NnrtlyaipHtfrn límufrattg Sibrarg
Evanston, Illinois
iunbar QlallprtUin
This collection is from the library of the late
Charles Franklin Dunbar, LL.D., Professor of
Political Economy in Harvard University, and is the
gift of his heirs.
1905
;>TT '
) I'r
THE NATIONAL BANKING SYSTEM
bt x-
CHARLES F. DUNBAR
DISTRIBUTION OF SMALL BANKS
IN THE WEST
bt
THORNTON COOKE
reprinted from
The Quarterly Journal of Economics
Vol. XII., October, 1897
. . rfívs . .
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Quarterly Journal of Economics, Càmbrldge, lífass.}^ business
Communications and^ubscriptions ($2.00 a year), to Geo. H. Elhs,
14t Franklin Street, Boston Mass.
THE NATIONAL BANKING SYSTEM
by
CHARLES F. DUNBAR
DISTRIBUTION OF SMALL BANKS
IN THE WEST
by
THORNTON COOKE
reprinted from
The Quarterly Journal of Economics
Vol. XII., October, 1897
gieo. H. ELLtt« ntttttfen, i4i ritANKLiN srieiT, ioston
THE NATIONAL BANKING SYSTEM.
Op the constituents of our paper currency the govern¬
ment notes are amply shown by the history of the last
thirty years to be the dangerous element. Elxperience has
shown that we can rely upon no principle or policy us a
safeguard against the caprice or the temptation, which at
intervals must surely beset any legislative body having
control of the direct issue of paper. The bank-notes, on
the other hand, have been jealously guarded and strength¬
ened by legislation, until they resemble a government
issue resting upon a special fund of cash and securities
rather than the promises of corporations. In their case
the present need of reform is not the result of excess or of
insecurity. Their increase is under heavy restraint, and
they are as secure as the credit of the government can
make them. Their grand defect is want of adaptation to
the proper business of banking, which limits their useful¬
ness in some parts of the country and makes them practi¬
cally unavailable for issue in others.
The framers of the bank acts of 1863 and 1864, which
have become Title LXII. of the Revised Statutes, had
their attention fixed chiefly on the provision of a paper
currency of uniform value throughout the United States,
which should absorb by permanent investment a certain
amount of United States bonds, and should become the
sole paper currency of the future. Indeed, the title of
each act, "An Act to provide a National Currency, se¬
cured by the pledge of United States stocks [or bonds],
and to provide for the Circulation and Redemption
thereof," sufficiently shows the point of view from which
these measures were regarded. The provisions as to the
4
general business of banking were, no doubt, greatly in
advance of those existing in many States ; but, after all,
it was the issue of notes upon a secure basis which inter¬
ested Congress and the public at the time, and has con¬
tinued to be a leading consideration in national legislation
on this subject ever since. Perhaps the failure of the
national system to meet the wants of large sections of
country might not, even now, have secured the attention
which it deserves, had not the provision for the safety
of the notes finally undermined the issue and threatened
its extinction. The inability of the system as it stands to
perform steadily and satisfactorily its chief duty of sup¬
plying the business of the country with a safe and ade¬
quate currency, has finally brought the whole subject of
banking under discussion, and has raised the question as
to the proper co-ordination of issue with the other func¬
tions of banks, in a more radical form than for thirty
years before.
Although the purpose of this paper is to consider some
of the points at which, in the judgment of the writer, the
national banking system has proved to be badly adapted
to the present needs of the country, the writer must pre¬
mise that the national system appears to him to be the
foundation on which any reform of our bank-note currency
must necessarily stand. Experience under that system
has shown plainly the gain secured by uniformity of regu¬
lation and unity of supervision. There is no question
that the national banks find their credit in every form
strengthened by the fact that all rest upon the same law,
universally known, and are under the same recognized
authority, whose mode of operation is universally under¬
stood. That the convenience of their notes for use is
materially increased by this unity of regulation, and by
the uniformity of design of the notes themselves, is per¬
haps the one point in the working of the national system
6
as to which all are agreed. To replace such a system by
any complex arrangement by which the right of issue
should be extended to State banks would be a palpable
sacrifice of advantages, from which the public as well as
the stock-holders of the banks are now gainers. It has
been proposed that such State banks as may accede to
proper regulations prescribed for safety and solvency
should be allowed the right of issue. But it is difficult
to see how such regulations could be enforced with cer¬
tainty except by the authority of the United States, or
by that authority without much risk of friction and possi¬
ble conflict between national and State jurisdictions, or
without such strictness of rule and superintendence as
would destroy the reasons for preferring State organiza¬
tion to national. The last-named consideration is the
more serious when we consider the fact, not to be dis¬
guised, that in many States the local opinion as to what is
safe regulation and what is not is too loose to be satis¬
factory beyond the State line. In short, practical as well
as theoretical difficulties begin to multiply, as soon as we
attempt to reconcile the conception of a really national
currency with anything short of an absolutely uniform
system of safeguards.
The banking history of the United States has been for
the most part a succession of catastrophic changes rather
than a process of steady growth. One expedient after
another has been taken up, abruptly dismissed in its turn,
like the two Banks of the United States, or suddenly
revolutionized, like the currency provisions of the Inde¬
pendent Treasury act. The national banking system has
now had a longer term of active existence than any other
national system adopted in this country, or any important
State system of issue. Seriously as its defects have
limited its usefulness, it has grown in strength and credit.
In the course of a generation it has collected a mass of
legislation, judicial precedents, and rules of official prac-
6
tice, which make up a body of administrative law of
remarkable completeness and value, known from one end
of the Union to the other,— a common possession, in
which it is not impossible that all our people may yet
come to appreciate their common interest. This is a
foundation to build upon, not an experiment to be dis¬
missed and superseded by some other. Never since the
early part of this century has there been a like oppor¬
tunity to improve our legislation upon banking and
currency by the proper adjustment of an existing system,
old enough and successful enough to have acquired an
J^torical position and credit. | We now enjoy an advan¬
tage analogous to that which England finds in making
the ancient reputation and strength of the Bank of Eng¬
land the starting-point in any financial measure, or France
ill her careful adhesion, through every revolution in dy¬
nasty or politics, to the century-old Bank of France.
It is also a practical consideration of great weight that
any change in the existing system would be made with
the least disturbance of business relations and practices,
if it were made by the better regulation of the mass of
banks which already have the right of issue, but upon
this it is not necessary to dwell.
The defective adaptation of the national banking sys¬
tem to the needs of the different sections is amply shown
by the reports of the Comptroller of the Currency. From
the latest of these reports * it appears that in 1896 more
than two-thirds in number of the national banks and
• See the table on page 7.
