F'- HG Z59 fin UC-NRLF C 5 bflM fi31 O CO O IN 1810 when the MECHANICS BANK of NEW YORK came into existence, the young Republic was more in need of a credit system than a money system. Its founders endeavored to render such service as to insure the best possible results in the development of a credit system and the country's resources; and their successors are as desirous now of being of equal service in securing a sound monetary system. Correspondents have every assurance they will receive the same courteous treatment that patrons have received for over ONE HUNDRED years. The Mechanics and Metals National Bank New York Capital, Surplus and Profits . $ 1 4,000,000 OFFIC ER S GATES W. McGARRAH President ALEXANDER E. ORR Vice-President NICHOLAS F. PALMER Vice-President FREDERIC W. ALLEN Vice-President FRANK O. ROE Vice-President WALTER F. ALBERTSEN Vice-President JOSEPH S. HOUSE Cashier ROBERT U. GRAFF Assistant Cashier JOHN ROBINSON Assistant Cashier CHARLES E. MILLER Assistant Cashier L©m]paiiuy NEW YORK B'way at 73d St. 55 Cedar St. 125th St. at 8th Ave. Capital & Surplus, $6,000,000 Total Resources, - $76,000,000 Officers John W. Flatten, Calvert Brewer, Carl G. Rasmus, Frank J. Farsons, Joseph Adams, Alexander Fhillips, Henry L. Servoss, T. W. B. Middleton, Victor Ehrlicher, Harry W. Hadley, Chauncey H. Murphey, William T. Law, President Vice-President Vice-President Vice-President Treasurer Secretary Asst. Treasurer Asst. Secretary Asst. Secretary Asst. Treasurer Asst. Treasurer Asst. Secretary Directors CHARLES S. HROWX, Douglas Robinson-Charles S. Brown Company New York BURNS D. CALDWELL, President Wells Fargo & Company New York ADOLPH LEWISOHN, Sons . . . JAMES G. Bank CANNON, President Fourth National New York LEWIS L. CLARKE, President American Ex. National Bank New York THOMAS DEWITT CUYLER, President Commercial Trust Company Philadelphia CHARLES D. DICKEY, Company . ' . . . ALLEN B. FORBES, Harris, Forbes & Co., New York ROBERT A. GRANNISS . . . New York HENRY R. ICKELHEIMER Ickelheimer & Company. WILLIAM A. JAMISON, Arbuckle Bros., New York ROBERT OLYPHANT . JOHN W. PLATTEN MORTIMER L. SCHIFF & Company . . . . Adolph Lewisohn & New York New York President of the Company Kuhn, Loeb New York HENRY TATNALL, Company Vice-President Penn. R. R. Philadelphia l'>rown Brothers & New York Heidelbach, New York LOUIS C. KRAUTHOFF Law . . . . . . Counsellor-at- New York JULIUS KRUTTSCHNITT . . . Directorof Maintenance and Operation, Union and Southern Pacific Systems New York EBEN B. THOMAS, President Lehigh Valley R. R. Company New York JAMES TIMPSON, Second Vice-Prest. and Financial Mgr. The Mutual Life Insurance Company New York GUY E. TRIPP, Chairman of the Board Westingliouse Electric and Manufacturing Company . New York ARTHUR TURN BULL, Post &Flagg . New York CORNELIUS VANDERBILT . . New York PAUL M. WARBURG, Kuhn, Loeb & Co., New York GEORGE G. WARD, Cable Company First Vice-Prest. Commercial New York Member N. Y. Clearing House Association III 'm^/lmi H^.M^*^ The Bank of North America (NfiUnna] Rank") cessive r and cust consister ED AND NE CON- ^EARS of fred its pa- cing princi- the BANK 5RICA in e city that "Cradle of Each suc- principles, 'y courtesy 312 Loans and Discounts $ 1 2,892,43 1 .79 Due from Banks and Bankers Clearing House Ex- changes Cash and Reserve - 2,310,876.13 978,600.92 3,072,341.02 Total $19,254,249.86 Capital - Surplus and Undi vided Profits Circulation Deposits - Total $ 1,000,000.00 2,726,298.17 494,900.00 - 15,033,051.69 - $19,254,249.86 Officers H. G. MICHENER, President S. D. JORDAN, Cashier R. S. McKINLEY, Asst. Cash. W. J. MURPHY, Asst. Cash. C. M. PRINCE, Asst. Cash. CHARTERED 1822 The Farmers' Loan and Trust Company 1 6, 1 8, 20 & 22 WILLIAM STREET BRANCH OFFICE, 475 FIFTH AVENUE NEW YORK LONDON 15 COCKSPUR ST., S. W. 26 OLD BROAD ST., E. C. PARIS 41 BOULEVARD HAUSSMANN THE Company is a legal depositary for moneys paid into Court, and is authorized to act as Executor, Administrator, Trustee, Guardian, Receiver, and in all other fiduciary capacities. Acts as Trustee under Mortgages made by Railroad and other Corporations, and as Transfer Agent and Registrar of Stocks and Bonds. Receives deposits upon Certificates of Deposit, or subject to check and allows interest on daily balances. Manages Real Estate and lends money on bond and mortgage. Will act as Agent in the transaction of any approved financial business. Depositary for Legal Reserves of State Banks and also for moneys of the City of New York. Fiscal Agent for States, Counties and Cities. Foreign Exchange, Cable Transfers. Letters of Credit payable throughout the world. HENRY A. C. TAYLOR CHARLES A. PEABODY WM. WALDORF ASTOR OGDEN MILLS FRANKLIN D. LOCKE J. WILLIAM CLARK GEORGE F. BAKER A. G. AGNEW SAMUEL SLOAN BOARD OF DIRECTORS CLEVELAND H. DODGE HUGH D. AUCHINCLOSS D. H. KING, Jr. PERCY A. ROCKEFELLER EDWARD R. BACON AUGUSTUS V. HEELY JOHN J. RIKER JOHN W. STERLING THOMAS THACHER MOSES TAYLOR PYNE STEPHEN S. PALMER HENRY HENTZ H. V. R. KENNEDY FRANK A. VANDERLIP JAMES A. STILLMAN ARCHIBALD D. RUSSELL PERCY CHUBB EDWIN S. MARSTON OFFICERS EDWIN S. MARSTON, PRESIDENT. SAMUEL SLOAN, vice-pres't. AUGUSTUS V. HEELY, vice-pres't k. sec'y. WILLIAM B. CARDOZO, vice-pres't. CORNELIUS R. AGNEW, vice-pres't. HORACE F. HOWLAND, ASST. sec'y. ROBERT E. BOYD, ASST. sec'y. WILLIAM A. DUNCAN, ASST. sec'y. n Of V ''' IN 1810 when the MECHANICS BANK of NEW YORK came into existence, the young Republic was more in need of a credit system than a money system. Its founders endeavored to render such service as to insure the best possible results in the development of a credit system and the country's resources; and their successors are as desirous now of being of equal service in securing a sound monetary system. Correspondents have every assurance they will receive the same courteous treatment that patrons have received for over ONE HUNDRED years. The Mechanics and Metals National Bank New York Capital, Surplus and Profits . $ I 4,000,000 OFFIC ER S GATES W. McGARRAH President ALEXANDER E. ORR Vice-President NICHOLAS F. PALMER Vice-President FREDERIC W. ALLEN Vice-President FRANK O. ROE Vice-President WALTER F. ALBERTSEN Vice-President JOSEPH S. HOUSE Cashier ROBERT U. GRAFF Assistant Cashier JOHN ROBINSON Assistant Cashier CHARLES E. MILLER Assistant Cashier ©irMa^© &Tif est C®mp®iruy NEW YORK B' way at 73d St. 55 Cedar St. 1 25th St. at 8th Ave. Capital & Surplus, $6,000,000 Total Resources, - $76,000,000 Officers John W. Flatten, Calvert Brewer, Carl G. Rasmus, Frank J. Farsons, Joseph Adams, Alexander Phillips, Henry L. Servoss, T. W. B. Middleton, Victor Ehrlicher, Harry W. Hadley, Chauncey H. Murphey, William T. Law, President Vice-President Vice-President Vice-President Treasurer Secretary Asst. Treasurer Asst. Secretary Asst. Secretary Asst. Treasurer Asst. Treasurer Asst. Secretary Directors CHARLES S. BROWN, Douglas Robinson-Charles S. Brown Company New York BURNS D. CALDWELL, President Wells Fargo & Company New York JAMES G. CANNON, President Fourth National Bank New York LEWIS L. CLARKE, President American Ex. National Bank New York THOMAS DEWITT CUYLER, President Commercial Trust Company Philadelphia CHARLES D. DICKEY, . Brown Brothers & Company . " . . . . . New York ALLEN B. FORBES, Harris, Forbes & Co., New York ROBERT A. GRANNISS . . . New York HENRY R. ICKELHEIMER . Heidelbach, Ickelheimer & Company New York WILLIAM A. JAMISON, Arbuckle Bros., New York LOUIS C. KRAUT HO FF . . . Counsellor-at- Law . . . . . . . . New York JULIUS KRUTTSCHNITT . . . Directorof Maintenance and Operation, Union and Southern Pacific Systems ....... New York ADOLPH LEWISOHN, Sons . . . ROBERT OLYPHANT . JOHN W. FLATTEN MORTIMER L. SCHIFF & Company . . . . Adolph Lewisohn & New York New York President of the Company Kuhn, Loeb New York HENRY TATNALL, Company Vice-President Penn. R. R. Philadelphia EBEN B. THOMAS, Company President Lehigh Valley R. R. New York JAMES TIMPSON, Second Vice-Prest. and Financial Mgr. The Mutual Life Insurance Company New York GUY E. TRIPP, Chairman of the Board Westingliouse Electric and Manufacturing Company . New York ARTHUR TURNBULL, Post & Flagg . New York CORNELIUS VANDERBILT . . New York PAUL M. WARBURG, Kuhn, Loeb & Co., New York First Vice-Prest. Commercial New York GEORGE G. WARD, Cable Company Member N. Y. Clearing House Association III SEABOARD ^ ' ^S*^' NATiOKLA\L BAMK oRG.f'rocccLx;c>xjji The Seaboard National Bank of New York with nearly thirty years of continued and substantial growth, with no con- solidations or mergers with other banks, with no single interest to serve, is con- fident that its excellent facilities will meet your requirements. We will demonstrate this to your utmost satisfaction if you will give us an opportunity. Capital .... 1 1,000,000 Surplus and Profits (Earned) 2,183,000 Deposits .... 37,000,000 IV FOURTH STREET NATIONAL BANK Philadelphia Capital . Surplus and Profits $ 3,000,000 6,500,000 Offers Unexcelled Facilities to Correspondents OFFICERS E. F. SHANBACKER, President JAMES HAY, Vice-President R. J. CLARK, Cashier B. M. FAIRES, Vice-President W. A. BULKLEY, Assistant Cashier FRANK G. ROGERS, Vice-President W. K. HARDT, Assistant Cashier C. F. SHAW, Jr., Assistant Cashier DIRECTORS JAMES HAY, President Merchants Warehouse Co, FRANK T. PATTERSON, North American Building CHARLES I. CRAGIN, Forrest Building WILLIAM A. DICK, North American Building EFFINGHAM B. MORRIS, President Girard Trust Co. WM. R. NICHOLSON, President Land Title and Trust Co. RUDULPH ELLIS, President Fidelity Trust Co. CLEMENT A. GRISCOM, Land Title Building FRANCIS I. GOWEN, General Counsel Pennsylvania R. R. Co. SIDNEY F. TYLER, Chairman ARTHUR E, NEWBOLD, of Drexel & Co., Bankers ISAAC H. CLOTHIER, Eighth and Market Streets ALBA B. JOHNSON, President The Baldwin Locomotive Works C. S. W. PACKARD, President Pennsylvania Company for Insurances on Lives and Granting Annuities E. F. SHANBACKER, President J. M. WILLCOX, Vice-President Philadelphia Saving Fund Society T. C. du PONT, President E. I. du Pont de Nemours Powder Company E. W. CLARK, of E. W. Clark & Co., Bankers The Girard National Bank Philadelphia ONE HUNDRED YEARS AGO, in 1812, Stephen Girard, who was the most eminent merchant and the wealthiest man in the United States, established Stephen Girard' s Banking \W^ ^^^^m House^ on Third Street, in Philadelphia, in the elegant building erected and occupied from 1795 to 1 8 1 1 by the Stephen Girard Arst BANK OF THE UNITED Born 1750 Died 1831 STATES. George Simpson, who for seventeen years was cashier of the Bank of the United States, was Mr. Girard's first cashier. Mr. Girard's death occurred in December 1831. Shortly thereafter in 1832, a number of Philadelphia's most prominent citizens organized The Girard Bank, taking over the magnificent building and occupying it from that day to this. It became THE GIRARD NATIONAL BANK in 1864, and its success can be attributed to the service it renders its patrons. Capital $2,000,000 Surplus and Profits . . . 4,700,000 Deposits 42,000,000 Resources 51,000,000 VI Continental and Commercial National Bank OF CHICAGO Northeast Corner Adams and Clark Streets Capital, Surplus and Undivided Profits, $30,000,000.00 OFFICERS GEORGE M. REYNOLDS, President RALPH VAN VECHTEN, Vice-President HARVEY C. VERNON, Asst. Cashier ALEX. ROBERTSON, Vice-President GEO. B. SMITH, Asst. Cashier HERMAN WALDECK, Vice-President WILBER HATTER Y, Asst. Cashier JOHN C. CRAFT, Vice-President H. ERSKINE SMITH, Asst. Cashier JAMES R. CHAPMAN, Vice-President JOHN R. WASHBURN, Asst. Cashier WM. T. BRUCKNER, Vice-President WILSON W. LAMPERT, Asst. Cashier WM. G. SCHROEDER, Vice-President DAN NORMAN, Asst. Cashier NATHANIEL R. LOSCH, Cashier FRANK L. SHEPARD, Auditor EDWARD S. LACEY, Chairman of Advisory Committee Continental and Commercial Trust and Savings Bank Capital and Undivided Profits, $4,300,000.00 OFFICERS GEORGE M. REYNOLDS, President CHARLES C. WILSON, Cashier JOHN J. ABBOTT, Vice-President FRANK H. JONES, Secretary GEORGE B. CALDWELL, Vice-President WM. P. KOPF, Asst. Secretary The Hibernian Banking Association Capital, Surplus and Undivided Profits, $2,900,000.00 OFFICERS GEORGE M. REYNOLDS, President JOHN W. MacGEAGH, Cashier DAVID R. LEWIS, Vice-President FREDERIC S. HEBARD, Secretary HENRY B. CLARKE, Vice-President and Man- EVERETT R. McFADDEN, Asst. Secretary ager Savings Dept. JOHN P. V. MURPHY, Asst. Cashier LOUIS B. CLARKE, Vice-President GEORGE ALLAN, Asst. Cashier Combined Capital, Surplus and Undivided Profits $37,000,000.00 Resources of Affiliated Institutions Over One-Quarter Billion Dollars VII |UIETL 1 but surely, m tne last rew years, Chicago nas oeen ac- quiring approximately the same relation to tne xV^estern and Northwestern sections or tne country that London bears toward tne trade or the Britisn empire. The money or the western nair or tnis continent is employed in commerce, rounded on a vast and growing agriculture. It is not used m speculative ventures but is at the call or all legitimate enterprises in developing new areas and new markets. To all this extraordinarily ricb, though still young territory, tbe banking pow- er or Cnicago supplies strength and vitality, and AviU continue to do so, keeping in tbe lead or tbe growtb or populations and industries. iFTbe vista is so broad, so far reacbing and so xuU or growing influence tbat fcAV of tbose most actively concerned realize wbat it means now, mucb less wbat it means to tbe future of a country wbose advance in wealtb and power IS one of tbe wonders of bistory. REPRODUCED FROM A RECENT PUBLISHED STATEMENT OF The National Bank of the Republic of Chicago JOHN A. LYNCH President W. T. FENTON .... Vice-President R. M. McKINNEY Cashier O. H. SWAN Asst. Cashier JAMES M. HURST . . . Asst. Cashier WM. B. LAVINIA . . . Asst. Cashier W. S. BISHOP ... Asst. Cashier VIII m A concise review of the monetary systems of the leading nations of the world, illustrating the fund- amental differences between the various systems. W^ith a copy of the charter of the Second Bank of the United States, and a discussion of the Monetary Commission bill now before Congress. By MAURICE L. MUHLEMAN American Bankers' Association Year-Book 1912 Published by The Banking Law Journal 27 Thames Street, New York 1912 Copyright, iqi2, by the Banking Law Journal Co., New York. FOUNDED 1803 The Merchants National Bank of the City of New York 42 Wall Street THE Merchants National Bank of the City of New York offers as a basis of busi- ness connection, a hundred years of success, conservative management, complete banking equipment, prompt and courteous attention, and an independence which permits of all business being considered strictly upon its merits. DIRECTORS JOHN A. STEWART. Chairman Board of Trustees United States Trust Co. ELBERT A. BRINCKERHOFF, Vice-President J. Spencer Turner Co. GUSTAV H. SCHWAB Oelrichs & Co., Agents North German Lloyd S.S. Co. -ROBERT M. CALLAWAY, President CHARLES D. DICKEY Brown Brothers & Co., Bankers EDWARD HOLBROOK President Gorham Manufacturing Co. JOSEPH W. HARRIMAN. Vice-President Harriman & Co., Bankers WILUAM A. TAYLOR Taylor, Clapp & Co. , Dry Goods Commission GEORGE ZABRISKIE Zabriskie, Murray, Sage & Kerr, Lawyers JAMES N. WALLACE President Central Trust Co. of New York CHARLES A. BOODY President The Peoples Trust Co. of Brooklyn JAMES C. COLGATE James B. Colgate & Co., Bankers Resources over $30,000,000 X THE BANK OF COMMERCE NATIONAL ASSOCIATION CLEVELAND ORGAKIZED IX 1899. HAVING A CAPITAI., SUR- PLUS AND PROFITS OF THRFE MLLL.ION SEVEN HUNDRED THOUSAND DOLLARS, AND RESOUR- CES OF TWENTY MILLION DOLLARS, IT IS THOROUGHLY EQUIPPED FOR TRANSACTING ALL BRANCHES OF LEGITIMATE BANKING, AND CORDIALLY INVITES CORRESPONDENCE WITH OUT-OF-TOWN BANKS,TRUST COMPANIES, CORPORATIONS AND FIRMS, REQUIRING A CLEVELAND CONNECTION, CONFIDENTLY BE- LIEVING IT CAN RENDER SERVICE THAT WILL MERIT THEIR PATRONAGE. ITS DIRECTORATE IS COMPOSED OF SOME OF CLEVELAND'S MOST REPRESENTATIVE BANKERS AND BUSINESS MEN; AN ASSURANCE OF A FAITHFUL PER- FORMANCE OF ALL TRUSTS. 257832 XI THE Comptroller of the Currency nas assigned to tne First National Sank or Cleveland the number seven, its original charter number, -wnich designates tnis in- stitution as one or tne oldest national banks in tne country. It nas bad an uninterrupted period or bealtby, permanent growth since its organization in 1863, rrom which it is safe to conclude tbat tne service rendered to its customers bas been agreeable and satisfactory. W'ltb a capital and surplus of more tban $4,000,000, and total resources of $36,000,000, it IS prepared to grant sucb accommodation as may be iivar- ranted by tbe standing and responsibility of tbe depositor. XII First National Bank Building MILWAUKEE, WIS. FUTURE HOME OF THE FIRST NATIONAL BANK OF MILWAUKEE FIRST SAVINGS &. TRUST COMPANY XIII inon: T HE progress and substantial growth of the city of Cleveland^ Ohio, and the success of its many great industrial and manufacturing enter- prises, can be attributed largely to its excellent banking facilities. The Union National Bank of Cleveland through strict adherence to up-to-date banking methods, has become one of the foremost banking institutions in the State. Banks, Corporations, Firms and Individuals desiring a Cleveland connection, can be assured of every courtesy in keeping with sound banking principles. OFFICERS GEO. H. WORTHINGTON E. R. FANCHER G. A. COULTON W. E. WARD . W. C. SAUNDERS E. E. CRESWELL President Vice-President Cashier Assistant Cashier Assistant Cashier Assistant Cashier XIV XV ORGANIZED 1850 MARINE NATIONAL BANK BUFFALO, N. Y. ( Paid in $ 500,000.00 ^^'^^ '( Earned 1,500.000.00 $ 2,000.000.00 Surplus and Profits (Earned) 1.500.000.00 Total Assets (Over) 36,000,000.00 The oldest bank of discount in Buffalo and the largest in the State outside of New York City. OFFICERS STEPHEN M. CLEMENT. President CLIFFORD HUBBELL. Cashier JOHN J. ALBRIGHT. Vice-President HENRY J. AUER, Assistant Cashier JOHN H. LASCELLES, Vice-President NORMAN P. CLEMENT, Assistant Cashier MERLE H. DENISON. Assistant Cashier JOHN J. ALBRIGHT STEPHEN M. CLEMENT WALTER P. COOKE WILLIAM H. GRATWICK A. C. GOODYEAR DIRECTORS EDMUND HAYES WILUAM H. HOTCHKISS CLIFFORD HUBBELL E. H. HUTCHINSON GEORGE B. MATHEWS CHARLES H. KEEP HUGH KENNEDY JOHN H. LASCELLES WILUAM A. ROGERS This Bank solicits the accounts of banks, corporations, firms, and individuals. Every effort is made by courteous personal attention to give customers the most prompt and efficient service CORRESPONDENCE INVITED XVI THE progress of a banking institution in one of the great money centers, where competition is extremely keen, depends upon its management and equipment for handling business. The National City Bank of Chicago is less than six years old, and its resources are now Thirty-four Millions which represent a record-breaking growth in American Banking. It opened for business February 5, 1907, with deposits of $2,198,337.25. The following table shows their growth: . $6,201,815.87 . 