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 /^^^^''^i ^yfe /yr fii/t A ^^^^' 
 
CENTURY OF 
 AMERICAN SAVINGS BANKS 
 
 Published Under the Auspices of THE SAVINGS 
 BANKS ASSOCIATION OF THE STATE 
 OF NEW YORK in Commemoration of the 
 Centenary of Savings Banks in America 
 
 Retrospective-Prospective 
 
 BY 
 
 JAMES HILTON MANNING 
 
 President of the Savings Banks Association of the State of 
 New York May 21, 1914 to May 18, 1916; Vice- 
 President for New York State of the Savings 
 Bank Section of the American Bankers 
 Association 1915-1916 
 
 "Save and teach all you are interested in to save; 
 thus pa've the ivay to moral and material success. " 
 
 Thomas Jefferson 
 
 NEV^ YORK 
 B. F. BUCK & COMPANY 
 
 160 Fifth Avenue 
 1917 
 

 y-ii "^ 
 
 
 
 Kssooso 
 
 Copyright, 1917 
 
 By 
 
 BENJ. F. BUCK, NEW YORK 
 
 ■^y)A) 
 
FOREWORD 
 
 The preparation and publication of this work grew out 
 of the desire on the part of the Savings Banks of the State, 
 and more especially the Savings Banks Association of the 
 State of New York (of which the author had the honor 
 to be president from May 21, 1914, to May 18, 1916), to 
 make suitable permanent record of the celebration of the 
 Centenary of American Savings Banks. 
 
 That celebration was held in connection with the twenty- 
 third annual convention of the Association in the city of 
 New York, May 17 and 18, 1916. It was an ever-memor- 
 able occasion in the history of Savings Banks in the United 
 States, attended by more than five hundred representa- 
 tives of this great interest from all parts of the country, 
 more especially from New England and the East. Unfor- 
 tunately, the clamant demands of the war prevented the 
 attendance of delegates from European countries, but they 
 were present in thought and spirit, as their most cordial 
 letters, written amidst all the dangers and distractions of 
 soul-harrowing times and printed in the chapter on the 
 celebration, clearly show. 
 
 Originally conceived as a small pamphlet to contain the 
 proceedings of the celebration, the work has gradually 
 grown to the proportions of a two-volume edition, em- 
 bracing in its scope the rise of Savings Banks in Europe- 
 and America, a history of each of the so-called pioneer banks, 
 of the United States, School and Postal Savings Banks, the 
 Thrift Movement in America, etc., besides numerous chap- 
 ters of a practical nature on the management of these in- 
 stitutions of the people. In addition to this there is pre^ 
 sented an authentic history of each of the 141 Savings 
 Banks in the State of New York, written from first-hand 
 information obtained especially for this work. This proved 
 
iv FOREWORD 
 
 a very arduous task, one which the author believes was 
 never before undertaken. That it may be found not 
 merely interesting but useful, both historically and as an 
 incentive to still greater efforts in behalf of our splendid 
 system of Mutual Savings Banks, is the sincere wish of the 
 author. 
 
 So many-sided was the subject seen to be and so volu- 
 minous the material collected, that all the arts of condensa- 
 tion necessarily were employed to reduce the work even to 
 its present limits. It would have been easily possible to 
 expand it into several volumes, instead of two, and then 
 not do the subject full justice. This is said for the special 
 information of those who may have contributed material 
 which has not been included, and those, if any there be, 
 who are inclined to the belief that their own particular in- 
 stitution has not been given due prominence. 
 
 In another aspect the occasion was seen to be of unique 
 importance. That the marking of this anniversary of the 
 establishment of the first Savings Bank in America could 
 be made to give the Thrift Movement in this country a 
 most powerful impetus — an impetus that should be felt 
 long after the incidents of the celebration had been forgotten 
 — was unquestionable. That such impetus was needed no 
 one who has even superficially studied the conditions and 
 possibilities of this wonderful country of ours for a moment 
 doubted; for while the figures collected and marshaled in 
 this work are truly stupendous in the aggregate, probably 
 few will have the temerity to claim that the people of the 
 United States have become really thrifty, or that much more 
 than a good start has been made in that direction. 
 
 With wise economy and prudence in expenditure, such 
 as is exhibited for example by the little republic of Switzer- 
 land, or the wonderful people of France, we should soon 
 become facile princeps in respect of accumulated savings 
 per capita of population, as well as in the sum total. That 
 such may be the final outcome of the present Thrift Move- 
 ment, is the sincere hope of every well-wisher of his country. 
 
 But it is impossible to write the history of Savings Banks, 
 either individually or in the aggregate, wholly in figures. 
 
FOREWORD V 
 
 The good they do in the communities where they exist is 
 immeasurably greater than the grand total of the dollars 
 which they guard and invest with such splendid efficiency. 
 As was admirably said on the occasion of the semi-cen- 
 tennial of the Dime Savings Bank of Williamsburgh: 
 
 "In this respect no other commercial enterprise is comparable to 
 the Savings Bank. It is as much a necessity in a community as is 
 the church, the library and the hospital, and usually it will be found 
 that the men who organize and serve as trustees of Savings Banks 
 are the same who, in their localities, are active in all charitable and 
 semi-charitable endeavors. To be a trustee of a Savings Bank is a 
 distinct honor and to which the best citizens of the community may 
 justly aspire." 
 
 This, to some extent, explains why prominent and busy 
 men-of-affairs in all the leading communities are willing 
 to give up so much of their time and thought to the man- 
 agement of these institutions of the people. 
 
 So long as this remains true, their perpetuity is assured. 
 
 The author desires to make grateful acknowledgment of 
 the loyal cooperation of his brother officers in the arduous 
 labor of collecting the necessary material for this history; 
 without that cooperation his efforts necessarily would have 
 been in vain. Special acknowledgment should also be 
 made of the valuable assistance given by Hon. Clark Wil- 
 liams, Charles A. Miller, Charles J. Hailes, Kenneth G. 
 White, John J. PuUeyn, Horace Anderson, Howard F. 
 Beebe, John Harsen Rhoades, Benjamin F. Buck. 
 
 The paucity of material pertaining to so vast and im- 
 portant a subject as Savings Banks has been remarked 
 upon by more than one writer. That the present work may 
 prove a welcome and to some extent valuable addition to 
 the literature of the subject, is the sincere hope of 
 
 The Author. 
 
 Albany, New York, December 30, 1916. 
 
CONTENTS 
 
 CHAPTER PAGE 
 
 I A Century of Thrift in America ... 1 
 
 Importance of the Event Celebrated by the Savings Banks 
 of the Country — ^The Great Lever That Has Lifted Strug- 
 gling Humanity Out of the Depths — Former Dependents 
 of Society Now the World's Potential Capitalists — New 
 York Rightfully Proud of Its Preeminence — Reasons Why 
 the Thrift Movement in the United States Should Be En- 
 couraged. 
 
 II The Savings Bank Idea 15 
 
 Ancient Origin of Banking — ^Money not Created by Gov- 
 enmient, but Regulated by it from Time Immemorial — 
 A Sound Banking System Essential to Stability of Values 
 — ^The Principle of Saving as Old as History — Savings 
 Banks Defined, Described and Classified — Founded in 
 Philanthropy and Free from Selfishness — ^Not Investment 
 Institutions but Financial Depositories. 
 
 III Origin of Savings Banks in Europe ... 30 
 
 Outgrowth of Philanthropic Plans for the Amelioration of 
 Poverty — First Literary Advocacy in France, First Prac- 
 tical Test in Germany and First Statutory Regulation in 
 America — Defoe's Pension Office Scheme the True Idea 
 — ^Rev. Joseph Smith in England and Rev. Henry Duncan 
 in Scotland Real Pioneers — Rapid Spread of the Move- 
 ment Since That Time — Origin of Savings Banks in 
 Other Countries. 
 
 IV Rise of Savings Banks in America . . .54 
 
 New York, Pennsylvania and Massachusetts Divide the 
 Honors — Survey of the Country a Century Ago — War 
 with Great Britain Had Left the Currency Demoralized 
 — Efforts to Relieve the Sufferings of the Poor — ^Little 
 Manufacturing, and Fears for the Food Supply — Rise of 
 the Factory System — ^Population of the Country Only 
 Eight and a Half Millions — Savings Bank Statistics — 
 The Morris Plan. 
 
viii CONTENTS 
 
 CHAPTER PAOE 
 
 V Pioneer Savings Bank in the New World 73 
 
 To Conde Raguet Belongs the Honor of Founding the 
 First Institution of This Character to Open Its Doors on 
 This Continent, the Philadelphia Saving Fund Society — 
 Facsimile of the First Account Opened — Brief History of 
 the Society, Now One of the Greatest in the World — 
 Biography of President Purves. 
 
 VI Boston First to Incorporate .... 89 
 
 Massachusetts Leads the World in Giving Savings Banks 
 the Sanction and Protection of the Law — "The Provident 
 Institution for Savings in the Town of Boston" Incor- 
 porated December 13, 1816, the Second Savings Bank to 
 Open Its Doors in America — James Savage Its Father and 
 Founder — Copy of the Charter — Officers Since Organiza- 
 tion — Deposits by Ten-year Periods. 
 
 VII Maryland Hears the Call 98 
 
 The Savings Bank of Baltimore the Third to Begin Busi- 
 ness in the United States — ^Prominent Citizens and Capi- 
 talists Interested and Active — First Deposit Taken on 
 March 16, 1818 — Steady Progress Shown Since That 
 Time — ^List of Presidents from Date of Organization, and 
 Original Act of Incorporation. 
 
 VIII Salem Second to Incorporate . . . .106 
 
 List of the Original Incorporators and Copy of the Char- 
 ter Granted by the Legislature, January 29, 1818 — State- 
 ment Showing Remarkable Growth Since Organization — 
 The School Savings Bank System Being Operated Suc- 
 cessfully — Sketch of President Samuel S. Rea. 
 
 IX New York's Pioneer Institution . . .112 
 
 The Bank for Savings Organized in November, 1816, and 
 Chartered March 26, 1819 — Opened on July 3, Following 
 — ^Thomas Eddy and John Griscom the Leading Pro- 
 moters — Extracts from the First Report to the Legislature 
 in 1820 — Investments in Real Estate Advocated by Gov- 
 ernor DeWitt Clinton and Authorized by the Legislature 
 — First Officers. 
 
CONTENTS ix 
 
 CHAPTER PAGE 
 
 X Connecticut Sixth in Line . . . .128 
 
 Incorporation of the Society for Savings, Hartford, on 
 June 1, 1819 — First Opened for Receipt of Deposits in 
 July Following — ^The Incorporators and First Officers — 
 Rapid Growth Shown — Quarters Several Times Outgrown 
 — Present Officers and Trustees. 
 
 XI Rhode Island's Earliest Banks . . .132 
 
 The Savings Bank of Newport Incorporated in June, 
 1819, and the Providence Institution for Savings in Oc- 
 tober of the Same Year — ^No Further Incorporations Un- 
 til 1828 — History of These Pioneer Banks of the Smallest 
 State — Financial Statements and Rates of Dividends Paid 
 — ^Two Vigorous Century Plants. 
 
 XII New York's Second Institution . . . 143 
 
 Incorporation of the Albany Savings Bank, March 24, 
 1820— Opened for Business June 10, 1820— Early Re- 
 strictions on Withdrawals — First Loan on Bond and 
 Mortgage, to Stephen Van Rensselaer — ^The Bank's Hand- 
 some Home — Officers Since Organization — The Original 
 By-Laws. 
 
 XIII Postal Savings Banks in Europe and 
 
 America 155 
 
 Sir Charles Sykes the First to Propose Their Establish- 
 ment — ^Ready Means of Introducing the Money Order 
 System — ^An Instant Success in England — Other Coun- 
 tries Follow — Features of the System Described — Bitter 
 Opposition in the United States Finally Overcome, and 
 the Plan Is Inaugurated in 1911, with Moderate Success — 
 Late Statistics. 
 
 XIV School Banks as an Auxiliary . . . .165 
 
 Their Real Value Now Generally Conceded — Pioneer 
 Work of John H. Thiry — System Firmly Established — 
 Long Island Plan Fully Described — Indirect Results of 
 Marked Value — ^New York's Splendid Campaign — ^Late 
 Statistics — Duties and Obligations of the Schools Toward 
 Pupils, Parents and the State. 
 
X CONTENTS 
 
 CHAPTER 
 
 XV Development of Savings Bank Legisla- 
 tion 
 
 182 
 
 Serious Objections to the Special Incorporation Plan — 
 First Charters Varied Widely as to Privileges and Pow- 
 ers — Early Beginnings of the System of State Regula- 
 tion — First General Investment and Organization Laws 
 — General Law Enacted in 1875, Pursuant to Constitu- 
 tional Requirement — Railway Bonds First Made Legal 
 in 1878 — Salutary Results of State Examinations. 
 
 XVI Mortgage AS A Savings Bank Investment 196 
 
 The Difficulties of Proper Appraisal — Good Bonds not 
 Easy to Obtain — ^How Some Borrowers "Milk" the Prop- 
 erty — Brokers and the Manner in Which They Operate 
 — "Filtered Mortgages" — Title Examination Exceedingly 
 Important — Title Companies Bear Losses When They 
 Come — Forged Mortgages not Uncommon — Steady De- 
 mand for Guaranteed Mortgages. 
 
 XVII Investment in Railroad Bonds . . .209 
 
 History and Principal Features of This Part of the Sav- 
 ings Bank Law — The Revision of 1905 a Step in the Di- 
 rection of Uniformity — Application of the Law to the Re- 
 funding of Mortgages — Brief History of the Working of 
 the Statute in the Ten Years Since Its Enactment — Opera- 
 tion Becomes Automatic — Changed Conditions Require 
 Great Care — Some Interesting Comparisons. 
 
 XVIII Liquidity OF Investments 222 
 
 How Can Savings Banks Meet Extraordinary Demands 
 Without the Necessity of Notice of Withdrawal or the Sac- 
 rifice of Values? — One of the Few Remaining Big Prob- 
 lems — Consensus of Banking Men as to Convertible As- 
 sets — County Bonds and Their Availability — Demand for 
 Municipals — Financial Panics and Their Lessons. 
 
 XIX Relations of Savings Banks, Discount 
 
 Banks and Trust Companies . . .234 
 
 Each Class of Institution Entitled to Its Own Field — 
 The Trust Company a Comparatively Modem American 
 Institution — Chief Distinguishing Feature Its Trust Pow- 
 ers — What It May Do — Sound versus Unsound Banking 
 
CONTENTS xi 
 
 CHAPTER PAGE 
 
 — Popular Ignorance of Savings Bank Principles — Inter- 
 est Departments Operated by Discount Banks and Trust 
 Companies — Should the Banking Law Be Changed? 
 
 XX Dormancy of Accounts 246 
 
 Some Popular Misapprehensions Corrected — Systematic 
 Efforts by Bank Officials to Minimize These Accounts — 
 Their Aggregate Much Less than Is Popularly Supposed 
 — Some of the Leading Causes of Dormancy — Such Ac- 
 coimts Never Outlawed — ^Their Annual Publication Now 
 Required — Some Very Interesting Cases Given in De- 
 tail, Showing Remarkable Detective Ability — Grateful 
 Recipients. 
 
 XXI The Savings Bank or To-morrow . .289 
 
 Marvelous Things Accomplished in the Century of Mu- 
 tual Savings Banks — Constant Vigilance Necessary on the 
 Part of Officers — Merely Honorary Positions Out of 
 Date — Importance of the Trustee — Progressive Banking 
 — ^The Ethics of Advertising — "Cooperative Competition" 
 — ^What of the Future? — Benefits of Financial Educa- 
 tion. 
 
 XXII Our Economic Position in 1916 . . .301 
 
 How the Wealth of the United States Has Increased Dur- 
 ing the Past Century — ^Nations Brought Closer To- 
 gether — 1915 and 1916 Years of Wonderful Prosperity — 
 How the United States Is to Meet the Changes That Are 
 Inevitable at the Close of the War — The Staggering Debts 
 of the Principal European Nations — Wisdom of the Na- 
 tion-wide Thrift Campaign. 
 
 XXIII The Spendthrift Nation 315 
 
 Are We Really a Saving People? — ^Love of Luxury and 
 Pleasure the Leading Characteristics of To-day — Self-de- 
 nial the Basis of Character — ^Words of Wisdom from 
 Great Men of All Ages— Why Thrift Is Blessing— Ex- 
 amples Showing How Money Grows — Some True Little 
 Stories from Real Life. 
 
xii CONTENTS 
 
 CHAPTER PAGE 
 
 XXIV Organization of the Savings Banks As- 
 sociation OF THE State of New York . 334 
 
 Great and Lasting Benefits Derived — ^Nearly Every Bank 
 in the State Now Included — ^The Early Meetings and 
 Those Who Attended Them — Concerted Action in the 
 Matter of Proposed Legislation One of the Objects Aimed 
 at — ^The First Officers Chosen — Group System Adopted 
 with Good Results — Banking Law Revision — Central 
 Banking Council Formed in 1916. 
 
 XXV The Savings Bank Centenary . . .350 
 
 Appropriately Celebrated in the City of New York, May 
 17, 1916 — More than Five Hundred Present at Celebra- 
 tion, Convention and Dinner — Guests from Other States 
 but None from Europe — High School Prize Essay Contest 
 — ^Many Messages of Encouragement and Congratulation 
 from Abroad — ^The Addresses in Epitome. 
 
ILLUSTRATIONS 
 Conde Raguet Frontispiece 
 
 PAGE 
 
 First Savings Bank, Ruthwell Village, Scotland . . 30 
 
 G. Colesberry Purves 72 
 
 First Savings Bank Account opened in America . . 77 
 
 James Savage 88 
 
 Henry Parkman 94 
 
 Charles S. Rea 106 
 
 Thomas Eddy 112 
 
 Stephen Van Rensselaer 142 
 
CENTURY OF AMERICAN 
 SAVINGS BANKS 
 
 CHAPTER I 
 
 A CENTURY OF THRIFT IN AMERICA 
 
 Importance of the Event Celebrated by the Savings Banks of the 
 Country— The Great Lever That Has Lifted Struggling Hu- 
 manity out of the Depths — Former Dependents of Society Now 
 the World's Potential Capitalists — New York Rightly Proud of 
 Its Pre-eminence — Reasons Why the Thrift Movement in the 
 United States Should Be Encouraged. 
 
 It has long been a worldwide custom, both pleasant and 
 profitable, for all right-minded individuals to pause in 
 their several vocations at the close of each succeeding year 
 and look back over what has been accomplished — ^pleasant, 
 because the season is universally regarded as peculiarly 
 dedicated to the spread of the gospel of goodwill; profitable, 
 because it is by studying the experiences of the past that we 
 learn to avoid mistakes in the future. It is in such spirit 
 that the Centenary of Savings Banks in the United States 
 is celebrated. 
 
 If the end of a twelvemonth is thus decreed by custom 
 as the proper time for introspection and retrospection, how 
 much more is the close of a century to be regarded as a fit- 
 ting opportunity to take stock of progress, to ascertain what 
 has been accomplished and to resolve, so far as in us lies, 
 to eliminate the failures and shortcomings of the past! 
 
 A century of American Savings Banks ! Could there be 
 a subject more pregnant, a topic more attractive, a theme 
 more inspiring? One hundred years ago, a tiny weakling, 
 appealing to a cold, unsympathetic world for- sustenance 
 
2 CENTURY OF AMERICAN SAVINGS BANKS 
 
 lest it perish — to-day, a Colossus, astride the financial 
 world, one foot upon Poverty, the other upon Despair; the 
 right hand scattering blessings untold upon poor, struggling 
 humanity, the left hand holding high the blazing STAR 
 OF HOPE! 
 
 Properly to estimate the good these institutions have ac- 
 complished in the century of their existence were much the 
 same as attempting to disclose the subtle alchemy of the 
 sunbeam, or to describe the gorgeous tints of the rainbow. 
 Truth to say, Savings Banks exercise much the same in- 
 fluence upon a community that sunbeams do upon the earth, 
 dispelling gloom and despair and giving in their place hope 
 and happiness. The mental, moral and physical uplift of 
 these institutions truly is incalculable; and yet, a century 
 ago, there were none in this great land of ours, and the older 
 countries of Europe were just crystallizing the epoch-mak- 
 ing idea into results. Crude as these were, they soon suf- 
 ficed to prove beyond doubt that, at last, the world was on 
 the right track and that the rest was merely a matter of 
 nurture and growth. How astounding that growth has 
 been will be shown in some detail in these pages. 
 
