National banking under the Federal Reserve System

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Monograph

Identifikator:: 1757542345

URN:: urn:nbn:de:zbw-retromon-135097

Document type:: Monograph

Title:: National banking under the Federal Reserve System

Place of publication:: New York

Publisher:: The National City Bank of New York

Year of publication:: 1927

Scope:: 154 S.

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Growth of the national banking system

Collection:: Economics Books

NATIONAL BANKING UNDER THE FEDERAL RESERVE SYSTEM IIT DEVELOPMENT OF SMALLER BANKS Prior to 1900, the minimum national bank capitalization permissible under the law was $50,000. This meant that in many of the less populous and less wealthy communities, where capital normally was badly needed for development of natural resources of the country, establishment of a national bank was often extremely difficult. Congress in March, 1900, amended the National Bank Act to provide for the organization of banks with a minimum of $25,000 capital. The same act also provided for the refunding of the national debt, and for issuing 2 per cent. consols, eligible as a basis of national bank circulation. The effect of this new legislation on the organization of national banks was almost instantaneous. During the five years preceding 1900, the average net yearly decrease in the total number of national banks in active operation had been 27. For the five years 1900-1904 inclusive, the average net yearly increase in the number of national banks of the country was 385. The few years immediately succeed- ing the passage of the Act of 1900 may be described as the “Golden Age” of national bank organization. No other period in the history of national banking approaches it for the prolific organization of national banking institutions. The net average yearly increase for the period 1900-1918 was 278. The following tabulation, made on the same basis as that indicated in the preceding section, shows how, during this period, national banks increased still further their ability to extend their credit. YEAR 1899 1918 pe DEPOSITS PER $1 OF CAPITAL LOANS PER $1 OF CAPITAL $4.17 $4.12 5.63 5.81 Due to the new provisions that had been made for national bank currency by the Act of 1900, the volume of bank notes increased materially during the period 1900-1913. In June of the former year, bank note circulation was $265,000,000, or 11.89, of the total money [161

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