12,344,125.88 , 15,243,602.94 . 22,965,928.59 . 27,524,223.90 . 31,041,046.16 Surplus and Profits $603,771.99 December 31, 1907 December 31, 1908 December 31, 1909 December 31, 1910 December 31, 1911 June 14, 1912 Capital $2,000,000.00 OFFICERS: DAVID R. FORGAN, President ALFRED L. BAKER, Vice-President H. E. OTTE, Vice-President F. A. CRANDALL, Vice-President L. H. GRIMME, Cashier W. T. PERKINS, Asst. Cashier W. D. DICKEY, Asst. Cashier HENRY MEYER, Asst. Cashier A. W. MORTON, Asst. Cashier WM. N. JARNAGIN, Asst. Cashier WALKER G. McLAURY, Asst. Cashier R. U. LANSING, Mgr. Bond Dept. M. K. BAKER, Asst. Mgr. Bond Dept. XVII Fort Dearborn National Bank United States Depositary — Security and Conservatism Fort Dearborn Trust and Savings Bank Capital .... $2,000,000.00 Surplus and Profits 600,000.00 Deposits .... 28,000,000.00 OFFICERS WM. A. TILDEN . . . . . President Vice-President Vice-President . . . Cashier Asst. Cashier Asst. Cashier Asst. Cashier Asst. Cashier NELSON N. LAMPERT . J. FLETCHER FARRELL HENRY R. KENT .... GEORGE H. WILSON . . CHARLES FERNALD . THOMAS E. NEWCOMER WM. W. LE GROS . . . HARRY LAWTON . . Mgr. Foreign Dept. Comparative Showing of Deposits February 14, 1908 $9,887,954.84 February 5, 1909 11,617,691.24 March 29, 1910 15,041,357.21 March 7, 1911 21,574,956.79 June 7, 1911 23,137,746.88 September 1,1911 24,500,075.82 December 5, 1911 25,445,199.89 February 20, 1912 26,207,446.32 April 18, 1912 27,287,752.30 June 14, 1912 28,433,836.35 Three per cent, interest on savings accounts. Deposits made on or before the tenth of each month bear interest from the first. The officers of the Fort Dearborn Trust and Savings Bank offer their services to clients who are seeking choice high grade bonds and seasoned securities. Acts as Administrator, Executor, Guar- dian, Conservator, Assignee, Receiver, Transfer Agent and Registrar. In fiduciary capacity as agent makes in- vestments, collections and disbursements. OFFICERS WM. A. TILDEN President NELSON N. LAMPERT . . Vice-President JOHN E. SHEA Cashier CHAS. A. TILDEN Asst. Cashier STANLEY G. MILLER . . Mgr. Bond Dept. E. C. GLENNY . . Secy, and Trust Officer SAFE DEPOSIT VAULTS HERBERT C. ROER, Manager We invite the accounts of Banks, Individuals, Corporations and Firms who appreciate banking efficiency. Personal and Courteous attention MONROE AND CLARK STREETS XVIII Capital, $2,000,000.00 Surplus, $2,000,000.00 Deposits, $35,000,000.00 C. H. Huttig, President F. O. Watts, Vice-Prest. Thos. Wright, Vice-Prest. R. S. Hawes, Vice-Prest. G. W. Galbreath, Vice-Prest. J. R. Cooke, Cashier D'A. P. Cooke, Assistant Cashier H. Haill, Assistant Cashier E. C, Stuart, Assistant Cashier XIX First National Bank Minneapolis, Minnesota Capital Surplus and Profits Deposits $2,000,000.00 2,500,000.00 23,000,000.00 Officers F. M. PRINCE C. T. JAFFRAY A. A. CRANE GEO. F. ORDE D. MACKERCHAR H. A. WILLOUGHBY President Vice-President Vice-President Vice-President Vice-President Cashier G. A. LYON P. J. LEEMAN Assistant Cashier Assistant Cashier Established 1864 XX The Corn Exchange National Bank of Chicago Capital . . . . Surplus . . . . Undivided Profits . ^3, 000,000.00 5,000,000.00 975,000.00 Offii cers ERNEST A. HAMILL, President CHARLES L. HUTCHINSON Vice-President CHAUNCEY J. BLAIR, Vice-President D. A. MOULTON . . . Vice-President B. C. SAMMONS . Vice-President FRANK W. SMITH . . Cashier JOHN C. NEELY . Secretary J. EDWARD MAASS . Assistant Cashier JAMESG. WAKEFIELD, Ass'tCashier LEWIS E. GARY, Ass't Cashier Directors CHARLES H. WACKER CHAUNCEY J. BLAIR EDWARD B. BUTLER CLARENCE BUCKINGHAM CLYDE M. CARR WATSON F. BLAIR EDWARD A. SHEDD MARTIN A. RYERSON CHARLES H. HULBURD BENJAMIN CARPENTER EDWIN G. FOREMAN CHARLES L. HUTCHINSON FREDERICK W. CROSBY ERNEST A. HAMILL Foreign Exchange Letters of Credit Cable Transfers XXI Resources, $6,500,000.00 4 THE ^ PEOPLES BANK OF BUFFALO —^ — -, TF intelligent handling of items "■■ and low rates appeal to you send us your Buffalo business. A. D. BISSELL, President C. R. HUNTLEY, Vice-President E. J. NEWELL, Cashier HOWARD BISSELL, Asst. Cashier C. G. FEIL, Asst. Cashier XXII The First National Bank of Buchanan County St. Joseph, Missouri CAPITAL SURPLUS 1500,000.00 300,000.00 This bank is located in the heart of the greatest agricultural district in the world. We consistently follow a conservative policy and invite patronage, feeling confident that our facilities for rendering prompt and efficient service are unsurpassed. OFFICERS R. T. FORBES - - - - President J. E. COMBS ----- Cashier R. S. BRITTAIN - - Assistant Cashier R. N. RIDGE ----- Auditor XXIII The National Bank of Commerce in St. Louis Capital $10,000,000 Surplus and Profits . . 2,000,000 Deposits 57,000,000 Accounts of Banks, Corporations, Merchants, Manufacturers, and Individuals solicited upon favorable terms. Officers B. F. EDWARDS .... President TOM RANDOLPH . . . Vice-President W. B. COWEN . . . Vice-President W. L. McDonald . . . vice- President J. A. LEWIS . . . > . Cashier C. L. MERRILL . . Assistant Cashier F. W. WRIEDEN . . . Assistant Cashier G. N. HITCHCOCK . . Assistant Cashier A. L. WEISSENBORN . . Assistant Cashier GEORGE R. BAKER . . Assistant Cashier H. C. BURNETT . . . Assistant Cashier W. M. CHANDLER . . Assistant Cashier XXIV The Capital National Bank gf ST. PAUL, MINNESOTA QThis bank — conducted in a broadly conservative manner — offers every advantage in service and every consideration consis- tent with sound banking. A business connection with us cannot fail to be of mutual advantage and satisfaction. Q Correspondence is invited. JOHN R. MITCHELL President JEROME W. WHEELER - Vice-President WILLIAM B. GEERY Vice-President JAMES L. MITCHELL Cashier EDWARD H. MILLER - - Ass't Cashier GEORGE M. BRACK - Ass't Cashier Capital and Surplus, $600,000.00 Deposits, $5,500,000.00 XX\" NATIONAL BANK OF COMMERCE IN NEW YORK UPON the merit of its strong financial condition, as evidenced by Capital, Surplus and Undivided Profits of over Forty Million Dollars, and upon its successful record since its organization, in 1839, the National Bank of Commerce in New York solicits the accounts of banks, bankers, corporations, firms, and individuals, and invites correspondence from those who contemplate forming new banking connections in New York. Besides a thorough equipment for the transaction of all branches of domestic banking, this bank has foreign correspondents at every important commercial centre in the world. JAMES S. ALEXANDER HENRY A. SMITH R. G. HUTCHINS, Jr. NEILSON OLCOTT OLIVER I. PILAT FARIS R. RUSSELL A. J. OXENHAM STEVENSON E. WARD JOHN H. STODDARD WILLIAM M. St. JOHN F. BORGEMEISTER, Mgr. President Vice-President Vice-President Cashier Asst. Cashier Asst. Cashier Asst. Cashier Asst. Cashier Asst. Cashier Asst. Cashier Foreign Department NATIONAL BANK OF COMMERCE IN NEW YORK XX \- 1 The Northwestern National Bank of Minneapolis, Minnesota is organized and equipped to give to its customers and corres- pondents the best banking service obtainable. ^ Being the largest bank in its territory the Northwestern is able to offer, through its many connections, unexcelled facilities, while its office organization is designed to give to every patron's affairs the individual care and attention which they may require. Capital and Surplus, $5,000,000.00 AFFILIATED WITH The Minnesota Loan and Trust Company XXVII Jfibelitp Crus^t Company CORNER OF CHAMBERS STREET & WEST BROADWAY Mt\a |9orfe MEMBER OF THE NEW YORK CLEARING HOUSE ASSOCIATION CAPITAL $1,000,000.00 SURPLUS $1,000,000.00 SAMUEL S. CONOVER, President WM. H. BARNARD, Vice-President JOHN W. NIX, Vice-President ANDREW H. MARS, Secretary STEPHEN L. VIELE, Ass't Sec'y ARTHUR W. MELLEN, Ass't Sec'y CS, Trust Officer DIRECTORS WILLIAM H. BARNARD, Importer, Raw Silk JAMES BUTLER, Pres. James Butler, Inc., ^Vholesale and Retail Groceries JAMES G. CANNON, President, Fourth National Bank SAMUEL S. CONOVER, President SAMUEL CROOKS, Late of Crooks, Thomas CSt, Co. Wholesale Teas and Coffees "WILLIAM C. DEMOREST, President, Realty Trust JAMES M. DONALD, Chairman of Board, Hanover National Bank CHARLES F. DROSTE, Droste CS. Snyder, 'Wholesale Butter and Eggs W^. J. FULLERTON, ■Wilson i& Bradbury, Dry Goods Commission FRANK A. HORNE, President, Merchants' Refrigerating Co. EDWIN E. JACKSON, JR., Pres. and Treas. Boorum iB, Pease Co., Blank Books ADOLPH KASTOR, A. Kastor CS, Bros., Wholesale Cutlery JAMES H. KILLOUGH, J. H. Killough CS, Co., W^holesale Produce Com- mission LEE KOHNS, L. Straus CS, Sons, Pottery, China and Glass- ware HENRY KROGER, Henry Kroger C5i> Co., 'Wholesale Liquors DIRECTORS CHARLES F. MATTLAGE, Chas. F. Mattlage CB, Sons, "Wholesale Provi- sions GERRISH H. MILLIKEN, Deering,Milliken iS> Co., Dry Goods Commission VINCENT S. MULFORD, Jewelers' Circular Publishing Co. JAMES E. NICHOLS, Austin, Nichols iB. Co., 'Wholesale Grocers JOHN W^. NIX, Pres., John Nix CS> Co., 'Wholesale Produce Commission JOHN A. PHILBRICK, President, John A. Philbrick :& Bro. ALEXANDER M. POW^ELL, Chocolate Manufacturer STEPHEN K. REED, Vice-President, Pettit iS, Reed, 'Wholesale But- ter, Cheese and Eggs GEORGE H. SARGENT, Sargent C85. Co., 'Wholesale Hardware HAMPDEN E. TENER, President, Irving Savings Institution ED'WARD H. TITUS, Late Treasurer Lord (3S. Taylor, 'Wholesale £& Retail Dry Goods THEODORE F. 'WHITMARSH, Vice-President, F. H. Leggett CS!. Co. Wholesale Grocers D. "W. 'WHITMORE, D. W^. 'Whitmore C& Co. Wholesale Butter and Cheese JOHN O. WILLIAMS, Vought <®. Williams, Iron and Steel Correspondence with banks, trust companies, corporations, firms and individuals is invited. The Company offers the services of a competent organization, supple- mented by financial security and a determination to please. REMEMBER THE NAME I t FIDELITY I I SEND US YOUR COLLECTIONS AND RECEIVE THE BENEFIT OF SPECIAL ATTENTION AND QUICK RETURNS. XX\'III i ORGANIZED 1903 UNION EXCHANGE NATIONAL BANK uftT^NEWYORIG • Capital and Surplus $2,000,000 Total Resources $14,000,000 HENRY S. HERRMAN President DAVID NEVIUS Vice-President and Cashier LOUIS J. WEIL Vice-President GEO. B. CONNLEY Asst. Caishier ^ Located in the heart of the new textile manufacturing district, and many of our clients being manufacturers and merchants whose business extends throughout the country, we receive a large amount of out-of-town checks. ^ Banks that can handle to advantage the items payable in their locality are invited to correspond with us. MEMBER NEW YORK CLEARING HOUSE UNION NATIONAL BANK PHILADELPHIA W. H. Carpenter President T. H. Conderman Vice-President Louis N. Spielberger Cashier John W. Mink Asst. Cashier Capital $500,000 Surplus $650,000 Undivided Protits $90,000 Deposits $6,500,000 ACCOUNTS OF BAINKS, BANKERS, CORPORATIONS ATV13 INDIVIDUALS SOLICITED XXIX NEW HOME THE INTERNATIONAL TRUST COMPANY DENVER The International Tru^ Company DENVER. COLO. Capital and Surplus, $ 1 ,000,000.00 OFFICERS - DIRECTORS H. M. BLACKMER THEO. G. SMITH F. G. MOFFAT . . P. E. CLELAND . . . President Vice-President Vice-President . . Treasurer A. V. HUNTER, Chairman of the Board H. H. BROOKS . Sec'y CEi Trust Officer F. G. HARRINGTON . Ass't Sec'y H. M. BLACKMER F. G. MOFFAT GERALD HUGHES THOMAS KEELY CHAS. M. MacNEILL JOHN H. PORTER THEO. G. SMITH M. D. THATCHER ALVA ADAMS JOHN EVANS J. H. P. VOORHIES SPENCER PENROSE XXX Emergency Door Heaviest Vault Doors in the World built for Bankers Trust Com pan y of NEW YORK Entire vault and complete equipment constructed by Herring Hall Marvin Safe « Company Builders of Bank Vaults New York Hamilton, O. Boston Chicago St. Louis Cincinnati San Francisco Main Door Closed Main Door Open XXXI The Mutual Benefit Life Insurance Company 1845 of Newark, N. J. Frederick Frelinghuysen, President I912 The Leading Annual Dividend Company Satisfactory Service to Policyholders for 67 Years Paid Policyholders Since Organization in 1845 Over 1300,000,000 Purely Mutual Liberal Policies Low Rates Large Dividends New Benefits as adopted are extended to old Policyholders The Mutual Benefit's Accelerative Endowment Plan is absolutely unique and is unequaled Send for leaflet " What Bankers Think of the Mutual Beneft.'' XXX 11 A Trip Through Fairyland From the Atlantic to the Pacific One Hundred Golden Hours at Sea ON ELEGANTLY EQUIPPED 10,600-TON STEAMSHIPS Along the Atlantic Coast, across the Mexican Gulf — from the American Metropolis to the Crescent City. NEW^ YORK NEW ORLEANS Along the Rio Grande IN TRAINS OF SUPERIOR EQUIPMENT Through the vast cotton and sugar planta- tions of Louisiana and Texas, the old missions, the historic Alamo, the great health resorts, along the Rio Grande with a unique panorama of two Republics — the United States and Mexico, through New Mexico and Arizona to The Road of a Thousand Wonders Through that most wonderful of States, Cali- fornia — in full view of the Pacific Ocean on one side and miles of blossoming orange trees on the other, continuing over the world-famous Shasta Route to Oregon and Washington. Southern Pacific Superior Service ALL THE W^AY Steamships Sunset Route New York to New Orleans New Orleans to San Francisco Call or write to L. H. Nutting, General Passenger Agent 366 Broadway 1158 Broadway 1 Broadway at Franklin Street at 27th Street at Bowline Green New York XXXIII Corner Liberty CS. ^Vest Streets The Coal & Iron National Bank of the City of New York Capital $1,000,000.00 Surplus and Profits (Earned) - $493,000.00 Depositary of the United States, City and State of New York Offers Every Proper Banking Facility Board of Directors Francis J. Arend .... Treas. Delaval Separator Co. ■Wm. G. Besler, Vice-Pres. and Gen. Mgr. C.R.R. of N.J. M. F. Burns Pres. Burns Brothers George H. Campbell . . Asst. to Pres. B. ca, O. R. R. Co. Daniel F. Connor OfWhitney ®, Kemmerer Alfred A. Cook Leventritt, Cook C& Nathan Henry L. de Forest Of de Forest Brothers Allison Dodd Dir. Burns Brothers H. ■W. Douty . . Real Estate Agt. C. R. R. of N. J. Joseph A. Fly nn . . V.-P. Fidelity and Dep. Co. of Md. W.J.Harahan Vice-Pres. Erie R. R. Co? George D. Harris George D. Harris C& Co. Henry L.Joyce, V.-P. Interstate Lighterage C5!, Trans. Co. John C. Juhring . . . Pres. Francis H. Leggett CS. Co. Albert B. Kerr . . . Zabriskie, Murray, Sage CS, Kerr E. E. Loomis Vice-Pres. D., L. ®. W. R. R. Co. James H. McGraw . . . Pres. McGraw Publishing Co. John A. Middleton . . V.-P. Lehigh Valley R. R. Co. James H. Parker . . Pres. Mutual Alliance Trust Co. Edwin H. Peck ■ E. H. CS, W. J. Peck ■Wm. B. Randall Pres. Secur. Trans, and Registrar Co. John T. SprouU President John AV. Sullivan .... Pres. John 'W. Sullivan Co. ■Wm. H. Taylor Pres. Goodwin Car Co. David Taylor Vice-President Stephen H. Voorhees . . Agt. Royal Bank of Canada G. O. "Waterman Treas. C. R. R. of N. J. Samuel Weil Samuel Weil CSk Son Frank D. \Vilsey . . . Pres. New York Boat Oar Co. ■Wm. H. "Woodin Asst. to Pres. Amer. Car and Fdy. Co. MEMBER NEW YORK CLEARING HOUSE ASSOCIATION XXXIV Merchants National Banky Burlington, Iowa Capital, - - $100,000.00 Surplus and Profits, 140,000.00 Officers J. L. Edwards • • ^ ^ President W. E. Blake • • « Vice-President James Moir , , Vice-President Alex. Moir , , Vice-President H. J. Hungerforc . Cashier F. L. Houke , , Ass't Cashier C. L. Fulton • Ass't Cashier Directors W. E. Blake, Chairman H. A. Brown W. W. Copeland James Moir Alex. Moir W. C. Tubbs N. S. Young T. W. Barhydt J. L. Edwards XXXV flgSWD \MyMf ' AN Institution where Courtesy and L Care in the smallest affairs have gone hand in hand with Success in the most important. One which will appreciate an oppor- tunity to serve or to advise in any financial or fiduciary matter and which is especially equipped to act as your agent in St. Louis and the Southwest. Capital, Surplus and Profits $8,500,000.00 XXXVI The Chase National Bank of the City of New York UNITED STATES DEPOSITORY (Clearing House Building) Capital - - - $ 5,000,000 Surplus and Profits (Earned) 9, 1 00,9 1 3 Deposits - - - 128,700,251 A. BARTON HEPBURN, chairman o ALBERT H. WIGGIN, PRCaiOKNT SAMUEL H. MILLER, vice prcsiocnt HENRY M. CONKEV, CASHIER EDWIN A. LE E, ASST. cashi CR CHARLES C. S LADE, ASST. cashier WILLIAM E. PU RDV, as ST. CASHII ALFRED C. ANDREWS, ASST. CASHIER DIRECTORS HENRY W.CANNON JOHN I.WATERBURY JAMES J. HILL U GEORGE F. BAKER GRANT B. SCHLEY ^ ALBERT H. WIGGIN A.BARTON HEPBURN GEORGE F.BAKER, JR. FRANCIS L. MINE We receive accounts of Banks, Bankers, Corporations, Firms and Individuals on favorable terms, and shall be pleased to meet or correspx)nd with those who contemplate making changes or opening new accounts Foreign Exchange Department XXXVIl ORGANIZED 1838 NATIONALIZED 1865 The American Exchange National 6ank New York Capital /^^^^^'^ Surplus and Profits $5,000,000 li^^l $4,327,000 LEWIS L. CLARKE, President EDWARD BURNS, Vice-President WALTER H. BENNETT, A. K. de GUISCARD, Asst. Cashier Vice-President and Cashier E. A. BENNETT, Asst. Cashier ARTHUR P. LEE, Asst. Cashier GEORGE C. HAIGH, Asst. Cashier When you are forming a banking connection, we ask your consideration of our 74 years' reputation, experience and ability to render you personal and special service in all departments. Depositary of the United States, State of New York and City of New York XXXVIII Detroit the Convention City, 1912 HOTEL POIVTCHARTR AIN HEADQUARTERS: American Bankers' Association Convention, 1912 ABSOLUTELY FIREPROOF GEORGE H. WOOLLEY and W. J. CHITTENDEX, Jr., Ma?«IA.GERS XXXIX DETROIT SKY LINE. DETROIT is one of the most ideal convention cities in the United States, owing to its many natural attractions, its many excellent hotels, and its hospitable people. It is a city of varied industries, having a greater variety and a larger number of manufacturing establishments than any city of its size in this country. Sixty per cent, of all the automobiles manufactured in the United States are made in Detroit. Ninety-five per cent, of all the adding machines made in this country are made in Detroit, it being the home of the Burroughs Adding Machine. And it is also in the lead in a number of other important manufactories. DETROIT'S L- XL tw.Nl WINDSOR, CANADA DETROIT'S BANKING INTERESTS Detroit has eighteen incorporated banking institutions. Three National banks, five State banks, three Trust companies and seven Savings banks, with a total capital and surplus of $22,000,000, total deposits of about $160,000,000 and total resources of about $188,000,000. There are 521 incorporated banks in Michigan, but Detroit has one third of all the capital, one third of all the savings deposits and nearly two thirds of the total deposits in the State. Detroit is a reserve city. Its total clearings for 191 1 were $968,647,059. ■f rain, Convention Headquarters tjS DISTRICT XLI Ss ■■'..