 PAUPERISM VERSUS SELF-RESPECT 
 
 "The poor you have always with you," said the Divine 
 Master, a sad truth which nearly two thousand years have 
 served to emphasize. All social philosophy has long 
 agreed that the poor could not be patronized and coddled 
 without the inevitable result of lapsing into pauperism. 
 For how many centuries the civilized world continued to 
 grope for the true solution of the problem of Poverty his- 
 tory only faintly records. Man's ambition, greed and self- 
 ishness on the one hand, and his thoughtlessness, waste 
 and bestiality, on the other, have made the problem well- 
 nigh insoluble. 
 
 And yet much — very much — has been done to improve 
 the condition of the poor, the shiftless and the unfortunate, 
 and in this regenerating process the Savings Bank has 
 proved the great lever that for a century has been slowly 
 
A CENTURY OF THRIFT IN AMERICA 3 
 
 but surely lifting humanity out of the Slough of Despond 
 into a clearer, purer atmosphere of contentment and hap- 
 piness. It has made possible the bridging over of the 
 rough places; it has conserved energy, built up innumerable 
 happy homes, deprived ill-fortune of its sting; erected un- 
 numbered hives of human industry that have kept the ar- 
 tisan busy and filled his dinnerpail ; built schoolhouses and 
 roads, inculcated habits of economy, providence, fore- 
 thought — in a word — THRIFT. And all this has been 
 done — at least, by the Mutual Savings Banks of the land — 
 without money and without price. In other words, these 
 institutions have cost their depositors nothing beyond the 
 legitimate running expenses. They have made the lives of 
 generations past, as they will make the lives of countless 
 generations to come, brighter, better, happier; they have 
 aided incalculably in producing a nobler manhood and a 
 sweeter womanhood. 
 
 Those pioneers who founded the first Savings Banks in 
 America builded better than they knew; they made all suc- 
 ceeding generations their everlasting debtors. At one mas- 
 ter-stroke, they gave poverty a blow more deadly and 
 struggling humanity an uplift more potent than anything 
 to be found in the history of recorded time. 
 
 A MODERN MIRACLE 
 
 For it is one of the marvels of all the ages that this single 
 institution has actually changed the once miserable de- 
 pendents of society into self-reliant, self-respecting citizens, 
 the real bone and sinew of the land ; that it has transformed 
 the former paupers of all lands, who were content to seek 
 even the crumbs that fell from their masters' tables, into 
 its real capitalists, the product of whose industry and self- 
 denial has built and is building our homes, our schools, our 
 factories, our ships, our roads, our bridges, our railroads, 
 our canals. 
 
 If this is not regarded as a modem miracle, it is because 
 familiarity has dulled our sense of perception and we are 
 imable to see things in their true relations. 
 
4 CESSTTURY OF AMERICAN SAVINGS BANKS 
 
 One's imagination is taxed to comprehend, even faintly, 
 the magnitude of the Savings Bank interest in the State of 
 New York, to say nothing of the country at large. The 
 Empire State has a right to be proud of its savings insti- 
 tutions, for it has the greatest system of Mutual Savings 
 Banks to be found anywhere in the world. It has a right 
 to be proud of the men who have unselfishly given so much 
 of their valuable time to the upbuilding and maintenance 
 af this system, which gathers and cares for the "gleanings 
 from the harvest fields of toil." 
 
 When Gov. DeWitt Clinton, in his message to the Legis- 
 lature of the State of New York in the year 1818, recom- 
 mended the establishment of Savings Institutions to relieve 
 the existing pauperism and destitution of the masses, and 
 when the Legislature in reply declared the suggestion highly 
 commendable and authorized the creation of the first Sav- 
 ings Bank in the State (The Bank for Savings in the City 
 of New York), it was little dreamed that therein lay the 
 nucleus of a potential force for universal good, which 
 should make the Savings Bank stand out on this its Cen- 
 tennial Anniversary as the benefactor of more than three 
 millions of people in New York State alone, representing 
 total deposits of nearly two billions of dollars, while, 
 throughout the United States the good work has so far pro- 
 gressed that eleven millions of people (one in every ten of 
 the population), have formed habits of thrift to such an 
 extent that their deposits in Mutual and Stock Savings 
 Banks represent nearly five billions of money. 
 
 The Mutual Savings Bank system as we view it to-day 
 is the result of one hundred years of corrective legislation; 
 it is closely identified with the moral and material interests 
 of every citizen of the State; it is the most important part 
 of the credit fabric of the Commonwealth. 
 
 THE REAL MEASURE OF THRIFT 
 
 There were in the State of New York at the close of the 
 year 1915, 3,243,362 depositors in 140 Mutual Savings 
 Banks, owning $1,819,206,937.91, an average to each de- 
 
A CENTURY OF THRIFT IN AMERICA S 
 
 positor of $560.90/ New York has nearly 45 per cent, of 
 all the savings deposits throughout the country ! 
 
 These figures, it should be remembered, include only 
 savings deposits in Savings Banks and take no note of in- 
 terest departments in National Banks and other financial 
 institutions. According to the latest available figures fur- 
 nished by the Comptroller of the Currency, there are over 
 three million savings accounts in such institutions. The 
 greater part of all the savings deposits in Chicago is held 
 by the loan and trust companies. The amount of savings 
 deposits in the country is shown to be over seven billions 
 of dollars, while the number of savings depositors or sav- 
 ings accounts must reach no less than seventeen millions. 
 This is a much greater amount of savings deposits than in 
 any other country, while only Germany and Japan can 
 show a greater number of savings depositors or savings 
 accounts. There should also be added to this vast total 
 the assets of the life insurance companies, for these are in 
 a sense savings institutions of the most practical and valu- 
 able kind. 
 
 Besides, as the editor of the Saturday Evening Post, of 
 Philadelphia, has pointed out, savings deposits are by no 
 means a trustworthy index to thrift. France is generally 
 conceded to be the thriftiest nation in the world, yet its 
 savings deposits are only one-quarter of those of Germany. 
 A thrifty Frenchman saves a few hundred francs, then in- 
 vests them in a good, safe bond. It is a gratifying sign of 
 the times that this wise and sound policy is being more and 
 more pursued in this country by the advice and cooperation 
 of prominent bankers in many of the leading cities. It is 
 also to be remembered that many thousands of thrifty agri- 
 culturists put their savings into land and livestock, so that 
 the true measure of thrift in the United States, as well as in 
 Europe, is never accurately stated or measured. 
 
 Nowhere will it be denied that the Savings- Bank has 
 more than justified the hopes of its founders in its adapta- 
 
 1 The number of Savings Banks in the State of New York was increased to 
 141 early in the year 1916. This is the first Savings Bank authorized in the 
 State since 1910. 
 
6 CENTURY OF AMERICAN SAVINGS BANKS 
 
 tion to the purposes for which it was designed, or that it 
 has, during the first century of its existence in this country, 
 made for itself and for humanity a record so wonderful in 
 the aggregate as to be almost beyond belief. When we 
 examine these results, how feeble and paltry in comparison 
 must have been the accomplishments of any merely chari- 
 table or eleemosynary institution, however great, well-con- 
 ceived or admirably administered! 
 
 That Savings Banks are the safest institutions in the 
 world is not merely a statement, but is easily susceptible of 
 proof. Statistics recently obtained in this country show 
 that the total liabilities of failed Savings Banks, in pro- 
 portions to the aggregate deposits of all such banks, is only 
 about six ten-thousandths of 1 per cent. (0.0006 per 
 cent.). And if we deduct the amount realized on the assets 
 of those few unfortunate or badly managed institutions the 
 actual losses to depositors are almost infinitesimal. 
 
 It is also highly gratifying to know that the cost of con- 
 ducting the Savings Banks of the State of New York is 
 less than $3 per thousand dollars of resources. Neither 
 greed nor graft has ever yet had a place in them. May 
 this be true so long as they shall endure! 
 
 NEW York's splendid system 
 
 Happily, we have never lost sight of the theory of the 
 State which wisely created and fosters the system, viz. : that 
 their primary purpose is the establishment of absolutely 
 safe depositories for the accumulations of the working 
 classes, and that profit always must be a secondary con- 
 sideration. In pursuance of this plan, every safeguard 
 which experience could suggest or skill and foresight devise 
 has been provided. And yet it is true that the most per- 
 fect system ever devised by the wit of man, in the last 
 analysis must rest upon the integrity and vigilance of those 
 earnest, philanthropic men who, without hope of reward, 
 have organized and consistently stood behind these bul- 
 warks of the working classes. Without doubt, they have 
 been constantly sobered by the knowledge, never for a mo- 
 
A CENTURY OF THRIFT IN AMERICA 7 
 
 ment lost sight of, that these vast sums entrusted to their 
 care, represent the strength, the vigor, the toil — the very 
 life — of these men and women, to be held in trust perhaps 
 until 
 
 Wasting age and wearying strife 
 Have sapped the leaning walls of life, 
 
 and it becomes necessary for them to draw upon their ac- 
 cumulations. 
 
 New York, being thus rightfully proud of the preemi- 
 nence of its Savings Banks, very properly has taken the 
 initiative in the celebration of this Centenary. The in- 
 teresting — one might almost say, fascinating — story will be 
 told with strict adherence to the truth of history, and in the 
 light of all the facts which diligent research has been able 
 to discover. 
 
 It is proper here to remark that in other States outside 
 of New England and the East, where Savings Banks never 
 have succeeded in gaining a firm foothold, it will be found 
 that building and loan associations and other similar in- 
 stitutions are supplying their place, not only in providing 
 assistance to those in moderate circumstances who are trying 
 to own their own homes, but furnishing a very profitable 
 and convenient method of investing surplus funds. And 
 while there have been many failures of these institutions in 
 some of the States, it is gratifying to know that they are 
 gradually being placed under more stringent regulations 
 and that their management is unquestionably improving.^ 
 
 In explanation of the fact that considerably more than 
 one-third of the Savings Banks deposits of the country are 
 to be foimd in New York State and nearly one-fifth in 
 Massachusetts, it may be said that there is a sentiment 
 throughout the West that "interested beneficence is better 
 than disinterested beneficence"; and yet it is indisputably 
 true that many of the strongest Savings Banks in this 
 country and in the world are these same Mutual banks, of 
 
 1 According to the report of the Superintendent of the Banking Department 
 of the State of New York for 1916, there were 215 savings and loan associa- 
 tions scattered over forty-seven of its sixty-two counties. 
 
8 CENTURY OF AMERICAN SAVINGS BANKS 
 
 which New York and Massachusetts are so justly proud. 
 In the matter of failures, at least, "disinterested beneficence" 
 seems to have much the better of the argument, and if the 
 same class of men in America and Europe continue to give 
 their thought and time to the safeguarding of these "gran- 
 aries of the poor," there need be no fears for the future. 
 
 THE FOLLY OF RECKLESS WASTE 
 
 With all this unstinted praise of the Savings Bank system 
 as we find it to-day, it must be conceded that, judged by the 
 test of ratio of accounts to total of population, the system 
 does not prove wholly satisfactory, for while the New 
 England States show one account to two of population, the 
 Western States show only one to about 18, the Middle 
 States one to 48, and the Southern States one to 406 ! This 
 is a condition which has long been known and recognized 
 by thoughtful men, and at last something is being done to 
 awaken people all over the country to the wickedness and 
 folly of reckless waste. The splendidly organized and 
 systematically promoted campaign inaugurated toward the 
 close of the year 1915, under the auspices of the American 
 Institute of Banking, and the American Bankers Associa- 
 tion (Savings Bank Section) to aid in stopping extrava- 
 gance and inculcating thrift is certain to be productive of 
 good results. Happily, this movement was not rendered 
 necessary by such desperate economic conditions as will 
 confront the warring nations of Europe for many years 
 after the close of hostilities, but it is none the less timely 
 and deserving of support. It was dictated by wise pru- 
 dence and foresight. 
 
 The American people often and openly have been 
 charged with being the most recklessly extravagant of all 
 the races of the earth, and doubtless, there is some basis of 
 truth in the assertion. Realizing this, the great banking 
 organizations of the United States are to be highly com- 
 mended for taking the initiative in so important a move- 
 ment. 
 
 A financial writer recently showed that if the one hun- 
 
A CENTURY OF THRIFT IN AMERICA 9 
 
 dred millions of people of this republic, during one year, 
 would save per capita only five cents more a day than the 
 year before, the total would reach a sum so great as to be 
 fairly staggering — ^not less than $1,500,000,000. Of 
 course, no expectation was entertained that they would do 
 this, but the concrete example shows the mighty power of 
 accumulation. Thrift means surplus, and surplus means 
 reserve wealth for the meeting of obligations, be they per- 
 sonal or governmental. 
 
 WHAT THE THRIFT MOVEMENT MEANS 
 
 During the next ten or fifteen years, the United States 
 will have need to raise vast siuns of money, and the greater 
 the reserve wealth of the nation, the easier will be the Gov- 
 ernment's stupendous tasks. With the proper effort, this 
 THRIFT MOVEMENT is Certain to bring also to our own 
 people, as it will to the whole world, a more or less adequate 
 realization of the mighty resources of the United States and 
 the capacity of its people, when once they are aroused, to 
 accomplish any given task. 
 
 All sorts of dire predictions have been made as to what 
 the future has in store for the United States, and while it 
 is unnecessary to be either a confirmed pessimist or a too- 
 hopeful optimist, no matter what may be our lot, whether 
 it be in the pleasant paths of peace or in the stirring scenes 
 of war with ruthless invaders of our soil, let it be ever re- 
 membered that the results will be measured and governed 
 to a very large extent, aside from the valor of the troops, 
 not by the number or amount of bonds which the nation 
 might issue — for unless the bonds were salable they would 
 be worthless — but by the aggregate of the people's savings. 
 
 The country, at the opening of the year 1916, found it- 
 self facing the greatest period of prosperity in its history. 
 As one of the results of the awful world-war that has devas- 
 tated the principal countries of the Old World, this nation 
 has been paying off its outside indebtedness in a manner 
 wholly unparalleled in its history. In order to supply 
 some small part of the fearful waste, and to continue the 
 
10 CENTURY OF AMERICAN SAVINGS BANKS 
 
 titanic struggle, the leading countries of Europe have been 
 liquidating their holdings of American securities, repre- 
 senting their contributions to our rapid material develop- 
 ment, to an extent never believed possible by our wisest 
 statesmen and financiers; however, the wonderful stimulus 
 given to our industries while those across the ocean — except 
 the manufacture of death-dealing instrumentalities — were 
 paralyzed, has given us a capacity for absorption of this 
 flood of securities never deemed possible. It is the testi- 
 mony of experts that the ordinarily difficult and painful 
 adjustments to new conditions created by the war have been 
 accomplished with unexpected ease. In truth, we are be- 
 ing enriched beyond the dreams of avarice. 
 
 It is the opinion of some of the wisest observers that our 
 prosperity, contrary to the view held in many quarters, is 
 not dependent upon the war; that while the conditions at- 
 tendant upon the war stimulated, they did not create the 
 forces making for all this great activity in this country. 
 However that may be, the prosperity is here and we are 
 literally rolling in wealth.^ What effect the ending of the 
 war may exert upon this coimtry, none is wise enough to 
 foresee, but it appears to be the best opinion that not upon 
 its continuance hangs the fate of our trade at home and 
 abroad, "but rather upon our own industry, our foresight 
 and our willingness to cooperate to the end that the oppor- 
 tunity which is now afforded us, the greatest ever offered to 
 the people of any country, may be profited by to the full." 
 
 But along with all this prosperity, present and prospec- 
 tive, come great obligations. While America faces a future 
 that is simply amazing in its possibilities, that very fact 
 should serve to sober and strengthen its people, should cause 
 
 1 Wall Street finds interest in the Paris Temps' s contrast of this country's 
 financial position before the war and now. That journal says : " Then the 
 United States was sending to Europe from $200,000,000 to $300,000,000 in inter- 
 est on its borrowings, $150,000,000 to $200,000,000 spent by tourists, $100,000,- 
 000 to $150,000,000 to expatriates and $20,000,000 to $40,000,000 in ocean 
 freights. Since the war the United States has imported $730,000,000 in gold 
 and has paid back a considerable amovmt of its previous borrowings, increased 
 its foreign trade by $2,250,000,000 yearly and loaned to foreign countries 
 $1,470,000,000, so that the American dollar now has replaced to a considerable 
 extent the old sovereignty of the English poimd abroad." 
 
A CENTURY OF THRIFT IN AMERICA 11 
 
 a general realization of the duties and obligations of the 
 situation. 
 
 NEW CAPITAL THE ONE IMPERATIVE NEED 
 
 It will hardly be denied anywhere that the great — ^the 
 imperative — need of the United States to-day is the creation 
 of new capital. It is equally true that no nation ever 
 reached greatness without having learned the art of accum- 
 ulation. 
 
 Capital is the margin between income and outgo. It 
 represents two things — ^labor and self-denial. The more 
 universal the practice of these virtues, together with those 
 of frugality, prudence and temperance, the greater will any 
 nation become. It is by means of these that man has lifted 
 himself above the brutes. Moreover, all this new capital, 
 of which the United States will soon be in great need, not 
 only for the development of natural resources but in the 
 carrying out of the "preparedness" program upon which 
 we are entering, will have to be obtained from within, for 
 Europe will have all it can do for many, many years to come 
 to make good the ravages of the awful conflict it has been 
 so ruthlessly waging for so many weary months. 
 
 For many years we have been so engrossed — obsessed — 
 with the craze for money-making that, apparently, it has 
 required the frightful cataclysm of this world-war to bring 
 us to a realization of our abject, pitiful weakness, in a 
 military sense, and our imperative need of national defense. 
 
 But now, it seems, we are awake and eager, not for any 
 participation in war but to make successful interference 
 with the processes of our moral and material development 
 along the lines we have chosen impossible should any na- 
 tion, however powerful, dare attempt it. On every hand 
 there are unmistakable evidences that we are determined 
 no ruthless invader shall overrun our fair land and compel 
 tribute to its greed for gold — for it is unthinkable that any 
 nation, however rash, would ever dream of permanent oc- 
 cupation of any part of our territory. Our Government, 
 in order to carry out any program that meets the sanction 
 
12 CENTURY OF AMERICAN SAVINGS BANKS 
 
 of the people, will have need for stupendous sums of money, 
 and this money will have to come from the ordinary people, 
 the common people, the great middle class — it will not come 
 from the great capitalists. 
 
 Secretary of Commerce Redfield said recently: 
 
 We have for the first time in our history, a sound system of finance. 
 In this respect our preparedness is complete. Our finances can be 
 mobilized on demand to meet the needs of trade. Enterprises and 
 investment may move with a certitude never before known as regards 
 our financial system. We hold the greatest gold reserve of history. 
 Whether we shall remain in the first place depends upon the vision 
 and energy of our bankers, manufacturers, merchants and farmers. 
 
 This is to a certain extent true, but the Secretary might 
 have added a still more important factor in the problem, 
 and that is the aggregate of our savings. No great pre- 
 paredness program can ever be fully realized unless and 
 until the whole people of this country learn the lesson of 
 thrift which a part have already learned. The New Eng- 
 land and. Eastern States have long shown the way, and it 
 is high time that the Middle West, the West and the South 
 fell into line and began to do their share in swelling the 
 accumulated capital of the nation to proportions commen- 
 surate with their earning and saving power. As the really 
 important thing with the individual is not what he earns 
 but what he saves, so the vital thing with a nation is the 
 amount of its available liquid capital. Without national 
 thrift, all the efforts of our bankers, manufacturers, mer- 
 chants and farmers will be of little avail. 
 
 At the same time, the need of naval and military defense 
 is fully as great. It is a fact beyond dispute that most 
 modern wars have arisen from commercial jealousies; the 
 present colossal struggle in which Europe is engaged is the 
 most recent and the most frightful example. The United 
 States sees its opportunity and is now seeking to obtain the 
 world's trade. Can any one doubt that, as soon as hostili- 
 ties cease, there will come the most drastic commercial ad- 
 justment, the fiercest struggles and the most dangerous 
 rivalries ever known, or that the United States will be the 
 
A CENTURY OF THRIFT IN AMERICA 13 
 
 storm center of these disturbances? What should be said 
 of us if we fail to guard against these dangers while yet 
 there is time? 
 
 These are the wise words of the Navy League of the 
 United States: 
 
 Nations are not always just and fair; consequently, we have had 
 one foreign war in every thirty-five years of our national existence. 
 Other wars are, to say the least, probable. We hope for universal 
 peace — sometime. But we don't expect the millennium to come dur- 
 ing our time. Therefore, we want to keep our -powder dry. 
 
 STOP THE WASTE IN AMERICA! 
 
 We may not be privileged to do anything toward stopping 
 the fearful waste in Europe, but we can do much to stop the 
 waste in America. From now on, economy must be the 
 watchword — wise economy, thrift — ^not miserliness — Gov- 
 ernmental, State, municipal, individual. English money, 
 French money, German money, Dutch money built many of 
 our railroads. American money will have to build our 
 battleships, our aeroplanes, our submarines, our munition 
 factories, our ordnance. 
 
