necessary to
secure the public interests in banking. The state through its bank
commissioner gives guaranty to the public of legitimate and safe banking.
The value of that guaranty, of course, depends upon the honesty,
experience and executive ability of the bank commissioner, whose term of
office and compensation should make him as independent as possible of any
weakening influence. Under present arrangements no state banks issue their
notes as currency because of a national tax of 10 per cent, which prevents
a possible profit from its issue. Present state laws, therefore, make no
provision for that function, unless by statutes existing before the
organization of national banks. The states still have the constitutional
right, apparently, to charter banks of issue, but the advantages of
uniformity throughout the nation are so evident as to make such action
very improbable.

_National banks._--The so-called national banks organized under authority
of United States government have been in existence since 1863, and have
proved, so far as currency is concerned, such an improvement upon anything
preceding in the way of bank issues, that few have advocated any return to
former methods. The system as now existing places the authority of the
United States in an officer called the comptroller of the currency. The
law requires an association of five or more persons with a definite name
and location, having not less than $100,000 capital ($50,000 in small
towns) all paid within six months of beginning business. Share-holders are
individually responsible for debts of the bank, aside from their stock, to
an amount equal to their stock.

In banks having over $5,000,000 capital a surplus of 20 per cent may take
the place of this individual responsibility. Not less than one-fourth of
the capital stock, usually one-third, is deposited in the United States
Treasury in the form of registered bonds of the United States, to be held
exclusively for security of circulating notes. These notes are issued to
the bank by the comptroller to the amount of not more than 90 per cent of
the market value of the bonds deposited. These notes, printed by the
government, signed, registered and sealed in the United States Treasury,
in denominations from five dollars to one thousand dollars, become money
when signed by the officers of the bank whose name they bear. The cost of
these notes, together with the cost of restoring when worn out, as well as
the e