EcF r Practical Banking NEW AND ENLARGED ALBERT S. BOLLES, Ph. D., LL. D. LECTURER ON BANKING IN THE UNIVERSITY OF PENNSYLVANIA AND ON COMMERCIAL LAW AND BANKING IN HAVERFORD COLLEGE; AUTHOR OF "BANKS AND THEIR DEPOSITORS." "BANK OFFICERS," "BANK COLLECTIONS," "THE NATIONAL BANK ACT AND ITS JUDICIAL MEANING," AND "THE FINANCIAL HISTORY OF THE UNITED STATES." ELEVENTH EDITION. Revised and Greatly Enlarged with Many New Forms. Price, $3.00 Postpaid. INDIANAPOLIS: Levey Bko's & Co., Inc., Bank Stationers. PUBLISHERS. 1903. "PRACTICAL BANKING," New and Enlarged. Copyright Renewed, 1898, BY LEVEY BRO'S & CO., INC., INDIANAPOLIS, IND. BANK STATIONERS. TO Lyman J. Gage., THIS BOOK IS DEDICATED AS A TOKEN OF THE AUTHOR'S REGARD FOR HIS FRIENDSHIP AND ADMIRATION FOR HIS RARE UNION OF A KNOWLEDGE OF THE HISTORY AND THEORY OF BANKING AND FINANCE WITH EMINENT SUCCESS AS A BANKER AND FINANCIER, [...]... force is created which is always needed in production and exchange THE HISTORY OF STATE AND NATIONAL BANKING CHAPTER II THE HISTORY OE STATE AND XATIOXAL BANKING A l)rii'f banking outline of the origin a and principal changes in American a description of the business itself And as state banking is the older, and forms the basis of the national banking system, we shall begin Mith a description of the... Finance THE HISTORY OP STATE AND NATIONAL BANKING 13 was properly deposited with the first banii was grauted, its doors were opened, and then the specie was promptly withdrawn and deposited with anothei", where the performance was repeated, and then with another until the circle was completed and the certificates obtained, and then the specie was returned to New Yorli and sold Thus with a small amount...I PART DEPOSIT I AND DISCOUNT BANKING PRACTICAL BANKING CHAPTER I THE ORIGIN, CLASSIFICATION AND UTILITY OF BANKS The term bank Is supposed to be derived from banco, the Italian word for bench, the Lombard Jews in Italy having benches in the market-place where they exchan^^ed money and bills When a banker failed, his bench was broken by the people, and he was called a bankrupt This... for that purpose, and a permanent deposit of about three White's Money and Banking, p 339 THE HISTORY OF STATE AND NATIONAL BANKING 15 thousand dollai-s on which the Suffolk Bank paid no interest This fund at one time exceeded one million dollars, which it could lend to the best advantage, as the deposits were of a permanent nature The daily balances often footed up as much more, and were also a source... carry on the business of banking, under the laws of the United States, the undersigned, subscribers for the stock of the association hereinafter named, do enter into tlie following articles of association: " First The name and title of this association shall be "The Second The place where its banking house and office shall be and its operations of discount and deposit carried on and its general business... Its notes, which were payable on demand in gold and silver, were receivable in payment of taxes, duties and debts of the United States To the superintendent was given the right of inspection The people had been deluded with such copious supplies of paper money by the states and the Continental was paid in specie President, Directors, and Congress that, notwithstanding every effort to circulate the... printer himself on hand, and the supply of paper ample Those were the only conditions The system was indeed excessively flexible It was too easy to accommodate borrowers, and the constant tendency was to over-accommodate and lose Experience clearly proves that the system finally adopted by New York is preferable to any of its predecessors Moreover, the central idea of a circulation practically fixed... (ireat Britain, and no one in that country ever demands a change Since 1844 the English system has been maintained, the fundamental principle of which is in some most important respects quite similar to that on which the banking system of New York finally rested We have thus explained at some length the final plan adopted in New York because the circulating note feature of the national banking system,... the New York Herald: "Here is an illustration of the way in which the redemption of the wildcat or stumptail money was accomplislied I had the handling of an immense amount of it, and sent my agents out to redeem it I sent out my son Samuel and a clerk, with a carpetl>ag full during the panic of 1S.j4 and IS'^o In his journeyiugs my son came to the town of Lafa.vette, Ind., having several thousands... establishing that system the banking laws of the states were carefully considered; and from them many things one reason for reviewing the most important changes in state banking prior to the adoption of the national banking system, that its relation to them may be better understood The mode of issuing notes, as we have just learned, was based on the system then in vogue in New Yorlc, and wliich experience . EcF r Practical Banking NEW AND ENLARGED ALBERT S. BOLLES, Ph. D., LL. D. LECTURER ON BANKING IN THE UNIVERSITY OF PENNSYLVANIA AND ON COMMERCIAL LAW AND BANKING IN HAVERFORD COLLEGE;. OF THE UNITED STATES." ELEVENTH EDITION. Revised and Greatly Enlarged with Many New Forms. Price, $3.00 Postpaid. INDIANAPOLIS: Levey Bko's & Co., Inc., Bank Stationers. PUBLISHERS. 1903. " ;PRACTICAL BANKING, " New and Enlarged. Copyright. in production and exchange. THE HISTORY OF STATE AND NATIONAL BANKING. CHAPTER II. THE HISTORY OE STATE AND XATIOXAL BANKING. A l)rii'f outline of the origin and principal changes in American banking is a