In this table the Middle States inclnde Maryland and the District of
Columbia ; the West and North-west, the States from Ohio to Iowa and
Minnesota ; the South and South-west, the Atlantic and the Gulf States from
Virginia to Texas, with West Virginia, Arkansas, Keutncky, and Tennessee ;
the Missouri River group is Missouri, Kansas, Nebraska, and the Dakotas ; the
Pacific States are Nevada, California, Oregon, and Washington ; the Cen¬
tral and Mountain group is Colorado, Idaho, Montana, Wyoming, Utah, New
Mexico, Arizona, Oklahoma, and the Indian Territory.
DISTBIBUTION OF BANKS, NATIONAL AND STATE.
[Compiled from the Report of the Comptroller of the Currency for 1896: the national banks for October 31, 1896 (p. 513);
the State banks for varions dates, chiefly in 1896 (p. 696). Dollars are given in millions and tenths of millions.]
Natiohai, Banks.
State Banes.
Number.
Capital.
Circulation.
Deposits.
Number.
Capital.
Deposits.
New England . . .
589
$161.3
$63.9
$254.2
14
$3.2
$5.8
Middle States . . .
950
198.3
86.4
719.6
332
42.9
242.9
West and North-west
995
2,534
151.4
511.
45.
195.3
348.6
1,322.4
985
1,331
59.2
105.3
202.8
451.5
Sonth and South-west
557
70.5
21.7
123.4
625
49.4
82.8
Missouri River . . .
357
914
44.3
114.8
9.4
31.1
75.9
199.3
1,469
2,094
39 2
88.6
99.4
182.2
Central and Mountain
126
15.8
4.1
45.7
203
4.2
6.9
Pacific ....
105
231
16.6
32.4
4.
8.1
30.2
75.9
o
00
283
42.
46.2
55.1
62.
3,679
658.2
234.5
1,597.6
3,708
240.1
695.7
8
more than three-fourths in capital were to be found in the
belt of States lying north of the Potomac and Ohio on
the east of the Mississippi, and including Iowa and Min¬
nesota on the west of this river. The same States have
more than one-third in number and two-fifths in capital of
the State banks carrying on business without the right
of issue ; but the State banks, taking these States to¬
gether, carry on an unequal contest with the national
system. In the rich States of the North the vast pre¬
ponderance, in number, capital, and business, is with the
national banks, although, as we advance westward, the
newer States, even in this belt, show a more equal division
of the field. Coming to the South and South-west, ex¬
cluding Missouri, we find the national banks less numer¬
ous than the State banks, but holding about seven-
twelfths of the capital and a slightly larger proportion of
the deposits. The group made up of Missouri, Kansas,
Nebraska, and the Dakotas, shows a great preponderance
of State banks in number and deposits and an approach to
equality in capital.* The Central and Mountain States
and Territories, with their extraordinary differences of
economic condition, have placed the greater part of their
small banking capital under the national system; and,
finally, the Pacific States show a great preponderance of
State banking, which upon examination is found to be
due to the little use made of national banks by California.
It is clear that the inequalities thus briefly recapitulated
rest upon something more than mere differences in popu¬
lation, wealth, and general activity. Those differences
would lead us to expect much disproportion in the use of
banks in general ; but it is plain that, in addition to this,
the comparative attractions of national banking with the
* It should be noted here that in the Comptroller's returns for Kentucky,
Kansas, Nebraska, and Oklahoma, the figures for State banks include private
as well as incorporated banks. The figures given in the Tables, pp. 31-35,
show that of the Kansas banks returned 109 are private, and of those in
Nebraska 81, mostly of small capital in each case.
9
right of issue, and of State banking without it, are differ¬
ently estimated in different States and sections. This
appears still more clearly when a comparison is made
between different parts of the same section. Thus, in the
large Western group, the four newer States — Michigan,
Wisconsin, Iowa, and Minnesota—have $36,000,000 of
State bank capital to $52,000,000 of national, in this
respect approximating the condition of sparsely settled
agricultural States in other sections. In the South, of the
most important banking States, the Virginias and Ken¬
tucky have $82,000,000 of State bank capital to $21,000,-
000 of national. In general, the rule holds that the
older, richer, or more densely populated States, with varied
industries, find it easier to use the national system than
the more thinly settled communities, poor in capital and
carrying on industries of slow return. Even such an
apparent exception as that of Texas, where only the
national system appears to be used, proves the rule ; for
Texas, since 1876, has forbidden by her constitution the
establishment of State banks, and any competition with
national banks must there be carried on by private bankers.
It is beyond dispute that one of the most serious diffi¬
culties in the use of the national system in the newer or
poorer communities is the requirement of an investment
in United States bonds, locking up banking capital in a
non-banking security, returning less than 3 per cent, to the
holder. In the older States, with abundance of capital
and low rates of profit, this requirement has less impor¬
tance ; but in States where the conditions are reversed it is
a heavy block in the way of the national system and its
possible usefulness. Especially does the bond deposit
block the way in any section where there is a need of
banks of relatively small capital; for, as the minimum
holding of bonds is one-fourth of the capital for banks of
$160,000 or under, and $50,000 for larger banks of what¬
ever size, it bears most heavily in proportion upon the
10
small capitals. The comparative pressure of this re¬
quirement in different sections in October, 1896, is shown
by the Comptroller of the Currency,* in a table from
which the following statement is made up: —
Bonds held Minimum Percentage
for circulation.
required.
of excess.
New England
. . . 65.4
21.6
.67
Middle States
. . . 87.9
28.9
.67
West and North-west
. . . 45.6
24.9
.45
South and South-west . . .
14.2
.33
Missouri River
7.1
.23
Central and Mountain . . .
... 3.9
2.9
.29
Pacific
... 3.9
3.
.24
237.2
102.6
The reluctance with which the investment in bonds is
made by small banks in the agricultural States is also
shown with great distinctness by the case of Texas, where
vigorous growth calls for extended banking, but only
national banks can obtain charters. Of the 207 national
banks in Texas, 88 are banks of 850,000 capital, of which
86 have the exact minimum of bonds, 1 a nominal ex¬
cess, and 1 a circulation equal to its capital. Of the 76
banks above 850,000 and not over 8100,000, 63 have only
the exact minimum, 7 only a nominal excess, and 6 have
together 8182,250 above the minimum. Of the 48 banks
having capitals above 8100,000, 86 have the exact mini¬
mum of bonds, 8 have only a nominal excess, and 4 have
together 8208,000 in excess of the requirement. For the
whole 820,920,000 of national bank capital in Texas, the
bonds held for circulation above the legally possible mini¬
mum is but 8484,700. The inference from these figures is
irresistible that banks in Texas cannot afford to invest at
the low rate of interest yielded by United States bonds,
and the presumption is strong that the increase of small
banks is hindered and the capital forced into other chan¬
nels by the bond requirement. Nebraska is also a strong
* Report for 1896, p. 552.
