Next in importance to State banks, trust companies and savings banks, came the private bankers. They were very numerous, exercising some influence among the alien population of their own race. Their operations were not as far reaching as those of the national and commercial State banks, but on a much smaller scale. They dealt generally in retail exchange and engaged in the sale of steamship tickets, acting as special agent for the transportation of goods between countries. However, in recent years, due to stringent legislation being placed upon their operations, the private bankers have felt the hardship of standing up against modern day systematically and progressively managed organizations, and their influence has passed away to a large degree.

The Investment Banker

The investment bankers, however, showed strong organization and progress. They exercised great influence in commercial banking operations. Their business extended to the private financing of industrials, public utilities, commercial firms, etc., engaging in stock and bond issues, and the distribution of same; dealing in foreign exchange, and engaging in the sale and purchase of securities on commission, for account of their clients. They acted as fiscal agents for municipalities and firms, and performed a relatively important service. Not being under such strict legislative supervision as the State banks and national banks. They could extend their operations into almost any field, including foreign, on a much wider scale than the State or national banks. In some States, a reserve in the form of securities was required to be deposited with the various State governments for protection of depositors. They were very numerous as a class, and very powerful. Some of the larger establishments extended their operations even to the control of national and State banks by means of stock ownership.