolation, and is now 49.8 cts.); the Government took a part adopted some of the business methods of the thereof; it appoints the chief officers and selects western world, the monetary and banking sys the directors from among nominees of the share tem of the United States was used as a model holders ; it has the power of vetoing such acts of for her own. directors as may be regarded detrimental to the The monetary unit, the yen, was almost exactly equal to the dollar; the Govern interests of the nation. ment issued notes directly, and also through The Bank acts as treasurer of the Govern national banks upon deposit of bond-security ment and handles its financial operations; it is (1872). An experience of ten years sufficed to the rediscount bank for all other financial insti demonstrate the great defects in such a paper- tutions ; it is especially charged with the regula money system, and, always prompt to adopt tion of the discount rate, and exercises an in corrective measures, the central bank system fluence upon the foreign exchanges. was substituted in 1882. Since that date the issue notes as follows: a. to any amount upon Bank of Japan alone may issue paper currency. coin in bank (silver not to be more than one- It may The purpose of the reform was to provide a fourth) ; b. 120,000,000 yen upon securities or greater measure of elasticity to the currency, commercial paper discounted; c. to a further, hence to the facilities afforded the people; and unlimited amount, subject to a tax of at least the consequent reduction in the discount rates, 5 per cent, per annum. which were pressing upon commerce and in dustry. Thus the currency feature is similar to that of The Bank also aided very materially Germany’s great bank; it permits a very liberal in the consummation of the change to the gold expansion, which proves useful, not only to standard in 1897-8; and was unquestionably an business in general, but to the Government, in indispensable instrumentality in the financing of case of emergency. the war with Russia. dicates how the demands The Bank’s capital is 30,000,000 yen (the yen Year 1897 The following table in have been met, amounts being in yen: Loans, etc. Deposits G o ld on Hand* Notes Out 96.900.000 226,200,000 135.200.000 78,100,000 35,30°,O O O 1900 65.300.000 228,600,000 146,000,000 1903 116.900.000 232.900.000 94,500,000 16,400,000 1906 147.200.000 341.700.000 137.600.000 401,500,000 1907 161,700,000 370,000,000 157.900.000 471,000,000 * T h e silver held was unimportant in amount. It will be observed that after allowing for the nation. As it is, the rates have been reduced credit-note issue of 120,000,000 yen, the amount fully 25 per cent.; the 12 per cent, charge is no of taxed notes has not been large at the dates longer normal in ordinary times, and a given; but during certain seasons each year cent, rate has occurred upon occasions in recent there are substantial increases. The general re sult has been a lowering of discount rates, which would unquestionably have been more marked but for the financial disturbances consequent years. per The fluctuations, which are more serious than is desirable, are generally outside the trade centers and traceable to special causes. In the upon the war with Russia and the enormous centers 6 per cent, money is, in normal times, borrowing which that struggle entailed upon the quite frequent. The coin reserve of the Bank, measured 29.098.000 yen Gold Coin against notes, has been fairly well maintained; Gold Bullion 132.644.000 117.919.000 in 1900, and again in 1904, it fell below 30 per Government Obligations cent.; but it has been above 40 per cent, in the Other Securities more recent years and the latest report shows Commercial Bills upward of 50 per cent. 23,333,° ° ° 66.990.000 369,984,000 Total The detailed statement of the “ cover” behind the notes on Dec. 31, 1907, is given thus: Capital 30,000,000 Surplus 21.500.000 The balance sheet, including the above, for the same date, follows, in yen: Coin and Bullion 172.312.000 Foreign Accounts 276.788.000 Notes Issued 369.984.000 Due from Banks and Agencies 205.338.000 Government Deposits 247.248.000 Loans and Discounts 178.528.000 Deposits and Accounts 224.048.000 Government Bonds 30.665.000 Other Liabilities Total 923.445.000 The Bank pays 12 per cent, in dividends and adds to its surplus every year. The head office 79,995, ° ° ° 10,484,000 Other Resources Total 923,445, ° ° ° Capital and Surplus 38,600,000 Notes (in Manchuria) 6,071,000 commercial centers, exclusive of Yokohama. Deposits 125,505,000 Bills Payable of the Bank is in Tokio; it has branches in eight 128,203,000 Cash O ther B anks 27,071,000 Investments Comprehensive statistics of other banks are furnished by the Government; thus 1,665 ordi Loans and Discounts 16,531,000 106,633,000 Bills Receivable 146,757,000 nary commercial banks show 278,000,000 yen capital, and 951,000,000 deposits upon a “ turn over” of about 13,000,000,000 yen. Total resources exceed 300,000,000 yen. There is a special mortgage bank, 47 agricultural and in This bank also pays 12 per cent, dividends dustrials, and 2 colonials, with an aggregate after setting aside a substantial part of profits annually for surplus. capital of 56,000,000 yen; there are also 519 savings banks (beside the Government system). The Yokohama Specie Bank (Shokin Ginko) was created in 1880 specially for the development of the foreign trade. Its capital has been in creased, from time to time, from 3,000,000 yen to 24,000,000. It has proved enormously use ful, in co-operation with the central bank, in its special field. It has branches in the principal ports of Japan and the rest of the world. It Japan’s banking system, by reason of its specialization of functions into the several classes, with a strong Government central bank as the chief organ, has proved eminentlysuccessful. The aggregate resources of the banks have in creased fourfold in the past decade; the ordinary banks particularly have flourished in a marked degree, as the following comparison shows: does a general banking business, and in addition 1897 issues notes payable in silver coin in Japan’s in yen, as follows : Deposits 1,665 Yen 161,442,000 19,465,000 235,5° 7, ° ° ° 277,772,000 OO Capital Paid Up Surplus 1,281 Y en eign exchange business is very large. At the end of 1907 it reported its condition, I 9°7 OO newly acquired territory in Manchuria; its for Number of Banks 951, 713,00° The Canadian System Although the Dominion of Canada issues Government legal-tender notes, the amount thereof is limited and well secured by coin; No bank may be established with less than $500,000 capital. Shareholders are liable to an amount equal to the par of their shares. bank-notes constitute by far the greater part of Monthly reports of condition, in very specific the circulating medium; in fact the bulk of the form, are required, including the item of loans Dominion notes is held in the reserves of the to directors or to firms in which directors are partners. banks. There are now thirty-two institutions of issue (three having recently been placed Perhaps nowhere except in Scotland, where a in liquidation); they operate through 1,800 similar system prevails, is the function of cur branches, reaching every hamlet in the country. rency banking so well performed as in Canada; The Government exercises a careful and ef the demands for money vary seasonally, de ficient supervision over the system and the banks termined largely by the crops; and the volume co-operate; so that, although there have been of notes and of credits increases and decreases occasional suspensions of banks, the common in almost absolute harmony with the growth or interest prevented losses to creditors, and notes abatement of demands. have always been fully redeemed. rate shows very narrow fluctuations and is, in Hence, the discount The present bank act dates from 1891; it per general, relatively low; nor is there a marked mits the banks to issue notes to the full amount difference between the rate at the centers and of the capital paid up, solely upon their credit, that prevailing at remote points of the wide with no prescribed coin reserves; there is, how territory of the Dominion. ever, a proviso that 40 per cent, of the reserves Elasticity of note-volume is brought about which they do hold shall be in Dominion notes ; largely by the compulsory redemption feature, and the notes are a first lien upon the assets of which prompts each bank to send notes of the the banks. They are, furthermore, required to others for redemption at once, when the de maintain with the Government a guaranty fund mands for currency slacken, or when it has its equal to 5 per cent, of their issues. own notes available for use. This fund Obviously each is to be used by the Government to redeem notes institution profits more through the use of its of a failing bank, to be replenished pro rata by own notes than from the use of those of other the other banks, and is afterward reimbursed banks. from the sums recovered from the assets. period of lessening demand sets in, the banks Notes of failed banks bear 6 per cent, from suspension But it is also a fact that when the voluntarily retire their notes as they come in. Covering a series of years the discount rate until provision is made for full payment. Bank-notes may not be issued for less than has fluctuated between 4^ per cent, and 6 per (The unit is cent., the lower rate named having prevailed the same as that of the United States, w'hose steadily during a period when the facilities had r $5 and only for multiples of $5. gold coin as well as British, is legal tender.) become fully equal to the needs. Severe penalties are imposed for excessive issues temporary upward turn, again to the high point, The recent Numerous redemption centers are was due largely to the rapid industrial and established by the Government, where notes commercial development with which the in of notes. must be redeemed on demand, subject to penalty crease in facilities did not keep pace. of insolvency proceedings. Upon demand of the capital of the banks is the chief determining The holder banks must pay up to $100 in Dominion factor, and there appears to have been need for notes (of $1, $2 or $4) upon any of their liabil an enlargement thereof. ities. item since 1890, when it was $60,000,000, has Loans upon, or purchases of, bank stock The growth in this that been as follows: 1895, $62,000,000; 1900, $65,- mortgages may be taken for pre-existing debts. 