11
case of the same kind, with the difference that Nebraska
seeks her relief by means of incorporated State banks.
The 113 national banks in Nebraska, having an aggregate
capital of $10,975,000, hold only $368,650 of bonds in ex¬
cess of the required amount ; and $330,000 of this excess
is held by the large banks in the cities of Lincoln and
Omaha. Out of 72 banks of $50,000 capital, only 3 hold
bonds exceeding the minimum by so much as $1,000, and
64 hold no excess whatever. Similar illustrations of the
working of the bond requirement may be found in many
other States.
Of the objects to be gained from the deposit of bonds,—
security for the notes and the creation of a market for
bonds,— the former alone now has any value. Against
the complete attainment of this object, which must be ad¬
mitted, have to be set the facts that, as the government
credit rises, the inducement to take out circulation weak¬
ens, so that the strength of the security tends to pinch the
issue out of existence, and that the necessity of giving this
particular kind of security produces the maximum of dis¬
couragement in sections where the need of banking facili¬
ties is strongly felt. The propositions to permit notes to
be issued to the par of the bonds, instead of the 90 per
cent, so far allowed, and to moderate or withdraw the 1 per
cent, tax on circulation, are offered as palliatives for an
acknowledged evil ; but they do not strike at the cause,
nor, as will be seen, can they have any effect upon some
of the more serious difficulties of the system. The root of
the trouble is, after all, the necessity for taking a relatively
large part of the capital of a bank out of the proper busi¬
ness of banking, and investing it elsewhere, when all that
the bank can do by means of its capital and credit com¬
bined is needed for the accommodation of its customers.
A complete remedy would have to start therefore, as was
proposed by the American Bankers' Association in 1894,*
* For the details of the " Baltimore Plan " see White's Money and Banking,
p. 458; Journal of Political Economy, Decemher, 1894, p. 101.
12
in the well-known " Baltimore Plan," with the abolition
of the bond deposit and the restoration of the note to its
natural relation, as an exercise of credit in the business of
banking. If to this were added provisions for the security
of the note-holder by a first lien on the assets of the bank,
and, as was also proposed in the Baltimore Plan, by a
guarantee or safety fund supported by the contributions of
the issuing banks, both reason and experience show that
the strength of the note would he ample. Some other
parts of the present system would no doubt need revision.
Provision for more thorough inspection than is possible
with the present staff, more frequent publication of ac¬
counts, and strengthening of the stockholder's liability,
not in its nominal extent, but in its binding effect,* are
changes already needed, which would then be seen to be
imperative.
Amended by resting the issues of national banks upon
their assets, where the business community are willing to
let the 11,600,000,000 of deposits rest, the system would
be freed from one of the burdens which hinder its prog¬
ress in the South and West. It would still find its
growth seriously hampered in sparsely settled districts
everywhere, by the inability of a small community either
to provide the capital or to supply the business for banks
of the size required by the present law. On this subject
a flood of light is thrown by iNIr. Thornton Cooke, in a
paper printed in the Appendix, showing the distribution
of small banks in Missouri, Kansas, Nebraska, and the
Dakotas. In these States the minimum capital required
for State banks is §10,000 in Missouri and §6,000 in the
four other States. Whatever this minuteness of capital
may show as to the prudence of the legislation, it proves
that in this important block of States the need of diffu-
• Prior to 1880 only about 35 per cent, of assessments upon stockholders of
insolvent banks was actually collected ; and in the finished cases since 1880, re¬
ported in the Comptroller's Report for 1896 (Table No. 76), it appears that the
collections averaged only 52 per cent.
13
sion is keenly felt ; and the same inference is to be drawn
from the minimum of $15,000 required in Michigan and
$10,000 in Minnesota. In the five States dealt with by
Mr. Cooke an extraordinary development has taken place.
Of 1,247 State banks covered by the latest official returns
and excluding private banks, 1,158 are not beyond the
$50,000 line of capital, 451 are not beyond the line of
$10,000, and 112 have capitals not exceeding $5,000. The
tables make it plain that in these States, as a whole, there
has been a strong movement to provide for needs not
now covered by the national system. There is a long
list of other States in which, upon examination, we should
find proof of demands not satisfied by the national sys¬
tem, but met imperfectly by State banks and by the great
number of private banks, of whose operations there is
no record even approximately complete. In every other
important banking country such a demonstrated need as
this for diffused but sound banking would be answered
by the establishment of branches or agencies of banks
of larger capital. This method is not unknown in the
United States, although for various reasons its applica¬
tion for many years past has been confined to a few States
and has been on a limited scale. That it is less applica¬
ble or hopeful here than in all the other English-speaking
countries, or that it needs anything more than proper
encouragement for its wide introduction, at least in sec¬
tions like the South and West, it is hard to believe. The
change required in the present law would be slight. If
no use were made of the liberty to establish branches, the
national system would simply stand as at present, if not
improved, at least not impaired ; and, if use were made of
the liberty, one of the two barriers which bar the access
of national banks to an important field would have ceased
to block the way.*
* The present Comptroller of Currency has urged the introduction of the
branch system in his Report for 1896, p. 102 ; and the same gronnd was taken
by Secretary Carlisle, Finance Report, 1895, p. Ixsxiv.
14
It has also been proposed, as a partial remedy for the
imperfect distribution of banking under the national sys¬
tem, to reduce the minimum required capital to §25,000,
as it stands in the law of New York and of several other
States.* This proposition, however, is open to some
serious objections. It plainly does not go far enough to
reach the seat of a great part of the evil. Taking for
illustration the case of the Missouri and Dakota group al¬
ready referred to, it appears from Mr. Cooke's tables that
little over one-third of the State banks in that group have
capitals above §20,000. The fact appears to be that banks
of §26,000 capital would be almost as completely beyond
the means of a majority of the small village centres in
sparsely settled districts as banks of §50,000 are now.
But, even if such a reduction of required capital were
enough to lead to an important extension of the national
system, it is also a serious question whether on other
grounds this would not be a move in the wrong .direction.
As national banks multiply in number, the problem of
insuring sound management by effective supervision
becomes grave. With not far from thirty-seven hundred
banks already in operation, the United States evidently
have in hand a task such as no government ever before
undertook ; and the difficulties of this task would increase
with the further pulverization of capital now suggested.
