CONSOLIDATION OF NATIONAL BANKING ASSOCIATIONS 211 
Deposits create credit, and credit creates business. It is undoubtedly a bad 
thing for the country, for the deposits of an entire State to be very largely con- 
trolled from two central cities of that State. It is possible, however, that the 
people of California will not fully realize that fact until they have gone through 
the fire. 
J. A. GrAVES. 
Los ANGeLes, February 8, 1926. 
STATEMENT OF EDGAR L. MATTSON, VICE PRESIDENT MID- 
LAND NATIONAL BANK & TRUST CO.,, MINNEAPOLIS, 
MINN, 
Mr. Mattson. Mr. Chairman, I am vice president of the Midland 
National Bank & Trust Co. of Minneapolis, Minn., and a member of 
the American Bankers’ Association, and to a greater or less extent 
I have been quite active in the American Bankers’ Association affairs 
and in the national bank division of the American Bankers’ Asso- 
ciation. } 
I was not present at the convention referred to at New Orleans; 
neither was I present at the convention at Boston. I do not, how- 
ever, because of that reason, feel that I need to in any apologitic sense 
refer to my connection with the American Bankers’ Association, 
which has adopted resolutions upon this particular bill, which have 
been introduced in the record here. I am appearing as a National 
banker, and while I have no official connection at the present with the 
national banking division, in a sense I am speaking as a representa- 
tive of that division. 
In connection with it I wish to read into the record an extract of 
an address that I delivered at the Atlantic City convention last 
October, at which time I wes president of the State national bank 
division. It is with reference to 2 eghion that has been under dis- 
cussion relative to the growth or lack of growth of the national-bank 
system and its effect in competition with State banks and trust com- 
panies. It reads as follows: 
In 1870 there were 325 State banks and 1,731 national banks—— 
The Cmarrman. In what ares was this? = 
Mr. Mattson. The entire United States. [Continuing reading:] 
In 1884 there were 317 State banks (exclusive of savings banks) and 35 trust 
companies, with aggregate resources of $700,000,000, and 2,664 national banks 
with total resources of $2,300,000,000. Twenty years later, in 1904, there were 
6,923 State banks (exclusive of savings banks) and 585 trust companies. Their 
combined resources were $5,240,000,000, while there were 5,331 national banks, 
with resources of $6,965,000,000. In the next 20-year period, bringing us down 
to 1924, the State banks and trust companies increased to 19,600 with resources 
of approximately $23,700,000,000, while national banks advanced in number to 
8,240, and their resources climbed to $21,700,000,000. It was in that period 
that the national banks lost most heavily in their comparative position. In 
the last seven years, 515 national banks, with an aggregate capital of approxi- 
mately $140,000,000, voluntarily liquidated and merged with State banks or 
reorganized as separate institutions under State charters. The capital thus 
withdrawn from the national system equals 10 per cent of its total, and likewise, 
it equals 6.7 per cent of all the capital represented in the entire Federal reserve 
system at this time. 
Senator Grass. How many national banks were organized in the 
meantime ? 
Mr. Mattson. I have not that information. It shows the num- 
ber that increased. They increased in that last 20-year period up