200,000; 1905, $83,400,000; 1908, $93,000,000. or mortgages are prohibited, except Bank of M ontreal Montreal, Canada During the panic in the United States in 1907, issue reached the amount of the capital; in the there was very considerable need for additional fall of 1907 the greatest amount of notes out means, which the banks failed to meet fully, and was about $4,000,000 less than the capital. the Government was constrained to emit an Moreover, it is suggested by Canadians that additional the banks would have been able to serve the supply of Dominion notes— an This incident caused public better had they loaned less of their means some discussion of the merits of the system and abroad, meaning chiefly loans in New York at it has been amended so that the note-issue limit call; the amount of “ call loans” elsewhere than extraordinary proceeding. will be extended to reach 115 per cent, of the in Canada in September, 1907, was over $63,- capital and the surplus, during the period of 000,000; in November the sum was still in excess greatest demand, from September to January. of $41,000,000. It is a question if this was needed; the fact is set forth that at no time has the maximum note$96,049,000* Capital Paid Up The following statement shows the condition of the banks on June 30, 1908: Specie $23,888,000 Surplus 71.655.000 Dominion Notes Notes 68.154.000 Five Per Cent. Fund 50.804.000 Deposits on Demand 226.671.000 Deposits at Notice 399.286.000 4,044,000 Bank Notes and Checks Loans, Ordinary Government Deposits 19.609.000 Due to Banks and Branches 26.323.000 6,701,000 Other Items 11.570.000 Excess Assets $926,018,000 Totals It is noteworthy that time deposits are very much larger than other deposits; also that the reserves are only about 10 per cent, upon all 93.907.000 Securities 72.267.000 Due from Banks and Branches 54.085.000 Other Items 27.965.000 Highest E n d 68 October 86 84 73 November 89 84 March 77 71 76 December 86 78 1908 May 78 76 June 76 July August Year Maximum Minimum Ra ng e 7 End 77 April presented, figures indicating millions of dollars: High est February upon demand deposits and notes. years at end of months, the following table is M ont h 1907 January deposits and notes, but upward of 24 per cent, To illustrate the fluctuation of note-issues by 571,627,000 Loans on Call Month 1907 * Including $3,000,000 of one bank in liquidation, 27.431.000 January 77 7i 76 February 70 69 March 71 69 78 September 73 67 73 April 72 68 78 81 77 May 70 68 79 June 70 68 1898 42 35 1899 5° 53 58 37 41 13 19OO 12 ing a capital of $14,400,000 and a surplus of 45 !3 $11,000,000; its total resources exceed $177,000,- 19OI The Bank 0} Montreal, established 1817, is the oldest and the chief one of the institutions, hav 1902 66 49 17 000; thus with slightly more than 15 per cent, 1903 70 55 15 of the capital of all the banks, it has nearly 20 I 9°4 72 15 per cent, of the aggregate resources. 19 125 branches, including three in the United 1905 77 57 58 1906 86 62 24 States, one in Mexico, one in London. 1907 84 68 16 for many years limited its dividends to 10 per This o nly partially reflects the m ovem ent, however; the following figures show the changes cent. It has It has Its circulation is correspondingly large, and it carries by far the largest part of the in a period of eighteen months giving highest Dominion’s public funds, being the Government amount and amount at end of month: depository in chief, and its financial agent. BANK OF IT AL Y, Banca D ’ Italia ROME Italy (B A X C A D ’ IT A L IA ) Italy has the credit of having established the of which is one-fifth of the average discount first banks in Europe, that of Venice in 1156 and rate, not, however, to exceed 1 per cent. Further that of Genoa in 1345. The monetary system issues are permitted on actual coin received and passed through many vicissitudes even after the issues on credit may be made subject to a tax consolidation of the numerous petty states into graduated according to the amount of over the present kingdom. The Government still issues (not covered by coin), the rate varying issues about 430,000,000 lire of legal tender from two-thirds of the discount charge up to notes. twice the charge. The system is bi-metallic, the unit lira, equal to 19.3 cts. Thus the amount of the The Bank of Italy is since issues is regulated by the charges made to bor 1893 the central organ of note-issues, although the Bank of Naples (est. 1539) and that of Sicily, rowers, and naturally this restrains borrowing also, since the tax is necessarily added to the still exercise their ancient issue functions; they charge. are, however, relatively small. in case of need. The chief bank Yet this provides amply for expansion Thus the chief bank, having has a subscribed capital of 240,000,000 lire, but 1,000,000,000 lire in coin, could lawfully issue, only 180,000,000 thereof paid in. subject to tax, 2,500,000,000 lire; but part there The Banks are privately owned, but the Government exercises supervision over all three, of would be taxed fully 10 per cent. Actually the issue would be about 1,400,000,000 lire, but by means of direct appointments of the chief whereof officers only in the two smaller ones. and 630,000,000 (the fixed sum) covered to 770,000,000 fully covered by coin After the reorganization of 1893 the paper 40% ; only 378,000,000 lire taxed at lowest currency continued at a discount for some time; rates. In 1907 the maximum of higher taxed banks are still permitted to redeem their notes notes amounted to less than 49,000,000 lire. in gold at the current rate in the market; occa There may also be an issue for the Govern sionally unfavorable exchanges cause a slight ment’s use, on which only }/5 coin reserve need premium on gold. be held. Discount rates are normally about 5 per cent.; Note-issues are regulated as follows: The maximum ordinary issue is limited to the panic conditions in 1907 increased the rate about thrice the capital of the banks, against to only 5^ per cent. which there must be held 40 per cent, of coin, maintained fairly steady by the system employed. three-fourths of which must be gold. 226.700.000 Capital and Surplus 1.411.600.000 Notes Public Deposits 175.600.000 Other Deposits 212.300.000 45,100,000 Other Liabilities 2.071.300.000 Total Following is a statement of the Bank of Italy The notes not covered by coin are subject to a tax, the rate It appears that 153,000,000 lire of the coin held belonged to the Government. The two Obviously the rate was for the end of 1907, in lire: Gold 896.300.000 Silver and other Cash 135.200.000 Loans 618.900.000 Securities 145.900.000 Current Accounts 64,300,000 Other Resources 210.700.000 lire of of notes the banks held 1,121,700,000 gold and 150,600,000 of silver; a coin ratio notes of nearly 69 per cent., which should preclude out, and 252,000,000 lire of coin; total means depreciation of notes. Other commercial banks 761,000,000 reporting show 1,600,000,000 lire of resources. other banks had 440,000,000 lire. Thus with r lire of 1,851,600,000 ww BANK OF B E LG IU M , BRUSSELS Banque Nationale De Belguique Belgium (B A N Q U E N A T IO N A L S This populous and thriving little kingdom, largely French in language, I)E B K L C .l.’ IQL’ E) The charter requirement contemplates that has the French the coin in reserve shall equal one-third of the monetary system (bi-metallic) and a National notes and other demand obligations, but the Bank similar in its constitution to its great Government reserves the right to suspend this neighbor in Paris. regulation if the Bank has an abundance of It was in 1850 that the present institution took the place of a multiple bills of exchange commanding immediate gold issue-bank system, which had produced cur or a sufficient foreign gold account. rency difficulties. pension of the requirement is quite generally In 1900 the charter was extended to 1929. The Bank is privately The sus exercised, for the coin reserve is usually con owned, but the Government appoints the chief siderably below the ratio fixed; yet the notes officers and thus supervises the business. are at parity, for the Bank is strong in means It carries the Government funds and serves the for speedy liquidation. fiscal it to furnish ample currency through redis department freely whenever required. This credit enables Its notes are legal tender so long as they are counts. redeemed in coin. of 275,000,000 francs, are subject to a tax The head office is in Brussels, and there is a Notes in actual circulation, in excess of £ per cent. In addition the Government branch at Antwerp; thirty-nine agencies afford takes one-fourth of the net profits in excess of facilities at every point of the kingdom. a 4 per cent, dividend and all receipts from Its capital is 50,000,000 francs and the re sources aggregate about 1,000,000,000 francs, the greater part of which is held against notes in circulation, deposits being relatively small. 