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lacking the British Empire is in central banks, it certainly does not lack branch banks for the use of its nationals; what is needed is the coördination of the several systems. (W. F. S.)

II. United States. Subsequently to the panic of 1907 and the recovery which followed, the banking system of the United States entered upon a period of prosperity and success which continued practically unbroken to the opening of the World War. The sudden outbreak of that war, 1914, caused a temporary shock not only to banking but to general business. This uncertainty, however, lasted but a few months, and was succeeded by a restoration of confidence which continued with expanding business and activity in all branches of banking down to the autumn of the year 1920. In the autumn of 1920 the development of post-war reaction in business and a violent shrinkage of prices brought severe pressure to bear upon all the elements of the banking system of the United States, but this was not sufficient to cause any dangerous shock. The period in question was one of unusual importance in American banking, not only because of the organization of the Federal Reserve system in which all national banks were compelled by law to assume membership, but also because of the fact that the strongest state banks and trust companies voluntarily entered the system during the first three years after its formation, with correspondingly broad effects upon financial organization, while the effects of the war and the expansion of American industry which accompanied the struggle greatly enlarged the activity of American banking and added to its profits.

Pre-War Period.—The years 1908-13 were characterized by a steady and consistent growth of business. In the following table, which shows the advance in the number of organized banks as well as their chief assets and liabilities, the increase of operations may be noted during the five years in question, and may be compared with the advance during the war period:—

Principal Items of Resources and Liabilities of National, State, Savings, Private Banks, Loan and Trust Companies
from 1900 to 1920. Compiled from reports obtained by the Comptroller of the Currency.
(In millions of dollars)

	Banks.	Resources.					Liabilities.
		Loans and  Discounts.	Investments.	Due from  Banks.	Cash on  Hand.	Aggregate  Resources.	Capital Stock  Paid in.	Surplus  Fund.	Undivided  Profits, Less Expenses.	Due to  Banks.	Individual  Deposits.	United States  Deposits.	National Bank  Circulation.
1900	10,382	5,625	2,498	1,272	749	10,785	1,024	648	233	1,172	7,239	98	265
1901	11,406	6,387	2,821	1,448	807	12,357	1,076	687	268	1,333	8,460	99	319
1902	12,424	7,145	3,039	1,561	848	13,363	1,201	781	315	1,393	9,104	124	309
1903	13,684	7,688	3,400	1,570	857	14,303	1,321	903	369	1,476	9,553	147	359
1904	14,850	7,930	3,654	1,842	990	15,198	1,392	993	367	1,752	10,000	110	399
1905	16,410	8,971	3,987	1,982	994	16,918	1,463	1,053	385	1,904	11,350	75	445
1906	17,905	9,827	4,073	2,029	1,016	18,147	1,565	1,180	378	1,899	12,215	89	510
1907	19,746	10,697	4,377	2,135	1,113	19,645	1,690	1,305	339	2,075	13,099	180	547
1908	21,346	10,380	4,445	2,236	1,368	19,583	1,757	1,401	359	2,198	12,784	130	613
1909	22,491	11,303	4,614	2,562	1,452	21,095	1,800	1,326	508	2,484	14,035	70	636
1910	23,095	12,495	4,723	2,393	1,423	22,450	1,879	1,547	404	2,225	15,283	54	675
1911	24,392	12,982	5,051	2,788	1,554	23,631	1,952	1,512	553	2,621	15,906	48	681
1912	25,195	13,892	5,358	2,848	1,572	24,986	2,010	1,585	581	2,632	17,024	58	708
1913	25,993	14,568	5,407	2,776	1,560	25,712	2,096	1,676	573	2,584	17,475	49	722
1914	26,765	15,288	5,584	2,872	1,639	26,971	2,132	1,714	562	2,705	18,517	66	722
1915	27,062	15,722	5,881	3,233	1,457	27,804	2,162	1,732	639	2,783	19,135	49	722
1916	27,513	17,811	6,796	4,032	1,486	32,271	2,195	1,849	564	3,463	22,834	39	676
1917	27,923	20,594	8,003	4,793	1,502	37,126	2,274	1,945	674	3,913	26,289	133	660
1918	28,880	22,514	9,741	5,136	896	40,726	2,351	2,034	684	3,595	27,808	1,037	681
1919	29,123	25,301	12,229	5,865	997	47,615	2,437	2,182	825	3,890	33,065	566	677
1920	30,139	31,256	11,387	5,833	1,076	53,079	2,702	2,410	976	3,708	37,683	175	688

In order to show the relative position occupied by the national banks, the following tabular comparison, relating to national institutions only, is presented. It will be understood that while the state banks and trust companies included in their number the bulk of the investment institutions of the nation, the commercial banking assets were predominantly held by the national banks.

The period 1908-13 was not, however, notable for any far-reaching changes in method or organization; provisions which had been enacted in the Aldrich-Vreeland law of May 30 1908 for the formation of national currency associations (see Federal Reserve Banking System) remaining practically a dead letter. There being no immediate or urgent necessity for the creation of national currency associations, since no disturbance in business conditions seemed to be imminent, the national banks made no effort to form them.

Growth of National Banks by Five-Year Periods
(In thousands of dollars)

	No. of  banks.	Total deposits.	Loans and  discounts.[1]	Reserve held.	Excess reserve.	Capital.	Surplus and  undivided profits.	Circulation.	Total  resources.[1]
Sept.  5 1900	3,871	3,699,804	2,686,760	983,333[2]	299,208	630,299	389,469	283,949	5,048,138
Aug.  25 1905	5,757	5,508,643	3,998,509	1,294,298[2]	322,170	799,870	620,294	468,980	7,472,351
Sept.  1 1910	7,173	7,140,836	5,467,161	1,573,522[3]	313,415	1,002,735	874,038	674,822	9,826,181
Sept.  2 1915	7,613	9,229,516	6,756,680	1,969,398[3]	868,756	1,068,864	1,022,596	718,496	12,267,090
Sept.  8 1920	8,093	16,751,956	13,706,066	1,232,039[4]	38,092	1,248,271	1,456,067	693,270	21,885,480

During the years in question the National Monetary Commission, appointed in accordance with the provisions of the Aldrich-Vreeland law, was prosecuting its investigations into existing conditions, but these investigations were academic up to 1912, while even in the latter year the bill for banking reorganization proposed by the National Monetary Commission (the “Aldrich Bill”) had small chance of success so that at no time prior to 1913 was there a serious prospect of fundamental change in legislation. The adoption of the Federal Reserve Act in the latter year greatly altered the conditions under which the national banking system, and indeed the whole banking system of the United States, was operating, but it did not produce any direct or immediate effect upon the methods or position of the banks themselves until a much later date. Indeed, the Federal Reserve Act itself did not come into practical operation until nearly a year subsequently to its passage, the reserve banks being organized in Nov. 1914. During the pre-war years, however, the problems of the national banking system which had already been recognized had been growing more and

1. Includes rediscounts.
2. Includes cash in vault and due from reserve agents.
3. Cash in vault, $842,609,000; due from Federal Reserve banks, $315,409,000; due from approved reserve agents, $811,380,000.
4. Lawful reserve with Federal Reserve bank. In addition, national banks held $471,546,000 cash in vault and $1,917,438,000 due from other banks including items with Federal Reserve banks in process of collection.