State Banking in the United States Since the Passage of the National Bank Act
State Banking in the United States Since the Passage of the National Bank Act
George Ernest Barnett
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McAlpin (1858), Ind. , 10; 137, the Court said: "Private banks of discount and deposit must have existed to a very limited extent, if at all, in the early period of our legislation. But in later years, they have become numerous and are discharging a large portion of the banking business. " 139] The Causes of the Growth of State Banks. 81 table shows with what rapidity, under these conditions, the growth of private banks proceeded: NUMBER OF PRIVATE BANKS* 1877 2432 1888 4064 1899 4168 In the pe...riod 1877-1888 the rate of increase was nearly sixty-eight per cent, but from 1888 to 1899 it was less than three per cent. This has come about despite the fact that the private banks in the larger cities have been con- tinually growing. The diminution in the number of pri- vate banks in the small towns has nearly counterbalanced the increase of broker's banks. That this check to the growth of private banks has been caused in considerable degree by the preference for the chartered bank is evident if one considers the growth of state banks of small size, as shown in the following table: NUMBER OF STATE BANKS HAVING A CAPITAL OF LESS THAN $50, 000 * 1877 187 1888 747 1899 2529 The chief reason for the partial supplanting of the pri- vate bank is the advantage of the corporate form of organi- zation in giving greater security to the depositor and con- sequently increasing the credit of the bank.
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