 While we are rejoicing at the return of "good times," we 
 must not lose sight of the fact that with this wonderful 
 prosperity has come higher and still higher cost of neces- 
 sities, which further emphasizes the need for careful buy- 
 ing, for wise husbanding, for systematic saving, for con- 
 servation of resources too long wasted with carelessness 
 bordering upon criminal. 
 
 In this vital work every individual citizen — every man, 
 woman and child in the republic — can play his part, for it 
 is by the combination of innumerable little economies that 
 the grand result will be achieved, just as many rivulets 
 form rivers and many rivers flow into the sea. Happy the 
 nation that has for its watchword the magic little word — 
 thrift! Then brightly will dawn the new century of 
 Savings Banks in America, bright not only in material 
 progress but in the priceless blessings of liberty and justice, 
 equality and fraternity, peace and prosperity. These, 
 
14 CENTURY OF AMERICAN SAVINGS BANKS 
 
 spreading abroad their benign influence, will make us a 
 still greater nation, not merely in a material sense, but broad 
 of vision, high of courage, generous of heart, noble of im- 
 pulse. 
 
 As we look forward at the beginning of the second cen- 
 tury of Savings Banks in the United States, what emotions, 
 what hopes, what aspirations must stir the thoughtful, and 
 what fears, perhaps, may temporarily overcome us ! 
 
 Are we not saddened inexpressibly by the thought that 
 none now living — or practically none — will be here to cele- 
 brate another similar event? All will have been gathered 
 to their fathers, 
 
 Each in his narrow cell forever laid. 
 
 If we of the century just passed have been highly favored, 
 what will be the lot of the coming generations? What in- 
 novations, what improvements, what progress, what growth 
 will be made? What world-wide changes — economic, 
 social, political — will be witnessed? Will War — ^hated, 
 wicked, devastating war — have been abolished forever and 
 peaceful arbitration substituted in its place? Will the 
 fearful engines of destruction have been turned into plow- 
 shares and the swords into pruning-hooks? Will right rule 
 in place of might ? 
 
 We may all speculate and conjecture, but the power of 
 divination is beyond poor mortals' ken. Let us not seek to 
 disclose what the future has in store, but rather be content 
 to do our part while yet we are here, thoroughly, conscien- 
 tiously, nobly. The grand result we may safely leave to 
 the divine control and guidance. 
 
 Whether the second century of Savings Banks will prove 
 as great in growth, in development, in beneficial results to 
 mankind as the first, none is wise enough to foretell; but 
 let us all be sure that if we have done our individual part, 
 if we have cultivated the spirit of patriotism, of independ- 
 ence, of industry, and have practiced prudence, frugality — 
 THRIFT — we need have no fears as to the results. 
 
CHAPTER II 
 
 THE SAVINGS BANK IDEA 
 
 Ancient Origin of Banking — Money Not Created by Government, but 
 Regulated by It from Time Immemorial — A Sound Banking 
 System Essential to Stability of Values — ^The Principle of Saving 
 as Old as History — Savings Banks Defined, Described and Clas- 
 sified — Founded in Philanthropy and Free from Selfishness — 
 Not Investment Institutions but Financial Depositories. 
 
 The origin of Banking extends far back of recorded 
 history to the time of mere tradition. We are told that 
 there was a bank established in ancient Babylon, founded 
 by one Egibi, which existed for many years — 604-485 — 
 and that it conducted operations "that would have done 
 credit to the Bank of England." There are records of the 
 existence of other very ancient banking institutions. 
 
 Banking was well imderstood in ancient Athens, and 
 while it languished in the Middle Ages, it revived with com- 
 merce in general about the middle of the twelfth century. 
 The Bank of Venice dates at least as far back as the year 
 1157, Genoa, 1345, Barcelona, 1400, Hamburg, 1619, and 
 Amsterdam, 1669. On July 27, 1694, the celebrated Wil- 
 liam Patterson founded the Bank of England, and the Bank 
 of Scotland followed one year later. The Bank of Vienna 
 dates as far back as 1703, Berlin, 1765, and the United 
 States Bank, 1790, although it was not incorporated until 
 the year 1816. 
 
 Money, as we know, was not created by government. 
 Long before any organized system of govermnent existed, 
 the inconvenience of barter caused people to use as a meas- 
 ure of value and a medium of exchange some commodity 
 such as wampum, cattle, silver, gold or other precious metal, 
 
 15 
 
16 CENTURY OF AMERICAN SAVINGS BANKS 
 
 which nearly everybody desired to possess. Any com- 
 modity so used was money/ 
 
 But while money was not created by government, its regu- 
 lation, from time immemorial, has been one of the most 
 important of the functions of government in all civilized 
 countries. Stability was early seen to be the prime requi- 
 site, for if money fluctuated greatly in value no man could 
 tell whether he would lose or gain by any transaction; con- 
 sequently confidence was destroyed and commerce stagnated. 
 This is why all the leading nations of the world, China 
 alone excepted, have made their silver and paper money 
 redeemable in gold. 
 
 Equally essential to prosperity and the stability of values 
 is a sound banking system, for if banks are lacking, or if 
 they do not for any reason command general confidence, the 
 people will hide their money, with the result that those who 
 need to borrow in order to transact their business must pay 
 exorbitant rates of interest, and commerce stagnates. 
 
 ORIGIN OF THE MODERN SAVINGS BANK 
 
 While the first mention of money-changers is to be found 
 in the Bible, it is a fact that in Greece the temples were the 
 first banks. Delphi and Olympia furnished superior 
 places in the way of security for the deposit of gold and 
 silver, and at the same time, as gathering places of pilgrims 
 and devotees, they gave both useful and profitable occupa- 
 tion to the money-changers. 
 
 It is not deemed any part of the plan of this work to 
 trace the rise and development of banking in general; that 
 has been done by some of the world's ablest students of 
 
 1 It is said that in Old Testament times, when the countries bordering on the 
 Nile, the Euphrates and the Tigris rivers were the centers of trade, the Carthagin- 
 ians were wont to sail along the Mediterranean with boatloads of their manufac- 
 tures, which they would unload on the coast of Lybia and, having lighted a big 
 bonfire near the goods, return to their ships. The inhabitants, knowing by the 
 bonfire that the Carthaginians had something to sell, would come out of their 
 city to inspect it. Then they would pile up their gold near the merchandise and 
 retire into the city. The Carthaginians would land again, examine the gold, 
 and if in their judgment it was equal in value to the goods they left, they would 
 take it and sail away. 
 
 This illustrates at once the ancient plan of barter, and also one of the first 
 advertisements of which history tells us — the Carthaginians' bonfire. 
 
THE SAVINGS BANK IDEA 17 
 
 finance. It is with the origin of the modem Savings Bank 
 as we now know it that we are here principally concerned. 
 
 The principle of saving is as old as history. The code 
 of Hammurabi, King of Babylonia (2240-2185 b. c), who 
 was as great in conquests of peace as of war, provided not 
 only for canals to bring in the overflow waters, but also the 
 erection of great granaries for the storing of wheat against 
 periods of famine. In biblical times, Joseph accumulated 
 the corn of Egj^t when it was plentiful for the seven lean 
 years that were to follow. Probably the earliest Savings 
 Banks on record were those established by the Roman em- 
 perors for the accommodation of their soldiers — ^Legion 
 Savings Banks they were. It was in the second century 
 after Christ, according to historians, that the humane cus- 
 tom obtained in Rome of permitting slaves to deposit extra 
 earnings in the creation of a fund for the final purchase of 
 their freedom. 
 
 Banks have been tersely described as lenders and bor- 
 rowers, their loanable funds consisting on the one hand of 
 their own capital, and on the other of the deposits en- 
 trusted to them. Their principal profits arise from the 
 payment to them of interest on loans. 
 
 Another writer has defined banking as "the agency by 
 means of which credit is made to effect the bulk of the 
 operations of production and exchange." ^ In the light of 
 these definitions, Savings Banks, strictly speaking, are not 
 banks at all. They are rather depositories of small savings 
 upon which dividends are declared from time to time in the 
 form of interest earned. 
 
 James Henry Hamilton, in his work "Savings and Sav- 
 ings Institutions," thus defines them: 
 
 Savings Banks are institutions established by public authority, or 
 by private persons, in order to encourage habits of saving by afford- 
 ing special security to owners of deposits, and by the payment of in- 
 terest to the full extent of the net earnings, less whatever reserve the 
 management may deem expedient for a safety fund; and in further- 
 ance of this purpose offices are located at places where they are cal- 
 
 lAmos K. Fiske, "The Modem Bank," (1915). 
 
18 CENTURY OF AMERICAN SAVINGS BANKS 
 
 culated to encourage savings among those persons who most need such 
 encouragement. 
 
 THE SAVINGS BANK MEANS SELF-HELP 
 
 The Savings Bank is the direct outgrowth of the idea of 
 philanthropy as applied to the condition of the working 
 classes of the community, those in moderate circumstances 
 who, necessarily or otherwise, live close to the limit of their 
 means, and who, in times of depression, financial panic and 
 lack of business confidence are the first to feel the pinch of 
 privation. It does not seek, according to the ideas preva- 
 lent centuries ago, to make these people objects of charity — 
 the very word is hated by the self-respecting poor — ^but to 
 help them to help themselves. And herein lies its greatest 
 strength and popularity. It makes independent, self-re- 
 specting, self-reliant men and women, instead of spineless, 
 purposeless, hopeless dependents. It is the true benefactor 
 of the wage-earner. 
 
 The experience of the world in the past century has shown 
 that "the greater the disadvantages under which one starts 
 in life, the higher the value of these virtues for winning the 
 first foothold and taking the first step toward something 
 better. The Savings Bank depositor has been called 'a 
 hero of civilization,' for he is helping in the accumulation 
 of that capital which is the indispensable prerequisite of all 
 we care for and all we want to do here on earth." 
 
 Prof. William G. Sumner, of Yale University, has said: 
 
 The Savings Bank depositor, as a type, gives the surest and most 
 concrete evidence of the industrial virtues. He must be industri- 
 ous, frugal, prudent and temperate. He is a capitalist. He is 
 getting in hand that power which has created and now upholds all 
 civilization. He is winning a share in its power. He is getting the 
 upper hand of the tasks of life. He is fortifying himself against 
 bad luck and disaster. He is developing his own character by the 
 self-denial and the persistent pursuit of a selected purpose which he 
 is obliged to practice. You find nowhere else such guarantees of 
 sound judgment, sober reason, and moderate temper as are offered 
 by the fact of saving. There is no other guarantee of good citizen- 
 ship which is so simple and positive, and at the same time so far- 
 reaching, as the possession of savings. 
 
THE SAVINGS BANK IDEA 19 
 
 It is one of the glories of the Savings Bank that it enlarges 
 the number of capitalists and at the same time reduces the 
 army of possible prodigals, paupers and tramps. By this 
 very act of saving, the saver aligns himself with the con- 
 servatives, and as a supporter of aii institution that is not 
 only an educator but at the same time a friend of capital, 
 of order and stability, both political and social. To use the 
 language of another : 
 
 While the Savings Bank is not organized to make money it is most 
 profitable in several ways. It accumulates money; it inspires and 
 trains men to get money and to the wise use of it; it spares those 
 who have capital from charges upon it for the support of those who 
 might otherwise become poor; it makes better men and families and 
 better citizens; it adds to the sum of national resources in money 
 and adds to the means of advancement in material improvement. It 
 is thus a many-sided benefaction-^to those out of it, as well as to 
 those in it. 
 
 It has also been very aptly said that while "the particular 
 fimction of a commercial bank is to supply fvmds to carry 
 on the trade and commerce of the country, the particular 
 function of a Savings Bank (aside from the encouragement 
 of thrift), is to supply funds for the improvement and 
 building up of communities and for other legitimate enter- 
 prises. The one furnishes credit, the other capital." 
 
 The large accumulations of current savings and their 
 purchases of negotiable securities in vast quantities give 
 Savings Bank managers an influence in the money market 
 that is now fully recognized by financiers; they are strong 
 competitors for capital in formation, and are constantly on 
 the lopkout for first-class securities, bidding against direct 
 investors. 
 
 SAFETY, NOT PROFITS, THE FIRST CONSIDERATION 
 
 Savings institutions soon proved their inestimable worth, 
 and the century during which they have carried on their op- 
 erations has only served to emphasize and magnify their 
 importance. Some one has truly said that it is not in sim- 
 ple human nature to put by a store for the ever-possible 
 
20 CENTURY OF AMERICAN SAVINGS BANKS 
 
 "rainy day." The savage and the child go on in reckless 
 improvidence. They take no thought for the morrow. In 
 this respect they are little better than the lower animals. 
 They need to be taught and trained. 
 
 Although Savings Banks frequently are described as 
 charitable institutions, eleemosynary in their character and 
 for the special benefit of the poor, the description is hardly 
 accurate. They are, in fact, benevolent institutions, pro- 
 viding safe depositories for the savings of the thrifty; they 
 are in their nature a public advantage designed to teach 
 correct habits of frugality and forehandedness. Being de- 
 positories for savings only, they can do no other business. 
 Each depositor owns individually all that stands to the 
 credit of his account, and all the depositors jointly own the 
 ^'surplus" and other property. Under the law of the State 
 of New York, the Savings Bank is not a business venture, 
 taking business risks and chances and seeking to make as 
 large profits as possible. On the other hand, it holds the 
 relation of a trustee for its depositors; safety, not profit, 
 is the primary object in its investments. As an illustration, 
 it does not "call" a mortgage in order that it may loan the 
 money to somebody else and profit on the transaction; nor 
 does it buy bonds because they are cheap. Ordinary banks 
 and trust companies are not Savings Banks, and the class 
 of securities in which they may invest their general deposits 
 are not limited by law as are those of the Savings Banks. 
 
 "The utility of the Savings Bank to organized society," 
 says Mr. Charles L. Stone, of Syracuse, "is coming to be 
 recognized. Amid the clash of interests everywhere to be 
 found, and the attempts to incite the hostility of labor 
 against capital, as though their interests were always and 
 necessarily antagonistic, amid all the disorganizing and dis- 
 cordant forces at work for the disintegration of society, the 
 Savings Bank offers a constant invitation and encourage- 
 ment to thrift, economy and the accumulation of the sur- 
 plus earnings of labor. The accumulations thus encour- 
 aged become capital. Capital is always conservative and 
 in favor of stable government. Through the instrumental- 
 
THE SAVINGS BANK IDEA 21 
 
 ity of the Savings Bank, any one who in the course of a year 
 may be able to save one hundred dollars or five hundred 
 dollars of the proceeds of his labor, has the opportunity 
 offered for an investment of that sum in securities of the 
 highest order, with the same pro rata advantage from his 
 investment as the large capitalist may receive from an ap- 
 proved investment of his funds; while, at the same time, 
 the depositor's money remains at all times subject to his 
 call." 
 
 Always it should be remembered that deposits, instead 
 of being hoarded, are loaned on real estate and invested 
 in bonds,, thus not only bringing earnings to the depositors 
 in the form of interest, but helping to build homes and fac- 
 tories and to carry on many other necessary public improve- 
 ments. In this way — a sort of endless chain — the money 
 finds its way back to the artisan and laborer in the form 
 of work and wages, to be again spent for food, clothing, 
 shelter and recreation. 
 
 "Scattered dollars are impotent dollars. Assembled dol- 
 lars are powerful dollars. The congregated fvmd moves 
 in one direction and has a common aim; whereas the scat- 
 tered dollars all have different ends and aims." 
 
 CARDINAL RULES FOR SAVINGS BANK TRUSTEES 
 
 Early in their existence, the Legislatures of the various 
 States, in recognition of the great utility and public good 
 of these institutions, enacted special laws to protect them 
 and the depositors. Their investments are carefully regu- 
 lated by law, the classes of securities being limited and 
 named; they are not allowed to hold any stocks of indus- 
 trial corporations ; they are regularly examined by the State 
 Superintendent of Banking, and under their present man- 
 agement and the wise and beneficent laws enacted, — more 
 especially in the Eastern States, — ^they are well conducted 
 institutions doing an amount of public good absolutely in- 
 calculable. Conservative management is one of the chief 
 factors of their success. 
 
 Assuming that the Savings Bank is virtually a safe de- 
 
22 CENTURY OF AMERICAN SAVINGS BANKS 
 
 posit company (with the added advantage that the former 
 invests the money intrusted to it and pays dividends 
 thereon), and should be as impregnable as a vault, the rules 
 essential for the trustee to keep in mind are these : 
 
 ^ First : Such a bank must be so conducted that the depositor can 
 have, on reasonable demand, every dollar deposited, coupled with 
 such interest as has been credited and not withdrawn. In other 
 words, the institution must have such an excess in assets over lia- 
 bilities that the management is convinced that, if given reasonable 
 time, the assets could be sold and each and every depositor paid in 
 full. 
 
 Second: The institution must always be in condition to meet at 
 any time, a demand from its depositors, not of an abnormal charac- 
 ter, because no bank could liquidate and pay every depositor at an 
 hour's notice. But it is all-important to remember that the cash be- 
 longs to the depositor and that he has a right to his claim. There- 
 fore, in addition to a proper margin of safety in the assets over lia- 
 bilities — known as surplus, or guarantee fund — there must be an 
 adequate cash reserve, either in the form of cash in the vaults of the 
 bank, or as a deposit reserve in other institutions. Add to these two 
 indispensable fundamentals — surplus and reserve — a law forbidding 
 any but the safest investments, a liberal portion to be of liquid char- 
 acter, and the picture is complete; the Savings Bank is not only im- 
 pregnable, but is an improvement upon the safe deposit vault. 
 
 Trustee Savings Banks were founded in philanthropy. 
 It is self-evident that there cannot be unfair competition, 
 ■corporate selfishness or inordinate, self -centered ambition 
 in philanthropic work, for just so soon as these elements 
 appear, the work ceases to be philanthropic. 
 
 Trustee Savings Banks, chartered by the State to encour- 
 age thrift throughout the State, constitute a system. Lack 
 of confidence in one conspicuous member may shake belief 
 in all. The trustees, therefore, for the preservation of 
 public confidence in their own institution must cooperate 
 for the conservation of the system as a whole. Nor should 
 they forget that the savings system is but a part of our bank- 
 ing structure, in the welfare of which the savings system is 
 deeply concerned, and for the welfare of which it must do 
 its share, 
 
 ^ John Harsen Rhoades. 
 
THE SAVINGS BANK IDEA 23 
 
 Trustee Savings Banks are not, as some contend, invest- 
 ment institutions; they are rather, financial depositories, 
 for if they were investment institutions, acting as agents 
 for the investment of the people's money, they would be 
 privileged, should occasion arise, to distribute among their 
 depositors, in lieu of cash, the depreciated investments in 
 which their savings had been placed. 
 
 Stock Savings Banks, on the other hand, are distinctly 
 business enterprises. There is no pretense on their part 
 of being purely philanthropic. As a general rule, the Stock 
 Savings Bank pays a stipulated rate of interest to its de- 
 positors and distributes the profits beyond that to the stock- 
 holders in the form of dividends. 
 
 There is no need to make comparisons of the relative 
 merits or stability of the two classes; both have points of 
 advantage, and when honestly and prudently managed, 
 both are admirable institutions. There is no doubt that in 
 the early history of the Mutual banks many abuses crept 
 in, and considerable losses were sustained by depositors, 
 weakening the faith of the general public in their stability; 
 but of late years, especially since wise laws have been en- 
 acted and firmly administered, including the building up 
 of adequate guaranty fimds, little fault can be found with 
 the management. 
 
 There is still another form of Savings Bank, peculiar to 
 the State of New Hampshire. This is known as the "Guar- 
 anty Savings Bank." It has been defined by the Bank 
 Commissioner of that State, R. H. Scammon, as quoted by 
 Wm. H. Kniffin, in his book "The Savings Bank and Its 
 Practical Work" (p. 60) : 
 
 The Guaranty Savings Bank differs from the ordinary Mutual 
 Savings Bank in that it has capital stock, or special deposits, as they 
 are called. It pays a certain stipulated rate of interest to its gen- 
 eral depositors and any surplus of earnings above this dividend is 
 available for dividends on the capital stock or special deposits. 
 These special deposits constitute a guaranty for the general depos- 
 itors, and the charter ordinarily stipulates that the special deposits 
 shall always equal 10 per cent, of the deposits. 
 
