GROWTH OF THE NATIONAL BANKING SYSTEM 
winning some concessions. The old spectre of the greenbacks was 
still sharing in the government’s consideration of currency matters. 
Bank circulation was measurably reduced during the period, both 
in total volume and per dollar of national banking capital. Whereas 
in 1882 there was $.65 bank circulation for every $1.00 of national 
bank capital, in 1899 there was $.84 bank circulation for every $1.00 
national bank capitalization. The chief causes for this reduction 
were: 
1—Three per cent. bonds constituted a large portion of the nation’s debt and 
were redeemable at the pleasure of the government; they were being rapidly 
retired and were hence undesirable as a basis for note issue. 
2—All other issues of government bonds were selling at high premiums. Four 
per cents reached 130-4. Circulation predicated on bonds at this market 
value was, of course, altogether unprofitable. 
3—The Government was purchasing silver, coining dollars and issuing silver 
certificates at a rate never lower than 2,000,000 per month and was using 
every means at its command to force these silver certificates into circulation, 
in direct competition with banks notes. 
But while circulation was declining, relatively, the practice of the 
bank extending its credit through deposits was rapidly gaining head- 
way. The following brief tabulation shows at a glance the relation of 
individual deposits and of loans to national bank capital stock at the 
beginning and the close of the period. The figures are compiled from 
the Comptroller’s Statements taken as near as possible to the ends of 
the fiscal years 1882 and 1899. 
YEAR 
1882 
1899 
DEPOSITS PER LOANS PER 
$1 OF CAPITAL $1 OF CAPITAL 
$2.24 $2.53 
4.17 4.12 
This was a very remarkable stride toward banking principles as we 
see them in operation today. At the close of 1899 there were in 
active operation 3602 national banks in the United States as com- 
pared with 2308 at the end of 1882. The average yearly increase 
for the period was 76. 
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