How our national banking system worked

With these few general provisions in mind, we are now in a position to examine the operation of the system and attempt to find explanation of those evils to which the credit mechanism of the country has clearly been subjected. The services of the national banking system in driving out the disorganized note issues of state banks, and in furnishing to state governments a model for regulating institutions of their own creation could not be gainsaid. But in no field of human activity had greater changes taken place than in that of commerce and business, and it could not but be felt that the development of credit and banking had lagged behind. Particularly inadequate did our banking system appear when attention was called to the frequency and severity of industrial crises in the United States. Such credit collapses did not occur with equal frequency or severity in European countries with great central banks.