••!:ll'i!?«"S»:eSM-"5'. /:V -.^c.^f \ fii^ *"^ Ri? rp* i 2n nn 5| ^^ iiii^'!: llliP*«!!iiiin :ir,ll^^^' 4« ¥i RST National Bank OF I>KTROIT* XLII T^-E FIRST Katio:xal. Bank OF DETROIT. ESTABLISHED 1863 Capital and Surplus, Tkree Million Dollars FIFTY YEARS of PROGRESS Tke First National Bank of Detroit establiskeJ m 1863, was tke ninety- seventk kank organizea in our national kanking system. It ^^^ill m 1913 mark its Fiftietk Anniversary of continuea success. Its development kas keen markea ky a strict aJkerence to metkoJs of conservatism yet progression. Tkat it kas kuildea ^vell is evidenced ky tke strengtk of its position in tke kanking v^orld and its far reackmg in- fluence m tke commercial life of tkis City and State. ^A^ itk its unexcelled facilities, it invites tke accounts of kanks, corporations and individuals extending to eack every courtesy and consideration. EMORY W. CLARK., President. WILLIAM J. GRAY, Vice President. WALTER G. NICHOLSON, Cashier. MERLE B. MOON, Vice President. W. A. McWHINNEY, Assistant Cashier. FRANK G. SMITH, Vice President. JOSEPH GRINDLEY, Assistant Cashier. JOHN W. STALEY, Vice President. F. F. CHRISTIE, Assistant Cashier. JOHN H. HART, Manager of Credits. L. F. MERZ, Manager Foreign Exchange Department. IRVING H. BAKER, Auditor. XLIII PENINSULAR STATE BANK of DETROIT, MICHIGAN Capital .... $800,000 Surplus Fund . . . $300,000 Deposits . . . $10,500,000 Total Resources . $11,600,000 OFFICERS J. H. JOHNSON PRESIDENT FRANK P. BYRNE VICE-PRESIDENT FRANK W. HUBBARD VICE-PRESIDENT W. G. TOEPEL CAJSHIER H. H. ELLERTON ASSISTANT CASHIER H. MOXON ASSISTANT CASHIER F. F. FLEMING ASSISTANT CASHIER W. J. NESBITT ASSISTANT CASHIER MAIN BANKING ROOM. OPENING DAY. XLIV DIME SAVINGS BANK BUILDING The dime SAVINGS BANK DETROIT, MICHIGAN CAPITAL, $1,000,000 SURPLUS AND PROFITS, $700,000 RESOURCES, $13,000,000 ■William Livingstone, President George H. Barbour, Vice-President Joseph L. Hudson, Vice-President OFFICERS Charles A. ^Varren, Cashier F. F. Tillotson, Asst. Cashier L. C. Sherwood, Asst. Cashier David S. Carnegie, Asst. Cashier Charlton E. Partridge, i4ss/.Cas/i/er George T. Breen, Auditor XLV XLVI Win ^eopto ^tate panfe DETROIT MICHIGAN Capital, Surplus and Profits, $3,500,000.00 Deposits :: :: :: :: :: :: 37,000,000.00 OFFICERS DIRECTORS Geo. H. Russel President Russell A. Alger Geo. E. Lawson Geo. E. Lawson Vice-President George H. Barbour H. B. Ledyard R. S. Mason Vice-President w. T. Barbour P. H. McMillan F. A. ScHULTE Vice-President ^ M. Campbell R. S. Mason B. S. Colburn Vice-President g g Colburn Fred. T. Moran Austin E. Wing Cashier ,-. a t-> »* t »* ^, _ _ *-. L- c • r» C. A. Ducharme M. T. Murphy H P. BoRGMAN . . . Cashier Savings Department •* R. W. Smvlie .... Manager Credits and Audits Jeremiah Dwyer W. Howie Muir J. R. BoDDE Assistant Cashier ^ «ank J. Hecker Geo. H. Russel Charles H. Ayers Assistant Cashier Fred. W. Hodges Henry Russel Enoch Smith . . Assistant Cashier J. C. Hutchins Hugo Scherer R. T. CuDMORE . . .... Assistant Cashier Jas. T. Keena F. A. Schulte Geo. T. Courtney Auditor Angus Smith .v,.^a Accounts of Banks, Bankers, Firms, Corporations and Individuals received. .*. Excellent Collection Facilities XLVII Union Trust Company lliiilding UNION TRUST COMPANY DETROIT, MICH. Capital 1 1,000,000. Surplus and Undivided Profits $500,000. OFFICERS HENRY B. LEDYARD, Chairman FRANK W. BLAIR, President GEORGE HENDRIE, Vice-President A. E. F. WHITE, Vice-President GERALD J. McMECHAN; Vice-Pres. and Sec. CHARLES R. DUNN, Vice-President and Treasurer. XLVIII The National Park Bank of new york organized 1856 CAPITAL AND SURPLUS, $ 18,000,000 DEPOSITS, JUNE 14, 1912, S111, 590,033 GILBERT G. THORNE VICE-PRESIDENT WILLIAM O. JONES ASST. CASHIER RICHARD DELAFIELD PRESIDENT JOHN C. McKEON VICE-PRESIDENT MAURICE H. EWER CASHIER WILLIAM A. MAIN ASST. CASHIER JOHN C. VAN CLEAF VICE-PRESIDENT FRED'K O. FOXCROFT ASST. CASHIER LOUIS F. SAILER ASST. CASHIER GEORGE H. KRETZ MANAGER FOREIGN DEPT. DIRECTORS JOSEPH T. MOORE STUYVESANT FISH CHARLES SCRIBNER EDWARD C. HOYT W. ROCKHILL POTTS AUGUST BELMONT RICHARD DELAFIELD FRANCIS R. APPLETON CORNELIUS VANDERBILT ISAAC GUGGENHEIM GILBERT G. THORNE JOHN C. McKEON RICHARD H. WILLIAMS THOMAS F. VIETOR EDWARD C. WALLACE EDWIN G. MERRILL JOHN G. MILBURN Directors : HOKACE E. AirSBBWS I'res. New York State Eys. AVQUST . BEIiMONT August Bo.!uiunt & Co. AUGUST BEIiMOZTT, JB., August BiJmont & Co. DANIEI^ J. CABBOZil^ I'lesUlollt Albcrene Stone Co. HABDEir Xi. CBAWFOBD Capital and Surplus $3,000,000 THE Pres The Ne F. S. iitu York. lin DU POHT Tfeas. E. 1. l>u Pont de Nemours Powder Co. SESMOND DuirnrE Pros. Dcsraond Duudg Co. EI^I^IS F. EAB£E I'resident NIpissinB Mines Co. O. O. FESSENDEN Ilayden W. Wheeler & Co. EI^BEBT H. QABT Chairman of the Board U. S. Steel Corporation. H. STUABT SOTCHKISS VIce-Pres. & Treas. L. Candee Rubber Co. JOEir M. KAirSEN Pres. Standard Steel Car Co. FABME^T W. HEBBZCK Cleveland, Ohio. OEOBOE M. KABD Chairman of the Board. FBAVK J. SCEAITET Everett. Hcane.v & Co. AUaUST KECXSCKEB VIce-Pres. Eastern Steel Co, BicaABD K. HiaamB ^'ice-President. 3aNIC Directors : FBAKXI^IN S. JEBOME I'Tes. First Nafl Bunli, wii.i;iAM A. i;aw Vice-Pn-s. First Nafl Bank of Phiia., Pa. FBAKK B. IiAVTBENCE Counsullor-at-Law. JOHN BUTQI^IITO Ulngling Bros. EDWABD SHEABSOSr Shearson. Hamniill & Co. KENBT F. SHOEMAXEB Now York City. New York JOHir D. VEBMEU^E Prvs. Uofidyear Rubber Co. samue:l wezXi Siimuel Weil & Son. FBANK S. UriTKEBBEB Pres. WItherbee, Sherman & Co. JOSEFS B. WBIOHT Pres U. S. Finishing Co I.OUIS a. XAUFUAir, President. FBANX J. HEAJTET, Vice-President. BICHABB H. HIQanrs, Vice-President WIIiIiIAM H. STBAWK, Vice-President. AIiFBED II. BUI^I^, Vice-President. BEBT i;. HASKIBTS, Cashier. HENBT Ii. CADUUS, Assistant Cashier. NOBBOBKE F. OATIiINO, Asst. Cashier. WAXTEB B. BOICE, Assistant Cashier. HEKBV C. HOOIiET, Assistant Cashier. OEOBOE M. HABD, Chairman. We invite the Accounts of Banks, Bankers, Manufacturers, Mercliants and Individuals. ,_.F#Vs)_ ESTABLISHED 1832 fi^Hl'I^UL NASSAU, BANKf aFNEWVDRK' XATIOXALIZED 1911 •- <3(|^- CHARTER MEMBER NEW YORK CLEARING HOUSE OFFICERS EDWARD EARL, JOH N MU N RO VICE-PRESIDENT LAURENCE H. HENDRICKS VICE-PRESIDENT H. P. PRESIDENT HENRY C. MILLER VICE-PRESIDENT NEWTON D. ALLING VICE-PRESIDENT ARTHUR W. GILBART, cashier STURR, ASS'T CASHIER G. L. THOMAS, ass-t cashier D 1 R E C T O R S SAMUEL R. WEED F. MUNROE DYER JOHN MU N RO ARTHUR COPPELL HENRY C. MILLER J. CHRISTY BELL AUGUSTINE J. SMITH D. HUNTER McALPIN LAURENCE H. HENDRICKS ARTHUR C. HARRIS EDWARD EARL THE FOURTH NATIONAL BANK OF THE CITY OF NEW YORK This bank was founded in 1864 by a group of leading New York citizens with the object of serving the monetary and commercial interests of New York and the country at large. Throughout its history, a policy of safe, steady growth, and association with some of the most eminent and responsible factors in American financial and com- mercial life has been consistently maintained with resultant success and satisfaction to its customers. JAMES G. CANNON, president SAMUEL S. CAMPBELL DAN lEL J. ROGERS VICE-PRESIDENT CHAS. H. PATTERSON CHARLES E. FOX VICE-PRESIDENT ASS" ERNEST W. DAVENPORT EDWIN T. ROSS VICE-PRESIDENT ASS" CHARLES E. MEEK VICE-PRESIDENT CASHIER ASS-T CASHIER RAYMOND B. COX ASS'T CASHIER CAPITAL AND SURPLUS, $10,000,000 XLIX The Citizens Central National Bank of new york THE location of a banking institu- tion in New York City often indicates tire character of its business; a bank situated in the very heart of the great wholesale tex- tile district, and controlling a large percentage of that class of trade, is naturally in a position to extend out- of-town clients unusual advantages. The Citizens Central National Bank is located on Broadway at Pearl and Worth Streets; within a radius of a few blocks will be found a number of the leading textile houses of the world, besides hundreds of firms in other branches of trade, from which this bank receives its patronage. The commer- cial character of its customers gives it a larger volume of mercantile collection items on other cities and towns than is handled by any other bank of its size in New York. This class of business makes it profitable for banks throughout the country to carry accounts with the Citizens Central. Capital ^2,550,000 Surplus and Profits 2,000,000 Total Resources . 34,400,000 EDWIN s SCHENCK. President FRANCIS M. BACON, Jr. - Vice -President ALBION K. chapman - . - ■ Cashier JELSSE M. SMITH . - ) JAMES McAllister - >• Asst Cashiers WILLIAM M. HAINES . - ) TABLE OF CONTENTS Page FOREWORD --.---.. I MONETARY SYSTEMS - 3 COMPARISONS OF SYSTEMS ----- 7 THE SYSTEM OF THE UNITED STATES - - 9 ANTE-BELLUM BANKS ---.-. 13 PRESENT SYSTEM AND PROPOSED REFORM - 18 CHARTER OF THE BANK OF THE UNITED STATES, 1816 21 FOREIGN SYSTEMS: w/^tREAT BRITAIN ---... 29 France - ^^ /GERMANY 39 AUSTRIA-HUNGARY 41 RUSSIA 45 ITALY - - - 47 SWITZERLAND - 48 SWEDEN 49 BELGIUM ----.... 51 JAPAN 53 n/CANADA - - - ^4 MEXICO - - - - - - - - 56 , COMPARATIVE STATEMENTS - - - - 57 SUMMARY - - - - . . - 5g Capital $ 1,000,000 Surplus $2,000,000 Profits $707,315.70 The Liberty National Bank of New York 139 Broadway, near Liberty Street The high standing of the men composing the Board of Directors of this Bank is a guaran- tee of its strength and ability to respond to every reasonable demand that can be made upon it. DIRECTORS Union N. Bethell Vice-Pres. American Tel. and Tel. Co. Newcomb Carlton Vice-Pres. Western Union Tel. Co. George B. Case White & Case Edmund C. Converse President Bankers Trust Co. Otis H. Cutler Pres. American Brake Shoe and F'dry Co. Henry P. Davison J. P. Morgan & Co. Zoheth S. Freeman Vice-President Samuel L. Fuller Kissel, Kinnicutt & Co. Thomas A. Gillespie President The T. A. Gillespie Co. Francis L. Hine Pres. First National Bank, New York Edward E. Loom is Vice-Pres. Del. Lack, and West. R. R. Co. Arthur F. Luke Luke, Banks & Weeks Howard W. Maxwell Vice-Pres. Atlas Portland Cen-.ent Co. Ambrose Monell President International Nickel Co. Daniel E. Pomeroy Vice-Pres. Bankers Trust Co. Seward Prosser President Daniel G. Reid Chair. Board Direc, Rock Island System Charles W. Riecks Vice-President and Cashier Charles H. Sabin y ice- President Guaranty Trust Co. Frederick B. Schenck Chairman Board of Directors Charles H. Stout New York Henry C. Tinker New York Charles H. Warren Treasurer Mutual Life Insurance Co. Albert H, Wiggin President Chase National Bank Mercantile Accounts Invited i.n FOREWORD DDDDaa a a D I D D A n D D DDDaaa HE people of the United States today have before them the gravest problems which have arisen in a generation. Of these the money and banking question is regarded by many of our most thoughtful men as the paramount one. A plan for the solution of this problem has been presented by the National Monetary Commission, and is now before Congress and the people for discussion. Qlt is imperative that this problem be solved correctly, because it involves the welfare of every citizen, since every citizen uses money and most of them use banks of one kind or another, QOur money and banking system contains so many defects that it can- not perform the functions properly, and the result is that we have periodic disturbances that destroy values and bring distress to the mass of our people. Other people are not subject to the same condi- tions because they have money and banking systems which operate properly and serve all interests. Q It is obviously up to the bankers to see to it that the representatives of the people in Congress are guided to a correct solution of the problem; the bankers are supposed to know what is necessary. QAs a contribution to the study of the subject, the BANKING LAW JOURNAL has undertaken to present a concise account of the money systems of the principal civilized countries, in order that those who wish to learn how other people have solved the same or similar problems, may do so. A comparison of the means thus employed, and of the resulting experience, will unquestionably be useful in reaching a conclu- sion as to our o^vn needs. Q, It is proposed in this volume to show what we have had in the past, in the way of a monetary system, what we now have, and v^hat is proposed for the future; discussing the proposed plans in the light of the past experience both here and abroad. Q Believing that the service thus tendered to bankers and others who want to know how to meet our problem intelligently, will be appre- ciated, the publishers of the JOURNAL submit this volume, confident that it will serve a useful purpose in the consideration of the subject. WHERE MONEY IS MADE AND WHERE IT IS DESTROYED IN THE BANK OF FRANCE I. WHERE THE NOTES ARE PRINTED. 2. CANCELING MACHINES. 3. WHERE THE NOTES ARE DESTROYED. MONETARY SYSTEMS DODDDD □ D D * D D A D D -^ ^ n D D DDnDDD COMPREHENSIVE study of Monetary Systems must include considera- tion of all the means of payment employed ; hence not only coin and paper-currency, but also checks — or more specifically deposit-currency — must receive attention. Coins Excluding the subsidiary and minor coins from present consideration, the coin systems of the world fall within one of the following classes : 1. Gold Standard. 2. Silver Standard. 3. Gold and Silver Standard, but without coinage of silver. 4. Gold Standard with Silver Currency. Standard coins are those which are by law made legal tender in payment of debts without limitation of the amount. Of class one the chief examples are Great Britain and Germany, where gold alone is standard money. Of the second class China is the only important example; there gold is only merchandise. In the third class are included the United States and France; both gold and silver coins are accepted as standard money. In the fourth class Mexico and British India rank first; gold is the nominal standard but silver is the actual money, at fixed value to gold. In considering coinage the ratio between gold and silver was formerly an impor- tant point; it cuts no figure today, since standard silver coinage is not important. The fineness of gold coins as well as their weight, are essential features in determining value, because the grain (or gramme) of pure gold is the ultimate measure thereof, at an equivalent rating throughout the world. TEEE HIMEi^SelT ////^.. . _ y^/f//:/ ^7^/ /////_ ^r^iv- ' ' /^- * c.*" '^ «. ■^^cx-Z^x- - EUaHHlUNIIlM HKHBHB-.iaBi /^. i>.^feii^^i;mn".i:ri»'ii.iiiiiir '>Bi<>wy»^ T < # .i»iii b>j ■■ l ianawiMrg NOTES OF THE SECOND BANK OF THE UNITED STATES I. NOTE OF THE PARENT BANK, PHILADELPHIA. 2. NOTE OF THE NASHVILLE BRANCH. 3. NOTE OF THE NEW ORLEANS BRANCH. THE WORLD'S PRINCIPAL MONETARY SYSTEMS Paper Currency Generally speaking the paper money of the world may be divided into three classes : 1. Bank Notes. 2. Government Notes. 3. Certificates of deposit for coin. The fundamental reason for note-issues is the need for supplementing the coin supply; when this purpose is adhered to, the use of notes is highly beneficial; when it is not observed within proper limitations, evil results usually follow. The United States has all three forms; most countries have only the first. Bank notes are in most countries secured by reserves in coin, by law or practice. Government notes are not always amply protected by coin. Coin certificates are always fully covered. Government notes are usually given full legal-tender power; bank notes possess that power in a few countries. Deposit Currency In this category savings banks' deposits are not included; only such deposits as are subject to check must be considered. Legal provisions calling for reserves against deposits exist in the United States, Belgium, Austria-Hungary, and a few other countries. In the other leading countries the practice is to hold reserves that are deemed adequate for protection. The need for such safeguards is evident, since the confidence of depositors must be assured, to give the checks against deposits currency or debt-paying functions. Reserve Requirements Where reserve provisions exist, either pursuant to law or practice, and are con- sistently observed, the stability of the currency resting thereon is in large measure assured. Nevertheless conditions bearing upon this feature of monetary systems vary in different countries ; and different methods are employed to bring about such stability. Stability is impossible where inflation is not adequately curbed, and undue contraction is not properly prevented. The end to be attained is obviously to adjust the volume of supply of both paper currency and deposit currency to the demand. The rates for money here play an important role, and the less these fluctuate the better will business interests be served. '^ ^' ■■' -- ^7 O C\- -, ' , 1 ■ %■ Lj-'^j -^ ^ u.^-^ rc-r* Ns.v v^ ^ -..■vl'; /,- ^^.f FOUR ^ C ^ -^ %! t^ #f :=;' :X0'"ii> m.y,.