owed with the requisite authority, or passed in the
form of a law by the legislative organs of the state. Charters of the
latter kind are known as special charters and are rarely used
nowadays, except in the case of institutions of a peculiar character,
endowed with special functions. The central banks of Europe owe their
existence to such charters, as did also the first and second United
States banks. In the early history of the United States special
charters were uniformly employed by the states, but for many years
general incorporation laws have been the rule, on compliance with the
requirements of which persons who desire to incorporate banks can
secure charters.

In federal states, both the federal government and the governments of
the constituent states frequently have and exercise the right to
incorporate banks. In the United States, banks incorporated by the
federal government under the terms of a general law, originally passed
in 1863 and many times amended since that date, are known as
_national_ banks, and those incorporated by the states under the
terms of general banking acts or of general incorporation laws are
known as _state_ banks. These latter are endowed with privileges which
enable them to exercise commercial and some investment banking
functions. Other banks also are incorporated by our states under the
terms of general laws, which are known as savings banks and trust
companies. The former, as the name implies, are institutions primarily
designed for the encouragement, collection, and investment of savings.
The latter are called trust companies because the earliest
institutions of this type made the execution of trusts of various
kinds their exclusive business. Banking functions were later added and
in many cases have now assumed chief importance.

The nature of the banking business requires some kind of organization
of the individual institutions in which certain ones will assume to a
degree at least the role of bankers' banks. In most European countries
this position is occupied by single institutions specially chartered
and endowed with special privileges and usually described as central
banks. Examples are the Bank of England in England, the Bank of France
in France, and the Imperial Bank of Germany in Germany. Around these
are grouped the other institutions in a kind of hierarchy, certain
large banks in the larger cities forming centers about which smaller
institutions group themselves. In th