Organization. - Private banks are organized in the same manner as ordinary partnerships. They may belong to an individual or a firm.

Functions. - The business of private banks varies in different localities. In many cases they possess the principal functions of national banks; in other cases their attention is directed only to special features of banking, such as the buying and selling of foreign exchange, stocks and bonds, etc.

Protection to Creditors. - In a few states private banks are restricted in their operations by statute, in which case they are subject to the inspection of state officials; but usually their operations are regulated and restricted only by the common laws of business. Thus it will be seen that their safety is dependent upon the integrity and financial responsibility of the individuals conducting them.

Note. - Private bankers are quite numerous in nearly all large cities, their capital stock aggregating, in some instances, more than the capital stock of national banks. Some private bankers make a specialty of loaning their capital for the promotion of business enterprises, taking for security the stocks and bonds of the enterprise promoted. These stocks and bonds are disposed of to customers, usually at a good profit.