Many banks for a long period did not avail themselves in the least of their privilege of issue.

The notes were subject to a tax.[2] A national bank (as the law now stands) may be organized, with $25,000 capital in towns not exceeding three thousand population, with $50,000 in towns not exceeding six thousand, with $100,000 in cities not exceeding fifty thousand, and with $200,000 in large cities.

Three cities, New York, Chicago, and St.Louis, have long been designated as central reserve cities, and some 47 other cities as reserve cities, in which the reserves of banks were required to bear a considerably larger proportion to their deposits than in other cities.[3] Other banks might count as part of their legal reserves their deposits in reserve city banks, up to a certain proportion.

The national banks in the larger cities thus became the great capital reservoirs of cash for the whole country.
National banks have been subject to stricter inspection than have been the banks in most of the states, a fact which has strengthened public confidence in their stability.

Except in this and the other respects above mentioned, a national charter offered few, if any, attractions to small banks, a majority of which have found it more advantageous to operate under state charters because of less stringent regulations as to amount of capital, reserves, and supervision.
Sec.4.