It will be seen that during the last three years of this series the dividends exceeded the net earnings. These dividends were paid, in part, out of previously undivided profits, which amounted to $51,000,000 in 1876, and had been reduced to $45,000,000 in 1878. These profits form an additional reserve, established by the banks themselves for the benefit of their share-holders. The capital cannot be impaired; the surplus cannot be touched; the only provision for an unfavorable turn of business is the reserve of undivided profits.

The losses of the banks during the last three years before the resumption of specie payments amounted to $64,000,000- $13,000,000 more than the aggregate of undivided profits in 1876. Within the eighteen months, ending December 31, 1878, over $36,000,000 of losses were charged off, and of this amount over $5,000,000 were charged off on account of depreciation of United States bonds held by the banks. This is the result, to the banks, of resumption of specie payments. The aggregate of these losses for three years is nearly 14 per cent. of the capital of the banks. The average number of banks passing their semi-annual dividends during the same period was 288-one-seventh of the whole number. On the last dividend day of 1878 357 banks, with an aggregate capital of $59,000,000, paid no dividend.

The banks have borne their full share of public burdens as well as losses. So long as the income and license taxes were generally maintained, the banks paid to the United States annually 5 per cent. of their net earnings, and $2 on each $1000 of capital for a license. These taxes were repealed in 1871. Prior to the repeal, the combined State and national taxes levied upon the national banks amounted to about 4 1/2 per cent. upon their capital: the rate has since been about 3 1/2 per cent. It is fair, however, to estimate the taxes upon the capital and surplus, as the profits are estimated. Taking, therefore, the avers capital for 1877 - the last year for which complete returns of taxes have been published-we find $485,000,000 of capital and an average surplus of $125,000,000, making $610,000,000, upon which the United States collected $6,900,000 and the States $8,830,000, making an aggregate tax of $15,730,000, or 2.6 per cent. upon the gross investment of $610,000,000 -that is $26 upon every $1000 belonging to the shareholders, at a full valuation. It will hardly be denied that the banks have borne their share of the public burdens. They are, in fact, the only bond-holders who are or can be taxed upon their investments in United States bonds.

The note circulation of the national banks reached the maximum of $324,000,000 in 1875 ; it afterward declined to $301,000,000 in 1878. Not one dollar of these issues has been discredited. There has been no bank panic to increase the distress attending the general liquidation following the collapse of railroad and other speculative investments in 1873. The strength and solvency of the national banking system has alone prevented a general disaster like that of 1839.

Out of the whole number of banks organized under the national law, only 69 have failed in fourteen years. The notes of these G9 have been paid, or provided for, dollar for dollar. On the other claims, payments have been made ranging from 15 to 100 per cent., and averaging 60 per cent. The whole loss is but little over $6,000,000. The average number of failures has been less than five annually, and the average annual loss to creditors has been less than $430,000. The average loss by the failure of 22 savings-banks in the single State of New York, during the seven years ending with 1878, amounted to $1,230,000 a year. Five State banks in Chicago failed in 1877 and 1878, with a loss to creditors of $3,819,500-$764,000 apiece.1 The losses of the savings-banks were losses of money invested for a profit. They were incurred, mainly, by seeking for too large a profit. Suppose a series of similar disasters had happened to the banks which were carrying loans amounting to $850,000,000 or $900,000,000 for the merchants and manufacturers of the whole country. Business would have ceased. Bankruptcy would have been universal. Instead of depression, we should have had ruin.

1 Eighty-nine banks failed in Illinois in 1861 and 1862, before the organization of the national banks.

This misfortune has been averted mainly by the influence of a law which, by wholesome prohibitions and restrictions, enforced by constant supervision and publicity, has restrained such banks as might otherwise have yielded to the current of speculation, and held them to their duty toward the legitimate business of the country. The law was not framed to please the bankers. It did not please them. If it pleases them now, it is not because it affords them special advantages, but because they perceive that its regulations are for the general benefit, and for theirs as a part of the community. Mr. McCulloch said, in a letter writ-ten a few years ago, that he was at first strenuously opposed to the plan, because he foresaw that, if it went into operation, the large and prosperous bank of which he was the head must go out of business, or surrender its privilege of issuing two dollars for one of capital. He explains why he afterward consented to take the office of comptroller of the currency, and goes on to say :1 "The system grew into favor with me day by day; and I have now no hesitation in saying that, for the United States, it is not only vastly superior to the system which it superseded, but that it is the best system which has been or is likely to be devised."