Banking laws in the United States, both National and State, have become crystallized into concrete form, and in the organization of any banking corporation certain legal requirements are prescribed by governmental authorities. Under the National Bank Act there is practically but one form of charter under which all National banks are organized. They are subject to Federal supervision and examination and their chief functions are those of a commercial bank, customarily called deposit and discount. In addition, a National bank has the right to issue circulating notes (currency) up to the amount of its capital stock, secured by an equivalent amount of U. S. Government prewar bonds. Many National banks also operate savings departments which are sometimes called thrift or interest departments to avoid a conflict with State laws limiting the use of the word "savings" to State institutions organized specifically for that purpose. While National banks are not under State supervision, they are governed by the laws of the State in which they are located in some few important matters such as legal holidays and interest rates. The laws of the different States provide for State banks of deposit and discount, loan and trust companies and savings banks. State banks, so-called, are usually commercial banks of deposit and discount and very closely resemble National banks except that they generally have a greater latitude in the ways in which they may lend money and in the amount they may lend to one borrower. A State bank which joins the Federal Reserve System has to conform very closely to the same rules that govern National banks. No bank organized under State laws issues currency. A State bank may by its title show that it is intended to perform various functions. It may be a savings and loan company, a trust and savings bank, etc. Whatever its function, it is organized under the laws of the State and is subject to the supervision of and examination by the State banking authorities. In a restricted sense building and loan associations also do a banking business and may be incorporated under State law. Trust companies are organized primarily for the purpose of holding and administering trusts of various kinds. In this capacity trust companies may act for both individuals and corporations in the following capacities: A. Individual - (1) executor of wills, (2) administrator of estates, (3) trustee under agreement, will or deed of trust, (4) guardian of minors and incompetents, (5) conservator or committee of incompetents, (6) agent of individuals. B.

Corporate - (1) transfer agent and registrar, (2) fiscal agent, (3) trustee under mortgage, (4) assignee and receiver of bankrupts (individuals or corporations), (5) guarantor of titles, (6) treasurer. The great growth of trust companies and trust departments may be attributed chiefly to the fact that they have perpetual existence, are always available during banking hours, are proficient and efficient, show no favoritism, operate economically, and have a record of 100% honesty in handling trust funds from their inception to date. Many trust companies are divided into two principal departments, the trust department which has just been described and a banking department which is almost identical in functions with a State bank of deposit and discount. National banks in many cases obtain permission from the Federal Reserve Board to act in various trust capacities, and in some States the so-called State banks may also be granted these powers. Savings banks are of two kinds - mutual and stock. The former have no stockholders, are governed by a philanthropic and self-perpetuating board of trustees, and pay the earnings of the bank to the depositors as interest. Stock savings banks pay an agreed rate of interest and distribute the profits to the stockholders as in any commercial bank. The bank is managed by directors elected by the stockholders. Mutual savings banks are found more frequently in the Eastern and Atlantic States. In many States, especially in the West and South, stock savings banks enjoy functions similar to those of State banks of deposit and discount, and frequently State banks and trust companies, not especially organized for the purpose, endeavor to obtain savings deposits.