^ / J'J / J i . • •• - . >, ■%^k%>,l^ji^^_^fc- CONTINENTAL CURRENCY 1776 FACSIMILES OF CIRCULATING NOTES OF THE CONTINENTAL CONGRESS. NOTE THE SKELETON OF LEAVES ON THE BACK TO PREVENT COUNTERFEITING Comparisons of Monetary Systems Fundamental Conditions to BE Considered DanDoa D D D T D D I D D A D D D DDDDDD N making comparisons of the means employed by the nations of the world in the regulation of their monetary affairs, we must bear in mind those differences in funda- mental conditions which make the problem of reform in the United States one that differs essentially from those now or formerly obtaining abroad. First and foremost, the United States is a federated republic, in which 48 states are possessed of co-ordinate power in the field of banking legislation; hence there has grown up a system of numerous small independent banks, the like of which exists in no other country except Japan. In almost every other important country branch banking prevails, and the people of every locality are thus well served, and pro- bably much more economically than our individual bank system serves us. It thus happens that in most countries a strong central bank with branches dominates the system; that other banks are usually largely capitalized and also operate through branches. Notable exceptions to this rule are Canada and Mexico, but solely in the particular that no one bank is legally con- stituted the dominant one; a number of banks with equal powers under the laws, make up the systems, although in each case one has become the leader because of preponderance. It is further to be borne in mind that no country except Russia has anything like the area and population, and the diversified inter- ests, that are found in the United States ; and in the case of Russia this condition is not significant. It is manifest that needs are as diverse as the conditions; vast regions still to be developed re- quire a different kind of service from that which is called for in the settled and developed ones; agriculture's needs are not the same as those of industrial and commercial interests. It is further to be considered that within the United States the practice of fixed reserves for banks is almost universally applied; this exerts a powerful influence upon conditions. In other countries the practice varies, but it is nowhere as rigid and as universally enforced as our laws contemplate. An important result of the conditions adverted to is that in the United States interest or discount rates vary quite exten- sively, the variation being properly char- acterized as geographic and seasonal. Another circumstance is that in the nature of things our multitude of banks (27,000) are in very large part conducted by men who are not by training or experience fully equal to the requirements of the business in the broader sense; in other countries where banks are few, the management is in the hands of men specially trained to the duties. In the development of our system, such as it is, there has been a decided leaning toward preference to stock-market transac- tions, whereas in other countries commercial needs are given marked advantage. We have no organized market for commercial paper. Finally we have as a handicap, conditions created by unwise legislation, both national and state, producing confusion and erratic results. Our paper currency is hence lacking in the chief essential to soundness, viz.: elasticity of volume; and our credit currency, represented by deposits in banks, is so inade- quately regulated that proper adjustment to needs and conditions is impossible. We have thus, at times, inflation far beyond reason; whereas in other countries the adjust- ment of supply to demand is so much more nearly achieved, that there is brought about a stability of enormous service to trade. It may hence be said that soundness and stability are the chief objects to be attained; all other factors are simply contributory thereto. Erratic instability is the concen- trated result of the co-operation of all the defects of our system; unsoundness is a necessary sequence. The correction thereof should hence be our aim in devising measures for the regeneration of the system. No plan which ignores this is worthy of atten- tion. It is to be added that since deposit-banking is not extensive in any of the leading foreign countries excepting Great Britain, Canada and Australasia, the problems which arose there related chiefly to currency issues, and the banking laws in those countries today deal particularly with that phase of the question. In general it is essential to recognize the close correlation of the note-issuing and deposit-carrying functions, giving due weight to differentiations due to local conditions. The foregoing comments furnish a basis for intelligent consideration of our problem and of the means proposed for its solution. THE UNITED STATES MINT, PHILADELPHIA UNITED STATES TREASURY, WASHINGTON The System of the United States Coin DDDDDQ D D n I D D 1 D D D DDDDDD HE coinage system of the United States dates from the law of 1792 which established bi-metallism at the ratio of 1 5 to i ; both gold and silver were made legal tender. For gold the British standard of .916 2-3 was adopted; for silver the fineness was .892.4. In 1834 the gold coins were changed in weight. In 1837 the silver dollar was changed in weight to 4123/2 grains and the ratio to gold altered to 15.988 (or nominally 16 to i) and the fineness of coins changed to .900. The change in ratio was made to accord with the rest of the world which had adopted higher rates. An act of 1873 omitted the silver dollar from the coinage without affecting its legal- tender quahty. In 1878 its coinage was reinstated but in limited amounts. In 1890 the purchase of silver for coinage was in- creased, but repeated attempts to reach some international agreement on silver having failed, the acquisition of silver was stopped in 1893. The bullion has been coined into dollars, which now amount to $565,000,000. In March 1900 an act was passed purport- ing to estabUsh the gold standard, but it merely decreed the maintenance of parity between gold and silver and the silver dollar remains a coin with full legal-tender powers. At present the standard is the theoretic gold dollar of 25.8 grains .900 fine, hence 23.22 grains of pure gold, which gives a value of $20,672 to the ounce of pure gold. The silver dollar weighs 412.5 grains, and is also .900 fine; the coinage rate for silver is thus $1.2929 per ounce fine; but silver is worth only 50 to 60 cents the ounce in the market. Subsidiary silver is since 1853 coined at a rating about 7% below that of the standard silver dollar, and is legal tender to $10 only. Paper Currency During the Revolutionary War both the United States and the states (excepting New Hampshire and Georgia) issued "continental currency," or promises to pay, without any coin behind them wherewith to redeem the promises. In many states this currency was made legal tender, and to refuse it in payment was in some instances declared treason by law. Nevertheless, it was issued so freely that it depreciated quickly and violently; in all there was printed and circulated (omit- ting a mass of counterfeits) some $280,000,000. Finally its value fell to one cent on the dollar. It was unquestionably the worst currency the country ever had. In 1790 Congress passed an act offering to redeem this currency at the rate mentioned (one per cent, of its face) but it is not known how much was redeemed. After the establishment of the Government under the Constitution (1789) the currency system had a checkered career. Beginning with notes of a few state banks prior to 1791, the United States provided for regulation by creating a central bank in that year. It served the purpose well, but as state banks increased the regulative system chafed them and when the charter of the United States bank came to an end in 181 1 renewal was refused. This caused inflation of currency, a crisis and distress; in 181 6 the second United States Bank was chartered, and in a few years it had the currency well regulated. Again this proper regulation proved irksome to state banks, and the renewal of the charter, expiring in 1836, was refused ; inflation again fol- lowed when regulation disappeared, and the crisis of 1 83 7 was the result. Political exigencies defeated the carrying out of the people's man- date in 1840 to create another central bank, and for more than 20 years state banks furnished all the paper currency, the greater part of which was disgraceful, being depreciated and fluctuat- ing violently in value, often proving absolutely worthless, because regulative reserve laws were, in general, absent. Periodic inflation and distressful results occurred. , The sub-treasury system under which the Government held its own revenues and kept its cash balances locked up, depriving the people of the use of the money, was created in 1840, perfected in 1846. In the Civil War period the United States undertook nationalization of the currency; Government legal-tender notes were issued in 1862, national bank notes were provided in 1863-64; soon state bank notes disappeared entirely. Having no reserve behind them the Government notes depreciated, fluctuating seriously; the bank notes being redeemable in the "greenbacks" also depreciated. But in 1879 resumption of specie payments and the creation of a $100,000,000 gold reserve fund, brought them to par with gold. For most of the period from 1836 to 1870 most of the currency of the people was as unstable as water, giving no assurance of value from day to day. x^J-^ ' t '^ I I I I Ji n ■ jj i ^::.'-0 .S'»c -^IK -^ ^/^-- .J\ —. ~ 2>. ^ - !,- -' ::> ^^ " ■ ; l^ -r. *7] rj -; t^ ^- -^ .; <^ CONTINENTAL CURRKNCV V NOTES OF THE COLONY OF NEW YORK 177' THE WORLD'S PRINCIPAL MONETARY SYSTEMS In 1864 the sub-treasury act was modified so as to enable the deposit of the Treasury balance in national banks, properly secured, thus making the money available to trade. Under an act of 1863, repeated in 1882 and in 1900, gold certificates, and in 1878 silver certificates, were provided for. In 1890 a new form of Treasury note to be issued for silver purchases was authorized; about $155,000,000 were issued; these have since been almost entirely redeemed. In 1900 the gold reserve against greenbacks was increased to $150,000,000. The . national bank notes are based upon Government bonds; no reserve is held against them; yet no one doubts their soundness. The most far-reaching change in the original law was that which authorized small banks with minimum capital of $25,000 in 1900. The direct money means hence consist of gold, silver dollars and greenbacks, all full legal tender; subsidiary silver of limited tender; gold and silver certificates, not legal tender but available for payment of all Government dues and for bank reserves; national bank notes, not legal tender but receivable by the Government for internal, taxes and by all banks; also available in many of the states for reserves of banks. The volume of silver dollars and certificates and of greenbacks is now fixed by law; that of national bank notes is determined largely by the supply of bonds; gold (and gold cer- tificates) alone may be increased without legal restrictions. It is noteworthy that the legislation of 1900 served to bring us gold so t*hat the stock in the country increased (1897-1912) by $1,000,000,000. Bank notes also increased from $291,000,000 to about $700,000,000 under the influence of that law. Deposit Currency Prior to the Civil War the character of banking was largely currency-issuing; in more recent years deposit-banking became domi- nant. It was imagined that state banks deprived of note-issue powers (1865) could not thrive; hence they nearly disappeared. After 1874 a change took place and these banks are now far more numerous than the nationals. Still later trust companies as- sumed deposit-banking functions; and the combined business of these two classes of state institutions is today greater than that of the national banks. Since the reserve regulation of deposit currency is an essential feature for safety and stabiUty, the fact that the vast amount of this class of money-means is created under 48 different codes of laws, with equally variant reserve systems, absolutely prevents that uniformity which is necessary to a sound and stable currency. Inflation is the periodic result, and this inflation of credit currency has been the main factor in producing the crises from which the people have suffered so severely. Moreover the reserve laws, both national and state, encourage the deposit of a large part of the prescribed reserves of interior banks in the banks in the centers; this causes a congestion there, and incites improper stock speculation, to the detriment of ordinary commercial business. Hence when needs arise the interior banks are short in their means and the pressure for cash becomes acute. Thus come our periodic panics, when banks simply suspend cash payments, of course in violation of law, and substitute artificial currency of their own, (clearing- house certificates, etc.). Discount Rates The discount rates in the United States must be considered from two view-points: that for "call loans" generally secured by stock exchange collateral ranging from 3^ per cent, per annum to 3^ per cent, per day, or 182 per cent.; and that for commercial loans and dis- counts, ranging from 4 per cent, to 12 per cent, according to the distance from the financial centers. In no other country is there such a wide difference in normal periods, nor such a violent fluctuation in abnormal ones. After the panic of 1907 legislation was enacted under which national banks may obtain currency from the Treasury by de- positing commercial paper or securities and paying a tax of 6 per cent. This would enable them to continue discounting paper even in case of a crisis. The measure has not been availed of, and is concededly imperfect for the complete regeneration of the system. At the same time (1908) a monetary commission was created to study the subject and report adequate remedies. This report, filed January 191 2, recognizes the many defects in the system. The Monetary Commission The Monetary Commission hence proposes a comprehensive reform under which the banks of the country, state and national, may form district associations and become feder- ated in a National Association, through which they may at all times be able to obtain cash Courtesy of the Bank of New York, N. A. CHECK OF AARON BURR, 1784 Caftilcr of the Bank of New'Tork, Pay to /?' ' ^' New York, th«. «r ©r Bearer, -, Dollars. , r?i.ioration. Sec. 2 2. And be it further enacted. That if the subscriptions and payments to said bank shall not be made and completed so as to enable the same to commence its operations, or if the said bank shall not commence its operations on or before the first Monday in April next, then, and, in that case, Congress may, at any time within twelve months thereafter, declare, by law this act null and void. Sec. 23. And be it further enacted. That it shall, at all times, be lawful for a committee of either House of Congress, appointed for that purpose, to inspect the books, and to examine into the proceedings of the corporation hereby created, and to report whether the provisions of this charter have been, by the same violated or not; and whenever any committee, as aforesaid, shall find and report, or the President of the United States shall have reason to believe that the charter has been violated, it may be lawful for Congress to direct, or the President to order, a scire facias to be sued out of the circuit court of the district of Pennsylvania, in the name of the United States, (which shall be executed upon the president of the corporation for the time being, at least fifteen days before the commencement of the term of said court,) calling on the said cor- poration to show cause wherefore the charter hereby granted, shall not be declared forfeited; and it shall be lawful for the said court, upon return of the said scire facias, to examine into the truth of the alleged violation, and if such violation be made appear, then to pronounce and adjudge that the said charter is forfeited an annulled. Provided, however, Every issue of fact which may be joined between the United States and the corporation aforesaid, shall be tried by a jury. And it shall be lawful for the court aforesaid to require the production of such of the books of the corporation as it may deem necessary for the ascertainment of the controverted facts; and the final judgment of the court aforesaid, shall be examinable in the Supreme Court, of the United States by writ of error, and may be there reversed or affirmed, according to the usages of law. Approved, April 10, 1816. 28 Great Britain's System Coin THE British coinage system is unique among civilized countries in that it is the only one absolutely ignoring the decimal method of notation, and continues in a sense the ancient practice of weight designa- tions for the money-metals. For the pound sterling of 480 pence retains the characteristic of the pound Troy of 480 penny- weights. The fineness of its gold is still measured by carats, the standard being 22 carats giving the rate .916 2-3. Originally the pound was Uterally a pound of "steriing silver," which means silver .925 pure. The value was reduced from time to time until 181 6, when it was fixed at £3 6 shillings. But since that date silver has been used only as subsidiary, gold being the sole standard coin. Gold of 22 carats fine yields £46 14 sh. 6d. to the Troy pound, making the ounce worth 77sh. io3/^d. The sovereign, as the £ is colloquially called, weighs 123.274 grains, of which 1 13.001 grains is pure gold; the United States dollar contains 23.22 grains of pure gold, hence the £ is equal to $4.8665. It is divided into 20 shiUings of 12 pence each, the latter being divided into 4 farthings each. The law provides that any one having gold of approximately standard fineness may take it to the Mint and have it coined free; but as this involves delay, a further provision compels the Bank of England to buy the gold at 77sh. 9d. or i3^d. below the Mint price. This creates a quick, open market for gold, and London has become the chief center for the buying and selling of the yellow metal. Among the British possessions only Aus- tralasia, South Africa and a few small islands, have the system of the mother country complete. The stock of gold in Great Britain is estimated at about $650,000,000 and despite the great use of checks, more than half of the gold is assumed to be in circulation. The coin and currency supply works out a per capita of $19.60. Paper Currency The paper currency consists entirely of bank-notes, issued in England and Wales by the Bank of England, in Scotland by nine and in Ireland by six local banks. (A very small amount of notes of other English banks are still used, but these are of no consequence). The issue system provides, since 1844, for a fixed sum upon securities, and beyond that only pound for pound for gold actually re- ceived and held; hence a large part of the issue is equivalent to gold certificates. No reserves are required by law to be held against notes, and only those of the Bank of England are legal tender, but in England and Wales only. The Bank of England dominates the sys- tem, and is indeed generally regarded as the dominant financial institution in the world. It was originally chartered in 1694, with a capital of £1,200,000 which it loaned to King WilUam at 8%; upon the public debt thus due to it a note-issue was based. Capital was