ABSTRACT
The results of the first set of regressions demonstrate that two arguments that have been advanced about late 19th century banking are not supported by the data on national banks. First, usury laws did not have any measurable impact on lender behavior. Variation in usury law limitations was not associated with variation in the balances rural bankers held in central reserve city banks. Second, higher net earnings were not associated with larger bankers' balances, so that it was neither more nor less profitable to hold bankers' balances. There are several interesting conclusions to be drawn from the regression results. One can think of US national banks as being divided into two groups of banking systems, distinguished by their size and integration into the overall monetary mechanism. State banks funded many of the agricultural mortgages denied by law to national banks, but it seems from results that national banks may be regarded as indirect suppliers of long term funds to agriculture.
