CONCENTRATION OF BANKING INTERESTS 415 



tions hold no less than $160,000,000 of funds deposited by 

 other national banks. The reserves of state banks and trust 

 companies are handled in the same manner; and on Septem- 

 ber 15, 1902, the national banks of New York city had 

 $414,000,000 of deposits that belonged to other institutions. 

 This means, of course, that the bank reserves of the United 

 States are concentrated more and more in a single city, just 

 as, in France or England, the reserves are stored in a great cen- 

 tral bank. 



The marvelous development of American industry in 

 recent years has increased very decidedly the demands made 

 upon our banking system at the very time when such business 

 has been drifting toward the city of New York. Between 

 1897 and 1902 the total bank clearings of the country in- 

 creased from fifty four to one hundred and sixteen billions of 

 dollars, while the proportion falling to the New York clear- 

 ing house rose from fifty seven to sixty four per cent of the 

 entire volume of these transactions. This has caused an un- 

 precedented increase of the capital employed; so that within 

 five years the banking institutions of New York have enlarged 

 their capital, surplus, and undivided profits from $232,000,000 

 to $451,000,000. And if, to these figures, we add the increased 

 deposits secured from outside banks, we can form some ade- 

 quate estimate of the strength of the forces that have been 

 concentrating our banking interests in a single city. 



To no small extent this demand for additional capital has 

 been met by the establishment of new institutions, particular- 

 ly by the formation of trust companies ; but in a much larger 

 measure it has occasioned an increase of the resources of exist- 

 ing banks. Prior to 1898 the banks of New York had been of 

 very moderate size. Only two had a capital of $5,000,000, 

 and the average for the clearing house institutions was less 

 than $1,000,000; to-day the average capital is nearly twice as 

 great, while three banks have as much as $10,000,000 and one 

 has $25,000,000. In 1895 the capital, surplus, and undivided 

 profits of the fifty national banks amounted to $110,000,000, 

 and their deposits stood at $507,000,000; in 1902 the number 

 of these institutions had fallen to forty five, while their capi- 

 tal, surplus, and profits had risen to $191,000,000, and their 