increased from time to time, chiefly by lending to the Government, until in 1816 the present capital of £14,553,000 (about $70,- 800,000) was reached. Notes were issued against the government debt and also on the Bank's own credit. Other banks, both chartered and private, many of which were estabUshed, also issued notes on credit. There were no reserve laws, and the country frequently experienced the troubles of depre- ciated currency; specie payments were sus- pended continuously from 1797 to 182 1, again in 1825, 1826 and 1837. The charter was originally for eleven years; it was renewed periodically the Government always reserving the right to change it or repeat it at ends of periods on a year's notice. It was in 1844 that the Government revised the banking system as to England and Wales, by a law which made the Bank of England the dominant factor. It was given the monopoly of currency -issuing for the future; it was permitted to continue the note issues upon government securities, then equal to the amount of its capital, and to increase such issues by two-thirds of the amount of issues which the other banks voluntarily surren- dered; beyond this sum issues were permitted only upon actual deposit of coin and bullion, one-fifth of which might be silver. The Bank was required to keep its banking business strictly separate from its note-issuing, and to report its status briefly each week. No reserve requirements were imposed. The Bank is not subject to Government examination. A prior law had prohibited the issue of notes under £5 in England and Wales, and made the Bank's notes legal tender there, 29 THE WORLD'S PRINCIPAL MONETARY SYSTEMS except in payments by the Bank, but only if coin redemption was continued. Under the operation of the law the Bank's notes based on securities have reached £18,450,000; other English banks have still out about £500,000. The Bank is a private corporation, none of its stock being owned by the Government. Voting is limited to holders of £500 of stock, but no stockholder has more than one vote. The Bank is the treasurer of the Govern- ment; the other banks keep deposit accounts with it, and it rediscounts their commercial paper when they need cash; it fixes the dis- count rate weekly when its report is published (Thursdays) and by reason of its being the depositary of the other banks the discount rate governs the market, in large measure. It allows no interest on deposits, but will discount paper for anyone having an account with it, which is not difficult to obtain. Branch banking is highly developed through- out Great Britain; while the Bank of England has only 11 branches the other banks have very many, aggregating 5,257 for the EngHsh ones alone. From a system of many inde- pendent banks there has developed one of 44 large ones, and the concentration still goes on. Ten years ago there were 77. All the banks of the United Kingdom are required to report semi-annually to a depart- ment of the Government, but these reports are not very detailed. Indeed the joint stock banks (as they are called,) carry on their business quite largely without much restraint, excepting the usual laws governing commer- cial transactions; there are no specific laws relating to bank supervision. Hence only a few of them report their reserve cash; and it is generally assumed that they hold not more than about 5 per cent, of gold against their deposits, depending upon the Bank of England for help in time of need. This condition has recently led to an agitation for larger gold reserves. The Bank has not exercised its right to hold silver in its note-fund for probably half a cen- tury. SCOTLAND has a system of its own, regu- lated by a law of 1845; the Bank of Scotland is the leader among nine issue banks which operate 1242 branches. The amount of notes permitted to be issued on securities was fixed by the law at £2,676,350; all additional issues must be covered by coin, but there is no limit to that sum. The peculiar credit-giving sys- tem of Scotland obviates the need for large note-issues, hence the limitation upon circula- tion is not onerous. There is no reserve re- quirement. IRELAND also has a semi-independent sys- tem created by the law of 1845; the Bank of Ireland is the chief institution. There are 695 branches. The banks are permitted to issue on securities £6,354,494 of notes, and of course without limit on deposits of coin. A larger issue on securities is permitted because the credit system is not developed. No legal re- serve provision exists. Both Scotch and Irish banks may issue notes as low as £1; the notes have no legal- tender power. Deposit Currency As already intimated, Great Britain uses checks against bank deposits very extensively; in no other country has the check system been so highly developed. The statistical table herewith shows the volume of deposits of all the banks in 191 1. An estimate of the coin reserves against them is also given. Since the STATISTICS OF BRITISH BANKS, JUNE, 191 1 (In £, GOGS Omitted) Bank of England . . Other English 86,891 All English 104,619 Scotch Irish All British * Estimated. Capital, Surplus, Profits Net Circula- tion Deposits, Current Accounts Gold in Reserve Loans, Dis- counts AU Re- sources 17,728 86,891 29,431 207 63,042 761,482 824,524 106,633 65,418 40,438 22,000* 36,356 492,813 110,214 894,351 104,619 18,748 12,015 29,638 7,126 7,114 62,438 6,000* 3,600* 529,169 70,663 45,812 1,004,565 137,833 84,996 135,382 43,878 996,575 72,038 645,644 1,227,394 3t THE WORLD'S PRINCIPAL MONETARY SYSTEMS Bank of England alone is required to publish actual figures of the coin held, the amount of gold held by the remainder is merely a close guess. It is fair to say, however, that the conservatism of the bankers prevents undue inflation as a rule; the exceptional instances are nevertheless sufficient to disturb the whole structure, when they occur. The advantage of stability is easier of attainment because there are so few individual concerns to deal with, viz. : for Great Britain entire only 74 banking concerns, with 7214 branches. Hence the reg- ulation is simple and in addition thereto, every one of the banks is managed by a corps of trained men, providing the most careful man- agement for even the smallest of the branches. It should be said here that the other banks reported £250,000,000 of "Cash on hand, at bankers and at call on short notice;^' the bulk of this was evidently "on call" because it was not in other banks as cash. The aggregate deposits thus figure out less than $5,000,000,000. Calculating the gold against notes and de- posits combined, the reserve ratio is about 7 per cent. But in practice no one considers the ratio except that of the Bank of England, which was upward of 43 per cent. The safety line is regarded to be at 40 per cent, and when that is reached the bank begins to think of raising its discount rate. In general the Bank's rate dominates the discount market; but there are qualifications to that statement. Usually the open market rate is below the Bank rate, which is its minimum. Thus in 191 1, the open market was continuously below at one time a full i per cent. Yet when the Bank advanced the rate the other banks quickly followed and kept very near to that of the Bank. While the Bank does not go into the market and buy bills, it may do so. Actually the same purpose is accomplished by permitting individuals to open accounts with it and obtain loans. The real point to be considered is that the Bank's rate in three years fluctuated between 2^/^ per cent, and 5 per cent, and was changed twenty times. In 1909 it was at 2^ per cent, for 189 days, in 1910 it was at 3 per cent, for 147 days, in 191 1 at 3 per cent, for 196 days. This is far from the stability exhibited by the Bank of France, although perhaps better than that of any other country. Following is tlie official report required of the Bank weekly, for a recent date; it is sub- mitted in two parts. The "consolidated statement" is appended for comparative pur- poses. The statement being for January 3rd shows a small reserve ratio because of the expansion for the "annual settlements;" soon thereafter the liabilities diminished and the ratio rose. It is interesting to note that, other things equal, the reserve ratio calculated in the man- BANK OF ENGLAND RETURN, JANUARY 3, 191 2 Banking Department Issue Department Liabilities Capital £i4,553,cxx) Rest (Surplus, &c.) 3,252,000 Public Deposits 16,677,000 Other Deposits 49,352,000 Seven Day Bills, &c 20,000 Total £83,854,000 Assets Government Securities £15,270,000 Other Securities 44,902,000 Notes 22,895,000 Gold and Silver Coin 787,000 Total £83,854,000 Notes in hands of public £29,190,000 Reserve* 23,862,000 Ratio to deposits 3S-^S% Liabilities Notes Issued £52,085,000 Assets Government Debt 11,015,000 Other Securities 7,435,000 Gold Coin and Bullion 33.635.000 Total £52,085,000 Consolidated Statement Deposit Liability £66,019,000 Net Note Liability 29,190,000 Total £95,209,000 Coin Held £34,422,000 Ratio of Coin 36.16% * Notes and coin in banking department. 32 THE WORLD'S PRINCIPAL MONETARY SYSTEMS ner shown in the consolidated statement, rises as note-issues increase, because for every mil- lion of notes emitted loo per cent, in coin must be deposited. The issue department return shows that on the date named the credit notes constituted nearly 36 per cent, of the total, and that the gold reserve was 64.68 per cent. As the note- issue increases the ratio rises; if the issue were to fall to £36,900,000 the reserve ratio would be exactly 50 per cent. The foregoing review indicates that Great Britain passed through experiences not unlike our own early in the last century and was forced to find a remedy in the central bank plan. While the one adopted, which differs from almost all the others, is claimed to have served admirably, there is no disguising the fact that it operates defectively at critical periods. Obviously the system provides for no elasticity in note-issues; an unexpected in- creased demand for currency can be met only by importing gold, and this must then be at additional cost. The only other alternative is for the Government to suspend the Bank Act and permit note-issues without full coin cover. This was actually done on three occasions, 1847, 1857, 1866, when crises occurred. The power to issue notes was actually availed of only in 1857 and then only to a limited extent. In the other two years the mere fact that the power existed served to allay fears, which in fact constitute an important part of the trouble in a crisis. Upon two other such occasions at least (1890 and 1907), the Government stood ready to suspend the Act, but assistance was obtained from the Bank of France, which rendered the suspension unnecessary. This suggests that the British system is defective, owing to its rigidity, and that a modification would prove desirable. Many bankers there believe, how- ever, that the provision of larger gold reserves in the other banks would meet the require- ments. The fundamental theory of the system is that the individual banks keep balances with the Bank of England, to which they can resort when they need cash; or they may rediscount paper with the Bank to obtain cash; that when demands for such cash are heavy, compared with the supply, the Bank will discourage the operation by raising the price for money, i. e., its discount rate. This has the effect of bring- ing gold into the country because it is practi- cally offering a higher price for the metal than other countries are bidding. But when cash is badly needed this operates as a tax upon business, whereas if crecht-notes could be issued the discount rate would not have to be raised. Still the policy is to restrain demands, no mat- ter what the conditions may be, and the British public appear satisfied with it, just as they are with their duodecimal coinage system. The French System Coin THE coinage system of France, which has been adopted by a very large num- ber of other states, is decimal as to notation and founded in the metric system as to weight. During the period prior to the 15th century, when the country consisted of numerous prin- cipalities, various money systems existed; after the consolidation into a kingdom, a uniform system was established, in which the livre or pound was the important element. (This pound was not the same as the British). Near the end of the i8th century tht franc became the unit, and by a law of 1803 the present system was finally adopted. It was bi-metallic with silver at a ratio of 15^ to gold; and the silver 5-franc piece is today still a standard coin although coinage thereof ceased in 1876. Standard coins are all .900 fine; sub- sidiary silver is only .835 fine. The chief silver coin weighs 25 grammes, or 385.8 grains, containing 347.22 grains of pure silver; at the ratio to gold this gives the 5-franc gold-piece 22.4 grains of pure metal, against 23.22 grains in the United States dollar; the 5-franc piece is hence valued at 96.47 cents, which gives the franc a rating of 19.29 cts. The metric gramme equals 15.432 grains; a kilogram is 1,000 grammes; the kilogram of pure gold is worth $664.60. Paper Currency Prior to 1848 France had a number of char-")) '^ tered banks issuing currency largely on credit all over the country. It was at about this time that the troubles similar to those experi- enced in other countries, led to the concen- tration of the function in the Bank of France. This institution was created in 1800 by the ' first Napoleon, who with his family and friends continued for some years to control the capital ^ ZZ ROYAL MINT, LONDON THE FRENCH MINT, PARIS THE WORLD'S PRINCIPAL MONETARY SYSTEMS thereof. The shares passed into private hands ^| with the disappearance of the great emperor, ( and have remained there ever since. Originally J the amount was 30,000,000 francs (nearly $6,- 000,000). This has been repeatedly increased, until the present figure of 182,500,000 francs was reached in 1857. A substantial part of the increase was made to acquire other note-issuing banks so as to concentrate the function. There are 32,500 share-holders, but only the 200 largest holders vote for members of the govern- ing board. The law has always limited the gross amount of the note-issues. At first this was 350,000,- 000 francs; it is now 5,800,000,000 francs. There is no provision in the law prescribing a specie cover for notes, the sole requirement being that the notes "shall be so proportioned to the reserve cash in the vaults of the Bank, that the Bank can at no time be exposed to danger of delaying payment of its obligations when presented." Bearing in mind that this law is over no years old, the wisdom thereof is striking. Yet the policy of the management has been so sound that the Bank has survived the many political changes in the country without diffi- culties except during the acute revolutionary conditions in 1848 and 1871 ; and has given the world the most striking example of how to provide a stable money system. The actual management is in the hands of a governor and two deputy governors who are appointees of the Government. It holds the public money; it operates through 78 branches and some 350 agencies throughout the republic. The charter is always for a term of years and is regularly renewed, but usually some addi- tional conditions are included, such as increas- ing the tax, making loans to the Government, and enlarging the maximum of note-issues. Yet the taxation is not onerous; i-io of i per cent, on notes issued on discounts, 1-50 of i per cent, on the rest of the issues and 1-8 of average discount rate on the first-named item. The tax in igio amounted to $1,395,000. The chief point recognized by all, is that the Bank is a great public institution, serving the people as a whole more adequately than any other similar institution in the world. The notes of the Bank of France are legal tender; they are redeemable either in gold or in silver 5-franc pieces, at the pleasure of the Bank; but the right to redeem in silver is not often exercised, and only for the purpose of discouraging gold exports at times when the poHcy of the Bank so dictates. France has the largest per capita supply of money, $41, Deposit Currency The French do not transact any considerable part of their business by means of checks; thus the deposit-currency is insignificant. Bank- notes and coin are used almost entirely. But the public are afforded remarkable facilities through the discount system; even the smallest tradesman may have his paper discounted by the Bank; the statistical return shows that nearly half of the paper thus handled by the Bank consists of bills for 100 francs (say $20) or less. Here is the chief source of the great public benefit, made possible by the use of credit-notes, not requiring a coin deposit before the Bank can issue the currency. The dis- count system is briefly as follows: Commer- cial paper of any amount, bearing three names, and having not more than 90 days to run, may be discounted. Most of the paper so far as amount goes is rediscoimted through the other banks, which are not numerous but have very many branches. These banks keep balances with the great Bank, but do not carry large reserves. The ready negotiabihty of small commercial paper actually takes the place of checks in a large measure. The small tradesman pays his bills with a draft or note and it becomes current paper available at the Bank for its notes. In order to provide a third endorser, an inter- mediary institution was created for this specific purpose some years ago. Paris also has an open market for money; the rate quoted there is generally somewhat below that of the Bank. It is noteworthy that the rates for loans upon collateral, i. e., stocks and bonds, are usually a trifle higher than for commercial paper. This is a normal condition due to the proper development of a discount market. Results in Operation The table accompanying this chapter shows that the Bank held a very large reserve of gold against its notes. The ratio has been growing in recent years. Thus in 1896 it was 56.7 per cent., in 1908 it was 60 per cent., in 191 1 it was 57.2 per cent. This makes for stabihty. At no time was there need for any inordinate strain to increase the reserve and the service to business was uninterrupted. The great stability is more definitely shown in the discount rates. Since 1888 — a period of 23 years, the rate changed only twenty times. From 1900 until our panic of 1907 the rate stood at 3 per cent, without change; it then rose to 4 per cent, but went back to 3 per cent, in January 1908. When the recent 35 - < fc 1=1 o o '-^ ^ ^ per cent. None of the banks except the issue-banks are subject to examination or to reporting, except the annual reports required by the laws of all corporations. Germany has very old and successful mortgage banks, which have loaned out 9,000,000,000 marks; also small local institu- tions for assisting agriculture, which show 4,500,000,000 marks of loans. Savings banks show deposits of 3,700,000,- 000 marks. GERMANY'S BANKING POWER, IN MARKS 5 Issue Banks g Berlin Banks 412 Others All Capital and Surplus 315,343,000 Deposits 765,730,000 Notes 2,403,013,000 Acceptances j Other Creditor Accounts 81,492,000 Cash j 1,129,398,000 Bills Discoimted. 