This ratio is the average for all the national banks, and includes, of course, widely-differing results in individual cases. I have already referred to the number of banks passing dividends; those that were paid in 1881 varied by State and city averages from 5 per cent. in Washington, to 46 per cent. in Idaho.

The very stringent regulations with regard to bad debts, have, no doubt, contributed very largely to the safety of the banks, and this result may be read in the comparatively small record of failures among them, as well as in the generally favourable liquidations that have followed. From the latest returns I gather that since the commencement of the system only eighty-six banks have failed, having a capital in all of under four millions sterling. The claims already proved amount to £5,157,000; these would not include their circulation, which is provided for immediately upon failure by sale of bonds deposited, or by the deposit of lawful money in the Treasury. Of these banks twenty-seven have paid in full all claims upon them, amounting to £1,610,511; nineteen, whose accounts are finally closed, have paid in varying rates upon claims of £1,156,606, an average of 59.5 per cent. The liquidations of forty banks, with claims amounting to £2,390,135, are still proceeding.

We must note the promptitude with which some of these liquidations have been conducted. In 1880 but three banks failed, and all in the month of June; before the Comptroller's report of 1st December in the same year 80 per cent. of their liabilities had been paid.

Even in the case of the Mechanics' National Bank of Newark, which failed so disastrously in November last, dividends amounting to 45 per cent. have already been declared.

The cost of these liquidations has been very moderate, as will be seen by the following particulars of accounts of national banks failing prior to November, 1879:

If the total amount realised by the sale of bonds deposited against the circulation were omitted from the item of cash collected, the ratio of expense would be 9.73 per cent. On the other hand, offsets are very frequently allowed, and bad or doubtful assets exchanged

for proved claims against the banks, the amounts of which do not appear in the cash collected, whilst the cost of the operations is included in the above account.

The following is the record and analysis of banks which have failed from the commencement of the system to 1st November, 1881:

The total loss to the public by these failures has not exceeded £1,400,000, whilst there are considerable assets yet to be divided. I have hitherto refrained from burdening this paper with comparisons, but it will enable us to appreciate these figures if I quote the following experience of failures among State and Savings Banks, and private bankers of the United States, during three years ending 1st January, 1879:

This record is certainly incomplete, and yet it shows during three years, losses very considerably beyond those sustained through all the failures among the national banks during eighteen years.

How much of their capital may have been recovered by the stockholders I cannot say. Only six cases are reported in which 1eturns have been made to them, but of late years that has not fallen within the province of the Comptroller. By Section 5236, the receiver appointed by the Comptroller was directed to divide rateably among the shareholders such assets as might remain after payment of all claims upon the association, but by Act of 30th June, 1876, the receiver was directed, after discharging the liabilities, to call a meeting of the shareholders and to deliver all remaining assets to any agent that might be appointed by the meeting.

On the general causes which have led to these failures, I will quote the remarks of the Comptroller in his report for 1877, words that have received renewed illustration in the latest examples :

The most fruitful cause of the failure of national banks has been the unlawful use of the funds or credits of these associations by their officers and directors. In most instances these persons have accomplished this malfeasance or crime by obtaining, in their official capacity, the discount of notes in which the bank had no interest. The receivers of six different banks, which have recently failed, have declined to allow claims for discounted rapers bearing the indorsement of the bank, upon the ground that the c'aimant had good and sufficient notice that the paper was discounted for the benefit of individuals and not of the bank.

Since the commencement of the system, under powers granted to the Comptroller, 86 banks have been placed in the hands of receivers. These had an aggregate capital of £3,752,520, and note issues of £2,593,688.

Three hundred and thirty-nine other banks, finding the advan

tages of the Acts no compensation for their restrictions, have gone into voluntary liquidation.

Annexed is a table giving the number in each year, together with their capital and circulation:

At the present moment the future of this great system is shrouded in uncertainty. The charters of a large number of banks are within a short period of their expiry, and the question of their extension is as yet undecided. The system is viewed by a large portion of the people with disfavour. It is frequently denounced as a monopoly, although its privileges are open to all who choose to submit to its restrictions. This section of its opponents anticipate in its downfall the resumption of the right of local issue. Here, too, are involved some political considerations that are beyond our scope. These banks may be said to represent the political principle of federalism as opposed to the older doctrine of state rights. Many sections of the Acts distinctly assert the supremacy of the cential authorities, and the decisions of the courts with reference to taxation, usury, and other points, have been governed by that idea. On the other hand, State authorities appear to lose no opportunity of placing the national banks at a disadvantage.

Another class of its opponents advocate the issue of all notes by the Treasury, and see in that plan a method of sub

stituting three hundred and fifty millions of dollars of notes bearing no interest for a like amount of Government bonds, and the annual saving of so much interest to the Treasury. How far either of these views may prevail we cannot discuss here, but I must say a few words as to the position of those banks whose charters are about to expire.

The National Bank Act of 25th February, 1863, accorded to every association formed under it succession not exceeding twenty years from the passage of the Act. The Act of 3rd June, 1861, specified the duration of the charter as "twenty years from its organisation"; and Section 5136 of the Revised Statutes defines its existence as a body corporate as from the date of its organisation certificate. Under these provisions, then, the charters of more than thirteen hundred and fifty banks will expire before the close of 1885. The first charter expired on 1st January of the present year, and the second in April;-following that others will expire as given