NATIONAL BANKING UNDER THE FEDERAL RESERVE SysTEM 
bers of the System, indicating a ratio of approximatley 1 non-national 
member bank to every 6 national members. 
In referring to the national banks as making possible the Federal 
Reserve System it is essential not to lose sight of the fact that, despite 
the splendid case the System has proved for itself by its own suc- 
cessful achievements, it was, nine years ago, untried, and looked upon 
questioningly by many substantial bankers and business men of the 
country. Had there been in existence no great body of banks, sub- 
jected to Federal legislation, it may well be doubted that the Federal 
Reserve System would have had such an early and free-handed 
opportunity to demonstrate its merits. 
With the inauguration of the Federal Reserve System, national 
banking in America entered upon a period influenced by elements 
of more radical departure from established principles of finance 
than those of any previous epoch. New regulations have become 
operative; new forces in the general scheme of banking have been 
introduced; a closer kinship between the national and non-national 
banks that are members of the System has arisen. And above all, 
the fact that in the neighborhood of ten thousand banks are encom- 
passed in one central banking system, working together for one pur- 
pose, has in itself had as tremendous a moral effect upon the member 
banks themselves as upon the country at large. 
During the period 1914-1922, the average yearly increase in the 
number of national banks was 81, but total assets of all national 
banks increased from 11.8 billion dollars (January 18, 1914), to 22.0 
billion (December 29, 1922), or nearly 100 per cent. In other words, 
the increase in total resources shown during the period mentioned 
practically equaled the growth of assets during the entire 51 years 
that the national banking system had been in existence up to 1914. 
Individual deposits in national banks more than doubled during the 
period, and loans increased over 90 per cent. These two items per 
$1 of capital, at the beginning and close of the period were: 
EAP 
1914 
1922 
DEPOSITS PER 
$1 OF CAPITAL 
$5.74 
10.52 
ot 
0] 
LOANS PER 
$1 OF CAPITAL 
$5.84 
8.81