Produced by The Online Distributed Proofreading Team at https://www.pgdp.net (This file was produced from images generously made available by The Internet Archive/American Libraries.) BANKING BY William A. Scott, Ph.D., LL.D. Director of the Course in Commerce and Professor of Political Economy in the University of Wisconsin CHICAGO A. C. McCLURG & CO. 1914 Copyright A. C. McCLURG & CO. 1914 Published April, 1914 Copyrighted in Great Britain W. F. HALL PRINTING COMPANY, CHICAGO EDITOR'S PREFACE In Europe the average man looks upon the bank as a benefactor. Through its agency he secures capital at low rates for his business. In America the bank is too often regarded as a necessary evil, certainly not with affection. Yet it plays a most important role in the nation's economy. Our banking laws are obsolete, unsatisfactory, and actually in some instances detrimental to the best and widest use of the nation's resources. Europe has many lessons for us in the problem of how best to use our accumulations. With agriculture demanding and the railroads calling for more capital, the question of scientific banking assumes new proportions. This book, with its chapters on commercial and investment banking, will help to a better knowledge. F. L. M. AUTHOR'S PREFACE The purpose of this book is to supply the general reader with a simple statement of the principles and problems of banking. Since it is designed primarily for American readers, special attention has been given to conditions in this country. An effort has been made clearly to draw the line between commercial and investment banking and to indicate the problems peculiar to each. That it may assist the average person in understanding present-day banking problems and thus contribute towards the formation of a sound public opinion regarding them, is the author's hope and desire. WM. A. SCOTT. _University of Wisconsin._ CONTENTS PAGE Chapter I. The Nature, Functions, and Classification of Banking Institutions, 1 1. Services Performed by Banking Institutions, 1 2. The Economic Functions of Banks, 4 3. Classification of Banking Institutions, 6 Chapter II. The Nature and Operations of Commercial Banking, 11