Mr. Merchant: How many such institutions are there?
Mr. Banker: There are today thirteen thousand three hundred and eighty-one State banks, with four hundred and fifty-nine million of capital and two billion nine hundred million of deposits.
Side by side with these state banks are 1,292 State Savings Banks, with seventy-seven millions of capital and eight hundred and forty-three millions of deposits. These State Savings banks differ only in name from the regular State banks. The only point to be noted in this connection is that the local statutes, or the laws of the State where the bank is located, always determine whether the name will be a State Savings bank, or a State bank. It may be assumed that whatever the name, the business carried on is practically the same all over the United States, with here and there some slight difference, but no substantial variance.
Mr. Manufacturer: These institutions you have named do not include the Trust Companies, do they? There seems to be a perfect craze to start Trust Companies now. Why is that?
Mr. Banker: Within the past twenty-five years there has grown up, almost as if by magic, the class of banks you have just mentioned, differing from State banks and State Savings banks only in one single respect, but that is an all-comprehending one. Enterprising men in almost every state have secured the passage of laws for what they call a Trust Company business. Generally speaking, what you cannot do under a Trust Company Charter is some kind of a business that has not yet been thought of.
There are 1,410 of such Trust Companies, so called, with capital amounting to $419,000,000 owing individual deposits amounting to $3,674,000,000 with $450,000,000 additional liabilities, or something over four billion dollars, all told.
This vast business has grown up outside of the National banking system, simply because the National bank could not, but these other institutions could develop along natural lines of business progress.
Notwithstanding these obstacles, however, there is no kind of a banking business that the National banks of the country are not doing in some way or other. Of course, they are not all of them doing all kinds of business, but they have worked out methods by which they can, if they desire to do so. Of the 7,397 National Banks, nearly half of them, 3,039, are now doing a regular savings bank business, without any express authority of law, and 2,340,226 depositors have deposited with our National banks $659,500,000.
Who is there who does not know that either downstairs in the same building, or upstairs in the same building, or around the corner in some other building, with the back ends of the two buildings adjoining, many, if not all, the National Banks have attachments, where they are carrying on the Savings bank business and the Trust Company business under state charters. National banks are under National supervision, while the State banks and Trust Companies, owned and manipulated by them, are under State supervision, or possibly under no supervision at all.