84,968,110 Capital and Surplus 798,167,760 Notes discounts in excess of 3^ per cent., thus en deavoring to regulate the interest rate. The following balance-sheet is for the end of 1907, in francs of 19.3 cts. each: Coin and Bullion 133,26!,800 Discounts 684,681,787 Current Accounts 93,614,248 Advances on Securities 61,716,731 Government Account 8 ,044,375 16,995,617 Investments 92 , 955.434 29,174,358 1,001,790,110 Total Other Liabilities Total The silver coin held frequently rises to 30,000,- Other Resources 1,001,790,110 of small denominations, 20, 50 and 100 francs. The ratio of coin to notes was less The currency system would thus seem less secure, than 17 percent, at the date of the statement; the so far as specific reserves go, than those of most of 000 francs. note-issues were, however, as usual on the last the leading nations; and this is, in a measure, re day of the year, very large. flected in the fluctuation of the discount rate; the In May, 1908, the notes stood at 727,000,000 francs; gold, 125,- range has been from 3^ to 6 per cent., the latter 000,000; silver, 31,000,000; thus giving the much ratehavingbeen made in the recent panic period. better coin ratio of over 21 per cent, to notes. The usual rate is, however, about 3^ per cent. Yet the ratio of gold holdings is that which After paying the Government about 12,500,- attracts attention; at the last-named date it was 000 francs, 8,300,000 francs remained for divi only a trifleabove 17 per cent., which is lower than dends of 16.6 per cent, in 1907. Depend Other commercial banks do a very extensive ence is placed upon the gold subject to its call in business; the resources of those whose reports are that of any prominent central bank. Paris and London, arising from the large com available aggregating fully 1,800,000,000 francs. mercial credits which the Bank has at those points, There are, also, several important private bank andupon the fact that two-thirds of the notes are ing-houses, not reporting. BANK OF SPAIN , Banco D e Espana M AD R ID Spain (B A N C O D K E S P A N A ) The Bank of Spain has the exclusive power of issuing notes in that kingdom. Thus in case of the issue of the maximum It dates from sum the Bank would have to have against the 1849, although it was not granted the monopoly notes 1,200,000,000 pesetas in coin, of which until 1874. 570.000.000 in gold. It is a private corporation capital ized at 150,000,000 pesetas (equal to francs), say $28,950,000. While the shareholders choose a council which appoints the directors, the gov ernor and the two deputy governors are appointed by the Government; the deputies are, however, Actually the maximum has not nearly been reached; but a very considerable part of the “ cover” for the notes other than coin is in the shape of Government obligations. Further more, the fact that so much of the coin reserve chosen from a list of nominees selected by the is in silver keeps the notes at a discount. council. full legal tender, the people are compelled to re Thus there is joint control. Being The charter of 1874 was for thirty years and ceive them, and suffer from the depreciation, permitted note-issues to only five times the which exhibits itself also in the foreign ex capital; but the needs of the Government, which changes. had for many years a deficit in its revenues, as much as would be necessary (or more) to brought about an enlargement of the issuing cover deficiencies in revenue by additional taxes, power in 1891 and in 1901; the latter due to the and re-establishing parity to the currency. The The people practically pay in this way financial derangement consequent upon the war Bank has, however, with the United States. rate of the premium on gold has declined from The charter was re newed and extended to 1921, on condition that the Bank give further help to the Government; at first the note-issuing right was enlarged to ten times the capital, one-third of the issue to be covered by coin, half the coin to be gold. (Spain is, like France, bi-metallic, and its large silver coins are full legal tender.) The latest extension respecting notes fixes the maximum limit of issue grown stronger, and the 30 per cent, to about 15 per cent. The suspension of specie payments and the power of expansion have enabled the Bank to maintain a fairly steady discount rate at 4^ per cent.; there was no increase during the panic of 1907; the disturbance then was confined to the exchange rate. at 2,000,000,000 pesetas, regulated as follows: In 1895 the Bank had out 987,000,000 pesetas 1.200.000.000 to have behind it one-third in in notes, holding 200,200,000 in gold and 256,- coin, half thereof in gold, the balance to be 350,000 silver; in 1908 the notes were 1,569,- covered by commercial paper and securities. 000,000 pesetas, gold 389,000,000 300.000.000 pesetas additional, fully covered 660.000.000. 500.000.000 pesetas further, to be fully covered At the end of 1907 the balance sheet showed, in pesetas of 19.3 cents each: by metal, half thereof in gold. Capital and Surplus 170,000,000 Notes 1,557,080,000 Cash and Balances Abroad Government Bonds Deposits and Current Accounts 5IO> 55^>994 Loans and Advances Treasury Accounts Other Liabilities i 49> ^ 4,I3 I 384,025,206 Advances to Treasury The resources are thus over 2,700,000,000 pesetas; other banks reporting 500,000,000 pesetas; has been the silver coin to notes, and over 24 per cent, of gold alone. by metal, 40 per cent, thereof in gold. dominance and The latter gives a ratio of 66$ of show about central growing; bank’s it now has Other Assets 61 branches and agencies. 1,095,345,802 344,468,953 i , i 52, 042,578 i 5°>387,6i 4 30,181,384 Its shares stand at 440 per cent., dividends having exceeded 20 per cent, for some years. is in Madrid. The head office BANK OF AMSTERDAM, AMSTERDAM Amsterdamsche Bank The Netherlands (DE N E D E R L A N D S C H E BANK) The early commercial development of the The head office of the Bank is at Amsterdam; Netherlands led to the use of banks as early as it has a branch at Rotterdam and eighteen 1609, when the Amsterdam Bank was founded. agencies. The Government uses the offices for the Treasury business. Note-issuing, as now carried on, dates, however, from the establishment of the Netherlands Bank in 1814. The regulation governing note-issues is that Its monopoly as a currency bank was the Bank must have in hand gold and silver received in 1863; the latest renewal of charter equal to 40 per cent, of its notes and other de was given in 1903 and runs to 1918. It is a mand liabilities (deposits, etc.). The expan privately owned and managed bank, but must sion is thus dependent upon its other business; divide profits with the Government after stock but this is generally small, the currency func holders receive 3^ per cent, dividends; yet the tion being the chief one. dividends have been from 8 to 13 per cent, in usually show a considerable margin of power recent years. to issue notes and effect rediscounts for the other banking interests. The Government exercises care ful, yet mild, supervision over its affairs. The country is bi-metallic, the unit (guilder or Thus the reports The condition of the Bank in March, 1908, showed, in florins, thus: florin) being 40.2 cts. Capital 20,000,000 Coin and Bullion 146,058,314 Surplus 5,031,908 Current Accounts 24, 744,762 121,071,728 , 265 947,760 Notes 12,681,627 Current Accounts, etc., 303,661,295 Total Loans and Discounts Investments 8,977,704 Other Resources 2,808,787 Colonial Banks About one-third of the coin and bullion con sists of silver, which is full legal tender. Calcu For the D u t c h E a s t I n d i e s the Bank of lated upon its gold reserve alone, the ratio would Java was established in 1828, as a currency be under the prescribed 40 per cent. and Formerly, even as late as 1899, the silver in the Bank far rediscount institution, operating upon much the same lines as the central bank in the exceeded the gold; there has thus been a material mother country. addition to the reserve strength. florins, its note-issues run as high as 65,000,000 With a capital of 6,000,000 florins; total resources, 78,000,000. Coin held Discount rates, while not usually high (3J was nearly 31,000,000 florins, hence far in ex per cent, being a frequent rate), fluctuate con cess of the 40 per cent, requirement; deposits siderably at times of pressure, having been as were only 4,500,000. high as 6 per cent, in 1907, for which year the and has fifteen branches and agencies. It is located at Batavia average rate was5.1 percent.; for 1905, on the Three other banks with Dutch charters do the other hand, the average was as low as 2 f per deposit business; their resources show about cent. In 1907 the 6 per cent, rate occurred in April, was reduced to 5 cent, later in the month and remained unchanged during the panic period. The gold reserve actually in creased in the period. 220,000,000 capital. florins, upon about 61,000,000 One of these dates from 1824. In D u t c h G u i a n a the Surinam Bank per forms the same functions; it has 700,000 fl. capital, 3,800,000 resources, of which 962,000 coin against 1,324,000 notes in use. Other reporting banks show 435,000,000 The former Dutch (Boer) republics in South florins of resources; many important private Africa had also been provided with a bank banking concerns, chartered in the Netherlands. not reporting, do business. MAIN BANKING ROOM Sveriges Riksbank Scandinavian Union The three States composing this union, formed in 1875, are Sweden, Norway and Denmark. The gold standard was then adopted, with the krone (crown), equal to 26.8 cts., as the unit. Each has a central bank of issue, the notes of which are legal tender. NORGES BANK N o r w a y controls its central bank, the Bank of Norway at Christiania, which was established in 1816, now capitalized at 15,500,000 kr. ment is appointed as in Sweden. SYERIGES RIKSBANK The note- issues may not exceed twice the amount of gold S w e d e n ’ s Royal Bank originated in 1668; it is thus next to the oldest existing issue bank. It owns considerable of the stock and the manage Its in hand and due from abroad; thus here, also, the expansion power is dependent in part upon capital of 50,000,000 kr. is all owned by the foreign exchanges. Government. The directors are elected by the portant ; a considerable number of other banks parliament and the governor is appointed by the serve the commercial interests, with resources of king. about 550,000,000 kr. Its chief office is at Stockholm. Its deposits are not im Until the end of 1903 other banks were also The central