The records of failures show that even in large banks the
close attention of directors is not always easily had ; but
with banks of the smallest class in small villages, not only
is there increased difficulty in making it worth the while
of directors to give the requisite attention and thought to
what is, after all, a matter of but trifling importance to
any one individual, but there is also the often experi¬
enced embarrassment in finding among the business men
of a village the material for making up a competent
board. The best promise of good management is afforded
*For this also see Report of the Comptroller of the Currency, 1896, p. 102.
15
by a bank with an immediate constituency large enough
to supply an ample choice of men, and with a capital
large enough to secure the pressure of a full sense of
responsibility, and to demand a reasonable share of time
and care from an unpaid body of men. In short, any
change in capital should be in the direction of consoli¬
dation rather than subdivision. The smallest class of
national banks now in existence should shrink, and the
extension of the system should be effected by banks of
more considerable capital, if we are to move towards the
most efficient and safe organization. As for the sugges¬
tion that such a movement would mean diminished com¬
petition and the " concentration of the money power," a sys¬
tem of thirty-seven hundred members would afford ample
scope for healthy consolidation long before the danger point
could come into view. As for any risk of monopoly, if
the power of establishing branches were restricted within
State lines, every State would be likely to find within its
borders sufficient competition among its own banks to
give its people the full benefit of diffused accommodation,
free from external control or internal combination.
So far our discussion has turned chiefly upon the present
inability of the national banking system to develop bank¬
ing in accordance with pressing needs of important sec¬
tions of the country. The further objection that the sys¬
tem is not so constituted as to supply an elastic currency
points to a defect in the working of the bank circulation
in every section. This objection is indisputable, if we give
to the word "elasticity" the meaning usually given to it
in banking discussions. If by elasticity we are to under¬
stand nothing more than mere capacity for growth under
favoring conditions, or variability, no doubt the bank
circulation has varied and has had its periods of growth.
It rose rapidly in its earlier period, when the investment
in bonds yielded a high return ; it ran down for a long
16
series of years as the return upon bonds declined ; and it
rose again after the revulsion of 1893, when with the
decline of bonds the return upon them advanced. But
the elasticity of a currency is understood to mean some¬
thing quite different from this tendency to vary over long
periods. It means responsiveness to present increase or
diminution of demand,— the power of adaptation to the
needs of the month, the week, or the day, whether rising
or falling. A glance at the figures for any series of years,
or for any period of marked change in affairs, shows that
the national bank circulation has never had this quality.
How should it be elastic? Elasticity implies the opera¬
tion of counter forces, in a currency as well as in a steel
spring. That a currency may be responsive to demand, it
is necessary that the forces, tending respectively to ex¬
pand or to restrict, should be forces at work in the daily
business of the bank, where it is brought into contact
with the community by the stream of*loans, deposits, and
payments. But under the national system at present the
motives for extending issues are completely separated
from real banking considerations, and such tendencies for
the return of notes as exist are equally foreign to the
relations between the issuing bank and that portion of the
public which it serves.
The failure of the national system to provide for a
return ñow of notes by some effective plan of redemption
is no doubt due to the circumstances under which the
national bank acts were passed. Looking to a distant
future, the acts contemplated an ultimate return to specie
payment, and some of their provisions were shaped ac¬
cordingly. But, after all. Congress was not greatly inter¬
ested in any present requirement of redemption, when, so
far as could be seen, the redemption of a note must for
years mean no more than its exchange for another piece
of paper, itself irredeemable. To tie the bank circulation
to the public debt, and thus to secure for it as good a
chance of ultimate solvency as a promise by the govern-
17
meut could then have, and to give the bank paper univer¬
sal credit, were immediately attainable results, beyond
which there was not felt to be much necessity for looking.
The act of 1863 accordingly made no provision for the or¬
dinary redemption of bank-notes anywhere except at the
counter of the bank itself ; and the chance of presentation
there was obviously so slight, that Mr. Sherman cheerfully
assured the Senate that " these notes, all being the same,"
so far from having a pitiful life of thirty or sixty days,
" may have an indeOnite circulation, and the average may
extend to years." * It was clearly the expectation that
the notes, when once set afloat, would drift on the ocean
of paper as long as their material could hold together.
The amended act of 1864 added the requirement that
every bank outside of the redemption cities should redeem
its notes through some bank in one of those cities, and
that all banks in other redemption cities should redeem
their notes through banks in the city of New York ; but,
in the -absence of any motive for demanding the redemp¬
tion of notes which every holder, whether a bank or an
individual, could use in his own payments, these provi¬
sions served only as a reason for allowing banks to reckon
as a part of their reserve the funds deposited by them
with banks acting as their redeeming agents.
This inadequate arrangement did not satisfy the con¬
servative banking opinion of the country ; and in 1865
and 1866 an important movement for establishing assort¬
ing houses in the chief flnancial centres, with central
redemption, was organized in New York, Boston, and
Philadelphia, with the approval of the Secretary of the
Treasury and the Comptroller of the Currency.! The
• Congressional Globe, February 10, 1863, p. 843. Mr. Baker of New Vork,
in the House, insisted upon the need of central redemption. Ibid., February
20, p. 1141.
f For the action oí the banks engaged in this movement, and for Secretary
McCuUoch's part in it, see Banker's Magazine, 1865-66, pp. 193, 401, 415. For
the views of the Comptroller of the Currency, Report, 1865 (for Mr. Clarke's),
and (for Mr. Hurlhurd's) 1866 to 1870.
18
elements of opposition, however, were too strong. The
project lost its strength, and died ; and the opportunity
was lost. The national bank system grew up with an ap¬
paratus of redemption which did everything but redeem ;
and no change was made until 1874, when the function of
redemption was transferred to the Treasury, and banks
were even forbidden by law to redeem anywhere else,
except at their own counters. Thus we have to-day a
system of so-called redemption, which no doubt removes
from circulation notes which for sanitary reasons, or from
wear and tear, are unfit for further use, and enables banks
which are overloaded with bank-notes at any season to
convert them into greenbacks ; but, plainly, the redemp¬
tion thus carried on has little more than an accidental
connection with the financial condition of any issuing
bank. A large amount of notes may be passing through
the Redemption Bureau ; but the National Bank of X has
no reason to look for any unusual return of its notes,
however extreme its expansion may be, for the holder
of its notes, whatever the amount of its obligations, will
sooner use them in payments than waste time by send¬
ing them to the Treasury. This is not a kind of redemp¬
tion which can possibly make the bank circulation re¬
sponsive to the demands of business, whatever else it
may accomplish.
