Another feature to be found in both these systems, and so far as I know peculiar to them, was this: that all the branches were responsible for the failure of any one of them; but the branches did not share in each other's profits. The result of this law was to make every branch the watch dog of every other branch; there was only one instance in which the home, or parent institution, took charge of a branch in either state, and that was in 1860. The executive committee of the State Bank of Iowa having heard that one of the branches had made some unsafe investments, "promptly took charge of its affairs, and authorized a reorganization, calling upon other branches for such aid as was required, which was given so that the branch, with no delay, and without loss of a cent to its customers, or note holders, or suspension even of its legal business, was again put on a firm and solvent basis." Undoubtedly this plan of supervision by the parent, or home institution, which did no business, was a wise precaution. Mark this, it is precisely the same principle put into operation that is now being followed by twenty of our Clearing Houses, and was then, and as I believe it will prove now, a practical guarantee of all the liabilities of all the banks that are subject to such examinations and supervision. The most significant fact, and the one to be noted particularly, is that the parent, or home institution, like the Clearing House, only acted for the branches, precisely as the Clearing House acts for its members, and examined and supervised them. Economically this principle is absolutely sound. Historically, it is of essential importance because here history is repeating itself, after a lapse of fifty years, and in both instances this protective principle and practice has grown out of precisely the same conditions--the unsound and dangerous methods of certain members of the banking fraternity itself. MR. MERCHANT: Gentlemen, the astounding thing to me is that when this country had once learned and practiced so sound, complete and perfect a banking system, it should have lost it. MR. MANUFACTURER: I don't think that that is at all strange when you remember that it only existed in a few states and consider just how we lost it. You will remember that the Virginia banks which were founded upon the old Scotch system started in 1804, and worked perfectly until the war broke out. The other banks, or systems of banks, were established from time to time, some of them as late as 1857, and as Mr. Banker remarked several nights ago, modeled very largely after the two United States banks, the charter of the last of which expired only in 1837. From a close study one can discover both of these two systems combined in some instances. In this way we were gradually working out a national system precisely as we are today under new and vastly more varied conditions, but the war coming on, destroyed all that had been done.