 It will be noted from this description that these special 
 
24 CENTURY OF AMERICAN SAVINGS BANKS 
 
 deposits are in the nature of capital stock, and it is further 
 to be remembered that these special depositors assume all 
 the risk of loss or depreciation in return for the higher 
 rate of interest received by them. These Savings Banks 
 violate one of the fundamental principles of Mutual Sav- 
 ings bank, viz.: That interest to depositors is not at a 
 fixed rate, but shall be paid only as it is earned. It is also 
 well settled that the surplus cannot be used in declaring 
 dividends, the latter fund being only for the protection of 
 the depositors. 
 
 It is also well to keep in mind the fact that starting a 
 Savings Bank is very different work from that of inaugu- 
 rating any other business enterprise. There is no capital 
 stock, the trustees or managers receive no salary or com- 
 pensation. Not only are they strictly prohibited from bor- 
 rowing any of the funds in their charge, but in the case of 
 the organization of a bank they are compelled to advance 
 money out of their own pockets to meet current expenses 
 until such time as the newly established institution is on a 
 paying basis. They must form an initial guarantee fund, 
 and an expense fund, both of $5,000 in amount, and must 
 make such additional payments to these funds as the Super- 
 intendent of Banking may deem necessary. These funds 
 are returnable when certain conditions have been fully com- 
 plied with. For all dividends declared and credited in 
 excess of profits earned, the trustees voting for such divi- 
 dend are jointly and severally liable. 
 
 Trustees are also held to a strict accountability for their 
 ofiicial acts. 
 
 In the case of Hun vs. Carey, in which the trustees were 
 found guilty of gross improvidence and mismanagement, 
 the court defined the relation between a Savings Bank and 
 its trustees or directors as that of principal and agent, and 
 the relation between the trustees and the depositors as simi- 
 lar to that of trustee and cestui que trust. It was expressly 
 held that if the trustees transcend the limits placed upon 
 their powers by the charter and cause damage to the bank 
 or its depositors, they are liable. It was further held that 
 
THE SAVINGS BANK IDEA 25 
 
 trustees are bound to exercise care and prudence in the 
 execution of their trust in the same degree that men of com- 
 mon prudence ordinarily exercise in their own affairs, and 
 that it is immaterial that the services were rendered gratu- 
 itously. 
 
 CLASSIFICATION OF SAVINGS BANKS 
 
 Savings banks may be classified under three heads: 
 First, those without capital stock, organized solely for the 
 purpose of receiving and investing savings and managed by 
 a board of trustees; second, those with capital stock and 
 managed by boards of directors, who pay a fixed rate of 
 interest and divide such surplus profits as there may be 
 among the stockholders; third, mixed Savings and Com- 
 mercial banks, which do a general banking business as well 
 as maintaining separate savings accounts. The first class, 
 known as Trustee Savings Banks, are most common in the 
 New England and Eastern States ; the second in the middle 
 West. 
 
 The Savings Banks of the first class differ from State 
 or National banks in that they have no stock or stockhold- 
 ers, their only capital being the deposits of their patrons. 
 They are mutual, that is, each and every depositor is an 
 owner in the bank, and the profits, after defraying cost of 
 administration and putting aside a proper reserve as pro- 
 vided by law, are paid to those whose money earns them. 
 Safety being the very first consideration, only so-called 
 "gilt-edged" investments may be made by the trustees and 
 , officers. These institutions are in reality voluntary trustee- 
 ships, undertaken by a few persons in a particular locality, 
 either self-appointed or chosen by the depositors. The cor- 
 porate body thus formed receives deposits or funds, small 
 in amount, preferably from the poorer classes of society, 
 and undertakes to invest them, using all possible diligence 
 to make the investments absolutely safe and agreeing to 
 divide all of the income, after payment of expenses among 
 the depositors, at stated times. 
 
 If a surplus is created — and it is required by the laws 
 
26 CENTURY OF AMERICAN SAVINGS BANKS 
 
 of many if not all of the States, — ^it is as a safeguard against 
 possible losses or emergencies. None of the profits on in- 
 vestments belong to the corporation itself. 
 
 The principal reasons for the creation of Savings Banks 
 are, first, to afford to the poor and to those of small in- 
 comes a means of keeping safe their occasional savings; 
 and, secondly, to enable such persons, by combining these 
 small sums, to invest them to good advantage. Those who 
 hide their little hoards in stockings, bureaus or other places 
 at home, and those who without experience try to make their 
 own investments, are the particular objects of the Savings 
 Banks. The latter are too often the victims of the wily 
 promoter, the schemer who is ever looking for the "easy 
 marks." The theory of these institutions is that their de- 
 positors will not draw out their savings except in cases of 
 real necessity, for the deposits are made to meet possible 
 emergencies in the private life of the depositors, not to be 
 used to meet the daily calls of business. It is the theory 
 upon which they were founded that the use of Savings 
 Banks should be confined to the class for whose benefit they 
 were devised, those who have neither the time, opportunity 
 nor ability to investigate and determine for themselves a 
 proper investment, nor means to enable them to pay for the 
 information through private sources. 
 
 In practical recognition of this principle, numerous 
 States have fixed limitations upon deposits, intended to 
 exclude that class who have acquired wealth and are or 
 ought to be able to invest their own funds. New York lim- 
 its the aggregate to $3,000; Connecticut limits the amount 
 receivable from any single individual in any one year to 
 $1,000; Vermont limits the aggregate to $2,000; Massachu- 
 setts limits deposits to $1,000 from each individual, and 
 permits it, by accumulation of interest, to reach $1,600 but 
 allows no dividend upon any sum exceeding $1,600. 
 Rhode Island places the limit at $1,500. 
 
 Varying exceptions are made as to trust funds, etc. The 
 fact has been pointed out by financial writers that in case 
 of temporary embarrassment the largest deposits, those be- 
 
THE SAVINGS BANK IDEA 27 
 
 longing to what may be termed the "capitalist class," would 
 be soonest withdrawn, and whenever private investment 
 promised better returns, these funds would leave the bank. 
 Whenever money is cheap and hard to invest, this class 
 solves the difficulty of investment by placing their funds 
 in the Savings Banks. Instead of supporting the banks 
 these people make of them a mere convenience; instead of 
 being a source of strength, they are a distinct element of 
 weakness. 
 
 It is a patent fallacy to suppose that Savings Banks 
 hoard money. The reverse is true. It is those who refuse 
 to patronize the Savings Banks who hoard money — or 
 squander it. For proof of this we need only look at the 
 operation of a financial panic. Those who in foolish fear 
 withdraw their money place it where it is non-productive, 
 and after the unreasoning fright is over put back the same 
 identical dollars they insisted upon taking out. 
 
 The Savings Bank, on the other hand, invests its money. 
 Its managers are intelligent, able, experienced men, com- 
 petent to make safe investments, and they are rigidly re- 
 strained from all sorts of unwise speculation by stringent 
 laws, with adequate penalties for their infringement. The 
 little savings, in the aggregate, amount to hundreds of mil- 
 lions, which, through the agency of the Savings Banks, 
 are added to the sum of active capital in the country, which 
 is not the less useful because it is permanently invested. It 
 thus adds new wheels to many-sided human industry and 
 keeps them going, the wonderful throbbing that goes on 
 night and day, never ending until the final dissolution of 
 all things earthly. 
 
 Again, it has been shown that the Savings Bank is one 
 of the best safeguards of property; that personal service in 
 an institution of this sort is more agreeable than jury duty; 
 that it is more economical than constables, police, poor- 
 masters, hospitals, prisons; that the millions of depositors 
 in the Savings Banks of this imperial State will be found 
 solidly arrayed against communism, rioting and disorder. 
 While it is benevolent on one side, it is a business enterprise 
 
28 CENTURY OF AMERICAN SAVINGS BANKS 
 
 at bottom, and when so conducted it is one of the most 
 profitable investments that can be made. It at once saves 
 money and saves men. And a host of Savings Bank de- 
 positors is infinitely better than an army of tramps ! 
 
 WHY MEN BECOME BANK TRUSTEES 
 
 But, the question may be asked, why should any man 
 of means and influence become the manager of a Savings 
 Bank? Why should he give up his valuable time — which 
 means to him money — to do something which pays him 
 nothing? 
 
 The answer has been so convincingly given by Henry L. 
 Lamb, one time acting superintendent of the Banking De- 
 partment of the State of New York, that it is herewith ap- 
 pended: "There is no man who has capital, who is ac- 
 quiring capital, that has not, in fact, an interest in the 
 success of Savings Banks, though he may not have seen this 
 or felt it. You give freely to support churches; you pay 
 taxes to maintain schools, to watch criminals, to punish 
 the bad. These things cost you money, and a good round 
 sum, too. Have not you, has not every man who can do 
 it, an interest in these institutions, which are saving in 
 many senses? 
 
 "Their great success will spare your own pockets; their 
 great success will add to the total of the resources which 
 can find profitable employment in this land; their great 
 success will breed a class of people of moderate means, 
 who will look up in the world, and not down. Why should 
 not any man, every man, indeed, who has the capacity for 
 the work, lend something of his time, something of his 
 judgment and knowledge, to the people that need them? 
 He shall lend not chiefly for the sake of the borrower of 
 such services but for his own sake. I put it upon the last 
 ground that the wisest self-interest of every man of sub- 
 stance will dictate his support of Savings Banks in which 
 he is a shareholder just so long as he has any relations 
 with other men and is a citizen bearing the tax burdens of 
 a citizen." 
 
THE SAVINGS BANK IDEA 29 
 
 These are, indeed, wise and true words which every man 
 of property and standing in a community should ponder. 
 They embody both wisdom and philosophy. And it may 
 be added that just so long as it is considered a distinguished 
 honor in this country to serve as trustee of a Savings Bank, 
 Just so long will these institutions of many-sided beneficence 
 be sure to endure. 
 
 TRIBUTE TO THE TRUSTEE SYSTEM 
 
 Alexander Cargill, who edited the memorial volume 
 which was issued in 1810 to commemorate the centenary of 
 Savings Banks held at Edinburgh on June 8, 9 and 10 of 
 that year, gives this testimony to the value of the trustee 
 system: 
 
 Almost from the outset of their history, and indeed up to the 
 present time, the outstanding feature of these Savings Banks is to be 
 found in the fact that their management has been under the control 
 and supervision of trustees; that is to say, bodies of public spirited 
 gentlemen of local inHuence and distinction who, gratuitously in 
 every case, act as patrons and, as such, supervise the affairs of the 
 Baiis in their respective boroughs, towns and cities. A happier out- 
 let for unostentatious but effective public spirit, in short, for prac- 
 tical philanthropy, was surely never devised in this or any other 
 country. At the present day every such Savings Bank in the United 
 Kingdom certified under the act of 1863, has its board of trustees 
 and managers, and it is not too much to say that the great mass of 
 depositors, numbering something like 1,800,000, appreciate the im- 
 grudging services in the cause of thrift which these gentlemen ren- 
 der; indeed, it is this distinctive feature which has done so much to 
 maintain the present position of Trustee Savings Banks, as an all- 
 important factor in the encouragement of thrift, making, in conjimc- 
 tion, of course, with the Post Office Savings Banks, for the welfare 
 of the masses of the people and, in substantial measure, for the sta- 
 bility of the State. As a century-old medium for the creation of 
 capital by means of small savings, and, moreover, in their being 
 personally supervised and controlled in the way indicated, besides 
 having the direct guarantee of the State for every pound of their 
 funds lodged with the National Debt Commissioners, the Trustee 
 Savings Banks of the United Kingdom enjoy a measure of success 
 which — in proportion to the number of banks in operation — equals 
 that of any similar agency of the kind in this or any other country. 
 
CHAPTER III 
 
 ORIGIN OF SAVINGS BANKS IN EUROPE 
 
 Outgrowth of Philanthropic Plans for the Amelioration of Poverty — 
 First Literary Advocacy in France, First Practical Test in Ger- 
 many and First Statutory Regulation in America— Defoe's Pen- 
 sion Office Scheme the True Idea— Rev. Joseph Smith, m 
 England and Rev. Henry Duncan in Scotland Real Pioneers — 
 Rapid Spread-'of the Movement from That Time— Origin of 
 Savings Banks in Other European Countries. 
 
 Where, when and how did Savings Banks originate? 
 To answer the question, we must go back more than a cen- 
 tury to a time when the great mass of the common people 
 of Europe, impoverished by the constant waste and drain 
 of wars, were in a condition of almost utter destitution. 
 Thoughtful men and women were everywhere seeking some 
 adequate means of relief but without success. Poverty 
 stalked abroad, emplojonent was scarce, industries of all 
 kinds languished, and widespread famine threatened. As 
 always, the common people, — ^the bone and sinew of the 
 various countries, — were the greatest sufferers. True, 
 charity could and did do much; benevolent people gave 
 freely of their means to relieve the destitution, but the more 
 they gave, apparently the greater became the need. Mere 
 largess might relieve, but could never cure existing condi- 
 tions. 
 
 The fact came to be recognized that the victims of these 
 conditions were not themselves wholly blameless, that to a 
 considerable extent they were improvident and careless of 
 their expenditures and were not encouraged in the idea of 
 laying by for the inevitable time of need. Hence it was 
 seen that if a plan could be devised whereby they could be 
 induced to put by systematically a portion of what they 
 were able to earn in times of activity there would be a 
 noticeable and permanent improvement in their condition. 
 
 30 
 
ORIGIN OF SAVINGS BANKS IN EUROPE 31 
 
 We have learned a great deal since those far-off days. 
 We now know that in large degree the poverty of the world 
 is a disease, the result of centuries of bad thinking and bad 
 living, that it "contradicts the promise and the prophecy of 
 the divine in man." It has been said with truth that the 
 love of ease has wrecked more careers than anything else 
 in the world except dissipation, and that a large part of the 
 poverty of the world is due to downright laziness, shiftless- 
 ness and unwillingness to make the effort. Self-reliance 
 and manly independence are the real stepping stones to 
 strong characters. "Power is the result of force over- 
 come." No one, of course, is an advocate of the blessings 
 of poverty, but it cannot be denied that "sweet are the uses 
 of adversity." 
 
 HOW MUCH IS AN EDISON OR A MARCONI WORTH? 
 
 It was Grover Cleveland who said: "There is surely no 
 development of mental traits, and no stimulation of the 
 forces of true manhood so thorough and so imperiously ef- 
 fective as those produced by the combination of well-regu- 
 lated ambition with the healthful rigors of poverty." 
 
 This is why the young man who has a fortune awaiting 
 him is to be pitied rather than congratulated. He is pretty 
 sure to be always a weakling. As a rule, it is the hard 
 school of adversity and of experience that makes the real 
 MAN. And nature is willing to pay any price for the 
 great ones. A champion race horse may bring $50,000 or 
 $100,000; but if the world's geniuses could be put up at 
 auction, how much would an Edison or a Marconi bring? 
 
 The French writer, de Malerce, has stated that "modern 
 Savings Banks found their first literary advocacy in France, 
 their first practical test in Germany, and their first statutory 
 regulation in England." This is probably very near the 
 truth, if we except the latter part of the statement, for the 
 evidence is conclusive that the United States preceded Great 
 Britain by about one year in giving Savings Banks legal 
 sanction and authority. 
 
32 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Hughs Delestre, in France, published about 1610, a 
 treatise in which he proposed the establishment of an in- 
 stitution for the benefit of the wage-worker, who "might 
 deposit his savings and withdraw them again, in whole or 
 in part, as he might require, with interest according to the 
 time they had been on deposit." This institution was in- 
 tended to take the place of alms-giving. It very nearly 
 approaches the description of the present-day Savings Bank, 
 but, unfortunately, nothing came of this advocacy. 
 
 Brunswick, in 1765, Hamburg, in 1778, Beme, in 1787, 
 Oldenburg, in 1790, Loire and Basle, in 1792, and Geneva, 
 in 1794 are said to have maintained places for the safe 
 deposit of small savings, but they were merely crude ex- 
 periments, granting annuities to patrons upon arriving at 
 a certain age, but permitting no withdrawals. 
 
 One of the first publications on the subject in England 
 was by Jeremy Bentham, just a century after Defoe wrote, 
 in whose plans for the benefit of paupers was included a 
 system of "frugality banks." All such schemes were essen- 
 tially philanthropic, and necessarily limited in their appli- 
 cation. 
 
 DEFOE THOUGHT OUT FIRST SAVINGS BANK 
 
 More than a century before the first practical Savings 
 Bank was born in Great Britain, and when he was scarcely 
 28 years old, that marvelous though erratic literary genius, 
 Daniel Defoe, the immortal author of "The Life and Sur- 
 prising Adventures of Robinson Crusoe," wrote in favor of 
 the establishment of a Pension Office. This he did in the 
 uninviting surroundings of a public jail to whose ill-smell- 
 ing precincts he had been consigned for the crime of speak- 
 ing his mind too freely about Government matters and other 
 things. Having little else to do, Defoe thought out what 
 was in reality the first Savings Bank. 
 
 The avowed object of his Pension Office was to abolish 
 pauperism. The plan was surprisingly similar to that of 
 our present Savings Bank, except that it was to be operated 
 by the Government. Its source was alone sufficient to con- 
 
ORIGIN OF SAVINGS BANKS IN EUROPE 33 
 
 demn that idea, and it is not surprising to learn that the 
 Government gave the proposal but scant consideration — 
 which means none at all. 
 
 Springing from the common people — his father was a 
 London butcher named Foe, and his distinguished son 
 seems to have changed a middle name into a prefix, either 
 for the purpose of aping or gibing the aristocracy, probably 
 the former — ^this English dissenter and vitriolic pamphleteer 
 many a time, both from the inside and the outside of a 
 prison cell where he languished as a debtor, not a criminal, 
 rattled the dry bones of the very "blue bloods" he was sup- 
 posed to have envied. 
 
 Though the author of more than two hundred miscel- 
 laneous works, Defoe's fame rests upon his fictions, whereas, 
 he should be honored and revered throughout the world 
 for his advocacy of great reforms in which he was far in 
 advance of his time, such as the coeducation of women, the 
 abolishment of imprisonment for debt, the separation of 
 Church and State, good roads, mutual insurance, and 
 finally. Savings Banks. 
 
 As to the last named, Defoe's plan was to have all the 
 wage-earning citizens of a community pool a certain pro- 
 portion of their weekly or monthly earnings and place the 
 pool at the disposal of the Government. The latter was to 
 pay interest. Any member of the pool might draw out 
 funds proportionate to his deposit whenever he needed the 
 money to tide over an emergency. If he fell sick, or became 
 disabled in the pursuit of his calling, he could apply for 
 a pension, and in old age retire and live on the income from 
 his savings. 
 
 In advocating this scheme, Defoe wrote: 
 
 I desire any man to consider the present state of this kingdom, and 
 tell me if all the people of England, old and young, rich and poor, 
 were to pay into one common bank four shillings per annum per head, 
 and that four shillings duly and honestly managed, whether the over- 
 plus would not in all probability maintain all that should be poor, and 
 forever banish beggary and poverty out of the kingdom? 
 
 And again: 
 
34 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Who, indeed, would pity that man in his distress who, at the ex- 
 pense of two pots of beer a month, ought to have prevented it, and 
 would not spare it? 
 
 Defoe's plan is not claimed to have been perfect, but that 
 his keen, alert mind saw clearly the advantages of the mod- 
 ern Savings Bank cannot be questioned. Thrift, like many 
 other precious plants, is of slow growth, and it was fully 
 half a century after Defoe's death before the first real in- 
 stitution of this kind was established. 
 
 Nevertheless, credit should be given where credit is due. 
 As some one has wittily observed, this brilliant romancer 
 became at once "the author of a great fact as well as a great 
 fiction." 
 
 In the year 1798, the Reverend Joseph Smith, of Wen- 
 dover, in conjunction with two of his parishioners, offered 
 to receive from members of his congregation any sum from 
 two pence upward, to be returned at Christmas, with one- 
 third added to the deposit — a sort of Christmas Club. In 
 1804, Mrs. Priscilla Wakefield, of Tottenham, with six 
 gentlemen, agreed to receive small deposits and pay 5 per 
 cent, interest on all sums above twenty shillings left more 
 than a year in their hands, thus adding a Bank to a Friendly 
 Society. In 1808, eight residents of Bath, four of whom 
 were ladies, offered to receive the savings of domestic 
 servants and pay 4 per cent, interest thereon. About the 
 same time Samuel Whitbread proposed to Parliament the 
 formation of a national institution "in the nature of a bank 
 for the use and benefit of the laboring classes alone." 
 
 These were all anticipations of Savings Banks, they were 
 getting nearer and nearer the true idea, but the results were 
 not given to the public, and very little came of them. They 
 were merely voluntary associations, without legal existence 
 or fixed rules, their only security being the confidence of the 
 proposed depositors in the integrity of their founders and 
 promoters. 
 
