THE net result of the national bank act is to be found in the annual statement of the condition of the banks, compiled and published by the comptroller of the currency. No statement so complete and authentic was ever before made in this country or any other. It exhibits the actual condition of the banks on five different days selected by the comptroller, without previous notice ; and the fact that these returns may any day be called for, is a powerful incentive to the banks to keep within the prudent restrictions of the law. If these requirements have tended to restrain speculation, to prevent a declaration of dividends not earned, to provide ample security not only for bill-holders but for depositors and share-holders-in a word, to create a body of solvent banks upon which the community may safely rely-then we ought to find evidence of their solvency in the comptroller's reports.

Here is the last report before the resump-tion of specie payments, showing the condition of the 2053 national banks in operation on the 1st of October, 1878 :

Analyzing these accounts, we find the following liabilities of the banks to the public:

The circulating notes and the public deposits are amply secured by United States bonds deposited with the treasurer of the United States; but for the purpose of this comparison, let these items also stand as if they were unsecured.

The immediately available resources are these:

Here are one- third of the gross liabilities of the banks in cash or its equivalent. To this sum must be added as available though not instantly available resources, the stocks and bonds:

With these resources should be placed the balances due from other banks, so that, without counting upon the loans, the banks can rely upon

The total liabilities to the public are $1,140,000,000, and the available resources of the banks are $873,000,000-more than three-fourths of the whole amount, not reckoning $834,000,000 of loans falling clue in from thirty to ninety days, and the personal liability of the share-holders to the amount of $466,000,000 more. Failure of such banks as these would seem to be impossible, and, in fact, it is stated that the few failures which have occurred have been occasioned either by criminal mismanagement on the part of the officers, or by neglect or violation of the law on the part of the directors.1

It is to be observed, furthermore, that the liabilities to depositors and all outside creditors except bill-holders, amount to $838,-000,000, and this amount is absolutely covered by cash and other available resources amounting to $873,000,000. The condition of the banks is precisely what it would have been if they had kept all deposits either on hand or safely invested in the public funds, and had loaned only their own capital and their credit in notes to the amount of about three-fourths of their capital. In other words, they are banking on their own funds, and not on borrowed money.

1 Finance Reports, 1867, p. 4; 1873, p. 99.

The proportion of capital to liabilities is much greater in this country than elsewhere-and this, no doubt, is owing to the strict requirement that the authorized capital shall be paid in. In England, as a rule, only a portion of the capital is paid in, though the stockholders are liable in every case for the full amount of their subscriptions, and, except in the limited banks, for all debts of the corporations. The London Economist of October 19,1878, gives the following figures for the capital, reserve, and liabilities of 3417 banks in the United Kingdom, including the Bank of England:

The corresponding statistics for the national banks of the United States appear above, as follows:

It will be seen that the capital of the 2053 American banks is about equal to the capital of the 3417 British banks, while the liabilities of the British banks are considerably more than double the liabilities of the national banks. The ratio of the aggregate capital and reserve to liabilities is 55 per cent. in this country and 23 per cent. in Great Britain.

The unexampled solidity of the national banks attracted the intelligent attention of the London Economist as long ago as 1866. After a thorough examination of the then comparatively new system, the Economist said, February 24,1866 :

We find that the banks of America are in a very sound state; we find that they have a larger available reserve against their liabilities than any European banks; we find that they depend far more on their own capital, which cannot be taken from them, than any European banks. In former times-in 1837 and 1857-the State banks of America kept very small reserves, and failed by wholesale; but this is not the case with the new national banks. If America were now subjected to the difficulties of 1S37 or 1857, probably her banks would be able to resist the strain. Of course America must pass through the trying change from war to peace; she ought to pass through the trying change from an inconvertible currency to a convertible. But we now 6ee that in both changes she will be assisted by a sound system of banking, and therefore we need be much less fearful of a momentous crash than if, as in former periods of danger and difficulty, her central institutions of credit had been, even when not insolvent, at least grossly deficient in available resources.

The trying change from an inconvertible to a convertible currency has now been accomplished. "Resumption was made certain on the 1st day of January, 1879," says Comptroller Knox, "by the cheerful co-operation of the banks."1 Their own notes are redeemable in coin the moment the legal tenders are withdrawn from circulation. In the execution of every measure intended to restore the national credit and lighten the public burdens, the government has been able to rely securely upon the intelligent and powerful aid of the national banks. These advantages have been secured to the public under a law which is not irksome to prudent, well - managed banks, but has proved exceedingly vexatious to those associations which would prefer to do a speculative business with insufficient capital, no reserves to speak of, and an excessive circulation. The sole privilege which the law grants in compensation for its many restrictions, is the right to issue circulating notes. That the banks value this privilege is shown by the fact that they generally abandoned the State system as soon as a prohibitive tax was laid upon the notes authorized by State law. That they do not value it inordinately is also plain; for,although their capital entitles them to over $400,000,000 of notes, and they hold nearly bonds enough to secure that amount of circulation, they have called for only about $300,000,000.