The Washington herald., 1911-01-29
BY FIANEUR-


One Of the most remarkable features
of the development Of American banking
for the past two or three decades has
been the rapid growth Of State banks
and trust companies In 1852 the number
of the State banks and trust companies
was less than one half the number OF
the national banks, while in April 1903
their number was nearly double that OF
the national banks. So have the resour-
ces Of the two classes Of banking insd-
tutions undergone a similar change in
relative amount.
At the end of May 1852 the capital OF
the State banks and trust companies was
s116, 80 600. and their deposits in round
numbers $4ooOOl0oO. approximately one
fourth of the capital and two-fifths OF
Of the deposits of the national banks
at the same date. while in April 1909 the
capital Of the State banks and trust COM
panies was nearly seven-eighths Of that
of the national banks and their deposits
were somewhat larger.
Even if we separate the State banks
and the trust companies It appears that
each class has had a remarkable growth
as compared with that of the national
banks The number of State banks in
operation in 1882 may be put at 97S with
a capital of s94. 100000. apd deposits ag-
Ercgating $3.50, ,Ooc 0d0. But in April 1903
there reported TO the National Monetary
Commission. 11.319 State banks with a
capital of s41s, ,0o0.0 900 and deposits Of s.
4O0. 600, 900. increase since 1852 Of some
10.40O banks with s3oo.OoO.0OO capital and
s., 10c. 600, 600 more deposits.
During the same period the increase
in national banks was 1854, and in capi-
tai si60 900. .000 and in deposits s.. 800 600
II will be noted that the increase in State
banks more than double that of
national banks, but the increase in capi-
tai and in deposits was only about two
thirds Of that Of the national banks.
Phenomenal Increase.
The increase of the trust companies
from 1882 to 1909 in number was 1,045, in
capital Si400OO,000, and in deposits S2.6iI,-
10000. The increase of the trust COM
panies in all three respects was less
than that of the national banks. but in
capital and deposits it was approximate
ly three-fourths of that of the national
banks. The percentage of increase was
enormously greater in all items than
that of the national banks.
The report of trust companies for 1899.
states their number as 400 with a capital
of SlGo,0O0.CC0 and a billion on deposit
But in 1909 there were about LOO trust
companies with n capital of $4,000. 900
and deposits of s.. 500 000. .coo. an increase
OF 10 per cent in number, 1e6 per cent in
capital, and l55 in deposits.
The national banks experienced also a
rapid increase both in number and in
resources during the same period On
February Is, 1885, the number of national
banks was G,594. with capital of s629-
cb.OC0 and deposits. exclusive of bankers
deposits. of So. coo. 900 600. April Is 1909
the number of national banks was 6.s9S
of N -
exclusive of bankers deposits of s4.636-
c6.G@. an increase in number of Q. per
cent. in capital of IS per cent. and in de-
posits of I32 per cent 1t will be noted
that in none of these respects was the
rate of increase as great as in that for
The State banks or the trust companies.
In considering the causes of the remark
able growth of the State banks and trust
companies outlined above it will be de-
sirable to consider separately the two
classes of banking institutions. although
the State banks and trust companies are
in certain important respects practically
a single class.
Their Superior Advantages.
Since private, State, and national banks
all banks of discount and deposit
the disproportionate increase of State
banks must be explained by their su-
pcrior advantages over one or both of the
Clesses competing with them. 1t may be
said however. that the national and pri-
vate hanks have almost exclusive fields
Of operation for very few private banks
have a capital sufficiently large to en-
able them to organize under the national
bank act
The State bank, on the contrary. is a
rival of both. the private and the nation
a. bank. as the amount of capital re-
quired in most OF the States to incor-
porate a bank under the State laws is
small enough to make il possible for the