The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1911-01-14

stons similar to those OF the national-
banking law, l. e., formed in such q
way as to centralize reserves. Con-
sequently, an interesting comparison
may be made. "The total resources Of
the state banks and trust companies
are somewhat less than the total re-
sources of the national banks; but on
September I, 1909, the net deposits Of
New York national banks due to state
banks and trust companies was
1884, 100000, while the net deposits
due to other national banks was $780,
100000"
Trust companies are, In general, re-
quired to keep the same reserves as
state banks, with the exceptions, (a)
that the former are more usually al
lowed to carry bonds or demand
loans as part of their reserves, and
(b) that different reserves are. re-
quired to be held against demand and
time deposits. Since the panic of
1907 Massachusetts, and New York
have increased the reserve require
ments of trust companies.
The difference in activity of the
deposits Of national bsinks and trust
companies is shown by the fact that
while the trust companies in the city
of New York had about the same
amount Of deposits as the banks of
that city their clearings amounted to
only about seven per cent Of the
clearings of the banks"
Under none of the state banking
laws has there been built up an inn
-tant system of branch banks" says
>Soc, ritter, although in nine states
Nxr mia, Delaware, Florida. Geo
gia,> O. lrk, Oregon, Rhode Island,
Virginh ga Washington state banks
and trust companies are definitely
permitted to have branches. In three
states Louisiana, Maine and Massa-
chusetts) trust companies may have
branches. In many cases, however,
there are restrictions as to location
of the branch. Specific authorization
by some state official or officials and
the requirement of additional capital
for each branch are usual conditions
for the establishment Of branches.
A number Of states have limited
the amount Of bank stock that may
be held by banks in order to prevent
the extensive control of banking by
single interest. However, ut has
not been possible to forbid the own
ership Of stock In banking insti-
tuition by persons or companies who
already own controlling interest in
other banking institutions on the
ground of such other ownership" In
1909 the Wisconsin commissioner re-
ferred to the unified ownership Of
banking institutions as follows: "A
new feature In banking has manifest
ed itself of late which. II permitted
to go on unhindered, will eventually
result in a monopoly control Of the
banking business. refer to the So
called holding companies. which are
increasing with alarming rapidity In
varfous parts ef, the country: One q
these companies, with headquarters
in Minneapolis, Mimi, owns a con-
trolling interest in more than fifty
banks in Minnesota. Iowa, Wisconsin
and the Dakotas. Legislation should
be had to discourage this evil In every
proper manner"
Analysis shows that state banks
have partially supplanted both pri-
vate banks and the national banks
with small capital.
Some Reasons.
The following reasons are given for
the growth of state banks at the ex-
pense of private banks: "G) The
chief reason for the partial supplant-
ing of the private bank by the small
bank is the advantage Of the corpor-
ate form of organization In givingj
greater security to the depositor and
consequently in increasing the credit
of the bank. (2) The growth Of small
state banks has been much increased
in a number Of states by legislation
relating to private banks" such as
the forbidding Of the use of q cor
porate name or the name bank by
non-incorporated institutions.
"In 1877 the number of state banks
with a capital of $4,000 and over was
634 and the number of national banks
was 2,0S0. In 1909 the numbers of
the same classes were 1920 and a.
773, respectively" The great major
ity Of state banks have capital of
less than $4,000. while the majority
of national banks have a capital Of
$4,000 or more. The reasons why
the smaller state banks have increas-
ed more rapidly than national banks
are: (1) Since the development Of
state supervision the credit of state
banks approximates that Of national
banks except for interstate business.
(2) The profit on the issue Of nation
al-bank notes has not been great. (3)
State banks have more freedom In
making loans. They may loan on
real estate (4) The reserve require
ments for state banks are less string
ent.
TAMMANY HALL
HAS MsuRGENI.