GOVERNMENT CONTROL OF BANKS 447 



tern has been steadily growing until there are now about 5/200 

 banks, with the great resources already referred to, the tenden- 

 cy to increase, both in number of banks, capital and deposits, 

 is greater among the banks other than national than among 

 the national banks. The foregoing is a table from the report 

 of the comptroller of the currency for the year 1903. 



The national banks, which had 67 per cent of the capital 

 in 1882, had 63.9 per cent in 1892, 52.4 per cent in 1902, 

 and 50.43 in 1903. The national bank deposits, which were 

 39.7 per cent of the whole in 1882, were 37.8 per cent in 1892, 

 32.2 per cent in 1902 and 32.8 in 1903. Some of this apparent 

 decrease may be possibly due to more complete returns from 

 the banks other than national which are now obtained, but 

 there is no doubt of the fact that the tendency is for the banks 

 other than national to increase more rapidly. This is true in 

 spite of the fact that the law of March 14, 1900, authorizing the 

 organization of national banks with a capital as low as $25,000, 

 has resulted in the conversion of a large number of state banks 

 in the country towns into national banks, and the organization 

 of a great many national banks to succeed private ones. Prob- 

 ably the principal reason for this tendency is the great in- 

 crease in the number of trust companies which have been or- 

 ganized during the last ten years. These companies, organized 

 under state laws originally designed to provide for companies 

 doing a strictly trust business, are taking advantage of the lib- 

 eral character of those laws, and a very large portion of the new 

 organizations are merely commercial banks, having trust com- 

 pany privileges perhaps, but in reality doing comparatively 

 little strictly trust company business. The laws of the differ- 

 ent states, particularly in regard to the cash reserves to be held, 

 and loaning money on real estate security, are so liberal that 

 organizations of this character have a great advantage over 

 the national banks in the inducements which they can offer 

 their customers. It is naturally to be supposed that any one 

 contemplating the organization of a new bank, other things be- 

 ing equal, will be inclined to do so under the laws which allow 

 the greatest freedom from governmental interference, restric- 

 tion and control. The question as to what shall be done in the 

 way of control of these new trust companies is very important. 



