442 WILLIAM BARRET RIDGELY 



has been for any such period such a thorough control through 

 restrictive statutes, frequent examinations and report, as 

 has been exerted over the national banks of the United States. 



Probably the main consideration in the passage of the cur- 

 rency act establishing the system of national banks was to pro- 

 vide a market for the national loans made necessary by the 

 war. The country, however, was glad of a chance to exchange 

 the system of state banks under different laws in each com- 

 monwealth for a national system, which would at least be uni- 

 form, and which, above all, would substitute a system of na- 

 tional bank note currency for the many issues of state bank 

 notes. As is well known, it was then expected that this bank 

 note currency would replace all other forms of paper currency 

 in circulation. It was probably on this account that the official 

 who was to have charge of the relations of the federal govern- 

 ment and the banks, was called comptroller of the currency, in- 

 stead of comptroller or superintendent of national banks, 

 which, as events have shown, would be a more distinctive title. 

 The issue of legal tender, United States notes and other forms 

 in circulation, and later the addition of a large volume of silver 

 certificates to our paper circulation, have made such a change 

 in the situation that, instead of furnishing all the paper cur- 

 rency, the national bank notes have formed but a compar- 

 atively small part of it. 



It was mainly the granting of the privilege of note circu- 

 lation which first attracted banks to the national system and 

 made any national control of banks possible. The national 

 banks were intended and expected to be primarily banks of 

 issue, and were indirectly given a monopoly of this privilege by 

 a prohibitive tax levied on the issues of all other banks. Out- 

 side of their note issues, the powers of the national banks were 

 quite severely restricted. They were expected to be banks of 

 deposit and discount and to transact, as far as possible, the 

 local commercial business of their community. They were 

 denied the power to have branches, to make loans on real 

 estate or to own real estate other than their necessary bank- 

 ing houses, to loan more than ten per cent of their capital to 

 any one person, firm or corporation, to own or deal in shares 

 of stock, to own or make loans on their own shares of stock 