 DR. DUNCAN THE REAL PIONEER 
 
 It was left for the Reverend Henry Duncan, an humble 
 Scottish minister, to establish on May 10, 1810, the first 
 
ORIGIN OF SAVINGS BANKS IN EUROPE 35 
 
 real Savings institution in the world, and thus to earn the 
 title of the "Father of Savings Banks." It was called a 
 "Savings and Friendly Society." 
 
 A more barren soil for the propagation of this precious 
 thrift-plant hardly could be imagined. Dr. Duncan's 
 parish was an unpromising one in Dumfrieshire, the in- 
 habitants being mostly poor cottagers whose average wages 
 did not amount to more than eight shillings a week. There 
 were no manufactures, nor any means of subsistence for the 
 people except what was derived from the land under cul- 
 tivation, and the owners of the land were mostly non-resi- 
 dent. Nevertheless, the good Doctor was not to be deterred. 
 He knew that even in the poorer families there were odds 
 and ends of income frittered away in unnecessary expenses, 
 and he believed that with practical lessons in economy, sup- 
 plemented by the opportunity to store away small savings 
 at interest, the habit of laying aside a little of their hard 
 earned wages might be formed. His anticipations were 
 fully justified by the results of the first year's operation of 
 his little "Savings and Friendly Society." ^ 
 
 The career of Dr. Duncan again proves the value of a 
 hobby. The good Doctor rode it continually and continu- 
 ously; he wrote and spoke and in every possible way sought 
 to promote the scheme, because he believed in it with all his 
 soul. 
 
 The machinery devised by Dr. Duncan, however, was 
 open to the objection of being too cumbersome. For ex- 
 ample, in his Savings and Friendly Society there were three 
 classes of membership, viz.: ordinary, extraordinary and 
 honorary. The first class consisted of the ordinary poor 
 depositor; the second and third, of those who paid certain 
 sums into the auxiliary fund, which fund was used to pro- 
 vide premiums for those who were most regular in their de- 
 posits. There was also rather elaborate machinery for the 
 management of the bank. A further objection to the plan 
 
 ^ It is stated that the first "safety deposit vault" in use in England was a 
 small iron chest, kept by the good Dominie Duncan in his modest home, and 
 that there were three keys to this chest, kept by the minister and each elder, 
 so that it took three people to open the baiik. 
 
36 CENTURY OF AMERICAN SAVINGS BANKS 
 
 was the imposition of fines and penalties upon those who 
 failed to make deposits during the year. Still another ob- 
 jection was the failure to place the savings entirely under 
 the control of the saver; in other words, withdrawals were 
 restricted, at the option of the "Court of Directors," which 
 body consisted of the governor, five directors, the treasurer 
 and one or more trustees chosen from the honorary and ex- 
 traordinary members. Depositors' personal records were 
 also thoroughly investigated before they were allowed to 
 "join the society." 
 
 It may be said that while Dr. Duncan did not originate 
 the Savings Bank idea, he probably did more than any other 
 man to crystallize it and prove its practicability, hence is 
 deserving of all the honors that have been given him. 
 
 DR. DUNCAN'S LIFE AND WORK 
 
 From a brief account of the life and work of Dr. Duncan, 
 written by Mrs. Sophy Hall, his great-granddaughter, it 
 appears that this distinguished Scottish divine was bom at 
 the Manse of Lochrutton, Kirkcudbrightshire, in the year 
 1774, and was descended on both sides of his house from a 
 clerical ancestry. A follower of the noted Chalmers, Dr. 
 Duncan, did not hesitate to give up home comfort and the 
 liabits of a lifetime to take part in that self-sacrificing move- 
 ment — ^the disruption of 1843. Educated at St. Andrews 
 University, he engaged in mercantile pursuits at the age of 
 sixteen, but finding the vocation extremely distasteful, de- 
 termined to enter the ministry, not so much from any spir- 
 itual call as that it seemed to offer him more scope and op- 
 portunity for reading and intellectual pursuits than a com- 
 mercial career. He became a student at Edinburgh Uni- 
 versity, where he first came under the powerful influence 
 of Dugald Stewart, and also spent two years at Glasgow 
 University, returning to Edinburgh later for a final two 
 years. He was afterward licensed as a preacher by the 
 Presbytery of Dumfries, and in 1799 was offered and ac- 
 cepted the living of Ruthwell parish in Dumfrieshire. 
 
 The young preacher, full of enthusiasm and irrepressible 
 
ORIGIN OF SAVINGS BANKS IN EUROPE 37 
 
 energy, at once set about the task of improving the material 
 condition of his poor parishioners, to which a series of bad 
 harvests had put the finishing touch of woe. Work was 
 scarce, prices high and wages low. Knowing that idleness 
 was certain to engender a distaste for work, the good clergy- 
 man sought in every way to find work. Many of the men 
 were employed in ditching and draining, and women were 
 set to work spinning flax, which he had bought. To still 
 further relieve the prevailing distress, he imported corn 
 from Liverpool and sold it at cost to the people in quan- 
 tities graduated according to the size of the family. His 
 biographer says : 
 
 "At the time when the name of Bonaparte was on every- 
 body's lips, when dread of invasion carried fear into every 
 heart, he started the Ruthwell Volunteers, and himself com- 
 manded them. His address from the pulpit inspired his 
 congregation with some of his own superabundant enthu- 
 siasm." 
 
 It was his happiness, he said, to live with his parishion- 
 ers, and should God and his country demand the sacrifice, it 
 would be his glory to die with them. 
 
 Dr. Duncan married in November, 1804, Miss Agnes 
 Craig, the daughter of his predecessor, the Rev. John Craig. 
 Together they worked for the benefit of the parish and she 
 encouraged him in every good thought and act of his life. 
 The poet Burns was a frequent visitor to her father's home, 
 and she is the heroine of the pathetic little story of "Bums 
 at Ruthwell Manse," quoted by Lockhart in his Life of the 
 poet. 
 
 In 1808, Dr. Duncan started his first literary production, 
 "The Scottish Cheap Repository," intended to give the peo- 
 ple sound advice and valuable instruction. Soon afterward 
 he embarked on his great literary undertaking, the Dum- 
 fries and Galloway Courier, which, under his manage- 
 ment, soon reached a high position among Scottish news- 
 papers. This publication still flourishes, and in the year 
 1909 celebrated the hundredth year of its publication. He 
 also wrote for many other leading publications, notably the 
 
38 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Edinburgh Encyclopedia. His garden was his principal 
 recreation. 
 
 As to the greatest and most abiding monument of Dr. 
 Duncan's career, the founding of the first Saving Bank, his 
 great-granddaughter says : 
 
 It was in 1810, that this practical philanthropist first put his scheme 
 into motion. While studying the question of the poor laws — a subject 
 in which he took the greatest interest — he came across a paper called 
 Tranquillity. This pamphlet contained, among much that was un- 
 practical and visionary, the germ of an idea for enabling the prudent 
 poor to provide for themselves, thus effecting an abolition of the poor 
 rates. He set to work at once to develop the idea. His efforts met 
 at first with little response, and had it not been that he had a passion- 
 ate belief in the system himself, and the pertinacity to continue in 
 spite of all opposition, it would have been difficult to carry the matter 
 through; but to his lasting honor, he achieved his object single-handed. 
 In 1810, the little parish Savings Bank opened its doors to receive 
 the first depositors — many were timid at first to entrust their money 
 to his keeping, but gradually their confidence was won and the fig- 
 ures obtained were remarkable, for the money subscribed in the first 
 year was £151, followed in the two succeeding years by £176 and 
 £241, successively, and then with a sudden spurt of life in 1814, they 
 rose to £922. 
 
 But the good Doctor's work was not ended with the open- 
 ing of the first Savings Bank, of which he became the ac- 
 tuary. Its success brought him world-wide correspondence, 
 and in 1814, with a view to making his scheme more widely 
 known among nations, he published a pamphlet which 
 went through several editions in rapid succession. Finally, 
 Dr. Duncan turned his attention to placing these establish- 
 ments under Government protection, and in spite of power- 
 ful opposition he won triumphantly. 
 
 The little cottage from which this world-wide movement 
 sprang, is still standing in Ruthwell, as a monument to the 
 "Father of Savings Banks." 
 
 Dr. Duncan and his coadjutors believed thoroughly in 
 building up character as well as saving money. He showed 
 remarkably clear vision when he said: "If you confine 
 yourself to the relief of poverty, you do little. Dry up, if 
 possible, the springs of poverty, for every attempt to stem 
 the running stream has failed signally." These two terse 
 
ORIGIN OF SAVINGS BANKS IN EUROPE 39 
 
 sentences describe admirably the true purpose of the Sav- 
 ings Bank. 
 
 THE MOVEMENT SPREADS — ^LEGISLATION INVOKED 
 
 The movement soon spread rapidly. Within seven years 
 there were no less than seventy-eight similar banks doing 
 business in the United Kingdom. One of the first and 
 greatest of these was the Edinburgh Savings Bank, organ- 
 ized in 1814 by the Edinburgh Society for the Suppression 
 of Mendacity. This bank was probably the first to adopt 
 the now universally used pass book. Compared with the 
 Ruthwell bank its operation was greatly simplified; it was 
 open but one hour a week. The Provident Institution for 
 Savings, Bath, and the Provident Institution of Southamp- 
 ton, followed in 1815. 
 
 In 1817 the first Acts of Parliament dealing with them 
 were passed (Acts. 57 Geo. Ill, caps. 105, 130; on July 
 11 and 12, 1817), Ireland having taken precedence of Eng- 
 land by one day. Scotland did not obtain its act until July 
 2, 1819. At the close of the year 1818, nearly a quarter 
 of a million sterling had been invested with the National 
 Debt Commissioners by the English and Irish banks, and 
 when the Scottish banks began to contribute their quota, 
 the success of the system was so assured that at the end of 
 ten years' operations no less than fifteen million poimds 
 sterling was invested, and at the close of another decade 
 (1837) close on 20,000,000 pounds. Their progress, how- 
 ever, was not vminterrupted, for in the year 1826, and 
 subsequently, large withdrawals took place, due to great 
 commercial distress and general panic in financial circles. 
 
 Between the years 1817 and 1828, eleven separate Acts 
 were passed by Parliament, and in the latter year they were 
 all consolidatd into the first comprehensive and well-di- 
 gested general law. 
 
 Complete statistics relating to the earlier years of the 
 Trustee Savings Banks are not available; but from 1829 
 figures showing their periodical transactions have been pub- 
 lished by the authority of Parliament. The following table 
 
40 CENTURY OF AMERICAN SAVINGS BANKS 
 
 shows the progress of these institutions from 1819 to 1861, 
 when the Post Office Savings Bank System was inaugurated: 
 
 Year No. of No. of Amount of 
 
 Banks Accounts Funds 
 
 1819 3S9 Unknown £2,813,023 
 
 1829 476 409,714 14,791,495 
 
 1839 541 748,393 22,486,553 
 
 1849 579 1,087,354 28,699,550 
 
 1859 625 1,503,916 38,726,676 
 
 1861 645 1,643,822 41,546,475 
 
 From these figures the steady and remarkable progress of 
 the Trustee Savings Banks will be seen at a glance. Since 
 1861, while the number of depositors has been reduced by 
 one-half, the amount of their invested funds has continued 
 sensibly to increase, notwithstanding the competition of the 
 Post Office Banks. This is explained by the fact that, 
 while a large number of the smaller Trustee Banks had 
 closed their doors or transferred their business to the Post 
 Office, the larger and stronger banks in the great centers 
 of population more than maintained their own. As proof 
 of this, Mr. Cargill cites the Glasgow Savings Bank, which 
 has (or had before the present war) 250,000 depositors 
 with over eleven million pounds sterling to their credit — a 
 sum more than equal to what the Post Office Savings Banks 
 owe to their depositors in Scotland and Ireland together. 
 
 The following table, taken from Mr. Cargill's excellent 
 article on "A Century of Thrift," shows the relative posi- 
 tions of the ten leading Trustee Savings Banks of the 
 United Kingdom, according to funds invested with the Na- 
 tional Debt Commissioners, in addition to which, most of 
 the banks named have large additional funds belonging to 
 their Special Investment departments: 
 
 Ordinary Department 
 Name of Bank Funds at Nov. 20, 1908 
 
 Glasgow Savings Bank £7,865,183 18 11 
 
 Liverpool Savings Bank 3,497,766 19 10 
 
 Manchester Savings Bank 3,270,613 3 6 
 
 Edinburgh Savings Bank 3,261,810 1 2 
 
 Bimdee Savings Bank 1,614,737 4 8 
 
 Hull Savings. Bank 1,502,104 14 11 
 
 Aberdeen Savings Bank 1,278,634 16 1 
 
 Sheffield Saving^ Bank . .■ 1,235,336 18 1 
 
 Newcastle Savings Bank 1,187,649 16 9 
 
 Preston Savings Bank 1,065,554 17 10 
 
ORIGIN OF SAVINGS BANKS IN EUROPE 41 
 
 In the year 1891, a new and more stringent system of 
 inspection of Trustee Savings Banks was brought into ex- 
 istence by Act of Parliament, with the result that these in- 
 stitutions soon began to enjoy a greater degree of public 
 confidence than ever before in their history. Their num- 
 ber in the year 1910 was 222 and their total deposits were 
 in excess of fifty-four million pounds sterling, the highest 
 amount ever reached. In addition to this, however, there 
 was a further amount of nine million, five hundred thou- 
 sand pounds in the Special Investment funds of a number 
 of the larger banks, belonging for the most part to those 
 depositors whose accounts in the ordinary department had 
 reached the maximum limit of deposit, £300; and of these 
 there were no less than 72,960. 
 
 In concluding his article, "A Century of Thrift," Mr. 
 Cargill says: 
 
 In these two British Savings Bank systems, [Trustee and Post 
 office], there are at the present day, [1910], close on thirteen mil- 
 lions of individual depositors, or about one in every three of the en- 
 tire population of the United Kingdom, owning something like £220,- 
 000,000 sterling, a sum approximating to about £17 per head. Of 
 course, the total results of a century of thrift — for Savings Banks 
 have only helped to contribute thereto — would show much larger fig- 
 ures than these, were it possible to include here the operations of 
 the friendly societies, cooperative associations, and similar provident 
 agencies that have been working side by side with the Savings Banks 
 for many years past. But if we take the operations of the Savings 
 Banks alone, from their small beginnings just a century ago up to the 
 present time, it is impossible to deny that, with the great mass of 
 people, the advantages of thrift are becoming every year more and 
 more appreciated. 
 
 Among the more prominent statesmen and parliamen- 
 tarians whose names will always be associated with the 
 earlier history of Savings Banks in Great Britain, should 
 be mentioned the Right Hon. George Rose, Treasurer of the 
 Navy; Chancellor of the Exchequer Vansittart; William 
 Wilberforce, Mr. (afterwards Lord) Brougham; Mr. Jo- 
 seph Hume ; Chancellor of the Exchequer Goulbourn ; Lord 
 Althorp; Mr. Pease; Chancellor of the Exchequer Spring 
 Rice; Mr. Cobbett; Mr. Bright; and Mr. W. E. Gladstone. 
 
42 CENTURY OF AMERICAN SAVINGS BANKS 
 
 It was under Mr. Gladstone's incumbency as Chancellor 
 of the Exchequer under Lord Palmerston's administration, 
 in the year 1861, that a new era in the history of Savings 
 Banks was inaugurated by the creation of the Post Office 
 Savings Bank system. 
 
 To this roll of honor should be added the name of Wil- 
 liam Wilberforce, the slave liberator, who greatly assisted 
 the Rev. Henry Duncan in getting through Parliament 
 the first acts of 1817-19. Thus the great liberator helped 
 to strike the fetters from the white slaves of ignorance, 
 pauperism, vice and crime. Perhaps the most striking 
 tribute to the action of Wilberforce in relation both to 
 slavery and Savings Banks, was in the adoption by the Eng- 
 lish Parliament of the principle that deposits in Savings 
 Banks should be made the test and means of manumission. 
 
 Germany's savings banks 
 
 The German Savings Banks probably had their origin 
 in projects for the amelioration of the condition of the poor, 
 during the second half of the eighteenth century in North- 
 ern Germany. It is believed that the first institution of the 
 kind was the loan bank established for the Duchy of Bnms- 
 wick, in 1765. In 1778 a somewhat similar bank was es- 
 tablished in Hamburg, which may be regarded as being the 
 first German institution designated as a "Sparkasse," or 
 Savings Bank. The savings feature of this bank was de- 
 signed to assist messengers, day laborers, hand workers, sea- 
 men, etc. As early as 1815, the Hamburg bank became the 
 guaranteed institution for the entire city. Other cities or- 
 ganized similar- institutions, and the Savings Bank idea was 
 taken up by churches, communities and commercial associa- 
 tions. 
 
 According to interesting facts gathered by the American 
 Institute of Banking, modern developments in banking and 
 commerce have caused many additions to be made to the old 
 Prussian regulations, yet the present system is largely built 
 upon the regulations concerning the establishment of the 
 Savings Bank system of December 12, 1838. This law 
 
ORIGIN OF SAVINGS BANKS IN EUROPE 43 
 
 covers most of the general principles necessary for estab- 
 lishing, organizing, supervising and conducting the busi- 
 ness of the public Savings Banks. The banks formed by 
 communal organizations are not covered by this law, but 
 have been restricted and controlled by various new statutes. 
 Regulations formulated by city authorities apply only to 
 city Savings Banks. 
 
 The responsibility of the city or community to which 
 permission is granted to establish a Savings Bank, is defi- 
 nite at all times, and in case of difficulty the security of 
 depositors is safeguarded by the local budget. The duly 
 authorized representative of the central government (Prus- 
 sian), is the court of high decision for most local matters; 
 in cases of vital importance the decision of the minister of 
 the interior is required. The provisions against loss are 
 regarded as remarkably thorough and effective for a law 
 passed so long ago. No provisions are made for "bank 
 examiners," in the American sense, but the responsibility 
 placed upon the state and community in which a bank is 
 established, is so great that careful revision of the bank 
 records would take place from time to time. Private or- 
 ganizations, such as unions and associations, do not come 
 within the purview of the law, but banks established by 
 such organizations are specially regulated. 
 
 Although efforts have been made to unite the Savings 
 Bank systems of the various German States into one co- 
 hesive whole and a German Savings Bank Union was 
 formed in 1881, these efforts have not been successful in 
 forming a central board or bank which directs savings af- 
 fairs for the Empire. 
 
 While it is true that Germany has no Postal Savings 
 Bank system, her Municipal Savings Banks constitute an 
 excellent substitute therefor, judging by results. It would 
 seem to be quite as much within the province of a munici- 
 pality to educate its people in thrift, as to provide public 
 hospitals and libraries, and this is what some of the prin- 
 cipal cities of Germany are doing. 
 
 The Municipal Savings Bank usually consists of a cen- 
 
44 CENTURY OF AMERICAN SAVINGS BANKS 
 
 tral office and a system of substations in different parts 
 of the city, where they are most needed, such as populous 
 factory districts. The Berlin Municipal Bank, for exam- 
 ple, has more than seventy-five substations, where money 
 may be deposited or withdrawn, and interest collected. In 
 some of the German States, as many as one-third of the 
 population are depositors in these banks. 
 
 This form of Savings Bank is usually foimd in places 
 where the local spirit is strong, the local govermnent pure, 
 and public confidence in the administration at the highest 
 point. As the municipal or city government, with its tax- 
 ing powers, stands back of the deposits, a stronger guaran- 
 tee could hardly be devised or desired. 
 
 Institutions of this type are common throughout the Ger- 
 man Empire, operating in the country districts as well as 
 in the cities. They are also the predominant type in Aus- 
 tria and France, and the plan has been successfully em- 
 ployed in Italy, Switzerland, Russia, Denmark, Sweden and 
 Japan. These are quasi-private corporations, having 
 power to own property, to make contracts, and to sue and 
 be sued in the courts. Managers and officials are appointed 
 by the municipality. Loans on real estate are the principal 
 form of investment. 
 
 Not infrequently, these banks send officials to the homes 
 of small depositors to collect weekly sums for deposit. 
 
 According to the latest available statistics, there were in 
 the German Empire at the close of the year 1913, 22,020,- 
 149 savings accounts, more than one-half of which were in 
 Prussia alone. Figuring upon a population of about 65,- 
 000,000, this would be approximately one account to every 
 three persons in all Germany, a splendid showing of thrift. 
 According to the same figures, for the year 1913, Germany 
 was credited with having 2,9 17- principal Savings Banks 
 and 8,108 branches. The total value of property which 
 the Savings Banks had belonging to depositors was 18,305,- 
 811,000 marks ($4,356,783,018). All property of the 
 banks, including buildings, deposits, etc., but excluding the 
 reserve fund, was valued at 18,444,460,000 marks ($4,- 
 
ORIGIN OF SAVINGS BANKS IN EUROPE < 45 
 
 389,781,480). The reserve fund for the same year was 
 stated as amounting to 886,390,000 marks ($210,960,820). 
 
