should be studied with care, and thoughtful inquiry made of business conditions and resources of the place under consideration. If the reader is entirely inexperienced in the purchase of this class of securities, then the perusal also of such subjects as "Legal Investment for Savings Banks," "Bond Values Tables," and " Net Return upon the Investment " is advised. Upon the whole, municipal bonds are about as good a field for the safe investment of funds as any. The percentage of loss within the last twenty-five years has been but small. For this, credit is due the dealers in such securities who have been largely instrumental in improving the laws regulating their issuance in many of the States, and who have forced the municipalities to live up to them, and who have offered but little encouragement for too excessive debt creating even where legally permissable. Mutilated Currency, Redemption of. Those desiring to have currency redeemed which has been mutilated are advised to write to the United States Treasury Department for instructions, as there are certain rules and conditions with which it is necessary to comply, and which can be had in printed form. Mutual Savings Bank. A savings institution, all the profits of which belong to the depositors; mutual ownership. Most savings banks are of this kind, and are without capital stock. However, there are in Pennsylvania, for example, savings banks of both kinds, those with and those without capital stock. Savings banks with capital stock are known as "stock savings banks," and the stockholders of such institutions derive their profits after the payment of the interest to the depositors. The management of savings banks having capital stock is vested in a board of directors and officers, the same as any other corporation, but a "mutual savings bank" is managed by what is known as a board of trustees, formed by its organizers at the time of its creation, and having the power among themselves to fill vacancies. M. & N. Interest or dividends payable semi-annually, May and November. M. & S. Interest or dividends payable semi-annually, March and September. N or "North." N. The ticker abbreviation for new restricting the investments of their savings banks, permit the purchase of bonds of cities in excess of a given population within a certain limitation of debt. That is, the bonds of any city within those States fulfilling the general requirements are considered legal savings banks investments. There are, however, certain cities having a net indebtedness in excess of the prescribed limit, but whose bonds are considered desirable investments. These cities, therefore, are specifically named, and do not come in under the general debt limitation. Such cities are referred to by the investment dealer as named cities." Napoleon. A name for the modern French gold twentyfranc piece, worth approximately $3.86 in United States money. It is a reproduction of a coin minted during the time of Napoleon Bonaparte. Narrow Market. When there are extremely few transactions upon the stock exchange. This may be used, of course, to express the market in other commodities than stocks. A wool merchant might say that there was a very narrow market" in his line of business, which would indicate that there was very little wool selling. National Bank.1 Incorporated under a charter granted by the United States Government, by which it is given authority to receive money on deposit subject to check, make loans, collect drafts, issue national bank bills — which is a form of currency, or money and do the general business required of a bank which accepts what are known as business deposits. Discounting and negotiating promissory notes, bills of exchange, and other forms of indebtedness, buying and selling exchange, making collateral loans, etc., are among the important functions of such an institution. In a limited way, it may purchase and hold real estate. As a rule, no interest is allowed on deposits, but, of course, may be by special agree ment. Formerly the amount which a national bank might loan to any one person, company, or firm, was limited to a sum equal to 10% of the paid up capital stock of the bank. In 1906 this was changed by an Act of Congress, increasing this limit to 10% of the capital and surplus, but in no event to exceed 30% of the capital. 'The query is often raised as to the right of a shareholder of a national bank to inspect its books and records. The United States Supreme Court has rendered a decision in effect that the right of inspection rests upon the primary proposition that the stockholders of a corporation own the property and that its officers are their agents, and, therefore, that a shareholder, with proper motives, may be permitted to inspect the books of such an association upon demand, and can enforce his right in the State Courts. National banks are not permitted to have branches, which not only accounts, in a large measure, for the difference between the United States and Canadian banking systems, but for the large number of small banks which we have scattered throughout this country. No bank in the United States, except one chartered as above, is permitted to have as a part of its name the word " National," and every such bank, likewise, must have the word "National" as part of its name.1 This is a protection to the public, and enables every one to be assured that such an institution is safe-guarded by national restrictions. On Nov. 12, 1906, there were 6,199 national banks in existence; total resources, $8,213,878,296.68; paid up capital stock, $847,514,653; surplus fund, $504,548,213.62. The history of the national banking system has been marked by very few failures, from 1863 to Oct. 31, 1905, only 5% of the total number of such associations having been closed as the result of insolvency. In nearly every case it was due to fraudulent management, or violations of the national banking laws. Other subjects which have a direct bearing upon national banks, and to which the reader is referred, are: "Double Liability," "Gold Banks," and the following six subjects. National Bank Call. Every national bank is required to render a report of its financial condition to the Comptroller of the Currency at least five times a year. The Comptroller issues "calls" for these reports without previous notice and may do so at any time. The condition of the banks on some given day previous to the issue of the "call," and not after, is secured. He may also "call" for a special report whenever he sees fit. National Bank Circulation. See National Bank Notes. National Bank Depository. See "United States Depository.” National Bank Examiner. The Comptroller of the Currency, with the approval of the Secretary of the Treasury, appoints a suitable person, or persons, to make an examination into the affairs of every national bank, who shall have power to make a thorough examination into all the affairs of the bank, and shall make a full and detailed report of the condition to the Comptroller. "There has been but one exception to this rule, that having been made in connection with the conversion, in 1864, of The Bank of North America, Philadelphia. This was the first organized bank in the United States, and the first which had any direct relation to the Government of the United States. When conversion was effected, favourable consideration was given to the request of the directors and other officers to become a national bank without change of title." - Letter received by the writer from the Comptroller of the Currency, dated May 7, 1906. National Bank Loans. Among the various restrictions surrounding the subject, there is one fact always to be borne in mind by all parties in relation to such a transaction, viz., that national banks are, by law, prohibited from loaning to any one person, firm, or corporation, more than one-tenth of its (the bank's) actually paid in capital stock and surplus, but in no event to exceed 30% of the capital. The discount of bills of exchange drawn against existing actual values, and the discount of commercial or business paper actually owned by the person negotiating the same, not to be considered in the amount of such a loan. 66 National Bank Notes.1 In order to increase the amount of money available for use, and at the same time produce what is known as an "elastic currency," that is, a form of money which can be increased or diminished within certain limitations, as the exigencies demand, national banks are authorized to take out circulation;" to issue what are known as "national bank notes," being one of the most common types of paper money in use in the United States. There must, however, be certain security behind these notes, other than the promises of the banks to pay, in order to protect the holder of such money, and thus make him willing to accept it at its face value without hesitation. The law requires that a bank, for instance, wishing to issue $100,000 in bank bills, must first secure $100,000 United States bonds. (No bank can issue "circulation" greater than its fully paid up capital stock.) Any unmatured interest-bearing United States bonds may be used, provided they are in registered form. "Circulation may be taken out against these bonds to the extent of their full face value, and, in the case cited, $100,000 in national bank notes may be issued by the bank. Should the market value of the deposited bonds fall below par, the Comptroller may demand legal tenders, or enough more bonds, to fully protect the notes issued. The United States' "promise to pay," therefore, is back of the bank notes, in addition to the assets of the bank issuing the same; strengthened by the lawful money reserve (see "Reserve") and the 1 Cleveland defines a "National Bank Note" as: "A promise of a national bank to pay to the holder, or bearer, on presentation, the amount named in the bill in legal-tender money of the United Statesi.e. in gold, silver coins, or greenbacks. This makes the bank-note indirectly convertible into gold at the option of the one owning or holding it." 2 In October, 1906, the Secretary of the Treasury announced that he would accept approved securities - meaning in general thereby, railroad bonds which are legal investments for savings banks in Massachusetts or New York other than Government Bonds, for United States deposits, to the amount of $18,000,000 with the understanding that the United States Bonds thus relieved should be used as a basis for increased circulation. Any bank taking out such circulation was required to retire the same between March 15th and August 10th, 1907. 5% redemption fund. (See "Five Per Cent. Redemption Fund.") This has provided us with a safe and sound currency, circulating throughout the country without discount or distrust. It is immaterial in what part of the country the issuing bank is located, whether it is solvent or has gone into the hands of a receiver, the United States is virtually behind the notes, and pledged to redeem them. The Government does not allow a greater reduction in the total amount of "national bank notes" outstanding than $9,000,000 in any one month. This does not apply in the case of bonds called for redemption, for notes secured by such bonds may be retired. This provides against too great a contraction in the currency. It further provides that every bank must deposit with the Treasurer of the United States a certain amount of bonds, but not less than $50,000, according to the amount of its capital stock. It is optional with the bank as to the issuing of circulation against him, however. The Chemical National Bank of New York has never issued circulating notes. "National bank notes" shall be received at par in all parts of the United States in payment of taxes, excises, public lands, and all other dues to the United States, except duties on imports; and also for all salaries and other debts and demands owing by the United States to individuals, corporations, and associations within the United States except interest on the public debt, and in redemption of the national currency. They are not "legal tender," and must not be counted in the " reserve" of a national bank. All national banks must receive notes of other national banks at par. These notes are redeemable in lawful money of the United States by the Treasurer, but not by the Assistant Treasurers. On Jan. 5, 1907, the outstanding circulation amounted to $596,361,164. Of this amount $549,174,179 was secured by United States bonds, and the remainder by a deposit of "lawful money." The Comptroller of the Currency gives the following method of ascertaining profit on circulation, taking the 2% Consols as an example: "In calculating the profit the interest on the bonds is added to the interest received on the circulation loaned at 6 per cent., giving the total receipts on an investment in $100,000 worth of bonds as $8,000. From the gross receipts are deducted the taxes on circulation, average expenses incident to cost of plates, redemption charges, etc., and the amount set aside. as a sinking fund to provide for the premium paid for the bonds, the difference being the net receipts. Assuming that the amount invested $100,000 worth of bonds was |