The singular futility of all this part of our legislation
is no doubt closely connected with the ideas as to the
meaning of note redemption in general, which have grown
up in connection with the greenbacks. Even before the
act of 1878 ordered the reissue of the redeemed green¬
backs, the original idea of redemption as the fulfilment
and ending of a contract had been obscured. That, as a
matter of legal interpretation, a note "retired and can¬
celled " had been paid, and that any new issue must be a
new debt, requiring clear legal authority for incurring it,
19
had been disputed for more than ten years,* until some¬
thing more than the mere interpretation of a statute had
come into the question. From 1866 to 1878 there is
shown in the debates and the acts of Congress a pro¬
gressive weakening of the force assigned to the term
" redemption," and the growth of an opinion that every¬
thing needful is accomplished, if the opportunity for an
exchange of one kind of currency for another is some¬
where held open.
But is it enough that every holder of government or
bank notes should understand that gold can always be
had for the paper at the Treasury or the bank? Espe¬
cially as regards bank-notes, can redemption do its work if
it is merely a passive arrangement for possible payment, in
case anybody thinks it worth while to call for it, and not
an active system of prompt presentation ? At the bottom
of much that is said and written on this subject there
would seem to be an impression that to give the public
convincing assurance of convertibility is the only object to
be provided for. But the redemption of a currency has a
bearing much broader than this. The exchange of notes
for specie on any large scale is called for in most cases
because the trade relations of the country or the section
concerned are such as to make specie for the time its
cheapest export. This state of things may be the result
of deplorable misfortune or of equally deplorable folly;
but in either case it is the misfortune or the folly that is
to be deplored, and not the process by which we pay in
the easiest way the debts which have been created. The
payment is, after all, a curative process, by which our
* In Jannary, 1868, Mr. Edmunds stated in the Senate his opinion that the
notes " retired and cancelled " under the act of 1866 could be reissued, and
moved an amendment to a pending biU to prevent this. Mr. Sherman objected
that reissue was illegal and further legislation on the point needless, and Mr.
Edmunds's amendment was lost. Congressional Globe, January 10, 1868,
pp. 435, 529. Sis years later $26,000,000 of notes once " retired and cancelled "
were reissued.
20
currency seeks the condition of equilibrium with our real
ability to hold money, as the first step towards sound
strength ; and it is for the general interest that the move¬
ment of specie should be easy, and that the payment of
our debts, in this form as well as any other, should be
prompt.
Moreover, whether we look at the government issue or
at that of the banks, it is important that the natural
effect of a depletion of our currency by specie export
should not, under ordinary circumstances, be thwarted or
warded off. In the one case, for the government to under¬
take, by the reissue of its notes, to keep up the domestic
currency in the face of a movement for redemption and
specie export, is to make that currency, so far as may be
possible, insensitive to the influences which tend to its
final replenishment. Mr. Sherman perhaps had a vision
of this truth when he recommended "that by law the
resumption fund be specifically defined and set apart for
the redemption of United States notes, and that the notes
redeemed shall only be issued in exchange for or purchase
of coin or bullion." * No doubt such an arrangement, so
long as Congress permitted its existence, would at any
rate have insured the close reciprocal relation which any
effective redemption of greenbacks should have with the
active currency, and would have made the position of the
Treasury defensible without the alternation of panic and
loan which has been witnessed since 1893. In the other
case, it is almost equally important that, so far as an
export movement of specie di-aws from the bank-note
circulation, it should draw as directly as possible from the
particular banks which are in a state of relative expansion.
The drain of specie is presumably not the consequence of
any equally distributed imprudence or any level stroke of
misfortune ; and its effect should fall, both by the rule of
right and by that of expediency, upon some more heavily
* Finance Report, 1879, p. x.
21
than upon others. This can only be secured by providing
for an easy, automatic return of notes, so that expanded
liability shall, so far as is humanly possible, be followed
by increased demand for payment.
With the imperfect conception of redemption in general,
on which our law proceeds, it is not surprising that the
national bank-note, when once issued, should be regarded
as a liability of indefinite date, differing from other bank
liabilities in this, that the issuing bank hardly need trou¬
ble itself as to its discharge. The fact that it has thus
become something not far different from a permanent ob¬
ligation, is no doubt one of the grounds for the idea of
unjust privilege which so many of our people connect
with the national bank system. It is also singularly at
variance with the principle of having a wholesome re¬
straint upon the operations of each bank by itself, which
governs our treatment of other demand liabilities. Pro¬
vision for the systematic return of notes by other banks,
like the daily collection of checks, is so contrary to our
present established habits of thought that it seems ab¬
normal, inconsistent with full credit, and useless, if not
hostile. But, not to dwell upon other considerations, it
appears too plain to require demonstration that a regular
return flow of notes is the necessary condition of the
elasticity which is now commonly demanded for our
bank currency. Elasticity cannot be secured without
the operation of restrictive force upon an outstanding
circidation : restrictive force cannot operate there, except
through the agency of the holders of the notes ; and it
can only operate through them by virtue of some legal
provision or of some convention or practice having equiva¬
lent force. Of legal provisions for this end a striking
example is supplied by the law of Massachusetts, which
from 1843 forbade any bank to pay out any notes except
its own, and thus made it necessary that notes received
22
on deposit or in payments should be sent to the issuing
banks for redemption. Of a practice equivalent in effect
to this, there is the equally striking case of the Canadian
banks, which, without any requirement of law, but simply
as competitors for business, " demand prompt and daily
redemption of all the notes of other banks that have come
in." * But our system presents nothing analogous to
these devices for making the self-interest of the banks the
restrictive force needed to secure elasticity of issue.f We
appear to rely vaguely upon some supposed slowly acting
tendency of the public to free itself by some means of a
currency, if felt to be excessive; but we set no machinery
in motion for that purpose, and do not make it for the
interest of anybody in particular to do that which on gen¬
eral grounds may be desirable for all. Even so radical a
scheme of reform as the "Baltimore Plan" contents itself
with the existing provisions for redemption.
it is obvious that the practical difficulties of redemption
have multiplied with the growth of our system. Methods
easily established at the start would be difficult of intro¬
duction into a mass of nearly thirty-seven hundred national
banks. Still, unless we are prepared to surrender the idea
of true elasticity, the means must finally be devised for
making the bank-note as well as the check present itself
systematically and promptly for payment ; and it is highly
* Breckinridge states that the average life of a bank-note in Canada is
found to be about four weeks. Canadian Banking System, p. 407.
t Breckinridge gives (ibid., p. 408) a diagram showing the monthly varia¬
tion of the issues of the Canadian banks for fifteen years. The minimnm is
nsuaUy reached in June, but sometimes in August, and one year in September ;
and the maximum is always near the beginning of November. From the low¬
est point to the highest, the average annual rise, which disappears in January,
is about 20 per cent., varying in the last dozen years from under 13 per cent, in
1882 to 24 per cent, in 1888. There is also a small rise in the spring, nearly
always at the beginning of April, but occasionally a month earlier, trifling in
amount, but singularly constant, and showing a remarkably close correspond¬
ence between the notes in circulation and some regularly recurring condition of
business.