bank shows capital and surplus permitted to issue notes and some of their paper 22.577.000 k r.; notes issued, 83,450,000; de still circulates (about 39,000,000 kr.). posits, 9,480,000; total liabilities (and resources), The limit of issue is governed by the amount due the Bank from abroad, hence it deals largely in foreign bills of exchange; the gold in hand is not permitted to fall below 60,000,000 kr. and the issues beyond this and the amount held abroad must be covered by commercial paper. Expansion is thus dependent upon business. The deposits are not large and those held are chiefly Government funds. Following is a statement for Dec. 31, 1907, in kronor: 122.100.000 kr. The gold in hand was 27,400,- 000 k r.; due from abroad, 21,000,000, and notes on hand, 10,000,000. The loans and discounts were 41,500,000 kr., securities held, 10,000,000. Discount rates are somewhat lower than in Sweden, 5 to 6 per cent, being the usual rate. DANSKE N A T IO N A L BANK D e n m a r k has a privately owned central bank, founded in 1818, known as the National Bank, at Copenhagen, operated under close govern Capital, Surplus and Profits Notes Deposits 70,552,115 190,115,534 61,139,290 National Debt Account 48,459,819 Due Other Banks 9,230,270 Other Liabilities 2*645,635 Total 382,143,364 mental supervision. kr. The capital is 27,000,000 Notes may be issued to the extent of 30,- 000,000 kr. on credit, covered by commercial paper; for the rest there must be gold in bank or due it on net balance from other banks. This provision operates quite satisfactorily in ordinary times, discounts being frequently at 4$ per cent.; the usual range is up to 6 per cent., but during Gold Silver, etc. 7°>322>453 Due from Abroad 39,760,626 8,210,467 Loans and Discounts 255,231,031 the 1907 panic Germany was able to compel the Bank to part with gold and rates rose to 8 per cent., seriously restricting discounts. tion is not yet fully normal. The situa With 121,000,000 Securities 6,232,693 Other Assets 2,386,093 kr. in gold in bank at the end of April, 1908. The other banks are important, showing The deposits are not large; the total liabilities, 307,000,000 kr. capital and 2,100,000,000 kr. including capital and surplus, stand at about of resources. Discount rates are high, 5 to 7 per cent, being the recent range. kr. of notes out the Bank held only 67,000,000 190.000.000 kr. Other banks report about 700.000.000 kr. of resources. MAIN BANKING ROOM, NORGES BANK Switzerland (SCH W EIZE RISC H E N A T I O N A L B A N K ) After some unfortunate experiences with local president, elected by this council, must be of the (cantonal or state) banks of issue, the Federal twenty-five Government appointees. Government of this republic assumed the regula- cil elects three directors for six years, who have Thecoun- tion of the currency function of banks in 1875. the direct conduct of the business. There were until recently forty banks issuing issuing is supervised by one at the head office The note- notes under fairly safe restrictions, but they also in Berne; the other business is centered at Zu- combined savings and mortgage-loan business, rich, where the two others are located, and were cantonal, not federal, corporations. The Bank may issue notes without limit, Accordingly the Government by law of 1905 provided it has a gold reserve of 40 per cent, and created a central bank, which actually began commercial paper for the balance, behind them; business in June, 1907. its other demand liabilities must be covered by The head offices are in Zurich and Berne, and there are seventeen such paper also. branches and agencies, which are being increased counts to run more than three months, and It may make no loans or dis to reach every one of the twenty-two cantons, paper must bear two names; stocks are not per- Its charter is for twenty years, and after three mitted as collateral, and bond investments, ex- years it will have the monopoly of note-issuing, cept Government issues, may be only temporary. The other banks must retire their notes in the It may not pay interest on deposits, except interval, in quarterly installments, the National Government funds, and dividends are limited to Bank aiding them in case of need with loans. 4 per cent. O f the profits 10 per cent, (not to The capital is 50,000,000 francs, but only half exceed 500,000 francs annually) go to surplus thereof need be paid in at present; one-fifth was until this equals 30 per cent, of capital; the excess allotted to existing issue banks in proportion to over 4 per cent, dividends then goes to the their note-issues; two-fifths to the cantons Government, which pays two-thirds of it to the (states) according to population; the remaining cantons to reimburse them for loss of tax on two-fifths and so much as was not taken under notes heretofore in use. the allotments, might be taken by Swiss citizens permitted, but the Bank may buy bullion and or other Swiss corporations. The Federal Government took none. No underwritings are exchange and issue gold and silver certificates. The Bank’s notes are not legal tender except in The management is in a council of forty payments to it or to the Treasury, members who are chosen for one year, twenty- Discount rates are low and fairly stable, 3$ to five of whom are appointed by the Government, 4$ per cent, being usual; they rose to 5iper cent, the rest by shareholders, no in the 1907 panic. private share- holder having more than 100 votes, irrespective of shareholdings. The president and National Capital 25,000,000 vice- Surplus .................... 48,500,000 Notes 159,200,000 131,400,000 Deposits at the end of 1907, in francs of 19.3 cts.: Other 231,700,000 National Coin and Bullion Bank Notes 13,100,000 881,500,000 26,700,000 348,700,000 Mortgages 383,000,000 Investments Mortgage Bonds .................... 922,700,000 Other Resources Other Liabilities 3,800,000 120,100,000 this leaves over 48 per cent, in gold to the notes, Other 59,400,000 2,500,000 .................... The National Bank held about 6,000,000 81,300,000 Loans and Discounts 108,300,000 Savings Deposits francs in silver and the other banks 2,000,000; The country is bi-metallic, Following is a statement of the issue banks Totals .................... 962,700,000 3,800,000 155,900,000 18,800,000 I I 3> 00> 5 000 214,700,000 2,186,100,000 There are a number of banks in addition whose assets aggregate about 500,000,000 francs. ] |jjjjjj Mir iitil iim ni] N A TIO N A L BANK OF GREECE, ATHENS, (E T H N IK E TRAPEZA) GREECE The paper currency here is issued by the The National Bank is privately owned, capital Government, the National Bank and the Ionian 20,000,000 drachmai, upon which dividends of Bank. from 17 to 19$ per cent, have been paid in recent tion, The National is by far the chief institu emitting at times up to 140,000,000 years, showing a very profitable business, with drachmai (equal to 19.3 cts.) of notes; the a wretched money system. Government has 80,000,000 out and the other branches in the several sections of the kingdom, bank less than 4,000,000. the head office being in Athens. The country is bi metallic, but as there is very little coin in reserve (none against Government notes) the money of the country consists of depreciated paper, fluctuating in recent years between 6 and There are forty-two The following statement of the National, in drachmai, is for Dec. 31, 1907. Other banks reporting show about 340,000,000 drachmai of resources, of which the Ionian has about 50,000,000, the Bank of Athens about 170,000,000. 16 per cent. 33,500,ooo Coin Notes 137,500,000 Notes Deposits and Current Accounts 126,000,000 Accounts Abroad 33,900,000 66,300,000 Mortgage Loans 68,700,000 Capital and Surplus Lottery Loan Saving Deposits Government Deposits Other Liabilities Total 9,800,000 per cent, against the notes. 74,300,ooo 17,900,000 Other Loans 117,700,000 4,900,000 Investments 69,700,000 Other Resources 26,100,000 395> 9°°,ooo The coin reserve thus figures out less than 2\ Government Loans 3> ° , 000 3° 2,200,000 Discount rates are high, but fairly steady, at 6$ per cent. In June, 1908, the gold premium stood at 8$. BANK OF PORTUGAL, LISBON (B A N C O DE PORTUGAL) PORTUGAL The Bank of Portugal is the successor of the of the issue to thrice the metallic reserve; but, in old Bank of Lisbon, founded in 1822; the re fact, conditions, due largely to Government organization took place in 1847, but it was not financial needs, are such that the Bank has for until 1891 that the Bank was given the sole years been permitted to put out notes regardless right to issue notes for a period of forty years. of this restriction, hence they are depreciated, Its capital, 13,500,000 milreis (at $1.08 equals the gold premium ranging at about 15 per cent. $14,580,000) is privately owned, and the di The notes are legal tender. rectors are chosen by the shareholders; the two As in Spain, the circumstances enable the chief officers are, however, appointed by the Bank to maintain a fairly stable discount rate, Government. 5 to 6 per cent, and to pay 9^ per cent, dividends. The head office is at Lisbon; there is one branch and nineteen agencies. The note-issuing franchise limits the amount Capital 13,500,000 Surplus and Profits Notes Out, net 3,340,508 70,967,000 The Bank’s condition at the end of 1907 was, in milreis, as follows: Coin Loans and Discounts Investments Deposits and Current Accounts 3,546,926 Government Debt Other Items 6,321,359 Advance to Treasury Total 97,675,608 The gold held is only about half the total coin, hence the reserve is about 7 per cent. Other Items 9,901,499 30,116,829 5,043,616 21,634,542 25,757,291 5,221,831 Other corporate banks are not important; pri vate banks do a large part of the business. TURKEY cent, steadily. Paper money is not used extensively in the O ttoman E m pire since the retirement of the greatly depreciated Government notes some years ago. The Bank’s resources foot up 204,000,000 levs; its deposits are hence quite considerable, 93,000,000 levs aside from the public deposits. The Imperial Ottoman Bank (es The Bank is at Sophia. EGYPT tablished 1863), an institution controlled by British and French interests, has the right to The British supremacy in the land of the issue notes, but the amount is comparatively Khedive has resulted in the use of paper cur small, and its coin reserve, consisting chiefly of rency issued by one bank, the National, which gold, is usually twice the amount of paper, so is capitalized at £3,000,000 and has a surplus that the notes are practically gold certificates, of more than half that sum. and do not add to the money supply. The up upward of £11,000,000; it carries about statement of the Bank shows for March 31, £6,000,000 of deposits, of which one-fourth is Its resources foot 1908, resources 503,000,000 francs;note issues for the Government. 