=The Banking Corporation.=—­Very closely related to the growth of business enterprise on a large scale was the system of banking.  In the old days before banks, a person with savings either employed them in his own undertakings, lent them to a neighbor, or hid them away where they set no industry in motion.  Even in the early stages of modern business, it was common for a manufacturer to rise from small beginnings by financing extensions out of his own earnings and profits.  This state of affairs was profoundly altered by the growth of the huge corporations requiring millions and even billions of capital.  The banks, once an adjunct to business, became the leaders in business.

[Illustration:  Copyright by Underwood and Underwood, N.Y.

WALL STREET, NEW YORK CITY]

It was the banks that undertook to sell the stocks and bonds issued by new corporations and trusts and to supply them with credit to carry on their operations.  Indeed, many of the great mergers or combinations in business were initiated by magnates in the banking world with millions and billions under their control.  Through their connections with one another, the banks formed a perfect network of agencies gathering up the pennies and dollars of the masses as well as the thousands of the rich and pouring them all into the channels of business and manufacturing.  In this growth of banking on a national scale, it was inevitable that a few great centers, like Wall Street in New York or State Street in Boston, should rise to a position of dominance both in concentrating the savings and profits of the nation and in financing new as well as old corporations.

=The Significance of the Corporation.=—­The corporation, in fact, became the striking feature of American business life, one of the most marvelous institutions of all time, comparable in wealth and power and the number of its servants with kingdoms and states of old.  The effect of its rise and growth cannot be summarily estimated; but some special facts are obvious.  It made possible gigantic enterprises once entirely beyond the reach of any individual, no matter how rich.  It eliminated many of the futile and costly wastes of competition in connection with manufacture, advertising, and selling.  It studied the cheapest methods of production and shut down mills that were poorly equipped or disadvantageously located.  It established laboratories for research in industry, chemistry, and mechanical inventions.  Through the sale of stocks and bonds, it enabled tens of thousands of people to become capitalists, if only in a small way.  The corporation made it possible for one person to own, for instance, a $50 share in a million dollar business concern—­a thing entirely impossible under a regime of individual owners and partnerships.