1,954,417,000 Loans 152,884,000 Securities, &c 160,524,000 Other Debtor Accounts 168,355,000 Totals [ 3,565,578,000 1,640,200,000 2,061,000,000 1,880,000,000 800,000,000 1,252,000,000 2,908,600,000 1,020,000,000 1,980,000,000 360,000,000! 1,698,300,000 1,517,400,000 907,300,000 3,378,800,000 220,000,000t 1,250,000,000 900,000,000 490,000,000 2,820,000,000 3,835,543,000 3,626,730,000 2,403,013,000 2,272,000,000 4,970,092,000 1,709,398,000 4,902,717,000 2,570,384,000 1,557,824,000 6,367,155,000 7,861,800,000 i 5,680,000,000 17,107,378,000 * Partly approximated. t Estimated; see text. The System of Austria Hungary Coin PRIOR to the union of the two mon- archies which constitute the chief parts of this Empire, Austria was a German state and the money system was much the same as that of the earlier days of the other sections of Germany. When the present Empire was constituted (1867) the Austrian system, somewhat developed, was imposed on the other states; but Hungary has always had its own coins. The silver standard domi- nated until 1892, when, in fact, a radical change took place. The former unit (the florin) was worth 48.2 cents, or exactly 2^ francs; the present unit (krone) is valued at 20.26 cents and has no relation to any other unit of coinage. In this particular a step backward was taken when the gold standard was adopted. The gold crown is theoretically .3387 of a gramme, equal to 5.228 grains, hence too small 41 ^ ^ X THE WORLD'S PRINCIPAL MONETARY SYSTEMS to be coined; gold coins are 900 fine. The silver crown weighs 5 grammes, and is also .900 fine. Paper Currency The reform of 1892 also extended to the paper currency. Both government notes and bank notes were in use up to that date, and both had been for many years sadly depreciated, not only because they were payable in silver, but because in the absence of adequate re- serves, the notes were irredeemable. The bank- note issue had for a number of years prior been concentrated in one bank; hence the reform of 1892 had to deal only with that institution. The reform is to be recorded as a highly creditable undertaking, accomplished only after much sacrifice and tribulation; for the plans did not work out as rapidly and as fully as had been hoped. The Government retired its notes with the help of the Bank and the latter's issues have finally been brought to par in gold. But compulsory redemption is not yet legally fixed. The Austro-Hungarian Bank is the successor of the Austrian National Bank, founded in 1816. The charter has been repeatedly re- newed by special legislation, since 1878, when the present title was adopted. The capital, 210,000,000 crowns, or about $42,000,000, is all privately owned, but the Government appoints the chief officers and half the direc- tors, and maintains careful supervision. It operates through 250 branches, and is pre- eminently an institution for public service. In 1890 the plan for note-issuing was altered to correspond with that of Germany. Credit notes may be issued to the extent of 470,000,- 000 crowns; beyond that sum notes issued without full coin cover pay a tax of 5 per cent, per annum; the reserve in gold must equal 40 per cent, of both notes and deposits; the notes not covered by coin must have commercial paper and securities behind them. Elasticity is thus amply provided for, subject to the tax; the fact that the tax is usually paid during crop- moving periods, shows the utility of the plan. But the tax is not usually added to the dis- count rate, the Bank paying it out of its profits as a public service. Since the Government shares in the profits this is a proper policy. Thus shareholders first get 4 per cent, divi- dends; any further profits are divided equally with the Government, after putting 10 per cent, thereof in the surplus fund; after share- holders have had 6 per cent, dividends, the Government gets two-thirds of the excess. Actually the shareholders get about 7 per cent. The Bank's notes are legal tender, and are issued in small denominations; thus fully half the issue is in notes of 50, 20 and 10 crowns. This has helped the Bank to obtain gold. Of $357,000,000 of gold in the country only $85,500,000 is estimated to be in circulation. The per capita money supply is $12.47. Deposit-Currency Checks are not extensively used, yet other banks, which are quite numerous, carry fairly large deposits. They are not required to hold fixed reserves and in fact do not carry large sums in cash, depending upon the central bank for means when needed. The result is that the note-issues are quite large, usually exceeding 2,000,000,000 crowns. Against this there is always a substantial reser\'e. But a very large part of the check business is done by the trans- fers of credits by the central banks and by the highly developed postal savings bank system. Discount rates are usually lower than in Germany, ranging between 33^ and 5 per cent, and are fairly steady. The money market is not so largely influenced by speculative loans as in Berlin; for Austria has not had such a period of industrial development. With parity restored to the paper currency the system is operating with great practical benefit. Some of the principal items in the Bank's statement appear below, the amounts being given in kronen: AUSTRO-HUNGARIAN BANK Capital 210.000,000 Surplus 16,000,000 Notes 2,320,000,000 Deposits 254,000,000 Mortgage Bonds 292,000,000 Gold 1 ,308,000,000 Silver 282,000,000 Bills Discounted 1,013,000,000 Loans 85,000,000 Mortgages 300,000,000 Total resources are nearly 3,30,0000,000 kr. 43 H O w (a » Pi o 3 o THE WORLD'S PRINCIPAL MONETARY SYSTEMS Other reporting banks show total resources of over 4,700,000,000 kr., but this does not represent the full commercial banking power, as the statements of some 2,500 small banks are not available. Savings banks of the several classes show deposits of fully 7,500,000,000 kr. Some of the postal savings banks carry checking accounts. Russia's System Coin THE coinage system of Russia rested on silver until 1899 and hence the money was depreciated and fluctuating. The adoption of the gold standard made the unit the (ruble of 100 copecks) 13.27 grains of gold .900 fine, value 51.456 cents. (Thus ■j}4 rubles = 20 francs.) Subsidiary silver is coined at .900 fine for the larger pieces, but only .500 fine for the smaller. A large amount of silver is used, since the gold stock, though very large, is chiefly in bank. The estirnated total gold in the country is $761,400,000; with 154,000,000 population the money per capita is reckoned at $6.75. This is very small. Paper Currency The paper currency is all issued by one bank, established in i860, which has a capital of 50,000,000 rubles all owned by the Govern- ment; hence the Bank is virtually a part of the Finance Department, but the note-issuing is now conducted on strict banking principles. For many years the currency was sadly de- preciated, but with the great reform coin- cident with the adoption of the gold standard, gold was acquired by bond-issues and the reserve fortified. The currency thus became sound. The note-issues of the Bank are permitted to exceed the coin on hand by 300,000,000 rubles; but gold held abroad may also be included as reserve. Except in case of great stress the issue has always been well within the limit. For present Russian conditions the reserve provision appears satisfactory; but as the country develops under the influence of the new regime, it will be necessary to provide a more elastic system for regulating issues. The Bank discounts freely for other banks and merchants, and regulates the discount rate. It has about 100 branches. The notes of the Bank are legal tender. Dei'osit Currency Checks are not largely used; but antici- pating development there have been enacted laws to regulate the other commercial banks which will have a salutary effect. Thus individual loans are limited to 10 per cent, of capital and total liabilities to five times the capital; reserves of 10 per cent, against deposits, in cash or in balances at the Imperial Bank, and annual reports, are prescribed; examinations are also provided for; loans to directors are prohibited and directors of one bank may not be such in any other. There are many small municipal banks for local business, and several large ones for the foreign trade. Finland has a money system and a central bank of its own. Discount rates are higher than in most European countries, having ranged from 4^ to 8 per cent, in recent years; 5 to 6 per cent. is normal. Statistics following show banking items in rubles. A partial return of commercial and municipal banks yields a total of resources aggregating 2,000,000,000 rubles. Mortgage banking is well developed, show- ing about 800,000,000 rubles of assets. Savings banks show about 1,560,000,000 rubles of deposits. BANK OF RUSSIA Liabilities Capital 50,000,000 Note-issues 1,428,000,000 Deposits 42,000,000 Government Funds 456,000,000 Current Accounts 184,000,000 Special Deposits 296,000,000 Other 68,000,000 Total 2,524,000,000 Assets Gold 1,300,000,000 Gold Abroad 1 70,000,000 Silver, &c 62,000,000 Bills discounted 442,000,000 Loans 388,000,000 Securities 122,000,000 Other 40,000,00c Total 2,524,000,000 45 9 < < ^ ^ - e Italy's System Coin I TALY has a coinage system identical with that of France; the franc is called the lira (plural lire) and is divided into loo centesimi. Paper Currency Paper currency is issued by the Go\ernment and by three banks; but of these banks two are relatively unimportant to the system; the Bank of Italy is to all intents and purposes the central bank, with a 30-year charter from 1893. It was created by merging a number of others. The Government currency consists in part of small silver notes ; it is not fully covered by coin and is purely for domestic use, hence plays no important part in the general conditions; yet if the country could afford it the people would be better off without this currency. For many years prior to the establishment of the present system (1893) there was a long era of badly depreciated currency. It will be recalled that the present union of Italian states dates from about 1861; before that each had its banks of issue, many poorly regulated, although Italy had the earliest experience with banks, Venice having had one as early as the twelfth century and Genoa following some- what later; the present Bank of Naples dates from 1539. After the union the central government undertook to unify the bank-note system and in part succeeded; but the plan was so de- fective that failure followed. Sound prin- ciples dictated the plan of 1893, but the labor of regeneration was slow and it has been only within a decade that the currency has be- come sound. The capital of the Bank of Italy is 240,- 000,000 lire, but only 180,000,000 is paid up. It is all privately owned; shareholders have one vote for each 20 shares, but none may cast more than 50 votes, no matter how many shares are held. The shareholders elect the 22 directors, and these choose the general manager and submanagers, subject to approval of the Government. The Bank operates through 102 branches and agencies. There are about 10,000 shareholders. The Government shares largely in the profits. Thus dividends are limited primarily to 5 per cent., then out of further profits one- third goes to the Government, two-thirds belongs to shareholders until they have 6 per cent.; any excess is equally divided between shareholders and Government. Actually the shareholders have not had the higher dividend because the Bank had many burdens to liquidate. Furthermore, the Government gets a substantial income from a note-tax. The two other issue banks (Naples and Sicily) have no share-capital in the usual sense, having bought out the shareholders long ago. Note-Issues Note-issues are regulated thus: the chief Bank may issue 666,000,000 lire on 40 per cent, reserves; the other two 248,000,000 lire; beyond these sums the issues must be fully covered by coin ; but for emergencies the chief Bank may issue 150,000,000 lire, on a 40 per cent, reserve if it pays a tax, graduated by amount. On part of the issues in excess of the fixed sum, the Bank pays the Government one-third of the discount rate which it earns thereon; on a second part the exaction is two- thirds; on the third part all of the discount rate earned goes to the Government. This obviously influences the discount rate. One-fourth of the note-reserves may be in silver. In fact the Bank of Italy frequently exceeds the "normal" or fixed issue amount. Yet discount rates have in recent years been quite steady, ranging from 7,^2 to 5^ per cent. Changes are infrequent and must be approved by the Minister of Finance. Private deposits may be taken, but interest may be allowed only to one-third the dis- count rate. Deposit Currency The use of checks has not developed ma- terially and deposits do not therefore play an important part in the system. There are numerous commercial banks. The regulation of these by the Government is not serious; they make annual reports the same as other corporations; there are no reserve laws. A bureau of the Treasurj^ examines the issue institutions, and all savings banks. The system of rediscount and transfers of funds partly makes up for the absence of checks. Two-name paper having not more than four months to run is available for rediscount at the Bank at any time, and special provi- sion is made for the facilitation of commerce and industry on a large scale; yet the small 47 THE WORLD'S PRINCIPAL MONETARY SYSTEMS tradesman is also accommodated, as in France. The money supply is estimated at $13.88 per capita. In the past ten years the reform has un- questionably improved conditions enormously, due to the centralized system and able man- agement. Statistics of banking, amounts stated in lire, follow: The two other issue banks have about 500,000,000 lire of notes, 350,000,000 lire of coin reserve; total resources about 800,000, 000 lire. Other commercial banks have about 1, 7oo,ooo,ooolire in resources, and savings banks report deposits of nearly 4,000,000,000 lire. There are a few large mortgage banks with about 1,500,000,000 lire in assets; also agri- cultural credit banks for small borrowers. BANK OF ITALY Liabilities Capital i8o,cxx3,ooo Surplus 1 20,000,000 Notes 1,931,000,000 Deposits and Current Accounts 305,000,000 Assets Cash 1,510,000,000 Bills discounted 724,000,000 Advances 167,000,000 Due from Banks 1 18,000,000 Switzerland's System THE coinage system of Switzerland is identical with that of France; the unit is also the franc of 100 centimes. Paper currency was for many years issued by banks chartered by the several cantons (states) and the system operated defectively. In most cases the cantons owned the banks; in others they provided more or less super- vision; but uniformity was lacking. After a fruitless endeavor on the part of the Federal Government to regulate these institutions, by prescribing uniform reserve requirements and minor regulations, the present central bank system was adopted in 1905 and established in 1Q07; under it the forty- two individual banks have been deprived of note-issuing powers, but continue to carry on all other kinds of banking business. Other commercial banks exist, a few of them quite important. Deposit-currency is not extensively employed, since the habit of using checks has not developed materially. Money par capita is estimated at $31.39. Clearing- houses were established in 1907. The Swiss' National Bank The Bank has a 20-year charter; the capital is 50,000,000 francs but only half is paid up. The shares are owned thus: 16 per cent, by the former issue banks, 39 per cent, by the cantons, and 45 per cent, by about 10,000 individuals or firms. No shareholder can have more than 100 votes. Of the 40 directors the Government appoints 25; the chief officers are appointed by the Government on recom- mendation of the board; so also the local managers of the several branches. The head- office for discounting is in Zurich, the chief city; but that for the note-issuing is in Berne, the capital. There are six other branches and thirteen agencies. Note-issues are limited only by the require- ment that there must be a 40 per cent, gold reserve, and the balance of the cover in com- mercial paper. No stock collateral loans are permitted and no investments in bonds except governments; loans on government and muni- cipal bonds are permitted. Commercial paper discounted must not run more than 90 days, and bear two names. Payment of interest on deposits (except government funds) is prohibited. Dividends are limited absolutely to 4 per cent. Further profits go to surplus (10 per cent, thereof) and the rest to the Government, which pays over two-thirds thereof to the cantons to reimburse them for the loss of revenues from the old system. It may discount for any one, may buy bullion and foreign exchange and issue bullion certificates. Its notes are legal tender only in payments to it or to the Government. Besides the examination prescribed by a committee of the board there is a govern- mental examination provided for. A short weekly report and an extended annual report, are also prescribed. Discount rates are fairly stable, 3^^ to 4^ per cent, being the usual rate; during our panic in 1907, 6 per cent, was recorded. There have been twelve changes in the rate in three years. Rates for collateral loans are always slightly higher. 