27,000,000 francs. considerably, in accordance with the demand Other Turkish banks are far less important; The note-issues fluctuate for the cotton crop movement. The total oc the Imperial has over fifty branches, the chief casionally exceeds £3,000,000, but falls to nearly office being in Constantinople. £2,000,000 in the slack season. The statute re quires that the notes be covered to 50 per cent, S ER VI A by coin, the remainder by securities and com Here the National Bank, located in the mercial paper. The Bank has its head office capital city, Belgrade, with capital 20,000,000 in Cairo; Two other dinars (or francs), has the sole note-issuing influence have about £10,000,000 of resources; banks under British power; the country is bi-metallic and the greater numerous foreign banks have agencies. part of the notes is based upon and specifically payable in silver. PERSIA The limit of issue is, as in Roumania, two and one-half times the coin in The Imperial Bank of Persia is a British in reserve; there is also periodically a small pre stitution which is permitted to issue notes, con mium upon gold, usually late in the year. stituting the only paper currency in that country. With about 33,000,000 dinars of notes, probably only It is a British chartered bank with a sixty-year 10 per cent, payable in gold, there is a coin concession from the Shah of Persia. reserve of 9,000,000 dinars gold and 8,000,000 of standard prevails, but the Bank’s reports are silver. The resources total about 60,000,000 rendered in pounds sterling. dinars. Discount rates are steady at about 6 per cent. Other banks are not important. BULGARIA B u l g a r ia has also a National B an k , but its The silver The capital is £650,000, and the note-issues £395,000; de posits, £550,000. Although only about one- half the total resources of £2,200,000 is in loans and discounts, the Bank does a profitable busi ness. The cash held is given as £387,000, but capital of 10,000,000 levs (or francs) is owned by the requirement as to notes is that the coin need the Government, which also issues notes; but be only one-third of the note-issues. the latter are fully covered by coin, while those privilege accorded the Bank the Government of For the of the Bank need be so covered to only 40 per Persia is entitled to 6 per cent, of the profits, cent, of the issue, and are partly payable in sil not, however, less than £4,000 annually. ver. With about 54,000,000 levs in notes, the dends are a little in excess of 6 per cent.; they Divi Bank held 22,000,000 of gold and 18,000,000 in have been at about that figure ever since the silver; yet gold occasionally goes to a small organization in 1889. premium and discount rates are about 7 per Teheran and there are 10 branches. The head office is in BANK OF R O U M A N IA , BUCHAREST (B A N C O N A TIO N A LA A R O M A N IE l) ROUMANIA is by far the most stable of the mainder may be covered by discounted paper. so-called Balkan states from the point of view The notes are not legal tender, but are receiv R o u m a n ia of its monetary system. It has now the gold able for all taxes, and are usually at par; the standard, and established a central bank of exception being when in certain seasons of pres issue in 1880, the National Bank at Bucharest, sure gold and exchange rise to a premium of the capital city. The Government took one- 1 to i j per cent. The discount rate is usually third of the capital 12,000,000 paid in (the lei at 5 to 6 per cent, but rose to 8 per cent, dur is 19.3 cts.); it appoints one-third of the directors. ing the 1907 panic period. The issue power is regulated by the gold in Other reporting banks, show about reserve, which must be at least 40 per cent, of 000,000 lei of resources. the amount of notes out at all times; the re 250,- tion at end of 1907 was, in lei: The Bank’s condi 12,000,000 Capital Surplus Notes in Circulation Current Accounts Other Items Coin on hand 97,194,497 24, 574,391 271,005,760 Gold Abroad 39,384,681 45,221,466 7,o87,375 ___________________________ _____ Total 359,888,992 The gold held was thus less than 40 per Loans and Discounts 89,151,123 Securities 3 1.085,05 5 Current Accounts 93»i78,597 Other Items 9,895,039 fifth of the profits after paying a 6 per cent, cent, of the notes out; but the Bank may count dividend on 30 per cent, of the gold held abroad as part cent, of the reserve. earned nearly 34 per cent, in 1907. The Government receives one- shares and setting aside 20 per of profits to surplus, yet the shares BANK OF BENGAL, CALCUTTA. IN D IA INDIA For a number of years past the paper cur rupees, it had 93,000,000 advanced on securi rency of India has been issued by the Govern ties. ment. for a number of years. The money unit is the rupee, the value of which is arbitrarily fixed at 32.4 cts. But the strictly Indian banks have not been note-issuing institutions. Dividends have been 10 to 12 per cent, The Bank was estab lished in 1809, so that it is about to complete a century of existence. The existing ones are partly con The Bank of Madras , with 6,000,000 rupees trolled by British interests directly and report of capital and 3,600,000 of surplus, carries a their business in pounds sterling; those classi total of resources of 55,500,000 rupees, of which fiable as local include a few important ones. 16.000.000 in cash. All of them operate by means of branches to facilitate business. The £ is fifteen rupees. The Delhi and London has nearly £2,000,000 of resources; the Mercantile has over £6,000,000, and the National, with £800,000 of paid-up capital, shows aggregate means of £13,500,000. The greatest of the Indian banks is the Bank of Bengal, branches. at Calcutta, with a number of Its capital is 20,000,000 rupees and it has a surplus of 15,750,000. Deposits ag The Indian Specie Bank has 7,500,000 rupees capital; it was organized in 1906, and has hence not yet a large business; its resources are upward of 16,000,000. The Bank of Bombay, an important concern, is capitalized at 10,000,000 rupees, and has 9,600,000 of surplus. Deposits are over 93,- 000,000 rupees, of which 11,000,000 are Govern ment funds. The total resources aggregate over gregate 176,000,000, and the resources total 115.000.000 rupees, inclusive of nearly 33,000- 215,000,000 rupees. 000 of cash, a very respectable reserve against the It carried, at the end of 1907, cash to the amount of 46,000,000— a sub stantial reserve fund— and had nearly 28,000,000 in investments. Among its loans of 136.000,000 deposits. Four minor banks reporting show resources of fully 105,000,000 rupees. HONGKONG SHANGHAI B A N K IN G CHINA C O R P O R A T IO N (H O N G K O N G . C H IN A The Russo-Chinese Bank has resources about The “ celestial empire” has neither a welldefined coinage nor currency system. The 160,000,000 rubles; the German Asiatic about 35,500,000 taels. standard is silver, and the tael (a weight), repre The Chartered Bank of India, Australia and sented by a small bar of silver, is the unit, China also does business here, as its name im equal to about 75 cts. A coinage system plies. Its capital is £800,000; surplus, £ 1 ,0 0 0 ,- was adopted some years ago, but not put into 000; note-issues about £500,000 and all assets practical operation to any great extent; a about £18,000,000. national bank was recently organized, has not progressed far. PH ILIPPIN ES but Notes are issued by The old Spanish Filipino Bank continues to Chinese bankers and by British, German, Rus do business here, under the supervision of the sian and Japanese banks. new Government established by the United of these is the By far the greatest Hongkong and Shanghai States. Its capital is 1,500,000 pesos ($750,000), Banking Corporation, capitalized at 15,000,000 and surplus 900,000 pesos. British (silver) dollars, worth in use do not exceed 1,200,000 pesos; included each; it has a surplus of about 50 cts. 25,000,000 and notes 15,700,000 dols. Deposits are 225,000,000, and it has over 50,800,000 dols. of cash on hand. It does business throughout the Circulating notes in its resources of nearly 10,000,000 pesos it had about 1,450,000 of cash. The Hongkong and the Chartered Bank also do a large business, employing about 20,000,000 Orient, and has agencies in the chief commer pesos of means. cial ports of the world where Asiatic trade is International Banking Corporation,with a cap heavy. Its resources total about 300,000,000 dols. A New York institution, the ital of $3,250,000, carries on nearly 10,000,000 pesos. operations of BANK GENERAL B A N K IN G OF NEW SOUTH Sydney, Australia ROOM , BANK WALES OF NEW SOUTH WALES f BANK OF A U ST R A LA S IA , MELBOURNE, A U STR A LIA AU STR ALASIA Australia and New Zealand have twenty-two of £23,000,000; total resources over £34,000,000, banks of issue, some with British charters. But, or more than one-sixth of the total means of all as in Africa, the use of gold is so prevalent that the banks. note-issues are not important in volume. dends The British pound is the standard of value at $4.86§. It has paid 10 per cent, divi regularly for many years; the £ 2 0 shares, all fully paid up, are quoted at £ 4 2 . Treated in the aggregate, their paid-up