y loaned on the security of real estate and for longer
periods.

Despite their limitations in this respect, the commercial banks must
be recognized as of growing importance in the work of encouraging and
collecting small savings, which in many cases are better invested in
other ways. In 1916, the centenary of the beginning of savings banks
in this country, a nation-wide propaganda was undertaken by the
American Bankers' Association for the encouragement of savings.

Sec. 4. #Investment banking#. Enormous amounts of securities issued by
governments or by corporations (railroad or industrial) are now on
the market and to be bought conveniently by private investors. Through
special bond houses some bonds are to be had in denominations as small
as $100 and $500. The regular brokers on the stock exchanges buy and
sell, for a small commission, the regular bonds and investment stocks.
Several large statistical and financial expert agencies[5] in return
for an annual subscription, offer advice to investors regarding
general market conditions and special securities.

For a large number of investors the personal examination and selection
of sound securities is too difficult a task. To serve their needs many
bonds and trust companies have of late developed special departments
for investment banking. Through these agencies the banks are
constantly placing as relatively permanent investments securities
which they have bought or have aided "to float" or which they handle
only as commission agents. In any case the real investment banker
is bringing to his task special training and a high sense of
his professional obligations, and is employing the services of
statisticians, financial experts, and of practical engineers to
determine exactly the fundamental conditions of each investment.
Investment banking promises to increase steadily in amount and
importance.

Sec. 5. #Savings banks in the United States.# For the increasing
number of wage-earners, salaried employees, and persons following
professions, investment as active capitalists is impossible.[6] Their
savings must take the form of passive investments. But there are few
good opportunities for lending money in small amounts, without great
risk, and the requirement of skill, time, and labor to look after the
loans and to collect the interest is prohibitive to a small lender. To
provide a place where small sums could be kept with safety and so as
to yield a moderate rate of inco