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as we have said, to 505 millions in Decembsr 1870, rind not attaining to more than 634 millions in December 1871, it rose in the same month of 1872 to 793 millions, in 1873 to 820 millions, and in 1874 to 1331, or just the amount at which it stood before the declaration of war. Its volume has, however, continued to increase, and on the 25th March of this year (1875) it stood at 1528 millions ; and the forced currency of the notes of the bank might be at any time withdrawn. It must be ad mitted that the management of the bank throughout these years of difficulty has been eminently prudent and

successful.

The bank is obliged to open a compte courant for any one who requires it, and performs services, for those who have such accounts, similar to those performed for their customers by the banks in London. The bank does not charge any commission on current accounts, so that its only remunera tion arises from the use of the money placed in its hands by the individuals whose payments it makes. It is probable, therefore, as has been alleged, that this part of the business is but little profitable. The bank also dis counts bills with three signatures at variable dates, but not having more than three months or ninety days to run. Besides discounting bills, the bank makes advances on stocks and pledges of various kinds, and undertakes the care of valuable articles, such as plate, jewels, title-deeds, &c., at a charge of 1- per cent, on the value of the deposit for every period of six months and under.

The administration of the bank is vested in a council of twenty-one members, viz., a governor and two sub-gover nors, nominated by the chief of the state, and fifteen directors and three censors, nominated by the shareholders. The bank has a large surplus capital or rest. In 1848 the dividends only amounted to 75 fr. per share. In 1855 and 1856 they were 200 and 272 fr. on each share. In 1870 they fell to 114 fr., but rose.again to 300 fr. in 1871, and to 320 fr. in 1872. In July 1856 the 1000 fr. share of bank-stock was worth 4075 fr.; in July 1857 it had sunk to 2880 fr. It is now (1875) worth about 3850 fr.

Banking in the United States.

Before the late Civil War it had been the uniform practice of the different States of the Union to allow banks to be established for the issue of notes, payable in specie on demand. In cases where the liability of shareholders in banks was to be limited to the amount of their shares, they had, previously to 1838, to be established by Acts of the local legislatures ; but, in general, these were easily obtained, and it may be said that banking was quite free, and that, practically, all individuals or associations might issue notes, provided they abided by the rules laid down for their guidance, and engaged to pay them when presented.

Under this system the changes in the amount and value of the paper currency of the United States were greater than in any other country, and it produced an unprecedented amount of bankruptcy and ruin.

Between 1811 and 1820, about 195 banks, in different parts of the Union, became bankrupt ; and it is said, in a report by the Secretary of the Treasury of the United States, dated 12th May 1820, that these failures, which mostly happened in 1814 and 1819, produced a state of distress so general and severe that few examples of the like had then occurred.

But bad as this instance was, it was nothing to that which took place subsequently to 1834. The accounts of the aggregate issues of the banks differ a little ; but the following statement is believed to be very nearly accurate, viz:

Years. Nous. 1330 |G6,628,898 1834 94,839,570 1835 103,692,495 1836 140,310,638 1837 149,185,890

Now observe, that this sudden and enormous increase took place uuder the obligation which we are told is quite enough to prevent all abuse of paying notes on demand. The result was what most men of sense must have antici pated, viz., that a revulsion took place, and that every bank within the Union, without, it is believed, a single exception, stopped payment in 1837.

In 1838 such of the banks as had been best managed and had the largest capitals resumed payment in specie. But in 1839 and 1840 a farther crash took place; and the bank-notes afloat, which, as has been seen, amounted to 149,185,890 in 1837, sunk to $83,734,000 in 1842, and to $58.563,000 in 1843. It is supposed that in this latter crash nearly 180 banks, including the Bank of the United States, were totally destroyed. And the loss occasioned, by the depreciation which it caused in the value of stocks of all kinds and of all sorts of property, was quite enor mous, And yet, vast as that loss was, it was really trifling, as a writer in the American Almanack has stated, compared with " the injury resulting to society from the upheaving it occasioned of the elements of social order, and the utter demoralization of men by the irresistible temptation to speculation which it afforded, ending in swindling to retain ill-gotten riches."

The evils of the American system were aggravated by the lowness of the notes which most banks issued. This brought them into the hands of retail traders, labourers, and others in the humbler walks of life, who always suffer severely by the failure of a bank.

After 1838 and 1842 various measures were taken in nearly all the States, but principally in New York, to restrain the free action of the banks, and to prevent a repetition of the calamities referred to.

In New York, for example, banks were divided into two great classes the incorporated and the free banks. The former, incorporated by a State law, had to conform to certain regulations, and to contribute a half per cent, annually upon their capital to a security fund, which was devoted to the payment of the notes of defaulting banks. But this was a most objectionable plan ; for, in the first place, it did not prevent bankruptcies, and, in the second place, it compelled the well-managed banks to contribute to a fund which went to pay the debts of those that were mismanaged. It consequently declined in favour, and soon become rarely acted upon.

In the other or free banking system, all individuals or associations who chose to deposit securities (minimum amount, $100,000) for their payment were allowed to issue an equal amount of notes. And this was certainly by far the more efficient as well as the more popular of the two plans. It was, however, not free from objection ; because, 1st, A longer or shorter, but always a considerable, period necessarily elapses after a bank stops before its notes can be retired ; and, 2d, The securities lodged for the notes were necessarily at all times of uncertain and fluctuat ing value, while, in periods of panic or general distrust, they became all but inconvertible. The Sub-Secretary of the Treasury of the United States animadverted as follows on this plan, in a letter dated 27th Nov. 1854 :

" The policy of many of the State Governments has of

late years consisted in encouraging the issue of small notes, by sanctioning the establishment of what are popularly called free banks, with deposits of stocks and mortgages for the ultimate security of their issues. This ultimate

security is, it may be admitted, better than no security at