capital is The Bank of Australasia, Melbourne, dates about £17,000,000, surplus and profits £8,000,- from 1835; its resources exceed £22,500,000, of 000; notes are less than £5,500,000, deposits in which nearly £17,000,000 in loans, £3,750,000 excess of £150,000,000. cash. Of the £200,000,000 of The capital is £1,600,000 and the sur total resources cash, chiefly gold, amounts to plus £1,470,000; notes £505,000. nearly £45,000,000, or nearly 30 per cent, re about 170 branches. serves against deposits and notes. from 11 per cent, to 14 per cent, recently. with population this means a Compared remarkably strong banking position. The Bank of N e w South Wales, organized in It has Dividends were raised The National Bank 0} Australasia, also at Melbourne, has £10,200,000 of resources, of which £7,000,000 is in loans and discounts, 1817, with some 250 branches, is the chief insti £1,650,000 tution, capital £2,500,000 and surplus £1,530,- This bank was organized in 1858, and part of 000; it has over £26,000,000 of deposits and its capital is in preferred shares. only £982,000 of notes out; cash is reported at 150 £6,869,000; the loans and discounts are in excess dividends. cash; branches note-issues and pays are £256,800. It has about 5 per cent, in note-issues, something like the national banks in the United States The most important of the six banks reporting is the Standard, organized 1862, which has nearly half the total resources, its statement showing £26,171,000. This business is done upon a capital of £1,548,000, surplus £1,900,000. Its subscribed capital is, however, £6,194,- 100, the unpaid three-fourths being shareholders’ liability. Dividends are at 14 to 16 per cent., and the shares (£25 paid up) stand at £63. There are about 150 branches and agencies. The Bank o f Africa, established 1879, with £1,000,000 paid up capital £500,000 surplus, and over £6,000,000 of deposits, has only £210,000 of notes out, and nearly £9,000,000 of total resources. There are about 75 branches. There is a substantial bank at Mauritius with £450,000 of means, and one in Nigeria carrying £120,000; for Sierra Leone and the vicinity there is one with over £1,000,000. HEAD OFFICE OF THE BANK OF A F R IC A Cape Town BRITISH AFRICA The British colonial possessions in South Africa have a number of banks which issue notes, but there is no great demand for paper currency in this section of the world, which is the greatest of its gold producers. In all there is only about £1,700,000 of paper in use, and the banks hold several times in gold. the The unit is that amount British pound equal to $4.86$. The following shows the general situation of the banks: Their capital aggregates £4,800,000 and the surplus £3,000,000; their aggregate resources amount to £53,800,000; the cash reported is about £7,000,000. Their business extends throughout the low er part of Africa and the islands adjacent; in addition to a large number of branches there, they have a few in Europe. The banks in Cape Colony proper deposit securities with the Government to cover their THE BANK OF A F R IC A Johannesburg Mexico Like several other countries, Mexico has a may without Federal Government sanction have multiple bank system for issuing notes; yet the branches in other States; the first bank estab National Bank is preeminently the central lished in each State is exempt from federal organ and dominates with a certain measure of taxes; others must pay in addition to general support from the Government. taxes a 2 per cent, capital tax annually. The present system may be said to date from 1896, when There is a Government official attached to revisory federal laws were passed, which sepa each bank who has a supervision over the busi rated banks into classes. ness in general and countersigns the notes. The adoption of the gold standard in 1905 (with a silver currency) Monthly reports of condition are required. served to strengthen it. There must be set aside annually at least 10 per Under this the peso or unit was made equal to 49.8 fcts.; prior thereto cent, of the profits to surplus account. the standard was silver and the peso fluctuated counting of paper is limited to two-name bills Dis in value; at one time (prior to 1875) the old peso running less than six months, unless secured by was worth $1,016. collateral. Mortgage loans are prohibited. Banks of issue are chartered for thirty years; Should the note-issue of a bank exceed the they are required to have at least 500,000 pesos limit of reserves, no further loans may be made; capital, and must deposit in the Treasury, or and if the excess is not retired within forty-five with the National Bank, one-fifth of the capital days the bank may be subjected to enforced with which they begin business, in Government liquidation. bonds. The note-issues are limited to thrice Special features of the law provide for mort the capital in any event; and cash reserves must gage banks and institutions of credit somewhat equal one-half the note-issues and deposits pay like trust companies. able on demand. permitted. No notes under 5 pesos are Notes are not legal tender. They are a first lien upon the assets, and are redeem Discount rates are rather high, 6 to 8 per cent, being a fair average. Following is a statement of the condition of the banks in the* aggregate, for 1907, in able only at the place of issue. State lines are rather closely drawn; no bank pesos: Capital 155,250,000 Bills Discounted 198,874,000 Surplus 54,895,000 Loans 116,566,000 Notes 99,072,000 Mortgages Bonds 18,450,000 Current Accounts 33,426,000 Cash 73,103,000 Other Items 33,926,000 Demand Deposits Deposits and Current Account 348,066,000 709,159,000 Total O f the cash reported 48,600,000 pesos was in gold. Silver is, however, also available for reserves; so that the reserve position was quite In 1897 the aggregate resources were only 131.000.000 pesos; in 1903 the sum reached There has thus been a very marked increase in recent years. There are twenty-six banks of issue, and -six 709,159,000 Total others included in these statements; several of the smaller issue banks have since been merged. The National Bank has over 300,000,000 pesos of resources, or considerably more than strong. 381.000.000. 22,685,000 264,005,000 40 per cent, of the total. The capital has been increased to 32,000,000 pesos, and its surplus is 27,500,000 pesos. agencies. It has 54 branches and Dividends have been 16 to 20 per cent, for a number of vears. THE NATIONAL BANK OF CUBA, HAVANA Banco Nacional De Cuba South America Most of therepublicsof SouthAmerica are pass have its capital increased from 45,000,000 ing through a transition stage in their monetary milreis to 70,000,000, which will bring its re affairs. The central bank plan is being adopted in sources up to 125,000,000 milreis. general, but the completion of the change will be ment takes part of the capital. somewhat delayed in many of them. Banks con do a large business, their resources being fully trolled by foreign interests do a large part of the equal to those locally chartered, say 320,000,000 discounting business, having numerous branches throughout the continent; some of these for milreis for each class. C h i l e has 150,000,000 pesos of Government merly had note-issuing functions as well. notes depreciated to about 44 per cent, (here A r g e n t in a has over 500,000,000 pesos of Government notes, greatly depreciated, but at a fixed valuation of 44 per cent. is 96.5 cts. At par the peso Considerable progress is being made toward the rehabilitation of the currency, the The Govern Foreign banks the peso at par is only 35.6 cts.). A gold fund is being established to bring notes to parity. Banking capital is reported at 80,000,000 pesos, resources about 350,000,000. The Bank of Chile is the central organ, with 30,000,000 pesos Government having a gold fund of nearly 130,- capital, 15,000,000 surplus and 150,000,000 of 000,000 pesos, and the National Bank is being resources. utilized to assist. notes, at 16,500,000 pesos. Its capital of 50,000,000 pesos paper, is being increased to 90,000,000 It reports cash, chiefly Government Foreign banks do a good share of the business. pesos; it will be the central organ of the system, C o l o m b i a has for some time past had the most which includes a number of large foreign-con- depreciated Government currency of recent trolled institutions. Accounts are kept in gold times; it is still rated at 100 for 1 of gold. A and in paper money ; thus the aggregate re central bank with a capital of 8,000,000 pesos sources of the banks were, at the end of 1907, gold has been organized to aid in rehabilitation. approximately 500,000,000 pesos paper and It is privately owned, and may issue notes to 200.000.000 gold; of this the National had 280,- twice the amount of its capital, provided it has 000,000 pesos paper and 30,000,000 gold; its 30 per cent, gold in reserve. cash holdings were 55,000,000 pesos paper and equal to one dollar U. S. The new peso is 18,500,000 gold. Discount rates were 7 per cent. are not numerous, the greater part of the busi B o l i v i a uses bank notes; four banks had the ness being done by private bankers, largely Corporate banks issue right and kept their notes at par in silver foreigners. by adequate reserves. In 1906 the gold stand pesos gold, all resources 1,140,000 pesos gold ard was decreed, and the National Bank is and 55,900,000 of paper; this gives it about gradually becoming the sole note-issuing bank. 6,800,000 pesos at gold values. One bank reports capital 600,000 It has 5,000,000 bolivianos of capital (the unit E c u a d o r has bank notes which stand at par. is 48.7 cts.), and its resources foot up over 20,- Two banks issue them to the amount of 9,500,- 000,000. ooosucres (equal to 48.7 cts.), upon a 50 per cent, Notes out were about bolivianos and cash 4,500,000. 