48 THE WORLD'S PRINCIPAL MONETARY SYSTEMS This is the most recent example of the establishment of central regulation of banking, and in circumstances somewhat similar to those existing in the United States. It is to be noted that the central organization was not effected until July, 1907, and thus the new system was subjected to the severe test of a world-wide financial crisis before it was four months old. It stood this test, and when the crisis passed the execution of the purpose for which it was created, — regulation of the cur- rency and the discount rates, with uniformity of action throughout the republic, — was satis- factorily realized. Under the provisions of the law, the Bank assisted the former issue banks to withdraw their notes from circulation within the period fixed, which expired in 1910. The volume of currency is adapted to the needs almost automatically; the discount rates are uniform throughout the land, and relatively low. An adequate gold reserve has been created and well maintained; the out- flow of the yellow metal has been regulated by the Bank, through the possession of a continuously replenished supply of foreign bills of exchange, which the country's export trade furnishes. Following are statistics of banking, amounts in francs. The former issue banks, capitalized at about 250,000,000 francs show deposit liabilities of 1,600,000,000 francs and a total of resources about 2,000,000,000. Savings bank deposits amount to about 1,500,000,000 francs. The aggregate banking resources are thus approximately 6,800,000,000 francs; the population is 3,559,000. SWISS NATION.\L BANK Capital 25,000,000 Notes 266,000,000 Deposits 182,500,000 Coin 173,000,000 Loans 139,000,000 Securities 6,000,000 The totals are about 500,000,000 francs. SEVENTEEN COMMERCIAL BANKS Capital 390,000,000 Deposits 1 ,076,000,000 .Acceptances 308,000,000 Obligations 870,000.000 Cash 49,345,000 Discounts 445,000,000 Loans 198,000,000 Securities, &c 653,000,000 The accounts balance at 2,820,000,000 francs. Swed en's THE Scandinavian coinage system, of which the unit is the kroner of 100 ore, prevails in Sweden; the standard is gold. Theoretically the unit is 6.914 grains of gold .900 fine, value 26.8 cents. Paper currency is now issued only by the Royal Bank (founded 1668) which is owned by the Government entirely. The governor is appointed by the king, the six directors by the parliament. Profits go to the Treasury — average about 11 per cent, on the capital of 50,000,000 kroner, after placing 10 per cent, in the surplus fund. Its notes are legal tender. The issue is limited to 100,000,000 kr. beyond the gold on hand or in foreign banks, but 40,000,000 kr. System of the gold must be on hand; and a 30 per cent, metallic reserve must be established against any credit notes above 60,000,000 kr. Notes not thus covered must have securities or bills of exchange behind them. A monthly report and a comprehensive annual statement are required. Prior to 1903, twenty-eight other banks also issued notes, under old charters and ineffective regulation; they issued more than the chief institution ; results were so unsatisfactory, since uniformity was lacking, that the power was concentrated in the year named. The central bank assisted the others in gradually liquidat- ing their note liabilities. 49 BANK OF SWEDEN, STOCKHOLM SVERIGES RIKSBANK MAIN BANKING ROOM SVERIGES RIKSBANK THE WORLD'S PRINCIPAL MONETARY SYSTEMS Deposit-currency is not extensively em- ployed; money per capita is $12.18. Since the reform there has been a marked improvement. In the first place, the Bank keeps the currency well protected, yet dis- counts very freely, two-name paper which may run up to six months. Expansion and con- traction of volume are adapted to the needs. This was well exhibited when in the panicky period of 1907 the discounts were fully equal to the note-issues. The discount rate has ranged from 4^ to 7 per cent, in recent years, but the high rate was in the 1907 panic. Normally it is about 5 per cent, and there have been less than three changes per year since 1901. Other commercial banks are now required to limit individual loans and prohibited from taking one-name paper. Monthly reports and periodical inspection are prescribed. The following statement gives the items in the Bank's account in kroner. Other commercial banks show 307,000,000 kr. capital, and 2,400,000,000 kr. resources. Savings banks have 920,000,000 kr. on deposit. BANK OF SWEDEN Liabilities Capital 50,000.000 Surplus 12,400,000 Notes 190,000,000 Due Banks 50,000,000 Public Deposits 8,000,000 Other 5,600,000 Total 316,000,000 Assets Gold 40,000,000 Other Cash 52,000,000 Discounts 101,000,000 Loans and Securities 25,000,000 Due from Banks 75,000,000 Other 23,000,000 Total 316,000,000 Belgium's System BELGIUM has a coinage system identical with that of France; the franc of 100 centimes is the unit. Paper currency is issued only by the National Bank ; there are, however, special conditions govern- ing the Bank's operations which are worthy of notice. The Bank is a private stock corporation, created by special charter soon after the kingdom separated from the Netherlands (1851). The charter now runs for 29 years from 1900. Capital is 50,000,000 francs, all paid in; no one with less than ten shares may vote, but no one may have more than five votes, either directly or as proxy. The shareholders elect six directors and seven censors, who with the governor, ap- pointed by the king, constitute the council of the Bank. The directors have, under the governor the active management; the censors have auditing and supervisory functions. The king also appoints the deputy governor, from among the directors, and the managers of the branch at Antwerp and of the 39 agencies. There is also a Government official charged with supervision and examination. Checks are not extensively used. The money-supply is estimated at $23.91 per capita. Dividends are primarily limited to 4 per cent. Excess profits are allotted as follows: 25 per cent, to the Government, 10 per cent, to surplus, 5 per cent, to the managers, 60 per cent, to shareholders. As the dividends aver- age about 15 per cent, the profits are evidently large. Yet the Government gets other revenues. Thus, if the discount rate is raised above 3^ per cent, the profit derived from the excess rate goes to the Treasury; and if the note- issue exceeds 265,000,000 francs the Treasury imposes a tax of a quarter per cent, on the excess. It gets no interest on its deposits with the Bank, but any surplus revenues must be invested and the income thereon goes to the Treasury. The notes of the Bank are legal tender; the issue is limited by the coin reserve, which must be at least one-third of all demand liabilities. In fact, however, this provision may be sus- pended by the Government and this is fre- quently done, particularly when the Bank has a large amount of foreign paper payable in gold (in London and Paris, very near by) which is regarded a satisfactory reserve asset. The Bank discounts freely for all, on three- name paper having not more than 100 days to run; two-names only are necessary on commercial paper, when accompanied by 51 BANK OF JAPAN, TOKYO NIPPON GINKO PUBLIC OFFICE, BANK OF JAPAN THE WORLD'S PRINCIPAL MONETARY SYSTEMS documents or Government bonds. Loans on collateral are permitted, but are not nearly as large as discounts of bills, other banks doing more of that business; loans to other than merchants must be registered. Discount rates are usually low, about 3 and 3^ per cent. A 6 per cent, rate was fixed temporarily during the 1907 panic; but in ten years the rate has altered only 22 times. The Minister of Finance has a voice in fixing the rate. It is clear that the system makes for stability, and Belgium thus has as stable conditions as France, although not nearly as strong. The influence of the Government unquestionably contributes to the condition and the elasticity of the system makes it adaptable to the needs at any time. Efficient administration is en- titled to a large share of the credit. A statement of the Bank is appended, amounts in francs. The Bank also carries on a sort of safe deposit business in which it reports some 3,500,000,000 francs of assets. It will be noted that the coin and bullion in the statement does not equal 20 per cent, of the liabilities; it is frequently the case, but when foreign bills are included the legal ratio is reached. Other reporting commercial banks have about 2,000,000,000 francs assets; private banks are numerous and important; savings banks, chiefly governmental, show 930,000,000 francs of de- posits. There are also agricultural loan banks. NATIONAL BANK OF BELGIUM Liabilities Capital 50,000,000 Surplus 28,000,000 Notes 900,000,000 Deposits and Current Accounts 1 10,000,000 Other 137,000,000 Total 1,225,000,000 Assets Coin and Bullion 203,000,000 Foreign Bills 145,000,000 Bills Discounted 525,000,000 Loans 2x5,000,000 Other 137,000,000 Total 1,225,000,000 The Japanese System Coins JAPAN adopted the gold standard for coin- age in 1897. The unit is the yen of 100 sen. Prior to that change in standard the bi-metallic system rated the yen at 99.7 cents; as silver had declined about one- half, the value of the unit was cut in two, to 49.8 cents. In gold it weighs 12.86 grains .900 fine, too small to be coined; silver for sub- sidiary coin is .800 fine. Paper Currency In some respects Japan's experience with paper has been very like our own. She com- plimented us mistakenly in 1872 by adopting our national banking system; there were also other banks without issue power, like our state banks; and the Government also issued notes. By 1882 the system was found very unsatisfactory. To provide elasticity of currency and thus reduce discount rates, the reform took the shape of a central bank of issue, continuing the other banks without note-functions. It has proved remarkably successful. A powerful bank to regulate foreign trade was then also created with very satisfactory results. The government notes have been retired. The Bank of Japan has an authorized capital of 60,000,000 yen, paid up 37,500,000 yen; the Government took part thereof to help it start, and it has always maintained a direct influence in the control. Thus it appoints the chief officers; also the directors from among nomi- nees of the shareholders, and it retains the power of vetoing any acts of the managers regarded detrimental to it. Note-issuing is modeled somewhat on the German plan. Thus the Bank may issue to any amount upon coin in bank; 120,000,000 yen upon securities or commercial paper dis- counted; beyond that to any sum subject to a tax of 5 per cent, per annum. There is no fixed reserve requirement. The Bank rediscounts for others and dominates the rate for loans. It reports briefly each week and comprehensively at the end of the year. 53 THE WORLD'S PRINCIPAL MONETARY SYSTEMS Deposit Currency Checks are coming into greater use, as indicated by the clearing-house returns; 8,211,000,000 yen cleared, 1910, compared with 5,532,000,000 yen in 1905. In view of this, a law of 1890 provided for some regulation of banks, but not as to reserves. The statis- tics appended show that the other commercial banks are important and increasingly so. As an example of the effect of the system upon discounts, the reduction of the average rate at Tokio from 9.7 per cent, in 1902 to 5.8 per cent, in 191 1 is cited. The Bank's rate has been at about 5 per cent, in recent years. Banking Statistics, In Yen BANK OF japan Liabilities Capital 37,500,000 Surplus 26,560,000 Notes 401,600,000 Deposits 280,800,000 Assets Gold 222,400,000 Securities 179,200,000 Discounts 102,600,000 Loans 40,300,000 The deposits are largely government funds. ONE THOUSAND, SIX HUNDRED AND FIVE COMMERCIAL BANKS Capital 316,700,000 Loans 536,000,000 Surplus 96,800,000 Discounts 623,600,000 Deposits 1,141,400,000 The separate bank for foreign trade shows its status as follows : YOKOHAMA SPECIE BANK Capital 30,000,000 Surplus and Profits 20,800,000 Deposits 141,800,000 Acceptances, &c 116,100,000 Discounts 88,300,000 Bills Receivable, &c 169,000,000 Securities 20,100,000 Cash and Due from Banks 27,400,000 There are mortgage, agricultural, industrial and colonial banks. Savings banks show deposits nearly 300,000,000 yen. Canada's System Coin THE actual standard coin of the Dominion is the gold dollar identical with that of the United States, although British gold coin is also legal tender; since there has been no mint until quite recently, the gold coin in use has been actually that of the United States; subsidiary silver pieces were coined in Great Britain for special use of the colony. Paper Currency The Dominion issues legal-tender notes, something like the greenbacks in the United States, against which there is a coin reserve: up to $30,000,000 there must be 15 per cent, gold, and 85 per cent. Dominion bonds; beyond that sum gold, 100 per cent. There are about $100,000,000 of these notes out, of which 70 per cent, are accordingly, gold certificates. The notes are used largely by banks in reserves, and are redeemable in gold. The bank-note system is in almost every respect most perfectly adapted to needs; but this excellence was reached only after much tribulation. Prior to the federation of the provinces (1867) there had existed local chartered banks which issued notes largely without due restraint, as in the United States; then the bond-security plan was adopted; it was also contemplated at one time to supersede 54 THE WORLD'S PRINCIPAL MONETARY SYSTEMS the banknotes with Dominion notes, but the banks refused to surrender their privileges. Sundry patchwork laws followed in the 70s and 80s, during which periods the banks them- selves corrected many defects, developing the present elaborate branch-bank system, which was finally legally estabhshed by an act of 1890, perfected by several statutes since, the latest in 191 1. There are now 28 banks having some 2300 branches, every hamlet in the Dominion being thus served in a satisfactory and most econo- mical manner. The salient provisions of the law are: Minimum capital $500,000, half paid in; $250,000 cash deposited with Government; approval of Treasury board. Note-issue allowed up to amount of paid-up capital purely on credit; denominations not under $5; must redeem notes at head office and at branches in chief commercial centers. No reserves required against either notes or deposits, but a 5 per cent, redemption fund for notes is required to be deposited with the Government. Notes are a first lien on assets, and share- holders are doubly liable. Monthly reports are required, but no exam- ination is provided for by law. A general supervision is exercised by the Canadian Bankers' Association, an incor- porated body. Since 1908, an act permits issues of "emer- gency currency" from Oct. i to Dec. 31 each year, to 15 per cent, in excess of capital and surplus, taxed at 5 per cent, per annum. It is thus a system of purely asset currency, with only slight Government supervision. Charters are for 20 years. Loans are not restricted, but banks are peculiarly well protected by the law respecting liens on pro- perty of borrowers. Deposit Currency In Canada checks are used extensively, hence, deposit-currency plays an important part in the system, and is well regulated despite the absence of reserve laws; in practice each bank fixes a reserve ratio for itself and holds to it. The managers are all trained bankers, and, thus, are considered to need less fixed restraint. The per capita money supply is placed at $30.92; deposits in the 28 banks run to $156 per capita. The gold supply is figured at $110,000,000, almost all of which is in the banks, or in the Treasury behind Dominion notes. Results in Operation Canada is thus provided with a system which assures soundness and elasticity of volume to the currency; the supply is auto- matically adapted to the needs, the value measure is rendered stable. These results are accomplished, first, by the practice of issuing notes only as demands for loans and discounts, or needs of depositors, arise; second, by the practice of each bank to promptly return for redemption all notes of every other bank; third, the mutual guarantee of notes by all the banks through the redemption fund; finally, the conservative and expert management. Not in twenty years has there been a call for the redemption of a single note from the guarantee fund. No bank can keep out its notes in excess of the demand, because, when not in actual use the notes reach other banks and are at once sent for redemption in specie or Dominion notes; this redemption is apt to cost more than the gain derived from any attempt to force the notes into circulation; such forcing is, moreover, regarded there as a violation of cardinal principles of banking. Discount rates are in general lower than in the United States, but what is more important, the variation between the rate in the money centers and the distant towns is trifling, whereas in the United States the variation is very great. Yet conditions are strikingly similar; there is a great territory to be served; diverse interests with agriculture dominant; seasonal demands for cash are the same. The contrast in results is due solely to the difference in the monetary and banking systems. It may be said that on one side of the boundary line between the countries 12 per cent, is charged, while on the other the rate is 6 per cent. The currency supply is always lowest about February i, and highest about Novemeber i, corresponding to the crop needs. The Bank of Montreal, established 181 7, has for years been the leader among the banks, but in recent years the Bank of Commerce has grown to a very good second in assets, which are now within $8,000,000 of those of the older bank. Together they hold 32 per cent, of the resources of all. While the ratio of cash to notes and deposits is only about 13 per cent., it is to be observed that the banks regard their loans on call as almost equal to cash ; and it is also to be borne in mind that nearly half the liabilities are in time deposits, which makes the call loans fairly liquid assets for their protection. Counting notes, public deposits due to banks, THE WORLD'S PRINCIPAL MONETARY SYSTEMS and demand deposits as immediate liabilities, the ratio of cash is over 27 per cent. It is interesting to learn that a very sub- stantial part of the call loans abroad will be found in the New York stock market. In Canada trust companies are not per- mitted to conduct banking business. Savings banks are both private and governmental; the former hold about $36,000,000, the latter about $57,000,000 of deposits. STATEMENT OF CANADIAN BANKS, MARCH, 191 2 Liabilities Capital, paid up $111,173,000 Surplus 99,234,000 Notes in circulation 95,918,000 Public Deposits 36,818.000 Deposits, Demand 331,896,000 Deposits, Time 606,045,000 Deposits, Abroad 84,737,000 Due to Banks 20,103,000 Other 13,203,000 