23
improbable that this can be done without restricting the
right of national banks to pay out other notes than their
own. It is conceivable, although unlikely, that competi¬
tion might set in among the banks of a single State, and
prompt them to refuse of their own accord to circulate
each other's notes, although a result like this — easy to
understand in a system of only thirty-nine banks, like the
Canadian — would be hard to reach in States which count
their national banks by hundreds. But outside of its own
State, and probably within it, the circulation of a bank¬
note would have to end by law with its receipt in pay¬
ment or on deposit by a national bank, and its return for
redemption would have to follow.
Probably the mere administrative difficulties in the way
of an effective system of real general redemption would
not be found to be so serious as they might appear at first
blush. For the most part the reserve cities, formerly
known as redemption cities, would be the natural centres
of redemption, at which the banks would clear their notes
with each other as they now clear their checks in a clear¬
ing-house ; and the two operations would be likely to be
carried on under the same roof. The reserve cities would
necessarily exchange with each other, possibly at a com¬
mon centre ; and thus, the country being districted, pre¬
sumably with reference to the natural course of commer¬
cial payments, notes paid in or deposited at any point
would find their way back to the issuing bank, through
the same channels in which the streams of other liabilities
flow back upon the debtor banks, and without more diffi¬
culty. No change in the present uniformity of design of
the national bank-notes would be required. Distinctive
marks to determine the redemption district in which a
note belongs, and possibly its State also, could be as easily
stamped upon it as the charter number of the bank is now,
and would be all that is required for instant recognition.
Moreover, the labor of assorting the notes, with a redemp-
24
tion system once fairly in operation, is not to be inferred
from the present condition of the bank circulation. We
now see a confused mass of notes on which no regularly
acting agency of this sort has been at work ; but, with an
established compulsory return of notes, the bank circula¬
tion of every part of the country would tend to be that of
the local banks. Notes might still stray widely, for uni¬
formity of system and design would give them the same
ease of movement among individuals as at present; but
the proportion thus carried to a distance would not be
great, and their wanderings would not be of long duration.
The whole circulation would probably be so far localized
that the chief labor in every redemption centre would be
to assort the notes issued in its own district and cleared
by the local banks ; and this would simplify and lighten a
task which, however formidable, would not be too great to
be undertaken in view of the object to be secured.
Returning now to more general considerations, the
limitation of the field of circulation to be expected from a
system of actual redemption deserves a little further
notice. Kxisting banks of relatively large circulation
might naturally dislike exclusion from the wide area in
which their issues now find their chance of long life. So
far as their gain from circulation comes from the supply
of currency for use in remote sections or those ill pro¬
vided with banking facilities, they could not be expected
to welcome a proposition to confine them in effect to their
home districts. But, besides the general equity of an ar¬
rangement which would call upon any bank to find its
chief field for note issue in the community with which it
has its closest relations, it is of special importance for the
better distribution of banking in the United States that
the opportunity as well as the legal right of note issue
should be more widely extended. The sections which
now find the national system insufficient are those in
25
which the sparseness of population and other industrial
conditions invite the use of bank-notes and limit the use
of bank credit in other forms. The local banks require
the support to be obtained from circulation, and it is desir¬
able as well as equitable that they should be able to rely
upon the support afforded in their own neighborhood. A
sense that the home field belongs first to the home banks
has shown itself in the demand for the relief of State
banks by the repeal of the 10 per cent, tax ; and this feel¬
ing is too well grounded to be disregarded with safety.
Certainly, if the national system is to be extended and
popularized, it will be necessary that in this respect the
local banks should be made as far as possible the natural
sources of supply for their own constituencies.
Whether the sections which are now deficient in banks
of issue would find their currency in actual use greatly
increased under the changed conditions here suggested
may be doubted. They are, as a rule, in debt,—rich in
possibilities, but poor in actual accumulation. National
banking with general redemption might, at any rate,
supply them as well as State banking, if the latter
were to be on the specie basis ; but could they under
any system find their currency plentiful if it were
kept at its specie value ? It is hard to see how the regu¬
lar course of payments, which now takes to the commercial
centres such coin, legal tender, or bank-notes as they
acquire, could fail to restrict their note circulation by
drawing from their banks their cash for remittance.*
This hardship is the natural consequence of economic
conditions which for the present keep their demands for
certain commodities constantly in advance of their means
*At a hearing before the House Committee on Banking and Currency,
December 19, 1896, Mr. W. L. Royall of Richmond, Virginia, presented his
views :—
" Mr. Rotaix. I say that, if you put out notes in a backwoods community
that are good at par in New York, those notes will leave the backwoods com¬
munity, and go to New York. . . .
" Mr. JOHNSOK. Must not those notes suffer a discount when the holders
26
of payment. Nevertheless, good policy and fair dealing
alike require that whatever opportunity may in fact exist
for affording either the present or an increased supply of
currency should be enjoyed first by banks upon the spot.
If the lack of active circulation remains as at present, the
nature of the difficulty will at least be clearer than it is
now, and will be obviously free from the present appear¬
ance of unjust discrimination. Moreover, to give to local
banks all possible encouragement for natural develop¬
ment, by enabling them to use as far as safety will allow
the power of issue, notoriously needed in immature com¬
munities more than in the mature, is the readiest way to
promote the growth of industry and wealth, which will
finally raise the people to the condition where their need
of goods for use will no longer keep them bare of cash.
At present the condition of portions of the South and
West presents a kind of deadlock. Their people are
poor in all but natural resources. They remain poor be¬
cause there is little " money in circulation," and there is
little "money in circulation" because they are poor.
With a short succession of bad years they are in some¬
thing like destitution. With a bountiful harvest they
gain a little ground, and hope rises. To encourage the
proper use of credit, and of credit in the form most nat¬
ural to their condition, although a slow remedy, appears
of them want to go outside of their own community to make purchases with
that money in their pockets ?
"Mr. RoYAm.. No, sir; those notes are payable in coin on demand.
They go to the bank, and say, ' Give me gold for these notes' ; and they get
gold."
And again, favoring the issue of notes by State banks,—
" Mr. Royau.. If [a bank] issues currency at all, it is for the con¬
venience of the people who live around it. Tet, if a country bank issues
currency backed by the government, that currency will leave it and the people
who really need it, and go to a commercial centre, where there is no legitimate
need for it."
