FINANCE, INDUSTRY, TRANSPORTATION. 



451 



francs. The bank is now the only authorized 

 source of paper money in France. Its charter 

 and exclusive privileges have been conferred, 

 varied, or continued by different governments 



son, April 10, 1816, at Philadelphia. A 

 capital of $35,000,000 was required, which 

 was to be equally divided into 350,000 shares, 

 of which the United States took 70,000. The 



and under varkms laws; the year 1897 was ! charter extended to March 3, 1836. The bank 

 the time fixed at which the terms made | was prohibited from lending, on account of the 

 with the bank by the public might be ended. ! United States, more than $500,000, or to any 

 The bank has branches scattered throughout j prince or foreign power any sum whatever, 

 all the departments. Besides discounting, without the sanction of law first obtained ; and 



the Bank of France advances upon deposits of 

 stock and pledges of a miscellaneous kind. It 

 also undertakes the safe custody of valuables. 

 A council of twenty-one members conducts the 

 direction of affairs, viz. : a governor and two 

 sub-governors, who are to be nominees of the 

 head of the government ; fifteen directors and 

 three censors, nominated by the shareholders. 



UNITED STATES BANKS. 



The first United States bank was established 

 by Act of Congress, approved July 25, 1791. 

 It was organized at Philadelphia, with a capi- 

 tal of $10,000,000, divided into 25,000 shares 

 each. The act prescribed that any 



of 



person 



subscribe for any number of shares not exceed- 

 ing 1,000 only the United States could sub- 

 scribe for more than this number of shares 



it was also prohibited from issuing bills of less 

 denomination than $5. In time, to facilitate 

 business, branch offices were established in 

 every state. In December, 1829, however, the 

 bank met strenuous opposition in the message 

 of President Jackson, who argued, as did Jeffer- 

 son when the first bank was started, against 

 the constitutionality of its charter ; and when 

 Congress, in 1832, passed a bill to recharter the 

 institution he imposed his veto, and soon after 

 removed from the bank the United States depos- 

 its. The bank corporation, however, continued 

 to exist until 1836, when the charter terminated. 

 The National Banking System was 

 created by Congress in the belief that it was 



copartnership, or body politic might I the best permanent method of securing paper 



money absolutely safe from loss to the holder 

 and readily convertible into coin. Under the 

 laws of the United States any number of per- 



that with the exception of the United States sons not less than five may form an association 



the subscriptions should be payable one fourth 

 in gold and silver, and the remaining three 

 fourths in certain six per cent, bonds of the 

 United States ; that the subscribers should be 

 incorporated under the name of " The Presi- 

 dent, Directors, and Company of the Bank of 

 the United States, " and the organization should 

 continue until March 4, 1811 ; that the bank 

 could hold property of all kinds, inclusive of 

 its capital, to the amount of $15,000,000 ; 

 that twenty-five directors should be chosen, 

 who in turn should choose from their number 

 a President ; that as soon as $400,000 in gold 

 and silver was received on subscription, the 

 bank could organize, after giving a notice of 

 its intention. The general effect of this insti- 

 tution was very salutary. The credit of the 

 United States became firmly established. The 

 bank notes stood at par with gold and silver. 

 The large deposits made the money available 

 for the use of the Treasury, and the State bank 

 currency, which had flooded the country with 

 no prospects of redemption, was greatly re- 

 duced. But with all its recognized advantages, 

 the act to recharter was defeated in 1811 by 

 the casting vote of the Vice-President, George 

 Clinton. Its loss, however, was immediately 

 felt in the sudden and rapid increase of the 

 currency of the State banks. To ward off an 

 impending crisis, a second bank was estab- 

 *ished by an act approved by President Madi- 



and obtain a charter for the purpose of carry- 

 ing on the business of a national bank. The 

 capital stock of a national banking association 

 is divided into shares of $100 each, and in cit- 

 ies of 50,000 population, or over, no associa- 

 tion can be organized with a less capital than 



1200,000 ; in cities of less than 50,000, 

 000 capital is required, but, with the approval 

 of the Secretary of the Treasury, national 

 banks may be organized in places of less than 

 6,000 inhabitants with a capital of $50,000. 



National banks are authorized to discount 

 and negotiate notes, drafts, etc. ; to receive 

 deposits; to buy and sell exchange, coin, and 

 bullion ; to loan money on personal security, 

 and to issue circulating notes. They are pro- 

 hibited from making loans on real estate, or 

 on security of their own shares of capital, ex- 

 cept to sec.nre debts previously contracted, and 

 real estate purchased or mortgaged to secure 

 a pre-existing debt cannot be held for a longer 

 period than five years 



Every national bank, before it is authorized 

 to commsnce business, must transfer to the 

 Treasurer of the United States registered bonds, 

 bearing interest, to an amount not less than 

 one fourth of the capital stock paid in, as 

 security for its circulating notes. Banks hav- 

 ing a capital of more than $150,000 shall be 

 required to deposit bonds to the amount of 

 one third of their capital stock. 



