22 



JV. G. Langii'orthy Taylor 



Banks, like 

 other corpora- 

 tions, were 

 early encour- 

 aged by gen- 

 eral legislative 

 acts of incor- 

 poration. 



national guild is not surprising, although seemingly inconsistent 

 with the protestations of legislators that they are deeply concerned 

 to maintain competition, which is understood by them to mean 

 " small businesses." The law recently passed by the United 

 States Congress/" facilitating the union of banks in different 

 sections of the country, is quite along this line, and in this 

 political sense, indicates a movement in advance ; but the re- 

 quirement of deposit for guaranty of the private notes purchased 

 with the emergency circulation is retained. These local associa- 

 tions, however, cannot bulk largely in the financial world, as they 

 have authority only over the emergency circulation, which is to 

 be taxed ten per cent, per annum. Mr. Fowler had also proposed 

 that the banks should assume the redemption of the United 

 States notes, and had provided a measure by which the latter 

 should finally be paid ofT by them without expense to the treasury. 

 But this enlightened provision has also been dropped. 



§ 19. This brief sketch of legislation on the subject of notes 

 must suffice, for it is designed less for information about the 

 various acts mentioned than to afford some notion of the extent 

 to which the organic conception of finance is gaining a foothold. 

 History of banking legislation is but one phase of that of corpora- 

 tion legislation in general. Corporations were originally char- 

 tered in order to secure the benefits that would accrue to a large 

 number of persons of moderate means who might, by laying their 

 capitals together, create .a fund adequate to the size of the enter- 

 prises of exploration and trade which the growing markets of 

 the modern world invited. Indeed, it has always been permitted 

 to do this. The first encouragement from governments consisted, 

 however, in privileges of monopoly and of the exercising of police 

 and judicial powers in foreign parts, which made it seem more 

 attractive and safe for these large partnerships to be constituted. 

 Subsequently, the principle of charter was extended to the more 

 modern business enterprises of manufacturing and banking. It 

 was found that the associates often suffered seriously from legal 

 responsibility to which they were subject with respect to enter- 



Approved, May 30, 1908. 



136 