Mr. Royall's cure for the difficulty appeared to be an issue of notes, not
too good, but just good enough to be used at home,— a difficult medium to
strike.
27
to be not only a hopeful one, but also the only one now
within reach of the national government.
To recapitulate the points which appear to be of chief
importance in the current discussion : —
The great objects to be secured are : to enable sections
of country, now excluded from the advantages of the
national banking system, altogether or in part, to make
use of this system and of the right of issue under it, as
their needs may require ; and to make the issues of the
national banks elastic as well as safe.
The natural means for securing these results are : to
abandon the present system of bond deposit as security
for notes, to substitute a first lien in favor of note-holders
upon all assets and upon the stockholders' liability, and to
create a guarantee fund supported by levy upon all banks
in proportion to their circulation ; to strengthen the sys¬
tem, by provision for closer inspection and by more fre¬
quent publication of accounts; to authorize and encour¬
age the introduction of the branch system, at the same
time raising the line of minimum capital, say, to $200,000 ;
and to organize a system of central redemption, enforced
by restriction upon the right of banks to pay out the
notes of other banks.
The practical and political difificulties, at present hin¬
dering any reform, need no comment. Factions in Con¬
gress, apathy produced by a new period of prosperity,
popular financial delusion, and differences of opinion
among the friends of reform may raise formidable obsta¬
cles in the way even of partial measures, and still more in
the way of any comprehensive plan, for the removal of
generally acknowledged evils. But, whatever steps it
may be possible to take, little will be gained if they do
not turn plainly towards the objects above stated, and
proceed courageously and unequivocally upon the general
lines which the present writer, following many others, has
reviewed in these pages.
DISTRIBUTION OF SMALL BANKS IN THE WEST.
Thb tables on pages 31-35, compiled from official returns,
show the distribution of small banks, private. State, and na¬
tional, in several of the Western States where there is a re¬
markable development of banking under State laws. Banks
are classified according to the amounts of their capitals, and
towns according to the numbers of their inhabitants. The
number of banks of each class in towns of each class is shown,
and vice versa the number of towns of each class having banks
of a given size.
The tables show a large number of small State and private
banks in small towns. In each table of private banks, except
for Nebraska, the largest number is in the upper left-hand
corner, showing how many banks having not more than $5,000
capital are in towns whose population does not exceed five
hundred. In the table of South Dakota State banks, also,
the largest number is found in the corresponding space. The
largest numbers in the other State bank tables, and in the
table of private banks for Nebraska, are in the spaces for
banks whose capital is not more than $10,000 each in towns of
five hundred inhabitants or less. $10,000 is the commonest
figure of State bank capital. It should be noted that the
minimum capital allowed by law to State banks is $10,000 in
Missouri and $5,000 in Kansas, Nebraska, and the Dakotas.
It will be seen from the horizontal lines of totals that in
Missouri somewhat more than one-half of the State banks are
in towns the population of which does not exceed one thou¬
sand. In Kansas and Nebraska two-thirds of the State banks
are in such towns, and in the Dakotas nearly all of them.
Most of the private banks, too, are found in small towns.
The fact that in the region under consideration the State
and private banks are small and are in little villages will be
seen clearly if on each of the tables of such banks a line in
29
drawn from the lower left-hand corner to the upper right-
hand corner. The figures that fall below the lines are few
or small,— somewhat fewer and smaller, of course, in the
tables of private banks than in those of State banks. The
figures in the State bank tables above the lines drawn as
suggested are large. There is, it seems, no great obstacle to
the organization in little towns of little State banks.
It is a natural question, then. Why are there any private
banks at all? It is true, they have more freedom in their
operations; but this reason does not often determine the
establishment of banks without charters, for the laws of all
these States except South Dakota impose some restrictions
on private banks, and even South Dakota exercises super¬
vision of them.
In most States the controlling reason, probably, is that the
small capital needed for a bank in a little town is often
supplied by one or two men, and that, if the bank is to be
incorporated, these capitalists must set up several "straw
men " to complete the number of " directors " prescribed for
incorporated banks.
In South Dakota, however, many private banks exist,
because the law requires no minimum capital for them. Two
private banks are returned as having no capital at all. Four
have not more than $1,000 each, and ten others have each
less than $5,000.
No attempt is made in these tables to show in what v&ry
little hamlets State banks are found. Seven Missouri villages
having no more than one hundred people have State banks,
the average capital being about the legal minimum, $10,000.
There are in Nebraska thirteen such towns with banks having
an average capital of $8,000. Eight such villages in Kansas
have banks with an average capital of more than $6,000.
About the same average capital is found in seven Dakota
banking towns of this size.*
Examining the tables again, one sees that State and private
*Of course, such towns as these do not alone support banks. The TlUages
are simply convenient trading-points for farmers. Besides the little bank there
is in each a railroad station from which the farmers conveniently ship cattle
and grain, when these are not bought up by the middleman the town is sere to
30
banks have a monopoly in towns whose population is one
thousand or less, except in North Dakota, where nearly one-
half of the national banks are in such towns. There are
national banks in some very small Kansas and Nebraska vil¬
lages, but they are few compared to the total for the State.
Let the reader cover the upper portions of the tables, so
that only the figures of banks with more than 140,000 capital
are visible. Now, leaving Missouri out of account for the
moment, practically every figure in each " national " table is
greater than the figure in the corresponding spaces in the
" private " and " State " tables. Except for the restriction on
capital, the people prefer national banks; and that is why
there are national banks in little North Dakota towns.
In Missouri the State banking system is evidently much
preferred. State banks were established all over Missouri
while the total of national bank currency was limited by
statute, and while it was, therefore, impossible to supply the
growing need for increased facilities by organizing national
banks. Except in Kansas City and St. Joseph, which grew
rapidly in the eighties and became national banking towns,
the State banking tradition has generally persisted. Missouri
is, therefore, an exception to the preference for national
banks discovered in the other States.
It has been proposed, and the proposition has been sanc¬
tioned by the American Bankers' Association, to authorize
the establishment of national banks with $25,000 capital. The
measure would not answer the purpose for which it is in¬
tended, even if all State banks capitalized at $25,000 or
more went into the national system. It will be seen that
considerably more than one-half of the State banks in Kansas,
Nebraska, and Missouri and more than three-fourths of those
in Dakota have not more than $20,000 capital each. If it is
desirable to establish a uniform banking system, another way
must be found.
afford. There is a poat-oCBce in the " general store." Livery stable and black¬
smith shop are nut far off. C!oal and lumber are for sale somewhere, perhaps at
the grain dealer's "office"; and there is sure to be a carpenter in the village.
The writer knows of a village where the banker himself is the carpenter.