6,500,000 Other banks’ gold reserve. The reports show capital of the notes to the amount of about 3,500,000 bolivi banks 7,600,000 sucres, resources 33,000,000, anos are still in use; their resources are about including 6,200,000 sucres of coin. 13.000.000 bolivianos. Foreign banks do con several agencies of foreign banks in the country. B r a z i l , with about 700,000,000 milreis of about 35,000,000 pesos (the peso at par is 96.5 siderable business. There are P a r a g u a y has also depreciated paper money, Government currency, is planning rehabilitation cts.). upon lines similar to those adopted in Argentina. and it is laboring to correct the currency evil, The paper stands at about 56 per cent.; at par by accumulating some 6,000,000 pesos in gold the milreis is 54.6 cts. to that end. The Bank of Brazil is to A central bank was authorized in 1905, The gold premium was at one tim^ fully 1,000 per cent. Foreigners control the banking almost entirely. Bank sos. resources total about 12,000,000 pe P e r u had such disastrous experiences with H o n d u r a s uses about 500,000 pesos (silver) depreciated paper that the use of notes was of bank-notes fairly covered; bank assets are about 2,500,000 pesos. totally abolished by law. Discount banking is largely in foreign hands. The local reporting shows about 7,000,000 pesos banks show capital £600,000, resources £5,800,- N ic a r a g u a 000. The Peruvian pound is the same as the British, $4.86$. (nominal) of adequate reserves; hence the notes are badly U r u g u a y has superseded the system under depreciated, the premium on gold ranging about 500 per cent. bank-notes out, but very in which three banks (two foreign) issued notes, by limiting the power to its chief institution. G u a t e m a l a has in addition to about 48,000,- The capital of the Bank of the Republic is owned 000 pesos of bank issues, a Government cur chiefly by the Government and it has nearly rency of 6,000,000 pesos; coin in banks is re 11,000,000 pesos of notes out. (Here the peso ported at less than 4,000,000 pesos, hence Against the notes it has over 9,000,- gold is often quoted as high as 1,000 per cent. is $1,034). 000 pesos of coin; part of the notes (about onefourth) are payable in silver. The total re sources of the Bank are about 23,000,000 pesos. P anam a has several small banks, but no note-issues. Foreign banks do a very large part of the busi ness, having resources greater than those of the W E ST INDIES central bank in the aggregate. V e n e z u e l a has also bank notes maintained The islands of the western continent have at par. Three banks of issue capitalized at 19,- the systems of money and banking of the coun tries to which they belong. 250,000 bolivars (equal to 19.3 cts.) show 4,200,000 of notes out and the same amount of coin in hand. Their resources aggregate about 72,000,- 000 bolivars. The Bank of Venezuela is the central organ; its capital is 12,000,000 bolivars; J a m a i c a and the other British possessions, including Guiana, are served largely by the Colonial Bank, established 1836, with a capital of £600,000 and a 25 per cent, surplus. resources 45,000,000. It has usually about £500,000 of notes in use and carries £400,000 of specie in its £3,500,000 of resources; deposits axe at times nearly £2,000,- CENTRAL AM ERICA 000, and it has over £500,000 in bills payable. There are a few minor banks in these col C o s t a R i c a has the best system among these small republics. onies. With the gold standard, the unit the colon of 46.5 cts.,' it has bank-notes G u a d e l o u p e and M a r t i n i q u e each has a maintained at par, issued by three banks; the bank of issue modeled on the French system, amount is limited to twice the coin on hand. each with capital of 3,000,000 francs; their com Capitalized at their re bined note-issues are nearly 13,000,000 francs, Coin holdings and total resources about 31,000,000, including 4,500,000 colones, sources aggregate 17,000,000. are about 2,600,000 colones and notes out 4,200,000. H a i t i has a central bank, S a l v a d o r has the silver standard, the peso fluctuating about 46.5 cts. It uses bank-notes, of which about 4,000,000 pesos are in use, backed by about 1,600,000 of coin (silver). 4,500,000 coin. owned by for eigners, but the arbitrary Government has des troyed its utility. Depreciated Government currency circulates exclusively; gold is at 400 per cent, premium. The Two United States Banks The first United States Bank was organized sidered as one inherent in any bank, for no in 1791, by an act of Congress drawn by Alexan specific authority was given in the charter; der Hamilton, the first and greatest of the there was, however, a proviso that the debts of Secretaries of the Treasury; the charter of the the Bank on account of notes and other items second Bank, granted in 1816, was largely de except deposits were not to exceed the capital. signed upon the same lines, modified in some Thus the limit of issue was under $10,000,000. particulars So long as the notes were redeemable in coin by Albert Gallatin, easily the second in capacity of our long list of finance they were to be received for federal taxes. ministers. count rates were limited to 6 per cent, by the Dis In both cases the charters were for twenty charter; but this restriction was subsequently re years, and were exclusive so far as the federal moved by another act. No complete reports of the condition of the legislature could make them so. Under our composite system of government it was then held Bank are available, although the Treasury was that the States had the unquestionable right to empowered to require them and probably did authorize banks with so. note-issuing powers. From partial reports it appears that there This view, indeed, was the cause of most of the were about $6,000,000 in deposits and $5,000,- currency troubles of the country for over seventy 000 in notes; loans reached $15,000,000, and years. In designing the central banks both Hamilton coin held $5,000,000. and Gallatin had in mind the regulation of the Baltimore, Washington, Norfolk, Charleston, issues of the State banks and not their extinction. Savannah and New Orleans. Jefferson and his political adherents, with the prosperous, exception of those who were under the influence average dividends; the Government sold its of Gallatin, opposed the shares by 1802, realizing a net profit of nearly creation of both The head office was in Philadelphia, and branches existed in New York, The Bank was paying more than 8 per cent, banks, regarding the action unconstitutional; 57 per cent, on the investment, allowing for but Hamilton’s views prevailed with President interest on its bonds issued to buy the shares. Washington in 1791, and the force of circum When, before 1811, the Bank’s charter was stances caused President Madison in 1816 to about to expire, reject Jefferson’s advice. Madison, despite Gallatin’s arguments, vetoed The first Bank was capitalized at $10,000,000, the bill. Congress renewed it, but Immediately upon the expiration of of which the Government took one-fifth, bor the Bank, the State banks in most of the sec rowing the money to pay therefor from the Bank, tions, no longer under restraint, proceeded to upon bonds. The twenty-five directors were inflate their note-issues, and an era of badly chosen by the shareholders, whose voting power depreciated currency followed, which rendered was regulated so that no single shareholder the financing of the War of 1812 vastly more might have more than thirty votes, irrespective difficult. of the number of shares owned. experiences the nation has had; the disasters The Bank was It was one of the most discouraging prohibited from dealing in anything but ex were relatively greater than in later crises, be change and bullion, but it might sell the bonds cause the country was young and not wealthy. received on account of its capital. (In order to By 1816 Madison changed his views and ap help the Treasury to float a loan, it had been proved an act of Congress for the creation of the provided that the major part of the capital was second Bank. to be paid up in Government bonds.) Treasury Government again took one-fifth, paying there The right to issue notes was evidently con appointing (by the President) one-fifth of the inspection was also provided for. Its capital was $35,000,000; the for by borrowing; but it reserved the power of twenty-five directors. The voting of shares was regulated as in the case of the first Bank, foreign holders having no votes; the business and the note-issuing powers were also similarly regu lated, and the discount rate was limited to 6 per cent. and Notes under $5 were prohibited, suspension of payments of notes or the Government bear testimony of these facts. Since its notes alone of all the paper cur rency were receivable for taxes and dues to the federal Government, it was able to induce most of the State banks to keep their currency sound by accepting their notes for the payments to the of Government so long as proper reserves were held 12 per cent, per annum upon the sums in volved. and redemption in specie thus provided for. deposits The was punishable Bank was by a penalty authorized to establish branches where it pleased, provided there was at least one in every State where 2,000 shares of its stock were held. In fact there were five in New England, three in the Middle States, ten in Southern and five in Western States, after 1820; But it refused to do this for State banks mani festing a disregard for ordinary honest principles of banking, thus gradually weeding out the vicious elements, whose worthless notes had been foisted upon the people during the era of inflation. It made special efforts to furnish currency and The facilities to the sections where capital was scarce Government moneys were to be deposited in the and banking means hence deficient; thus its Bank or branches, unless otherwise directed by business in New England, where banks were the Secretary of the Treasury, who was, how numerous, was always far less than that in its the head office was in Philadelphia. ever, required to report to Congress the reasons Southern branches. By