 THE SAVINGS BANK AT BREMEN 
 
 The savings bank (die Sparkasse) at Bremen "is one 
 of the most peculiar and original institutions of its kind in 
 all Germany, if not in the whole business world. It is in 
 the nature of a private savings and loan bank conducted 
 for the exclusive benefit of its depositors. 
 
 It was founded in June, 1825, by eighty prominent citi- 
 zens of Bremen, among whom were the president and many 
 members of the Bremen Senate, members of the Citizens' 
 Assembly and other prominent citizens, and was incor- 
 porated under the law of the Free and Hanseatic State of 
 Bremen. It was instituted mainly for the purpose of offer- 
 ing an inducement for saving to the people of Bremen, es- 
 pecially to the poorer classes, by giving them a safe oppor- 
 timity of investment apd a profitable return on their sav- 
 ings. A second object was to establish a source of supply, 
 or creative means, for the furtherance of public welfare and 
 charities. 
 
 In the beginning a law was enacted by which it was di- 
 rected that none of the profits should ever be divided among 
 the members of the society, but that they should be dis- 
 tributed among charitable institutions and enterprises of 
 public utility and expended for the common welfare. 
 
 The following table illustrates the growth of the institu- 
 tion in niunber of depositors and amounts deposited at the 
 end of the last year of each decade, and also at the end of 
 1911: 
 
 Number of Amounts 
 
 Year Savings Books Deposited 
 
 1830 3,751 $260,160 
 
 1840 9,318 755,860 
 
 1850 18,014 1,826,772 
 
 1860 25,392 3,611,782 
 
 1870 28,826 4,349,197 
 
 1880 30,864 7,940,528 
 
 1890 97,097 13,435,831 
 
 1900 140,372 17,741,372 
 
 1910 188,716 28,681,431 
 
 1911 195,163 30,307,344 
 
46 CENTURY OF AMERICAN SAVINGS BANKS 
 
 FRENCH SAVINGS BANKS 
 
 In France, according to a report made by the United 
 States consul-general at Paris, in answer to an inquiry made 
 by the American Institute of Banking, the Savings Banks 
 are government institutions, under the control of the Min- 
 istry of Commerce, Post Telegraphs and Telephones. 
 
 The total amount of deposits at the close of the year 
 1915, was about two billion francs ($400,000,000). The 
 maximum sum received on deposit from any one person is 
 1,500 francs ($289.50). The population of France was 
 estimated, on January 1, 1915, to be about 39,300,000. 
 
 The Government, by authorizing the issuance of "City 
 of Paris" and "Credit Foncier" bonds of low denomina- 
 tions, payable by installments, and benefiting by prize draw- 
 ings, encourages the poorer classes to invest their money 
 in gilt-edged securities bearing 3 per cent, or 4 per cent, 
 interest. 
 
 Take, for example, the City of Paris issue of 1912. The 
 bonds, of a face value of Frs. 300, were issued at Frs. 285, 
 with 3 per cent, interest. The first installment was only 
 ten francs, and the balance of Frs. 275 was payable by in- 
 stallments of Frs. 25 (less accrued interest), payable up 
 to September, 1916; that is to say, one payment every three 
 or four months. The issue will be repaid entirely in 
 seventy-five years, but, to render the issue more attractive, 
 for the first twenty-five years there will be a monthly prize 
 drawing, with prizes varying from Frs. 100,000 downwards, 
 and for the last fifty years the drawings will be quarterly. 
 
 One can readily understand the attraction that the pos- 
 sibility of winning a prize which will render him inde- 
 pendent for life has on the workingman, and it is not as- 
 tonishing to find at least half of the working class families 
 in France holders of one or more bonds of this description. 
 All the City of Paris issues since 1865 (twenty in all) have 
 been made on similar lines. The saving habit in France 
 is exceedingly strong. 
 
 In the country districts children, when they have finished 
 
ORIGIN OF SAVINGS BANKS IN EUROPE 47 
 
 the "Ecole Communale" at the age of thirteen or fourteen, 
 are sent to work on farms more or less distant from their 
 parents' residence, where they are lodged and fed and paid 
 a small "retribution," averaging about 300 francs ($57.90). 
 In most cases the parents, who receive the money, pay it 
 into the Savings Bank for the child, and when the boy has 
 finished his military service, or the girl is of marriageable 
 age, they find themselves possessed of a small capital with 
 which either to begin business or to form the dowry which 
 is generally expected in that country. 
 
 THE SAVINGS BANK OF PARIS 
 
 The Savings Bank of Paris had its origin in a maritime 
 insurance company in May, 1818, with the name Cats see 
 d'Epargne et de Prevoyance (Bank of Savings and Fore- 
 sight). The founders paid in $200 each, while the insur- 
 ance company furnished the place of business. 
 
 The object of the company was to receive on deposit the 
 small sums which might be entrusted to it by the laboring 
 classes, whether workmen, artisans, domestics, or those en- 
 gaged in agriculture, as well as other persons who were 
 both economical and industrious. The smallest deposit al- 
 lowed was twenty cents. The statutes contained a funda- 
 mental principle. "Whenever the account of a depositor 
 shall show a sum sufficient to buy, at current rates, the sum 
 of $10 annual payment, in state bonds, the bonds shall be 
 transferred and registered in his name, and he will become 
 the owner, except that the bond will be left on deposit in the 
 bankj which is charged with the duty of collecting interest 
 for him." Fundamentally, the purpose of the Savings 
 Bank was to accumulate the small savings of the working 
 classes until an amount was reached sufficient to buy at 
 current rates, a bond of fifty francs of state rentes. 
 
 The Savings Bank of Paris was a pronounced success 
 and its example was rapidly followed in a number of other 
 cities in France. However, the revolution of 1848 caused 
 the suspension of a number of these Savings Banks. The 
 Government took over the deposit accounts. The Savings 
 
48 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Bank of Paris is still an independent institution, but uses 
 its deposits to invest in state securities, virtually under the 
 supervision of the "caisse des depot se consignations," a 
 government board charged with the investment of savings 
 funds for the National Postal Savings Bank. The postal 
 Savings Banks of France have not affected the steady growth 
 of the other savings institutions as in other countries. 
 
 According to a report issued in 1914, there were 550 Sav- 
 ings Banks in operation in France, besides 1,854 branches, 
 making a total of 2,404 savings institutions. The caisses 
 d'epargne of France are preeminently the savings banks 
 of wage-earners, small tradesmen and children, deposits 
 as small as one franc (19.3 cents) being accepted. The 
 postal savings banks of France number approximately 
 8,000. 
 
 In some of the European countries the authorities have 
 gone so far as to establish slot machine savings banks in 
 order to teach the people the value of the small coins. 
 About four years ago a bank in Budapest established a 
 series of these little banks. The machines are arranged 
 for the receipt of two coins, the crown ($0,203) and the 
 twenty-filler piece ($0.04). They return a ticket for each 
 coin deposited and these tickets bear interest from the date 
 of their issuance. One hundred and ten tickets may be ex- 
 changed for a bank book. The machine is so constructed 
 that if countei'feit coins are deposited, the numbers of the 
 tickets issued for them can be ascertained; it can be ar- 
 ranged to take coins of other sizes and weights than the 
 crown and the twenty-filler pieces. The total deposits in 
 1912 were 65,000 crowns ($13,195). 
 
 JAPANESE BANKING 
 
 In answer to an inquiry on banking in Japan, Consul- 
 General Skidmore sent the following letter from Yokohama, 
 dated December 16, 1915, to the American Institute of 
 Banking: 
 
 The modem system of banking in Japan dates from the National 
 Banks Regulations in 1872. The regulations for ordinary banks are 
 
ORIGIN OF SAVINGS BANKS IN EUROPE 49 
 
 applicable to savings banks also. Savings banks, whose business is 
 to take charge of ttie deposits made by the public at compound in- 
 terest, must be joint-stock companies. Their directors are jointly un- 
 der unlimited liability with respect to the obligations of the bank 
 incurred during their term of office, and upon the lapse of two full 
 years after their retirement therefrom are released from such liabil- 
 ity. Savings banks must, as guarantee for payment of savings de- 
 posits, provide themselves with interest bearing national or local loan 
 bonds corresponding in value to at least one-fourth of the deposits 
 received and place them in the Deposit Section of the Department of 
 Finance. If, however, the said guarantee fund reaches an amount 
 equal to at least one-half of the capital, commercial bills and reliable 
 companies' debentures and shares may be used. Any alteration in 
 the articles of association of a savings bank or any change in the kind 
 and method of its business must be previously approved by the Min- 
 ister of Finance. 
 
 When a bank (1) receives a sum of less than $2.49 as a deposit 
 at a time, (2) takes deposits periodically or several times within a 
 certain period by fixing beforehand the time of repayment, or (3) re- 
 ceives money periodically or several times within a certain period 
 under a promise to pay a certain sum of money at a certain period, it 
 may be regarded as a bank transacting the business of a savings bank. 
 
 In 1905, 481 savings banks and 202 other institutions engaged in 
 the savings bank business in addition to their principal business re- 
 ceived $118,017,608 of savings deposits and paid 9.4 per cent, inter- 
 est. In 1914, 500 savings banks and 153 other firms carrying on 
 a savings bank business took in $156,042,987 worth of savings, pay- 
 ing an interest of 4.2 per cent, on them. The total number of postal 
 savings depositors in the year ending March 31, 1915, was 12,928,- 
 005, over SO per cent, of whom were farmers and students, and the 
 value of these was $100,985,778. 
 
 The population of the Japanese Empire, according to the last cen- 
 sus, was as follows: 
 
 Japan proper 54,843,083 
 
 Chosen (Korea) 15,911,937 (of which 291,217 
 
 Taiwan (Formosa) estimated at 3,500,000 are Japanese) 
 
 The Post Office Savings system was introduced in 1875. A sin- 
 gle deposit must not be less than ten sen (almost five cents), and the 
 total amount deposited must not, except for public corporations and 
 in other special cases, exceed $498; if a deposit exceed this sum and 
 the depositor does not reduce it to the said limit, he is required to buy 
 with the surplus national loan bonds and other securities. The rate 
 of interest on deposits was increased from 4.2 to 4.8 per cent, in 
 April, 1916. Moreover, there have been established postal savings, 
 the withdrawal of which is restricted by agreement among several 
 
50 CENTURY OF AMERICAN SAVINGS BANKS 
 
 persons or is not permitted within a fixed term, and joint savings, 
 the deposit of which is made by several persons jointly in the name 
 of their representative, and also special savings for emigrants abroad 
 to deposit in the postal savings at home from their place of residence. 
 
 DEPOSITS IN EUROPEAN SAVINGS BANKS 
 
 In an article contributed to the Scotsman (Edinburgh), 
 of March 4, 1916, Mr. Cargill gives the following tables 
 showing the deposits in the Savings Banks of the principal 
 countries now at war: 
 
 No. of Funds in 
 
 Deposi- Savings 
 
 tors Bank 
 
 German Empire 15,000,000 £480,000,000 
 
 Austria and Hungary 6,000,000 250,000,000 
 
 Turkey and Bulgaria Negligible. Negligible. 
 
 Total 21,000,000 £730,000,000 
 
 United Kingdom 11,000,000 £225,000,000 
 
 France 10,500,000 175,000,000 
 
 Belgium 2,000,000 32,000,000 
 
 Italy 5,800,000 100,000,000 
 
 Russia 5,580,000 180,000,000 
 
 Canada, Australia, and New Zealand 1,150,000 52,000,000 
 
 Total 36,030,000 £764,000,000 
 
 (All figures are roundly stated.) 
 
 At a glance it will be observed how Germany and Austria 
 almost equal in toto all the other nations with whom they 
 are at war. Germany preceded all others in the etsablish- 
 ment of Savings Banks, and there can be no doubt that she 
 is now reaping the advantages of her foresight and acumen 
 in so energetically fostering the thrift habit among her mil- 
 lions of wage-earners. 
 
 EFFECT OF THE WAR UPON EUROPEAN SAVINGS BANKS 
 
 In response to a request for a brief resume of the effect 
 of the present war upon the Savings Banks of the United 
 Kingdom, Mr. Alexander Cargill, Actuary of the Edin- 
 burgh Savings Bank, one of the largest and most prom- 
 inent in Europe, wrote under date of March 25, 1916: 
 
 The effect which the war has had upon the funds of our Banks 
 is almost impalpable. I mean there has been no reduction in the 
 
ORIGIN OF SAVINGS BANKS IN EUROPE 51 
 
 amount of the funds; if anything, there has been an appreciable ad- 
 vance all round. I wish I could say more upon this point here and 
 now, but the fact is that it is too soon yet to confirm anything authori- 
 tatively as to the influence of the war on our great National Thrift 
 movements (which of course are not confined to Savings Banks only). 
 Generally speaking, the great masses of the people are being taught 
 by the war a new chapter in Thrift, and are to be educated, young 
 and old alike, to an appreciation of the thrift principles in a way 
 that half a century of peace times could never accomplish. In this 
 regard, it may be well said in the famous words of Shakespeare, that 
 "there is a soul of goodness in things evil." 
 
 In the momentous problem which confronts us, there is, of course, 
 no room for sentiment, much less for smug complacency. We are 
 in the region of inexorable fact. The problem is — Can we harbor 
 our resources so as to maintain inviolate the financial security of the 
 nation and Empire ? Yes, it can be done, but, make no mistake about 
 it, there must be enormous sacrifice. Economy will have to be prac- 
 ticed almost to the point of stinginess. Thrift must become the be- 
 all and end-all of both individual and national endeavor. The gos- 
 pel of money-saving will require to be preached as it has never been 
 preached before; every person, be his purse long or slender, must 
 save, save, save. Extravagance in any shape or form will be not 
 only unpatriotic but criminal. He that saves most will be accounted 
 the most worthy; the spendthrift will be anathema. 
 
 REMARKABLE DEVELOPMENT OF SAVINGS ASSOCIATIONS 
 
 One of the most striking and significant developments of 
 the war to be seen in Great Britain is the multiplication of 
 savings associations. On September 11, 1916, there were 
 no less than seven thousand of these and they were still 
 increasing rapidly. Four hundred committees were at work 
 forming the associations in various parts of the country. 
 
 The fact was being impressed upon the people that every 
 shilling saved and lent to the nation possessed three values : 
 (1) When saved it limited the demand for goods and serv- 
 ices, thus moderating the price of commodities and setting 
 free material and labor for essential national ends. (2) 
 When lent to the nation it became directly available for the 
 purposes of the war. (3 ) When invested it not only helped 
 to meet the national need of the moment, but became for the 
 individual a sure protection against the proverbial "rainy 
 day." 
 
52 CENTURY OF AMERICAN SAVINGS BANKS 
 
 London had on the above date, 850 of these savings asso- 
 ciations, Yorkshire 580, Lancashire 520; Nottinghamshire 
 340; Gloucestershire 320; Leicestershire 270, StaflEordshire 
 260, Surrey 250; Warwickshire 250, Lincolnshire 200, 
 Kent 160, Cheshire 150. 
 
 It is very evident that only a good beginning has been 
 made in this movement, for in Wales and Monmouthshire 
 ■at the time this was written, the propaganda was just be- 
 ginning and some coimties had hardly been touched. It 
 was stated that all classes were coming in — employers and 
 wage earners, professional men and the poor. 
 
 SAVINGS BANK DEPOSITORS IN EUROPE 
 
 The following table shows the number of depositors in 
 the Savings institutions of the principal European countries 
 and the aggregate amounts of their deposits : 
 
 Country Depositors Deposits Population 
 
 Austria 
 Communal and Private Savings 
 
 Banks 4,385,064 $1,291,041,227 28,763,000 
 
 Postal Savings Banks 2,300,407 40,297,296 
 
 6,685,471 1,331,338,523 
 France 
 
 Private Savings Banks 8,391,694 754,409,859 
 
 . Postal Savings Banks 6,187,203 336,893,799 39,602,000 
 
 14,578,897 1,091,303,658 
 Germany 
 Public & Corporate Savings Banks 22,979,254 4,445,833,574 
 Communal and Private Savings 
 Banks 1,149,251 428,023,064 66,715,000 
 
 24,129,505 4,873,856,638 
 Italy 
 Communal and Corporal Savings 
 
 Banks 2,399,606 490,191,340 
 
 Postal Savings Banks 5,780,010 376,072,443 35,239,000 
 
 8,179,616 866,263,783 
 
 Russia 
 State, including Postal Savings 
 
 Banks 8,988,225 867,929,500 170,903,000 
 
 United Kingdom 
 
 Trustee Savings Banks 1,870,510 261,875,606 
 
 Postal Savings Banks 12,750,693 886,211,861 46,026,000 
 
 14,621,203 $1,148,087,467 
 
ORIGIN OF SAVINGS BANKS IN EUROPE 53 
 
 Country Depositors Deposits Population 
 
 United States 
 
 Postal Savings Banks 525,414 $ 65,684,708 101,740,000 
 
 Mutual and Stock Savings Banks 11,285,755 4,997,706,013 
 
 The figures for the world (estimated population, 1,005,339,000) are: Depositors 
 132,506,114; deposits, $18,044,316,316. 
 
 Note: The figures for European countries were gathered before the out- 
 break of the war, during the years 1911-1914. 
 
CHAPTER IV 
 
 RISE OF SAVINGS BANKS IN AMERICA 
 
 New York, Pennsylvania and Massachusetts Divide the Honors — 
 Survey of the Country a Century Ago — War with Great Britain 
 Had Left the Currency Demoralized — Efforts to Relieve the 
 Sufferings of the Poor — ^Little Manufacturing, and Fears for the 
 Food Supply — Rise of Factory System — Population of the Coun- 
 try Only Eight and a Half Millions — Savings Bank Statistics. 
 
 Three Commonwealths of the American Union — ^New 
 York, Pennsylvania and Massachusetts — were chiefly in- 
 strumental in the establishment of Savings Banks in the 
 United States. The Empire State is believed to have been 
 the pioneer in their organization (though concededly not 
 the first to actually begin business), the Keystone State was 
 the first to open the doors of such an institution, while the 
 Old Bay State enjoys the unique distinction of having led 
 the way in their incorporation by act of legislation, not only 
 in America but throughout the world. "An Act to incor- 
 porate the Provident Institution for Savings in the Town of 
 Boston," was approved on the 13th day of December, 1816. 
 No legal sanction of such an institution can be found any- 
 where prior to this date. The first Acts of the British 
 Parliament dealing with Savings Banks were passed on the 
 nth and 1 2th of July, 1817. Scotland, though leading the 
 world in the organization and actual operation of Savings 
 institutions, as we now know them, did not obtain its Acts 
 until two years later — July 2, 1819. 
 
 Providentially, as it would seem, a dominant figure arose 
 in each of these cities, at about the same time, — ^Thomas 
 Eddy, in New York, Condy Raguet, in Philadelphia, and 
 James Savage in Boston, — ^to start the Savings Bank move- 
 ment on this side of the Atlantic. Each received publica- 
 
 54 
 
RISE OF SAVINGS BANKS IN AMERICA 55 
 
 tions, — and probably letters — from England, describing the 
 movement in that country and testifying to its remarkable 
 success. Each one became an enthusiastic promoter of a 
 Savings Bank for his city and each with brilliant results. 
 As a consequence, the Philadelphia Saving Fund Society 
 was organized, directly through the efforts of Mr. Raguet 
 and the men whom his enthusiasm enlisted in the cause, 
 and opened its doors for business Dec. 2, 1816. This was 
 undoubtedly the first Savings Bank in the United States. 
 It was two years later before the institution was incor- 
 porated. Largely through the initiative of Mr. Savage, 
 the Provident Institution for Savings in the Town of Bos- 
 ton, was the second to open its doors, in the month of Feb- 
 ruary, 1817. It had been incorporated on December 13, 
 1816, which was the first legal recognition of an institution 
 of this sort in the world. The Savings Bank of Baltimore 
 was the third to commence business, on March 16, 1818, but 
 it was some nine months later when it was incorporated. 
 Then followed the Salem (Mass.) Savings Bank in April, 
 1818, and the Bank for Savings, New York, in 1819. 
 
 Detailed reference to the organization of each of these, as 
 well as several other pioneer banks, will be found in subse- 
 quent chapters. 
 
