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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-

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page

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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


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102