Nearly all these were doubtless demand deposits (what proportion were time deposits we have no data for determining), and were available as immediate purchasing power for the depositors. The total money (other than bank notes) in the commercial banks of the country was hardly 11 per cent of this amount. In that year the total amount of money of all kinds in circulation (and in banks) in the United States (outside the Treasury), including gold and silver and certificates represented by bullion in the treasury, United States notes of all kinds, and national bank notes, was about one fourth of the amount of these individual deposits in commercial banks. This may suggest the enormous influence that banking has in determining the average efficiency of the circulating medium of the country.] [Footnote 14: See above, sec. 3.] CHAPTER 8 BANKING IN THE UNITED STATES BEFORE 1914 § 1. The First and Second Banks of the United States. § 2. Banking from 1836 to 1863. § 3. National Banking Associations, 1863-1913. § 4. Defects of our banking organization before 1913. § 5. Lack of system. § 6. Inelasticity of credit. § 7. Periodical local congestion of funds. § 8. Unequal territorial distribution of banking facilities. § 9. Lack of provision for foreign financial operations. § 10. The "Aldrich plan." § 1. #The First and Second banks of the United States.# A knowledge of the history of banking is helpful to an understanding of the present banking system in our country. The form of our present banking system has been affected by various economic and political events which will be sketched here in broad outline to give a background for our present study. Alexander Hamilton, the great first Secretary of the Treasury in Washington's cabinet, advocated the charter of a central national bank as one portion of his larger plan of national financiering. His purpose was realized in the chartering, in 1791, of the First Bank of the United States, for a period of twenty years. The capital for this institution was in small part subscribed by the government, but mostly by private capitalists. The management of the bank was left almost entirely in private hands. The central bank established branches in many parts of the country, issued bank notes which circulated everywhere without depreciation, acted as the governmental depository of funds and as governmental agency in various ways. It seems to have been successful and useful as a banking institution until the expiration of its charter in 1811, but it was touched by the contemporary controversies over state rights and was from the first opposed by those who feared the growth of a strong central government. This opposition prevented the extension of its charter.