422 CHARLES J. BULLOCK 



investigation by the comptroller of the currency shows that, 

 with banks having a capital of a million or more dollars, the 

 operating expenses are but 1.33 per cent of the aggregate 

 loans and discounts; while in the case of banks with a capital 

 of $100,000, the proportion rises to 2.34 per cent. Moreover, 

 it is possible for a large institution to employ at high salaries, 

 men of special ability in each department of work. Within 

 the limits in which these considerations apply, it would seem 

 that concentration heightens the efficiency of our banking cap- 

 ital. 



But the further claim is made that our larger banking 

 institutions will contribute to the stability of financial condi- 

 tions and it is said that a plan of harmonious cooperation has 

 been developed which will materially diminish the injury pro- 

 duced by the next industrial crisis. In this direction, our in- 

 dependent banks, each compelled to seek its own safety in 

 times of impending danger, have not possessed the strength 

 which a unified banking system would exhibit. Of this fact 

 we have had so many demonstrations that serious argument 

 upon the subject is hardly necessary: but it does not follow 

 forthwith that any and all movements towards consolidation 

 will result in increased stability; much will depend, inevitably, 

 upon the wisdom and conservatism which the great institu- 

 tions display. 



In this connection it must be observed that the largest 

 banks in New York are for all practical purposes, corporation 

 banks. Some of them frankly state that they do not care for 

 small customers, by which is meant depositors whose accounts 

 average from one to twenty thousand dollars ; and all of them 

 cultivate principally the business of the larger corporations 

 and out of town banks. These features of their policy entail 

 certain important results. It is a well known fact that de- 

 posits of a small or moderate size are more stable than million- 

 aire accounts, which are likely to be drawn down very rapidly 

 when money is high. Only a short time ago one of the big 

 banks was notified, an hour before closing for the day, that a 

 check for $5,000,000 had been drawn against a large account. 

 With "a little skirmishing", so a reliable financial paper states, 

 "the situation was met in a few minutes"; but the incident 