 For purposes of comparison and ready reference the fol- 
 lowing table will prove of interest: 
 
 Institution Opened Incorporated 
 
 Phila. Sav. Fund Society Bee. 2, 1816 Feb. 25, 1819 
 
 Prov. Inst, for Sav. Boston Feb. 19, 1817 Dec. 13, 1816 
 
 Savings Bank of Baltimore Mch. 16, 1818 Dec. 1818 
 
 Salem (Mass.) Savings Bank Apr. 15, 1818 Jan. 29, 1818 
 
 Bank for Sav. New York July 3, 1819 Mch. 26, 1819 
 
 Hartford (Conn.) Soc. for Sav July 14, 1819 June 1, 1819 
 
 Savings Bank of Newport, R. I Aug. 11, 1819 June 1, 1819 
 
 Providence (R. I.) Inst, for Sav Nov. 20, 1819 June 1819 
 
 Albany Savings Bank June 10, 1820 Mch. 24, 1820 
 
 None of these pioneers could have had any adequate idea 
 of the importance of the steps they were taking, or of the 
 phenomenal manner in which these little weaklings were to 
 grow into financial giants; they were simply acting in ac- 
 cordance with their lights. They were leaders in a great 
 
56 CENTURY OF AMERICAN SAVINGS BANKS 
 
 movement that had had its inception in the Old World and 
 now had spread to fair, free America, where it was des- 
 tined to far outstrip the older country in the results 
 achieved. 
 
 Before taking up these pioneer banks in the order of their 
 actual opening for business, it will be profitable, perhaps, 
 to briefly survey the country at that period. 
 
 CONDITION OF THE COUNTRY IN 1816 
 
 The United States had just emerged from the war with 
 Great Britain. Incredibly soon after the treaty of peace 
 had been signed, December 24, 1814, the people returned 
 to their respective vocations and set about the process of 
 rehabilitation. It was the Government that had suffered 
 most. The money of the country was in a condition of 
 demoralization difficult to describe or understand. The 
 sources of issue exceeded four hundred in number. Much 
 of the "wild-cat" money, as it was called, was counterfeit 
 and much of it came from alleged banks that had no exist- 
 ence. The charter of the United States Bank, founded by 
 Alexander Hamilton, had expired in 1811 and a re-charter 
 was defeated in Congress. Now a twenty-year charter for 
 a national bank with a capital of $35,000,000 was readily 
 obtained. The Government subscribed seven millions of 
 this, while the bank paid the Government a bonus of a mil- 
 lion and a half for the charter. Elson states that this had 
 a wonderful effect in restoring confidence, and that in a 
 short time the national debt was steadily decreasing, while 
 the people were busy, prosperous and happy. 
 
 "Soon after the coming of peace the country was flooded 
 with all manner of merchandise from England, and the 
 people, seeing their new industries threatened, called upon 
 Congress to protect by tariff laws what the embargo and 
 the war had protected for them before. The response was 
 the tariff of 1816, fathered by William Lowndes, of South 
 Carolina. By this tariff duties were raised to an average 
 of about 20 per cent., and this not only greatly increased 
 the revenue, but proved ample for protection; and the busi- 
 
RISE OF SAVINGS BANKS IN AMERICA 57 
 
 ness of manufacturing increased and flourished throughout 
 the land." ^ 
 
 While the War of 1812 had cost the United States 30,000 
 lives and a hundred million dollars, and the capital had 
 been captured and burned, it was deemed successful from 
 the American standpoint, for it had brought commercial in- 
 dependence and a final separation from European affairs, 
 proving that the United States could hold their own against 
 the greatest naval power on earth and that our republican 
 form of government was not to fail, as had been so gleefully 
 predicted by its enemies. With the reawakened national 
 consciousness came prosperity, and that wonderful tide of 
 immigration that has not yet ceased. The one disturbing 
 and demoralizing condition was the debasement of the cur- 
 rency, and this caused untold hardship, particularly among 
 the working classes. It was a period of active philan- 
 thropy, when thoughtful men and women in America as well 
 as in Europe were seeking in every possible way to relieve 
 the sufferings of the masses and at the same time institute 
 a system that should abolish poverty. 
 
 EFFORTS TO RELIEVE THE POOR 
 
 In this quest, every conceivable agency, — even to the lot- 
 tery, — was resorted to. The historian Keyes gives a list 
 of forty or more institutions which were organized in New 
 York alone, about this time, all intended to relieve the suf- 
 ferings of the poor. Nearly all of these long since passed 
 away, but it may be worth while to mention one that still 
 exists, viz. : The Society of Tammany, or Colvunbian Order 
 in the City of New York, incorporated in 1805. This was 
 originally a charitable organization "for the purpose of 
 affording relief to the indigent and distressed members of 
 the said association, their widows and orphans and others 
 who may be found proper objects of their charity." Keyes 
 suggests that the Association may have been originally 
 formed "as a burlesque upon the various friendly societies 
 springing up in the country upon the model of similar insti- 
 
 1 Elson, History of the United States. 
 
58 CENTURY OF AMERICAN SAVINGS BANKS 
 
 tutions in Great Britain; the object being to ridicule the 
 growing practice of importing our institutions from the 
 country from which we had so recently declared and estab- 
 lished our independence." 
 
 Legislation looking to the abolition of poverty was sought 
 in the different States, even to the extent of fixing a min- 
 imum wage for artisans and laborers, but of course all such 
 projects were foredoomed to failure. It was then that the 
 attention of these same thoughtful men was attracted by the 
 success of the first Savings Banks in Great Britain, and the 
 determination was reached to establish similar institutions 
 in the New World. The benefits that flow from the blend- 
 ing of business and benevolence in the Savings Bank sys- 
 tem were then practically unknown, but it was long ago 
 discovered that pauperism and crime are close allies, and 
 that public morals become more and more lax as poorhouses 
 and workhouses increase. 
 
 A century ago there was very little manufacturing in this 
 country, nearly everything, except the products of the soil, 
 being imported. The limit of food production with the 
 implements then in use had about been reached, and there 
 was even a fear that the food supply would not keep peace 
 with the increasing population. However, immediately 
 following the invention of the reaper, the number of bushels 
 of wheat and other grains per acre, as well as the size of 
 the farms, showed a remarkable increase. 
 
 One of the qualities of the Yankee which have made him 
 famous the world over is his remarkable inventiveness, 
 which leads him to do nothing by hand that may be done 
 more quickly or more cheaply by machinery. As a result, 
 more labor-saving devices are in use in the United States 
 than in any other country. 
 
 CONDITIONS THEN AND NOW 
 
 Logically, if not inevitably, there came the factory sys- 
 tem of industry. During and immediately following the 
 Colonial times, American industrial methods and processes 
 were very simple. The home was the seat of industry 
 
RISE OF SAVINGS BANKS IN AMERICA 59 
 
 where was done the work of spinning, weaving and cloth- 
 making. With the advent of the new appliances brought 
 into use by the inventive genius of the Yankee, came entirely 
 new conditions. Great power looms and other compli- 
 cated machinery could not be installed in the home, but 
 had to be housed separately in factories, so goods instead 
 of being handmade and homemade, became machine-made 
 and factory-made and, largely by reason of the use of this 
 efficient machinery, together with the superior intelligence 
 and ambition of the American workman, the United States 
 have been able to compete with lower-paid workmen in Eu- 
 ropean countries and export and sell their surplus manu- 
 factures at a profit. 
 
 This factory system, however, is not without its disad- 
 vantages. One of its results has been the unnatural drain 
 upon the rural communities and the concentration of great 
 masses of the population in urban centers. 
 
 A century ago, only about 3 per cent, of the inhabitants 
 of this coimtry were to be found in cities, while the re- 
 mainder lived in small towns and on farms and were de- 
 pendent upon agriculture for subsistence. The number of 
 people in the rural districts has so decreased that there are 
 only about 36 per cent, of the population left to work the 
 farms, yet it is a remarkable fact that, with only one-third 
 of the labor, the farms of to-day produce enough to feed 
 the entire population, and export, in addition, more than 
 one hundred million dollars' worth of products annually. 
 This is due to the wide use of labor-saving machinery and 
 to the improved knowledge of how to raise and rotate 
 crops. 
 
 It is a record that has never been exceeded in the history 
 of the world. 
 
 A century ago there was nowhere on this vast continent 
 a steam engine of any kind, not a mine, not a spinning 
 frame, not a power loom, nothing that would now be called 
 a factory; not an agricultural implement except the simplest 
 forms of hoes, rakes and plows; very few roads practical 
 for use the year round, few paved streets, and not an arti- 
 
60 CENTURY OF AMERICAN SAVINGS BANKS 
 
 ficial canal. A century ago there was no Atlantic cable, 
 no telegraph, no telephone, no wireless. 
 
 When the first Savings Bank was established in Amer- 
 ica, the population of the United States was 8,500,000 and 
 there were but 246 banks in the country. Four years later 
 there were ten Savings Banks, with 8,635 depositors and 
 deposit accounts aggregating $1,138,576. Since that time 
 the growth has been very great. 
 
 SAVINGS BANK STATISTICS 
 
 There were in the State of New York on January 1, 1916, 
 3,243,362 depositors in 140 Savings Banks, an increase for 
 the year of 72,057. The total resources aggregated 
 $1,974,046,375.62, an increase of $61,841,801.70. Aver- 
 age deposits amounted to $560.90. The amount due de- 
 positors was $1,819,206,937.91. The amount deposited 
 during the year, not including dividends credited, was 
 $412,502,363.32; amount withdrawn, $429,908,102.58; 
 amount of dividends paid and credited during the year, 
 $65,124,623.36. The increase in bond values enabled the 
 banks to increase their surplus during the year by $14,419,- 
 839.61, the total amount of such surplus on January 1, 
 1916, being $154,124,167.51 as against $139,704,327.90 
 for the year previous. Deposits showed an increase of 
 $47,705,979.85. 
 
 Reports filed with the Comptroller of the Currency on 
 June 23, 1915, showed that the resources of the 27,062 
 institutions of the United States, exclusive of the twelve 
 Federal Reserve Banks, were nearly $28,000,000,000, or 
 an average for each institution reporting of a little over 
 $1,000,000. For the same period 140 Savings Banks, 201 
 banks of deposit and discount, 80 trust companies and 73 
 private bankers, a total of 494 institutions in New York 
 State, reported total resources of over $4,670,000,000, or an 
 average for each institution of nearly $10,000,000. The 
 ratio of resources of the State institutions of New York 
 against the total resources of institutions in the entire coun- 
 try is 16.8 per cent. 
 
RISE OF SAVINGS BANKS IN AMERICA 61 
 
 Trust companies and banks of deposit and discount had 
 total resources on December 31, 1915, of $3,326,321,670, 
 or nearly 12 per cent, of the total for the country. 
 
 The savings deposits of 630 Mutual Savings Banks re- 
 porting to the Comptroller of the Currency on June 23, 
 1915, were $4,319,000,000, of which amount $1,930,000,- 
 000 was contributed by the 140 Savings Banks in New 
 York State, or nearly 45 per cent, of the total. 
 
 The capital, surplus and undivided profits of trust com- 
 panies, banks of deposit and discount and private bank- 
 ers for New York State on July 1, 1915, were $337,055,250, 
 while the surplus of Savings Banks was approximately 
 $138,020,085, which would make a grand total of $475,'- 
 075,335, or more than 10 per cent, of the total of all bank- 
 ing institutions in the United States. 
 
 The reports of one hundred forty Savings Banks of the 
 State of New York on the morning of July 1, 1915, showed 
 the following condition: 
 
 Increases 
 Total during 
 
 the year 
 
 Resources $1,930,596,230 $18,572,355 
 
 Due depositors 1,791,524,601 18,311,202 
 
 Market value surplus 138,020,085 98,263 
 
 Par value surplus 176,893,305 12,765,730 
 
 Interest paid or credited 64,369,705 2,759,206 
 
 Amount deposited during year 387,072,851 *S3,249,993 
 
 Amount withdrawn during year 433,117,019 *20,195,467 
 
 Number of open accounts 3,202,659 21,411 
 
 * Decrease. 
 
 The following table shows the corresponding statistics 
 for the year 1915: 
 
 Resources $1,974,046,375.62 
 
 Due Depositors 1,819,206,937.91 
 
 Market value surplus 154,124,167.51 
 
 Par value surplus 183,009,554.05 
 
 Interest paid or credited 65,124,623.36 
 
 Amount deposited during year 412,502,363.32 
 
 Amount withdrawn during year 429,908,102.58 
 
 Nxmiber of open accounts 3,243,362 
 
 Institutions imder the Supervision of the Banking De- 
 partment of the State of New York. (January 1, 1916.) 
 
62 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Banks of deposit and discount 203 
 
 Banks of deposit and discount (branches) 98 
 
 Private bankers ^ 
 
 Trust Companies °2 
 
 Trust Companies (branches) 47 
 
 Savings Banks ^^ 
 
 Safe deposit companies 4J 
 
 Safe deposit companies (branches) 37 
 
 Investment companies 15 
 
 Investment companies (branches) 1 
 
 Personal loan companies 20 
 
 Personal loan brokers 1 
 
 Foreign corporation agencies 23 
 
 Savings and loan associations 251 
 
 Building lot associations 1 
 
 Land bank 1 
 
 Credit imions 17 
 
 1,072 
 
 Increase of nearly $500,000,000 in the resources of these 
 institutions for the year 1915 was recorded. The total re- 
 sources at the close of the last fiscal year were $4,871,264,- 
 926, representing an increase of 11.2 per cent. The ex- 
 pense of supervision increased $1,205.60, or about one- 
 half of 1 per cent, over the year previous, but the pro rata 
 cost to the banks decreased. The expense is calculated 
 and apportioned according to the resources of the banks. 
 In 1914 the rate was 5.18 cents for each $1,000 of re- 
 sources, while in 1915, owing to the increased resources, 
 the rate dropped to 4.68. 
 
 COMPARISON OF DIVIDEND RATES 
 
 (State of New York) 
 
 January July January 
 
 1915 1915 1916 
 
 Number paying 4 per cent 89 94 101 
 
 Number paying 4 and Ayi per cent 2 2 
 
 Number paying 3J4 per cent 39 33 29 
 
 Number paying 3 and 4 per cent 8 7 S 
 
 Number paying 3 and 3^4 per cent 1 
 
 Number paying 354 and 4 per cent 3 3 3 
 
 Number paying 3 per cent 1 
 
 BANKS SHOW UNPARALLELED GAINS 
 
 Under the conditions of business throughout the United 
 States and the operation of the Federal Reserve Bank Act, 
 the aggregate resources of the national banks. State banks 
 and trust companies increased 25.51 per cent, over those 
 
RISE OF SAVINGS BANKS IN AMERICA 63 
 
 of June 30, 1913, which was a few months before the 
 Federal Reserve Act went into effect, according to the report 
 of Controller of the Currency John Skelton Williams, 
 issued October 31, 1916. This increase, according to the 
 Controller, is greater than the total resources of the national 
 banks in January, 1904; it surpasses all records and has no 
 parallel in the financial history of this or any other covmtry. 
 A distinguishing feature is the widespread and general dis- 
 tribution of the money and available credit and capital of 
 the people. The growth and increase in banking resources 
 is confined to no particular section or district of the coimtry. 
 The banks and trust companies are lending to the people 
 $3,243,000,000 more money than they were lending three 
 years before the inauguration of the new currency system. 
 During these three years the deposits in all the banks of 
 the country increased $6,242,000,000; the increase in the 
 national banks was 33.56 per cent., and the increase in the 
 State banking institutions, including State banks. Savings 
 Banks, and trust companies was 29.26 per cent. In the 
 Eastern States the largest increase was in New York, 41 
 per cent., followed by Pennsylvania, 17 per cent.. New 
 Jersey, 17 per cent., and Maryland, 17 per cent. The only 
 three States in the Union which showed a reduction in their 
 State banking institutions, were Alabama, Mississippi and 
 Oregon, while in each of these States, during the same 
 period, deposits in the national banks showed large in- 
 creases. The four States showing the highest percentage 
 of increase in deposits were Oklahoma, 54 per cent., Ari- 
 zona, 53 per cent.. North Dakota, 52 per cent., and 
 Wyoming, 49 per cent. 
 
 CLOSED SAVINGS BANKS 
 
 Following is a statement showing the closed Savings 
 Banks in the State of New York, the years they were char- 
 tered and closed, the rate per centum of dividends de- 
 clared, unclaimed dividends deposited with the Superin- 
 tendent of Banks, the amount disbursed to claimants, and 
 the balance of unclaimed dividends : 
 
64 
 
 CENTURY OF AMERICAN SAVINGS BANKS 
 
 ^ Rate Unclaimed Paid by 
 
 •^ ^ per cent. dividends superin- Balance 
 
 a g Name of Institution of deposited tendent unclaimed 
 
 ■5 u dividend with to 
 
 V K declared superin- claimants 
 
 S ^ tendent 
 >, >, 
 
 1869 1876 Abingdon Square Savings Bank. 48 $930.37 $481.78 $448.59 
 1860 1876 Bond Street Savings Bank, N. Y. 86^ 21,132.88 10,443.01 10,690.87 
 1868 1871 Bowling Green Savings Bank... 85 3,994.29 19.56 3,974.73 
 
 1867 1875 Central Park Savings Bank.... SO 1,497.76 704.19 793.57 
 
 1857 1880 Central Savings Bank, Troy*... 100 49.72 49.72 
 
 1866 1880 Chautauqua County Savings 
 
 Bank* 100 2.24 S.24 
 
 1870 1877 Clairmont Savings Bank 15 501.90 17.98 483.92 
 
 1868 1877 Clinton Savings Bank 68.169 831.91 81.14 750.77 
 
 1868 1877 Coxsackie Savings Institution*.. 100 258.32 19.60 238.72 
 
 1869 1884 Eleventh Ward Savings Bank* .. 100 1,833.19 147.25 1,685.94 
 1869 1880 Equitable Savings Institution*.. 100 150.49 45 150.04 
 1892 1899 Fulton County Savings Bank*.. 100 26.32 4.22 22.10 
 1868 1877 German Savings Bank of the 
 
 Town of Morrisania 46 1-6 3,656.86 1,488.39 2,168.47 
 
 1866 1875 German Uptown Savings Bank. 64 5,598.70 1,142.92 4,456.78 
 1904 1908 Guardian Savings Bank, Brook- 
 lyn* 100 888.27 700.03 188.24 
 
 1871 1879 Haverstraw Savings Bank 75 596.04 327.21 268.83 
 
 1866 1880 Hope Savings Bank, Albany* ... 100 320.71 320.71 
 
 1871 1880 Mechanics' Savings Bank, 
 
 Brooklyn* 100 329.39 329.39 
 
 1852 1876 Mechanics and Traders' Savings 
 
 Institution, N. Y. 71 14,315.91 7,056.48 7,260.43 
 
 1865 1883 Morrisania Savings Bank* 100 842.74 670.88 171.86 
 
 1868 1876 Mutual Benefit Savings Bank.. 64 7,554.86 3,630.80 3,924.06 
 
 1869 1876 New Amsterdam Savings Bank.. 77 429.79 9.30 420.69 
 
 1874 1879 Newtown Savings Bank* 100 1.40 1.40 
 
 1869 1877 Oriental Savings Bank, N. Y... 60}^ 2,255.50 296.47 1,959.03 
 
 1868 1880 Park Savings Bank, Brooklyn*.. 100 329.44 339.44 
 
 1863 1875 People's Savings Bank, N. Y. . . 48 7-12 5,530.96 3,037.14 2,603.82 
 
 1869 1881 Port Jervis Savings Bank* 100 261.97 248.13 3.84 
 
 1867 1877 Saratoga Savings Bank 88 437.88 1.82 436.06 
 
 1868 1876 Security Savings Bank, N. Y... 61 H 1,865.72 638.81 1,236.91 
 
 1864 1878 Sixpenny Savings Bank, N. Y... 86.65 39,319.89 12,645.86 26,674.03 
 1854 1875 Third Ave. Savings Bank, N. Y. 19 895.15 465.91 429.24 
 
 1870 1876 Trades Savings Bank, N. Y 15 547.32 3.72 643.60 
 
 1873 1878 Union Savings Bank, Saratoga 
 
 Springs 6 180.89 36.17 144.72 
 
 Total $117,358.78 $44,297.12 $73,061.66 
 
 * Closed voluntarily. 
 
 In addition to the banks named above, the Washington 
 Savings Bank was taken over by the Banking Department 
 on Dec. 29, 1910, and three dividends aggregating 61 per 
 cent, have been paid. The State Savings Bank, New York 
 City, was closed by the Banking Department on Dec. 1, 
 1911, and dividends amounting to 54 per cent, have been 
 paid. The liquidation of these two banks has not yet been 
 completed. 
 
 STATISTICS OF SAVINGS BANKS IN AMERICA 
 
 For the year ended June 30, 1914, there were 2,100 Sav- 
 ings Banks (Stock and Mutual) in the United States. 
 
