ABSTRACT
Between 1884 and 1908, the restrictions on the formation of new banks in California were minimal in that neither California’s Bank Commissioners nor the U.S. Comptrollers of the Currency denied bank charter applications because these regulators believed a local community did not need a new bank. 1 Given this freedom, the pattern of bank entry in California in this period provides information in two areas. First, it shows how largely unrestricted banking spreads through a rapidly developing economy. Second, it indicates the importance of various market factors in determining the attractiveness of local bank markets when regulators’ preferences do not affect the location of new banks.