Capital Subscribed, Unpaid 1,455,000 Excess Assets 14,277,000 Total Assets $1,414,859,000 .Assets Specie $36,028,000 Dominion Notes 96,735,000 5% Redemption Fund 5,818,000 Notes and Checks on Other Banks 50,751,000 Securities 93,989,000 Due from Banks 63,121,000 Loans, Current, Canada 818,287,000 Loans, Current, Abroad 34,209,000 Loans, Call, Canada 69,846,000 Loans, Call, Abroad 94,667,000 Real Estate, &c 36,280,000 Other 15,128,000 $1,414,859,000 Mexico's System Coin y4FTER having been a silver-standard /-\ country for centuries, as the greatest -^ ^ producer of the white metal, Mexico in 1905 adopted the novel system of having a gold standard with silver cur- rency for the people; establishing a sub- stantial gold redemption fund to enable the exchange of silver for gold at the fixed valua- tion, so as to prevent depreciation and fluctua- tion, which had been the condition prior to the reform. The unit of coinage is the peso containing 12.85 grains of gold .900 fine, hence, valued at 49.8 cents. Paper Currency Prior to 1897 there was a lack of uniformity in the constitution and regulation of issue banks. Then the Federal Government under- took central regulation. Notes are now issued by 24 banks located in the several states; but the National Bank is by far the most important and the leader in the system. The issue banks must have at least i ,000,000 pesos capital, half paid up; they must deposit 20 per cent, of the capital in Government bonds; charters may not run for more than 30 years. In fact, however, this "free-banking" law is suspended until 1822, as there was a disposition to increase the number unduly. They may issue notes to thrice the paid-up capital, but must have a reserve of 50 per cent, against both notes and other demand lia- bilities, including deposits. A government official is located in each bank's head office; he keeps check on the note-issues, and counter- signs the notes, so that the law is carefully observed. The notes are not legal tender. The banks operate through branches, and are under strict supervision by the Govern- ment. Monthly statements and full annual re- ports are required. Deposit Currency is an insignificant factor; the commercial development of the country has been slow; yet it has prepared for such an evolution in its laws, as the reserve requirement mentioned above, and the inspection system, show. The money supply is estimated at $9.98 per capita. Separate banks are created under the law for mortgage loans and another class for financing purposes. There are also numerous private banks. The National Bank has about 40 per cent, of the total business. Promotion banks have about 130,000,000 pesos of resources, mortgage banks, 55,000,000. There are no savings banks. The issue banks show debts and means approximately as follows, amounts being given in pesos: 56 THE WORLD'S PRINCIPAL MONETARY SYSTEMS MEXICAN BANKS Capital 1 18,000,000 Surplus 55,000,000 Demand Deposits 70,000,000 Term Deposits 60,000,000 Notes 112^000,000 Current Accounts 50,000,000 Other 40,000,000 Total 505,000,000 Gold 55,000,000 Other Cash 35,000,000 Discounts 92,000,000 Loans 60,000,000 Securities 60,000,000 Current Accounts 170,000,000 Other 33,000,000 Total 505,000,000 Illustrative Comparative Statements To illustrate the working of the systems of the four chief countries of Europe, the following figures are presented, the amounts being stated in millions of dollars. The period covered is from Septem- ber, 1911 to March, 1912. The discount rate reflects changes in condition. Th€ tables show the quarterly (and par- ticularly the annual) settlement needs; note the expansion in December in each case. It should be borne in mind that the Austrian Bank is not compelled to redeem notes in gold coin. The sharp advance in the discount rate in October was due to the political crisis between Germany and France over Morocco. France withdrew funds loaned in Germany, which then resorted to London, and finally to New York. Altogether France exhibits the greatest stability. BANK OF ENGLAND BANK OF FRANCE End of Sept. . . Oct.... Nov. . . Dec. . . Jan Feb... March . Gold Notes Deposits* Reserve* Rate % Gold 207 145 279 155 3 622 182 146 248 128 4 1 629 i«5 143 258 135 4 642 172 145 329 118 4 634 191 141 246 142 4 639 200 139 331 153 3K 646 191 143 325 141 2,'A 650 Notes Loans Rate % 1066 1099 1090 1 145 1093 1016 1051 282 343 319 279 309 285 380 3 i% lA 3^ iA 3^ BANK OF GERMANY AUSTRO-HUNGARIAN BANK End of Sept . . . Oct.... Nov. . . Dec. . . Jan Feb... March . Coinf Notes Loans Rate % Taxed Notes 1 242 558 456 4 126 255 466 349 5 65 269 427 311 5 245 547 464 5 114 288 418 286 5 297 391 285 5 i 280 511 429 5 38 iJ Coinf Notes Loans Rate % 324 318 318 319 322 324 319 504 521 485 515 474 459 467 239 268 237 269 213 215 212 * Deposits and reserves shown, as more significant than loan items, which are not distinctly reported. f A substantial part of the coin is silver, not separately stated in the case of Germany. For a comparison between United States national banks and Canadian banks, at dates nearest the calls of Comptroller of Currency, the following table is given, the amounts being stated in millions of dollars: 57 THE WORLD'S PRINCIPAL MONETARY SYSTEMS UNITED STATES CANADIAN 1911 Notes Deposits Loans j Reserves Notes Deposits Loans Reserves Mch. 7 681 June 7 682 Sept. 1 697 Dec. 5 703 1912 Feb. 20 704 5305 5478 549° 5536 5630 5558 5611 5663 5659 5810 ^Maximum Canadian note-issue in October, 107 millions; then began to diminish. Under the Canadian system it is not neces- sary to curtail loans because the reserves are reduced. The greatest absurdity is shown, however, in the movement of the volume of notes in the United States, compared with that in Canada. Note particularly the increase in the former in February, when demands slacken, and the decrease in the latter. 908 946 895 863 950 80 82 91 102 932 959 1004 1003 871 888 932 969 989 110 118 121 138 134 To illustrate how the three chief systems act under the influence of panic, the following tables are presented, amounts being again stated in millions of dollars. The period cov- ered is from October, 1907 to January, 1908. Panic conditions first manifested themselves in the United States about the middle of October, but the great banks had anticipated them in a measure. ba:* TK OF ENGLAND Date Gold 169 154 156 149 157 174 TVT t Loans, Notes , ^^_*' Reserve Rate, % Oct. 19 Nov. 2 Nov. 30 Dec. 28 Jan. 4 Jan. 18 143 143 141 144 144 138 339 408 387 392 41S 332 114 lOI 106 95 104 126 4K 7 7 6 5 London's free market for gold causes a concentration of demand upon its Bank, and hence rates are necessarily raised to . points beyond those of the Bank of France. Note the substantial accumulation of gold after the crisis passed. ' The item includes discounts as well as loans on securities, the former not being separately stated. BANK OF FRANCE Date Oct. 3 Oct. 31 Nov. 28 Dec. 26 Jan. 2 Jan. 23 Gold 535 538 521 519 S16 518 I Notes Discount 948 965 930 927 968 943 358 350 359 346 416 345 Rate, % 1% 3K 4 4 4 3 The Bank had raised its rate from 3% before October 19, anticipating trouble; it came back to this rate immediately after the crisis subsided, even though the gold reserves were not materially increased. BANK OF GERMANY Date Coin* Notes Disc'ts Taxed Notes 94 69 62 64 149 ... Rate, % Oct. 9 Oct. 31 Nov. 30 Dec. 23 Dec. 31 Jan. 23 201 203 185 196 187 244 407 385 360 373 449 341 343 338 330 341 442 271 5K 7>^ 7K 6 Despite the great increase of coin and decrease in notes and discounts in January, the Bank was constrained to keep the rate at 6% for the time being. Note the move- ment of taxed notes. * Includes silver, amount not separately stated. 58 , J*-* •'! **. •, • • • THE WORLD'S PRINCIPAL MONETARY SYSTEMS The strain at the turn of the year is the note- worthy feature; France accomplished it with- out going above a 4 per cent, rate, increasing discounts 70 millions; Germany had to impose a 7^ per cent, rate to expand loi millions, and Great Britain's expansion of 83 millions was at a 7 percent, rate, the lower figure having been fixed after the turn of the year. The raising of dis- count rates unquestionably restrained expan- sion, even at the turn of the year. The Bank of England lost 20 millions gold, net ; the Bank of France, 22; the German Bank, 16 millions. Summary of Special Features No central bank has a capital as high as 100 milhons, that of the Bank of England, about 7>^ millions, being by far the largest. . None of the oth- ers exceed 40 millions. Russia, Sweden, and a few minor states own the entire stock of their central banks. In all the others there is a restriction upon voting power to prevent concentration of control. In all except England the governments exercise the power of appointment of the management, particularly the chief officers, in a greater or less degree. In Switzerland the Government appoints five-eighths of the directors. Charters are never for as long as 50 years; in almost all cases the term is 20 years or less, thus reserving the power to the governments to make terms for renewals in accordance with altered conditions. In almost all cases profits to shareholders are Umited, and the governments participate therein. In several cases the governments go so far as to exact the major part of profits derived from the raising of discount rates. This tends to keep rates lower than might otherwise be the case. In a few instances the consent of the governments must be had to raise rates. In order to enable the banks to make the discount rates fixed by them effective, they are not prohibited from discounting for individ- uals as well as banks. The usual practice is to permit individuals first to have deposit ac- counts with the central banks, to entitle them to discounts. It is almost universal that no interest is allowed on deposits in central banks, except as to government funds in a number of cases. While in the case of the most successful' central bank (the French) no rule as to a reserve ratio on liabilities exists, most of the charters require fixed minimum reserves; but the rigidity of such reserve requirements is in most cases relieved by the power to issue notes in excess of the limit by paying a tax or otherwise. The notes of the central banks, as well as deposits with these by other banks, are avail- able as reserves for the latter; only very few of the latter are required legally to hold specific reserves, even where the checking system is highly developed. All central banks operate through branches and agencies; transfers of funds for other banks and individuals at small charge (or without charge in some cases) are prescribed and con- stitute a large part of the business in many of them. Central bank notes are in many cases made legal tender. They are all redeemable in coin on demand and generally speaking in gold, penalties being imposed in most cases for failure to redeem. Discounting of bills of exchange is univer- sally a far more important part of the business than loaning on collaterals; and rates for the former are always lower than for the latter. The concept that a central bank is a pubHc service institution, created for the benefit of the whole people and not only for the banks, prevails everywhere. The nations realize that their trade as a whole is to be served to assure prosperity, and this purpose is the chief end of the systems. 59 ^ > w o < 2 ^ !^ -J 1 S < kJ a' aj « S H D w & < U w z S as < H o < w < The Estey Piano BACKoftheEstey Piano is over sixty-five years of conscientious effort in the making of musical instruments. Every one of those years of endeavor has been one of betterment, though the underlying prin- ciple has not changed. That principle has been applied to pianos — the determination to build as good as any in the world — to make them honest without stinting or cheapening in material or workmanship — to put con- science into them, as well as wood, and strings, and felt — and to sell them at a moderate price. For over sixty-five years the Esteys have been building musical instruments, and building better every year ! To-day the Estey Piano and the Estey Player Piano reflect not only the highest integrity in making, but the result that commends itself to the judgment of the careful, conservative, discriminating buyer. Warerooms: New York, 23 West 42nd Street Philadelphia, corner Walnut and 17th Streets St. Louis, I I 16 Olive Street Brattleboro, Vt. London, 12 Rathbone Place, Oxford Street Factory: 1 1 2- 1 24 Lincoln Avenue and 271-289 East 133d Street New York City STYLE LOUIS XV TINY GRAND Length, 5 feet. Width, 4 feet 8 inches. Made in Mahogany. Other woods to order. A Year of Remarkable Growth THIS Company's business has received a splendid impetus during the past year. The great plant at Niagara Falls, although less than two years old and noted for its size and completeness has been found inadequate to meet the growth of the business. Within ninety days the floor space and capacity have been doubled. A new product for the automobile field has been brought out — an Electric Starter and Lighter. This new product fits in perfectly with the class of engineering and manufacture carried on heretofore. A trade name has been adopted for common application to all our products which are now widely advertised and sold under this trade-mark. Products for Railway Field Axle Equipment for Electric Light on Cars^over 6000 of these are now in service. Storage Batteries to operate Automatic Safety Signals used in Block Systems. The Storage Battery method is now recognized as the best. Products for Automobile Field Electric Starter and Lighter for Gasoline Automobiles. The U-S-L equipment is the one which does away with the fly-wheel. It has taken automobile manufacturers by storm — adopted as standard equipment for many leading makes. We have sold our capacity. Storage Batteries to drive Electric Cars and Commercial Trucks. Our cities aire due for a revolution in transportation methods and electric trucks are fast coming into favor because of economy. This line is gaining steadily. Products for Power Installations A great many classes of power plants require storage batteries. U-S-L Batteries have demonstrated their superiority for this work and their sale is growing rapidly. • . U-S-L Products Excel and U-S-L Business Grows. We would be glad to have you visit our factory. The U. O. Light & Heating Co^ General Offices: Factory: 30 Church Street, New York Niagara Falls, N. Y. .• Branch Offices and Service Stations Boston Buffalo Cleveland Detroit New York Chicago St. Louis San Francisco i;fc e purpose of a jouitk^ is not only to arrive^' at the goal , out to find en j o yment on the wciy HENRY VAN DYKE ^IJOYMENT ON THE WAY is assured to all who travel via the New York 1^,^^ /Central Lines. The gradeless ''Water ' '^ Level Route" insures solid comfort b^ ay and refreshing sleep by night. The scenic beauties of the Hudson and the Mohawk Valleys and the shores of the Great Lakes are a constant delight to the eye. The luxurious modern equipment and courteous service — affording every convenience of home, club ai make your enjoyment complete. 20th Century Limited This world-famous overnight train between New York and Chicago saves a business day. Its equipment is the recognized stand- ard for train service throughout the world. Lv. New York 4.00 p.m. Lv. Chi^go - 2.30 p.m. Lv. Boston - 1.30 p.m. Ar. Boston -11.50 a.m. Ar. Chicago - 8.55 a.m. Ar. New York 9.25 a.m. Railroad and Pullman tickets delivered by special Mes- senger without extra charge. For further information address Gen'l Eastern Pass. Agent, 1216 Broadway. New York 'Phone: 6310 Madison Brooklyn 'Phone: 167 Main ''Water Level Route'* , NEWYORK . Central ' LINES ' You Can Sleep Irving National Bank NEW YORK STATEMENT, July 31, 1912 ASSETS Immediately available Cash in Vault and Checks for Clearings Due from Correspondents and Demand Loans Available within 30 days Loans Due in 30 Days United States Bonds . - . . Other Bonds and Investments - . . Other loans and discounts Due Within 4 Months - _ - . Due After 4 Months $12,049,509.18 15,302,351.82 4,965,875.95 - 1,527,752.20 2,479,043.82 13,267,076.40 3,357,757.94 LIABILITIES CAPITAL - - - - SURPLUS AND PROFITS Circulation - - - _ T> ..„ j Individual Deposits g^j^^ ^ _ $27,351,861.00 8,972,671.97 16,624,834.34 $52,949,367.31 $23,330,363.06 21,468,872.31 $4,000,000.00 3,071,331.94 1,078,800.00 44,799,235.37 $52,949,367.31 DIRECTORS LEWIS E. PIERSON, President F. A. M. BURRELL Vice-Pres. Charles A. Schieren Co., Leather M. M. BELDING.Jr. President Belding Bros. CSfc Co., Mfrs. Sewing Silk WILLIAM H. BARNARD Treas. Mason-Seaman Trans- portation Company WILLIAM C. BREED of Breed, Abbott CS, Morgan, Counsel lors-at-Law WARREN CRUIKSHANK President Cruikshank Company JAMES M. DONALD Chairman Hanover Nat. Bank ROBT. L. GERRY, Newport, R. I. WM. HALLS, Jr.. Summit, N. J. LEE KOHNS of L. Straus <& Sons, Art Pottery and Glassware JOHN G. LUKE President 'West Virginia Pulp and Paper Co. GERRISH H. MILLIKEN of Deering, Millikcn C& Co.,Com- mission Dry Goods SIDNEY Z. MITCHELL Pres. Electric Bond CSl. Share Co. DANIEL P. MORSE Pres. Morse C5i Rogers, Whole- sale Boots and Shoes ROLLIN P.GRANT, Vice-Pres. OFFICERS Lewis E. Pierson, President James E. Nichols, Vice-President Rollin P. Grant, Vice-President "Willis G. Nash, Vice-President Benj. F. Werner, Vice-President Charles H. Imhoff, Vice-President Emil Klein, Vice-President Harry E. Ward, Cashier D. H. G. Penny, Ass't. Cashier RichardJ. Faust, Jr., Ass't. Cashier J. Franklyn Bouker, Ass't. Cashier Samuel Redfem, Ass't. Cashier DIRECTORS JAMES E. NICHOLS, of Austin, Nichols 6t Co., Whole- sale Grocers; Vice-President. CHARLES E. PERKINS, President J. T. Perkins Co.,Yarns JACOB H. SCHOONMAKER, Secretary Butler Bros., Inc., Wholesale GeneralMerchandise EDWARD R. STETTINIUS, President Diamond Match Co. WILLIAM SKINNER, of William Skinner & Sons, Silks. JOHN H. SEED, Brooklyn, New York S. FREDERIC TAYLOR President Bordens Condensed Milk Co. WILLIAM A. TILDEN, President Fort Dearborn Na- tional Bank, Chicago, Illinois. GUST A V VINTSCHGER, President Markt & Hammacher Co., Import and Export. THEODORE F. WHITMARSH, Vice-President F. H. Leggett & Co., 'Wholesale Grocers. DANIEL W. WHITMORE, of D. W^. 'Whitmore & Co., Wholesale Diary Produce. FRANK W. WOOL WORTH, Piresident F. W^. WoolworthCo. Five and Ten Cent Stores. WILLIS G. NASH, Vice-President STRICTLY A COMMERCIAL BANK Our new location will be in the WOOLWORTH BUILDING GAYLAMOUNT PAMPHLET BINDER Manu/aclurtJ iy GAYLORD BROS. I«e. Syr