In the United States under the national banking system the idea of free banking was carried to its extreme not only through the unrestrained chartering of institutions with very small capital (the minimum being made in 1900 as low as $25,000), but also through the prohibition of the establishment of branches. Inability to create branches consequently implied the necessity of creating many small institutions, with the result that in the United States to-day the total number of banks is roundly stated as 30,000. These banks are of all grades of size, efficiency, management, and types of business, and even in the national banking system, numbering but 8,000 members, all of which operate under some uniform standards of supervision, owing to the fact that they are obedient to the dictates of a single statute, several different kinds of banks must be recognized. Taking the typical New York City or Chicago institution, we may regard it as practically on a plane with the English joint-stock banks or with the chartered Canadian or Australian banks. It is an institution of large capital, broad ramifications, and highly advanced methods of business. Were it permitted to establish branches, it would undoubtedly do so, placing them at strategic points throughout the country and eventually building up a network of communications similar to those existing in Canada or in Europe. On the other hand, the small country bank of $25,000 capital has few connections outside of its own community, and these only with larger banks which act as agents for it in the holding of its funds and in providing remittances. Such banks are to be regarded as analogous to the branches of the great European and Canadian institutions which are established here and there merely for the sake of meeting the convenience of the community.

There has always been much discussion about the question what type of banking system is the best or the most scientific - a problem referred to at the opening of the present chapter. This controversy has reduced itself to several distinct phases which may be grouped as the discussion about central banking or the desirability of a central bank, the desirability of branch banking, and the question of interlocking directorates or interbank control. Some attention ought to be given to each of these topics by every student of banking evolution, since a comparison of ideas relating to them throws much light upon the question of types of banking systems. In practically every industry to-day there is a process of integration - that is to say, a process of classification and organization which results in the establishment of definite units of business. This is true in banking as in other industries; in fact, it is probably more broadly true in banking than elsewhere, owing to the fact that banking is so highly developed and systematized as an occupation. This process of integration in practically every industry works toward the standardizing of products, the establishment of narrower margins of fluctuation in prices, and the creation of methods of insuring community of action and unity of control throughout the industry.