TABLES ON BANKS IN THE WEST.
NORTH DAKOTA.
[83 Banking Towns, 100 Banks. (Private banking prohibited.)]
STATE (June 27, 1896).
NATIONAL (October 6. 1896).
Population.
Population.
ai
Ui
n
CAPITAL.
o
o
o
g
o
o
O
o
O
O
O
O
o
o
0
0
0
0
0
0
d
0
d
0
d
S
>o
eo
to"
o
lO
CO
10
4>
?
O
ŒI
o
?
o
0
9
9
9
9
9
09
01
O
•**
o
Aa
O
4^
O
o
o
«a
o
«a
<
H
4a
0
4a
0
4a
0
4a
4a
0
4a
0
4a
H
H
H
%
;z¡
Íí
Í5
H
H
Not over $5,000....
10,000
15,000
" 20,000
" 25,000
30,000
13
1
14
14
30
3
33
33
4
3
7
7
3
?
1
6
6
í>
3
5
5
1
9
2
40,000
" 50,000
9
2
1
11
7
1
0
22
1
5
24
2
" 75,000
1
1
1
" 100,000.,..
1
1
1
9
9
6
Over 100,000
1
1
1
52
15
9
1
1
71
1
12
7
9
5
2
29
100
ze
o
Ê
o
o
oo«^c^i^eotoiON^w«»
o o U« o o ^ o uv
o o'o'o o o © o o o o
oooooooooo©
oooooooooo©
©
►
M
I-"
IC lO © o »
Not over 500.
H-bo»-©iowhöco over 1,000.
Not over 2,000.
Not over 3,000.
Not over 4,000.
Not over 6,000.
Not over 10,000.
Over 10,000.
Totals.
o
a
e*
►
>9
O
M
>
H9
»
p
o
M H- ÍO 00 ►
Not over 1,000.
Not over 2,000.
Not over 3,000.
Not over 4,000.
Not over 6,000.
Not over 10,000.
Over 10,000.
Od ^ »(k. (
Totals.
o
0
►
h
M
O
«
09
>
bä
«H
0
0
©
to
09
to
4^
Not over 600.
Not over 1,000.
Not over 2,000.
Not over 3,000.
Not over 4,000.
Not over 5,000.
Not over 10,000.
Over 10,000.
Totals.
e
a
p
ÏS
M
O
«
►
M
O
Î2J
O
Ö"
<D
to *-< k« CO
ToTAiiS ALL BANES.
S£
I
O
•<
O O ti* ti*
O O O^O O O ©"o o'o'ö
OOOOOOOOOOO
OOOOOOOOOOO
Q
s
— Ca <>. w íí s Not over 800.
aw ^ (O Not over 1,000.
» ^ CK en aw Not over 3,000.
Not over 3,000.
] Not over 4,000.
Not over 6,000.
Not over 10,000.
- Over 10,000.
TOT4.LS.
3
m
M
§
I
co
CO
Oi
w
►
oo-aolo
Co N- N- M N- . tmé
Not ov6r l,000w
Not over 2,000.
H- ^ ^ lo N- »- Not over 3,000.
^ CO M- . CO CO Not over 4,000.
Not over 5,000.
Not over 10,000.
Over 10,000.
Totals.
o
QD
5
o*
s W
H ^
2 ^
i w
s ^
^ Ui
Cn
O
W
<3i
M
Not over 600.
Not over 1,000.
Not over 2,000.
Not over 3,000.
I Not over 4,000.
Not over 6,000.
Not over 10,000.
Over 10,000.
Totals.
o
>4
c3
s;
M
O
§
i
O
e
o wca.'pw-n.a'.a^uKo-j Totals all Battes.
^ 1 caca^i^O0Diocar-'«O'^ I
MISSOURI.
[296 Baneixg Towns, 652 Banks.]
PRIVATE (April 11,1896).
STATE (April 11,
1896).
NATIONAL (February 28, 1896;.
i
i
POPÜLATIOH.
Population.
Population.
1
1 00
' W
»
iJ
e:i
CAPITAL.
g
o
o
o
É
eí
e
e
o
w
S
o
Ö
g
*S
o"
É
g
1
e<5
©
S
•jíT
©
o
©
iO
©"
o'
©
©
o
lO
i
e'
s
M
©
S
«
o
s
e
©
©
©
©
©^
©"
WH
?
«
«
«
?
ë
©
D9
?
?
?
©
©
f
ni
?
©
?
©
©
©
u
©
o"
95
m
O
o
O
4»
O
43
o
4«
o
43
o
«
O
43
o
43
43
O
43
©
43
©
43
©
43
©
<
H
O
43
©
43
43
o
43
©
43
©
43
©
■<
h
;zs
%
¿
H
ñ
Z
á
ê
ÎZi
O
6H
Zi
z
z
z
Z
O
H
H
Not over
$5,000
10,000....
15,000
20,000....
?,?
10
2
2
1
3
40
4*
4
1
44
167
64
87
.i8
18
9
6
1
1
1
.3fi
84
30
12
8
3
9
131
?
2
4
21
97
9
1
1
60
11
?
5
3
11
17
93
91
8
9
9
9
1
76
It
25,000
30,000
1
1
1
.3
5
19
90
8
9
5
9
1
55
tt
1
1
1
7
11
9
1
22
23
It
40,000
3
4
7
4
9
9
1
24
24
84
14
46
41
it
50,000
1
1
2
2
7
13
19
1
19
7
3
57
9
9
9
9
4
0
1
7
25
4
tt
75,000..,.
1
3
4
1
1
1
u
100,000
1
1
2
9
'S
i
13
15
27
21
9
3
3
7
18
20
Over
100,000
9
9
9
1
19
Totale
45
27
12
4
7
9
9
99
137
110
97
44
10
30
22
36
486
2
13
5
5
2
14
26
67
652
•As $10,000 is by law the minimum capital of State banks, these are presumably institutions so recently organized that only half their capital is yet
paid in.
NEBRASKA.
[342 Banking Towns, 526 Banks.]
capital.
Not over $5,000.
" 10,000.
" 15,000.
" 20,000.
" 25,000.
30,000.
" 40,000.
" 50,000.
75,000.
100,000.
Over 100,000.
Totals'.
PEl'VATE (December 31, 1896).
Population.
10
23
7
2
2
1
45
25
81
state (December 31,1896).
178
Population.
81
42
13
35
80
69
34
39
23
14
23
8
6
1
332
NATIONAL (October 6, 1896).
Population.
14
14
36
18
10
10
4
11
19
72
12
15
14
113
»This bank is in "East" Ornaba, the population of which has not been ascertained apart from that of Omaha itself.
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