far the larger part of its notes were issued in the Southern and Western for any changes. States; and relatively speaking, it is a question The Bank paid the Government $1,500,000 whether at any time since (even to-day) those for the charter and was to do the Government’s sections, always showing a need for greater business without charge. facilities, were as well and as cheaply served as The chaotic monetary conditions retarded they were by the great Bank. the opening of the Bank until 1817, and in But the restraints imposed by the Bank be conjunction with bad management delayed its came irksome to many who were averse to con The con servative banking; this feeling was assiduously stitutionality of the charter was attacked in the cultivated among the people, particularly among highest court, but this question was determined those less prosperous; and presently it became favorably to the institution. a political issue, fathered by President Jackson, efficient operation until after 1819. After these diffi culties had been overcome, the Bank became that the Bank was scourging the people. prosperous and highly efficient, at one time gress in vain endeavored to correct this gross rivaling error; Jackson vetoed the bill to renew the the similar England and France central in institutions of international im Con charter of the Bank, July 10, 1832, and was victorious in the contest before the people in portance. It was, however, at home that its greatest use fulness was shown; it not only regulated the that year. Thus nearly four years before the charter expired, the Bank was doomed, as its paper currency in an admirable manner, but predecessor had been, to be destroyed through the foreign and domestic exchanges and the political fatuity. discount rates as well. ment deposits began to be placed in the State It may be said that never in the country’s history have the people had a sounder currency or more nearly stable money and domestic exchange rates, during the best The writings of banks. That there was some ground for criticism of the Bank’s constitution and management may period of the Bank’s life. be conceded; yet none of these defects were such Gallatin as could not have been adequately remedied by merous executive and than As early as 1833 the Govern as well legislative as nu reports of intelligent legislation. But instead of corrective regulation, destruction had been determined with the Bank question as an issue; but President upon by the Jacksonians; thus the nation was Harrison died before Congress could legislate, wantonly deprived of the very best currency and his successor, Tyler, recreant to the pledges, and banking system it ever had. vetoed repeated bills to create another United The inevita ble result followed: State banks, free from re States Bank. straint, proceeded, with relatively few excep upon our political inertia as a nation, that the tions, to inflate note-issues enormously, in many specters raised by Jackson have prevented the The cur adoption of this, the only practical comprehen the expansion sive solution of our currency evils, as evidenced cases absolutely without reserve. rency soon depreciated and It is an interesting commentary reached the bursting stage in 1837, when the by the experience of other people. country experienced the worst financial crisis in its history. Reports of the second Bank were made periodically; from these a statement of its aver In 1840 the people reversed Jackson, choosing age annual condition for the entire period of its Harrison and Tyler in the campaign that year, life has been prepared, and is here presented: Capital Loans $35,000,000 $39,100,000 Deposits 12.300.000 Securities 9.100.000 Circulation 10.700.000 Specie 6.500.000 Due to Home Banks 700.000 Notes of Other Banks 1.400.000 Due Foreign Banks 800.000 Due from Other Banks 2.400.000 Other Items 4,000,000 Due from Foreign Banks Other Items Total 900,000 4.100.000 $63,500,000 Loans stood highest for the end of any one The charter expired in March, 1836; it con year, at $66,293,000 in 1832, deposits at $22,- tinued, as a State bank, under Pennsylvania 761,000 in the same year, circulation $23,000,000 charter, until 1840, when the losses due to the in 1836, specie at $15,700,000 in 1835. panic compelled liquidation. Courtesy of the Girard National Bank of Philadelphia THE BANK OF T H E U N IT E D STATES PHILAD EL PH IA IN Building now occupied by the Girard National Bank I 795 N. W. HALSEY & CO. Bankers and Dealers in Bonds I N V I T E attention to the superior facilities afforded for the purchase and sale of high grade Investment Bonds and Notes in the various securities markets. W ith an experienced organization and the best of financial, legal and engineering connections, the firm’ s recom mendations are based on expert analysis of dependable information. Detailed lists of Municipal, Railroad and Public Utility Bonds furnished upon application. f Deposits of surplus funds received subject to liberal interest allowance. H Invest ment business of Banks, Trustees and Individuals solicited. Personal Interviews and Correspondence Invited On request, pamphlet, “ Bonds as a Secondary Reserve for Banks ” 4 9 W A L L S T ., N E W Y O R K PHILADELPHIA CHICAGO SAN FRANCISCO Boston Correspondent, MERRILL, O L D H A M & CO. Banking in Cuba BANCO N A CIO N A L DE CUBA (N ATIO N A L BANK OF CUBA) Banking in Cuba before the American occu It has only been since the establishment of pation was conducted principally by private the National Bank of Cuba that checks have andwhat are known as merchantbankers, in con been used to any extent, but they are rapidly nection with their other business, and there are growing in favor, as indicated by the increase still some very strong houses of this character. in deposits shown by the statement of this The only two banks which publish state bank from $4,000,000 in 1902 to over $16,- ments of their business in Cuba are the Bank 000,000 in 1908. of Spain for the Island of Cuba and the Na savings department. tional Bank of Cuba. a new departure, organized for the first time in Cuba by this bank. The Bank of Spain was organized in Spanish times, and the Spanish Government transacted its business through it. Of this $1,500,000 is in its The Savings Bank was The number of checks paid over the counter Its nominal capital is $8,000,000 Spanish of the head office of the National Bank of Cuba gold, equivalent, approximately, to $7,200,000 now reaches over 3,000 per day, and the move United States currency, but it carries in its ment of actual cash, as distinct from checks, assets $3,000,000 of its own stock. The stock through the tellers, reaches more than $1,000,- is held principally by Spaniards and its Board 000 per day, principally in coin, as United of Directors is largely composed of the same States bank notes are very scarce. Collections nationality. in Havana run over $1,000,000 per week. The National Bank of Cuba was organized As Cuba’s business is international in its in 1901, and was the fiscal agent and deposit character, so is its banking. ary for the United States Government, and deal in the money of every country of the through it all revenues were disbursed and world in daily transactions over the counter, audited by means of checks on the bank, in the purchase and sale through drafts and The Republic of Cuba adopted the same sys tem of handling its moneys through this bank. The paid-up capital of the National Bank of cable transfers of pounds The bank must sterling, francs, pesetas, marks, liras, yen, Chinese and Mexi can dollars and all other currencies. Cuba is $5,000,000 United States currency. These operations are usually made against Its head offices are in Havana, with fifteen Spanish gold, as the local payments are made branches throughout the Island. in that money. The stock of this bank is held principally in Cuba, the Drafts are drawn on Cuba in Spanish gold or silver and United States cur Its rency, and remitted in the money of the coun Board of Directors is composed of Americans, try from which the drafts come, although some Cubans and Spaniards. bankers require drafts on them payable “ in United States, France and Great Britain. This bank has com bined the National banking system of the Spanish gold at the current rate.” In order United States with the branch banking sys to make the rates, the bank must, therefore, tems of Europe, and its heads of departments keep advised daily by telegrams of the situa have been drawn from the principal banks of tion and markets of every part of Cuba, and the world. Business and correspondence is con by cable, of the principal money centers of ducted in Spanish, English,FrenchandGerman the world. to meet the requirements of the cosmopolitan and international character of its business. The Bank of Havana and branches of the T o indicate the volume of foreign exchange, the turnover of the National Bank of Cuba in the last year amounted to $140,000.00©, Royal Bank of Canada and the Bank of Nova which includes the operations between bank Scotia are also doing business in Cuba. ers. Banking House of Knauth, N achod & K uhne, Leipzig, G erm any. H E Banking House of Knauth, Nachod & Kuhne, T N ew York and Leipzig, was founded in 1852. They were the pioneers in educating the inland banks of the United States to do a Foreign Exchange business. They make a specialty in providing funds for travelers; their letters of Credit being among the best known in the world, and their Travelers* cheques are the most convenient form of procuring ready funds for the traveler that can be secured. They make arrangements with Banks and Bankers, enabling them to draw their own drafts direct on more than one thousand cities in Europe and the Orient. They have a thoroughly organized department for the sale of investment securities, and execute orders on the New York Stock Exchange. They receive deposit accounts, subject to check, on favorable terms and invite correspondence. Members o f the New York Stock Exchange. v