Bank

an institution devoted to the handling of money. The term is derived from the banca or banc on which the Italian moneychanger sat. The name has been extended to the office in which a banking business is carried on. It is applied also to the business organization itself. The first public bank is said to have been established in Venice in 1550. The early bankers were Jews.

Banks are open usually in the middle of the day, or from nine to four. The morning and evening hours are required to check up accounts and to see that no mistakes have been made. Banks are closed on Sundays and on bank holidays. New Year's Day, the Fourth of July, Christmas Day, and Thanksgiving are bank holidays everywhere. The anniversary of Lincoln's Birthday, and of Washington's Birthday, Labor Day, Good Friday, Decoration Day in the North, and Memorial Day in the South, are observed in most of the states. A note falling due on any of these dates is payable on the preceding day.

There are several sorts of banks. Private banks are owned and managed by individuals, just as any other business would be managed. They are dependent entirely upon the degree of confidence which the public may have in the proprietors. There are not far from a thousand private banks in the United States. Some states forbid private banks.

State banks are organized under the laws of the respective states. They are subject to inspection by the state examiner. They are required to keep a certain percentage of their deposits on hand. The proportion of their capital banks are permitted to loan is limited by law; also the amount an officer or director may borrow. Some states forbid the loan of money on real estate, because it requires too much time to get it in again in case it should be needed to pay depositors. There are between four and five thousand state banks with total deposits reaching into ten figures.

Savings banks may be divided into two classes. All the profits made by mutual savings banks are distributed among depositors. The directors serve frequently without pay until a bank's earnings have reached a certain percentage of its deposits. Other savings banks are operated by stock companies for profit. Almost all state and national banks have savings departments. The distinguishing feature of savings banks is that of paying a low rate of interest on deposits and of loaning the same on the best of security. Wage earners and others are invited to make small deposits as often as possible. A well managed savings bank does much to encourage thrift and economy. There are over a thousand savings banks in this country with aggregate deposits exceeding those of state and private banks put together. The loan and trust companies belong to this class of institutions. Many receive deposits and do a general banking business, but their specialty is the administration of estates, the guarding of bequests, the purchase and sale of bonds. There were, in 1905, 417 of these institutions in the larger cities of the Union. They are heavy holders of United States bonds.

National banks were first organized under a congressional act of June 3, 1864. According to its provisions as amended by subsequent legislation, at least five persons must associate and pay in a capital of not less than $25,000. National banks are required to invest a certain proportion of their capital--one-fourth when the capital of the bank is $150,000 or less, and one-third when the capital exceeds that amount--in United States bonds. These bonds must be deposited in the national treasury as security for currency the bank is authorized to issue. A bank may issue paper money up to the full par value of the bonds deposited with the government. The government prints all bank notes, and redeems them in case of the bank's failure. There were, in 1906, 6,162 national banks having bond deposits with the United States treasurer to the amount of $526,-944,030.

The total amount of capital invested in American banks is over $1,000,000,000. Banks are organized like any other business for the profit of the stockholders, but they are a great accommodation to the public. In paying wages and settling accounts, it is a great convenience to be able to write checks for the several amounts, instead of carrying about a large amount of money. As the checks must be signed by the person to whom the bank pays the money, they serve as receipts. Banks are also of service in transmitting money from one part of the country to another. For a few cents extra, one may purchase a bank draft payable to the receiver, it may be on the other side of the globe. It is estimated that out of our entire population, at least one person in seven transacts business with some bank.

There is no institution known as the Bank of the United States. The great financial institutions of the world are the following:

Capital.

See Money; Mint; Gold; Silver; Greenbacks; Clearing House