RISE OF SAVINGS BANKS IN AMERICA 65 
 
 These banks had 11,109,499 depositors and $4,936,591,- 
 849.03 in savings accounts, an average of $444.35 to each 
 depositor. About every ninth person has a savings ac- 
 count. 
 
 Of the 2,100 Savings Banks 634 are mutual institutions, 
 having no capital stock. At the close of 1915, these had 
 8,274,000 depositors and $3,923,000,000 in savings ac- 
 counts. The proportionate amount of business done by 
 these banks is therefore about four-fifths of the total. 
 
 While the bulk of the savings deposits in the United 
 States is greater than in any other country, in the amount 
 of per capita savings, this country is surpassed by France, 
 Norway, Sweden, Germany and Switzerland. 
 
 The Mutual Savings Banks are located largely in the 
 New England States, where there are 412. In New York, 
 New Jersey, Pennsylvania, Delaware and Maryland there 
 are 199, and in Ohio, Indiana, Wisconsin and Minnesota 
 there are 21, while there is one each in West Virginia and 
 California. In the other States the Savings Banks are stock 
 concerns. Of the total number of Savings Banks deposi- 
 tors, 3,634,000 are in New England and 3,181,000 are in 
 New York, so that approximately six depositors in ten are 
 residents of these seven States. These depositors have 
 about three-fourths of all the Savings Banks deposits in the 
 country. 
 
 From these figures it is apparent that the habit of thrift 
 is confined to a comparatively small area of the country 
 and to a comparatively small number of the people. What 
 a remarkable exhibit would be made were all sections of the 
 country as thrifty and provident as New England ! 
 
 DEPOSITS IN THREE GREAT STATES 
 
 It will be interesting to note the aggregate deposits and 
 number of depositors in the fiscal year 1915, in the States 
 of Massachusetts, Pennsylvania and New York: 
 
 In Massachusetts 2,309,008 depositors had $899,279,596 on de- 
 posit in 195 Savings Banks. Pennsylvania, with only eleven Savings 
 Banks (seven of which are in Philadelphia), had savings deposits 
 
66 
 
 CENTURY OF AMERICAN SAVINGS BANKS 
 
 aggregating $242,575,384.94. Of this amount, the Philadelphia Sav- 
 ings Fund Society had $137,749,487.66; the Dollar Savings Bank 
 of Pittsburgh, $34,379,915.43; the Western Savings Fund Society of 
 Philadelphia, $37,975,373.91. New York State, although having 
 fewer Savings Banks than Massachusetts, took the lead with 140 in- 
 stitutions, having aggregate deposits of $1,930,596,230 and 3,202,659 
 depositors. 
 
 SAVINGS DEPOSITS IN THE UNITED STATES 
 
 The appended table, taken from the annual reports of 
 the Comptroller of the Currency, Treasury Department, 
 showing aggregate savings deposits in the United States on 
 that date, does not include Postal savings. The compila- 
 tion includes 634 Mutual Savings Banks and 1,466 stock 
 Savings Banks. Included with the figures are $157,172,- 
 071.19 reported as subject to check without notice, $24,461,- 
 209.50 demand certificates of deposit, and $4,366,000.29 
 certified checks and cashiers' checks outstanding. Statistics 
 for California include figures for savings departments of 
 commercial banks but not the number of such departmental 
 banks, and the number of depositors have been estimated. 
 Depositors for a small number of banks in various States 
 have been estimated. So-called Stock Savings Banks of 
 Ohio are included with commercial Savings Banks, and 
 Michigan "Commercial and Savings Banks" have also 
 been included. 
 
 NUMBER OF DEPOSITORS AND AVERAGE AMOUNT DUE EACH 
 DEPOSITOR FOR THE YEAR ENDED JUNE 30, 1914 
 
 Number Number of Amount of Average to 
 
 Stati of banks depositors deposits each 
 
 depositor 
 Dollars Dollars 
 
 Alabama (1) (1) (1) (1) 
 
 Arizona 3 3,589 1,814,225.50 505.50 
 
 Arkansas 
 
 California 137 876,663 458,215,671.00 522.68 
 
 Colorado 6 8,950 2,213,706.79 247.34 
 
 Connecticut 83 622,852 313,273,629.22 502.96 
 
 Delaware 2 34,176 12,054,855.18 352.73 
 
 Dist. of Col 18 80,424 10,978,723.68 136.52 
 
 Florida 5 9,506 1,580,615.57 166.27 
 
 Georgia 30 54,748 12,491,635.49 228.17 
 
 Idaho 1 973 194,836.38 200.24 
 
 Illinois (2) 
 
RISE OF SAVINGS BANKS IN AMERICA 
 
 67 
 
 State 
 
 Number Number of 
 of banks depositors 
 
 5 
 
 791 
 
 11 
 
 17 
 
 9 
 
 48 
 52 
 
 Indiana 
 
 Iowa 
 
 Kansas 
 
 Kentucky 
 
 Louisiana 
 
 Maine 
 
 Maryland 
 
 Massachusetts 196 
 
 Michigan 190 
 
 Minnesota 10 
 
 Mississippi 17 
 
 Montana 2 
 
 Nebraska 
 
 Nevada 1 
 
 New Hampshire 59 
 
 New Jersey 27 
 
 New Mexico 11 
 
 New York 140 
 
 North Carolina 28 
 
 North Dakota 2 
 
 Ohio 3 
 
 Oklahoma , 
 
 Oregon 9 
 
 Pennsylvania 12 
 
 Rhode Island 15 
 
 South Carolina 26 
 
 Tennessee 31 
 
 Utah 13 
 
 Vermont 21 
 
 Virginia 19 
 
 Washington 15 
 
 West Virginia 8 
 
 Wisconsin 24 
 
 Wyoming 3 
 
 34,445 
 
 607,878 
 
 24,318 
 
 46,802 
 
 63,165 
 
 240,604 
 
 289,585 
 
 2,305,340 
 
 544,898 
 
 144,568 
 
 15,331 
 
 5,644 
 
 Amount of 
 deposits 
 
 Dollars 
 
 13,249,197.25 
 
 217,038,520.92 
 
 4,474,626.32 
 
 7,361,257.19 
 
 17,650,883.22 
 
 97,221,727.11 
 
 109,663,346.61 
 
 895,178,637.11 
 
 174,138,267.66 
 
 32,829,622.43 
 
 4,908,623.09 
 
 2,246,869.17 
 
 Average to 
 each 
 depositor 
 Dollars 
 384.65 
 357.03 
 183.99 
 157.29 
 279.44 
 ■404.07 
 378.69- 
 388.31 
 319.58 
 227.08 
 320.20 
 398.10 
 
 1,789 
 
 218,628 
 
 336,600 
 
 4,519 
 
 3,181,023 
 
 56,199 
 
 4,690 
 
 117,695 
 
 1,475,197.14 
 
 102,271,138.96 
 
 130,635,801.93 
 
 1,007,365.97 
 
 1,771,560,808.38 
 
 10,338,466.24 
 
 910,102.06 
 
 64,580,398.28 
 
 15,493 
 
 500,465 
 
 148,283 
 
 36,178 
 
 72,843 
 
 55,638 
 
 117,584 
 
 44,091 
 
 58,507 
 
 31,284 
 
 84,296 
 
 8,695 
 
 5,668,193.35 
 218,843,715,05 
 82,237,169.60 
 10,873,392.70 
 16,079,166.58 
 14,085,750.35 
 52,939,223.30 
 10,784,314.28 
 19,053,871.31 
 
 5,532,126.21 
 27,862,359.52 
 
 1,073,810.93 
 
 824.59 
 467.75 
 388.10 
 222.92 
 556.91 
 183.96 
 194.05 
 548.69 
 
 365.93 
 437.28 
 554.59 
 300.56 
 220.75 
 253.16 
 450.22 
 244.60 
 325.67 
 173.83 
 330.53 
 123.50 
 
 Total 2,100 11,109,499 4,936,591,849.03 444.35 
 
 (^) Included with statistics for commercial banks. 
 
 (*) Included in reports of the Comptroller of the Currency in abstract of 
 State banks having savings departments. 
 
 THE GROWTH OF SAVINGS DEPOSITS AS SHOWN BY THE 
 
 REPORT OF THE COMPTROLLER OF THE CURRENCY 
 
 (From 1820 to and Including 1915) 
 
 Year 
 1820 
 1825 
 
 No. of 
 Banks 
 10 
 15 
 36 
 52 
 61 
 70 
 
 No. of 
 
 Depositors 
 
 8,635 
 
 16,931 
 
 38,035 
 
 60,958 
 
 78,701 
 
 145,206 
 
 Deposits 
 $1,138,576 
 2,537,082 
 6,973,304 
 10,613,726 
 14,051,520 
 24,506,677 
 
 Average due 
 each Depositor 
 
 $131.86 
 149.84 
 183.09 
 176.72 
 178.54 
 168.77 
 
 Average 
 per Capita 
 in the U- S. 
 $0.12 
 
 1830 
 1835 
 1840 
 1845 
 
 .54 
 .82'" 
 
68 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Average 
 
 No. of No. of Average due per Capita 
 
 Year Banks Depositors Deposits each Depositor in the U. S. 
 
 1846 74 158,709 $27,374,325 $172.48 
 
 1847 76 187,739 31,627,479 168.46 
 
 1848 83 199,764 33,087,488 165.63 
 
 1849 90 217,318 36,073,924 165.99 
 
 1850 108 251,354 43,431,130 172.78 1.87 
 
 1851 128 277,148 50,457,913 182.06 
 
 1852 141 308,863 59,467,453 192.54 
 
 1853 159 365,538 72,313,696 197.82 
 
 1854 190 396,173 77,823,906 196.44 
 
 1855 215 431,602 84,290,076 195.29 
 
 1856 222 487,986 95,598,230 195.90 
 
 1857 231 490,428 98,512,968 200.87 
 
 1858 245 538,840 108,438,287 201.24 
 
 1859 259 622,556 128,657,901 206.87 
 
 1860 278 693,870 149,277,504 215.13 4.75 
 
 1861 285 694,487 146,729,882 211.27 
 
 1862 289 787,943 169,434,540 215.03 
 
 1863 293 887,096 206,235,202 232.48 
 
 1864 305 976,025 236,280,401 242.08 
 
 1865 317 980,844 242,619,382 247.35 
 
 1866 336 1,067,061 282,455,794 264.70 
 
 1867 371 1,188,202 327,009,452 283.63 
 
 1868 406 1,310,144 392,781,813 299.80 
 
 1869 476 1,466,684 457,675,050 312.04 
 
 1870 517 1,630,846 549,874,358 337.17 14.26 
 
 1871 577 1,902,047 650,745,442 342.13 
 
 1872 647 1,992,925 735,046,805 368.82 
 
 1873 669 2,185,832 802,363,609 367.07 
 
 1874 693 2,293,401 864,556,902 376.98 
 
 1875 771 2,359,864 924,037,304 391.50 
 
 1876 781 2,368,630 941,350,255 397.42 
 
 1877 675 2,359,314 866,218,306 361.63 
 
 1878 663 2,400,785 879,897,425 366.50 
 
 1879 639 2,268,707 802,490,298 353.72 
 
 1880 629 2,335,582 819,106,973 350.71 16.33 
 
 1881 629 2,528,749 891,961,142 352.73 
 
 1882 629 2,710,354 966,797,081 356.70 
 
 1883 630 2,876,438 1,024,856,787 356.29 
 
 1884 636 3,015,151 1,073,294,955 355.96 
 
 1885 646 3,071,495 1,095,172,147 3S6.S6 
 
 1886 638 3,158,950 1,141,530,578 361.36 
 
 1887 684 3,418,513 1,235,247,371 361.39 
 
 1888 801 3,838,291 1,364,196,550 355.41 
 
 1889 849 4,021,523 1,425,230,349 354.40 
 
 1890 921 4,258,893 1,524,844,506 358.03 24.35 
 
 1891 1,011 4,533,217 1,623,079,749 358.04 25.29 
 
 1892 1,059 4,781,605 1,712,769,026 358.20 26.11 
 
 1893 1,030 4,830,599 1,785,150,957 369.55 26.63 
 
 1894 1,024 4,777,687 1,747,961,280 365.68 25.53 
 
 1895 1,017 4,785,519 1,810,597,023 371.36 25.88 
 
 1896 988 5,065,494 1,907,156,277 376.50 26.68 
 
 1897 980 5,201,132 1,939,376,035 372.88 26.56 
 
 1898 979 5,385,746 2,065,631,298 383.54 27.67 
 
 1899 987 5,687,818 2,230,366,954 392.13 29.24 
 
RISE OF SAVINGS BANKS IN AMERICA 
 
 69 
 
 
 No. of 
 
 No. of 
 
 
 Average due 
 
 ear 
 
 Banks 
 
 Depositors 
 
 Deposits 
 
 each Deposito, 
 
 1900 
 
 1,002 
 
 6,107,083 
 
 $2,449,547,885 
 
 $401.10 
 
 1901 
 
 1,007 
 
 6,358,723 
 
 2,597,094,580 
 
 408.30 
 
 1902 
 
 1,036 
 
 6,666,672 
 
 2,750,177,290 
 
 412.53 
 
 1903 
 
 1,036 
 
 6,666,672 
 
 2,750,177,290 
 
 412.53 
 
 1903 
 
 1,078 
 
 7,035,228 
 
 • 2,935,204,845 
 
 417.21 
 
 1904 
 
 1,157 
 
 7,305,443 
 
 3,060,178,611 
 
 418.89 
 
 1905 
 
 1,237 
 
 7,696,299 
 
 3,261,236,199 
 
 423.74 
 
 1906 
 
 1,319 
 
 8,027,192 
 
 3,482,137,198 
 
 429.64 
 
 1907 
 
 1,415 
 
 8,588,811 
 
 3,690,078,945 
 
 433.79 
 
 1908 
 
 1,453 
 
 8,705,848 
 
 3,660,553,945 
 
 420.47 
 
 1909 
 
 1,703 
 
 8,831,863 
 
 3,713,405,710 
 
 420.45 
 
 1910 
 
 1,579 
 
 9,142,908 
 
 4,070,486,246 
 
 445.20 
 
 1911 
 
 1,884 
 
 9,794,647 
 
 4,212,583,598 
 
 430.09 
 
 1912 
 
 1,922 
 
 10,010,304 
 
 4,451,818,522 
 
 444.72 
 
 1913 
 
 1,978 
 
 10,766,935 
 
 4,727,403,950 
 
 439.07 
 
 1914 
 
 2,100 
 
 11,109,499 
 
 4,936,591,849 
 
 444.35 
 
 1915 
 
 2,159 
 
 11,285,755 
 
 4,997,706,013 
 
 442.83 
 
 Population estimated at 100,125,000. 
 
 
 Average 
 per Capita 
 in the V. S. 
 $31.78 
 33.45 
 34.89 
 34.89 
 36.52 
 37.52 
 39.17 
 41.13 
 42.87 
 41.84 
 41.75 
 45.05 
 44.82 
 46.53 
 48.56 
 49.85 
 49.91 
 
 THE MORRIS PLAN 
 
 The Morris Plan of borrowing as well as investing money 
 in small amounts, which first began business at the close 
 of the year 1914, has proved a boon to the poorer classes, 
 in the larger cities, especially in circumventing the "loan 
 sharks." The Company has a cash capital of half a mil- 
 lion dollars, is backed by some of the most substantial and 
 reputable citizens of the State, and is fully authorized by 
 the State Banking Department. The operation of the plan 
 is very simple. Loans are made to individuals of small 
 amounts, for a period not exceeding one year, on the basis 
 of character and earning capacity. 
 
 The Company accepts no deposit accounts. The dis- 
 counts and charges received from borrowers are used to pay 
 operating expenses and interest on its certificates, and only 
 after these are paid are the stockholders entitled to such 
 dividends as the earnings will permit. Dividends on the 
 Company's stock are limited to 6 per cent, on its book 
 value. The Morris Plan is thus a plain business propo- 
 sition intended to bring borrowers and lenders together on 
 a basis whereby both are benefited and neither asks a favor 
 of the other. The Company issues certificates of two kinds, 
 each for $50 or multiples thereof, viz.: Investment Cer- 
 
70 CENTURY OF AMERICAN SAVINGS BANKS 
 
 tificates in amounts from $50 to $1,000 bearing interest at 
 5 per cent.; and Installment certificates, payable in fifty 
 equal weekly installments. When fifty equal installments 
 have been regularly paid, 4 per cent, interest per annum 
 is allowed on the aggregate amount paid, from and after 
 the twenty-fifth payment, provided the same has not been 
 pledged with the Company as security for a loan. This 
 certificate, when fully paid up, may be exchanged for an 
 investment certificate, bearing 5 per cent, interest per annum 
 from the date of exchange. 
 
 The borrower executes a note for the amount of the loan, 
 which must be signed by two or more co-makers, who thus 
 become responsible for its pajTnent. The Company must 
 be satisfied that the borrowers and co-makers are responsible 
 and of good character. For every $50 loaned, or part 
 thereof, the borrower agrees to buy a certificate and to leave 
 it with the Company as security. Weekly payments are 
 required on these certificates. If the borrower fails to make 
 his payments, the Company holds the co-makers responsible. 
 Interest (discount) at 6 per cent, is deducted in advance. 
 If the loan is rnade, but not otherwise, a charge of one 
 dollar is made on each $50 or part thereof; no charge to 
 exceed $5 if the loan is for $250 or more. 
 
 During the first fourteen months after beginning busi- 
 ness, the Company made loans aggregating $1,128,460, to 
 9,512 borrowers, the average loan being $118; and in the 
 forty cities where Morris plan institutions are in operation, 
 loans aggregating more than $14,500,000 have been made 
 to over 115,000 borrowers. Investment certificates aggre- 
 gating $138,400, were issued to 1,047 persons. 
 . The following statistics will be of interest: 
 
 Borrowers 
 
 Men 14,882 
 
 Women 724 
 
 Average weekly income '$26 
 
 Married 10,965 
 
 Single 4,568 
 
 Supporting children 8,766 
 
RISE OF SAVINGS BANKS IN AMERICA 71 
 
 No. of children 21,493 
 
 Supporting others lo|625 
 
 No. of others 11,756 
 
 Real-estate owners 1,845 
 
 Reasons for Borrowing 
 
 Repay loan sharks 294 
 
 Pawns and chattels 470 
 
 Miscellaneous debts 3,068 
 
 Illness and births 2,606 
 
 Deaths 317 
 
 Weddings 198 
 
 Begin housekeeping 114 
 
 House improvements 253 
 
 Household expenses 1,286 
 
 Personal expenses 1,317 
 
 Education 321 
 
 Begin business 350 
 
 Business expansion 1,783 
 
 Mortgage and interest 334 
 
 Taxes 421 
 
 Rent 202 
 
 Help relatives 414 
 
 Vacation 536 
 
 Miscellaneous 619 
 
 Positions or Occupations or Borrowers 
 
 Clerks 1,387 
 
 Post-office Employees 1,541 
 
 Other U. S. Employees 549 
 
 State Department and Court Employees 149 
 
 City Department and Court Employees 1,345 
 
 New York County 142 
 
 Firemen 1,073 
 
 Policemen 936 
 
 Proprietors and Partners 1,681 
 
 Managers 332 
 
 Secretaries and Stenographers 169 
 
 Foremen 193 
 
 Agents 311 
 
 Salesmen 786 
 
 Factory Operators 393 
 
 Machinists 159 
 
 Inspectors 137 
 
 Tailors 161 
 
 Artisans 145 
 
72 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Printers' trade 1,521 
 
 Teachers 157 
 
 Doctors and Dentists 87 
 
 Writers 27 
 
 Telegraphers and Dispatchers 186 
 
 Bookkeepers and Accounts 391 
 
 Public Service Employees 304 
 
 Transportation Company Employees 463 
 
 Miscellaneous 881 
 
CHAPTER V 
 
 PIONEER SAVINGS BANK IN THE NEW WORLD 
 
 To Condy Raguet Belongs the Honor of Founding the First Institu- 
 tion of This Character to Open Its Doors on This Continent, 
 The Philadelphia Saving Fiuid Society — Facsimile of the First 
 Account Opened — Brief History of the Society, Now One of the 
 Greatest in the World — Biography of President Purves. 
 
 To Condy Raguet, a century ago one of the leading 
 citizens of Philadelphia, belongs the honor of being the 
 father of the Philadelphia Saving Fund Society, the first 
 institution of the kind to open its doors in America. It is 
 a unique distinction, and no man better deserves or would 
 more worthily bear it were he alive to-day. 
 
 Condy Raguet was a native Philadelphian (born, 1784), 
 and one of the prominent and substantial citizens of his 
 time. Lawyer, banker, merchant, soldier, political econ- 
 omist, statesman, his career was as varied and useful as it 
 was brilliant. He matriculated at the University of Penn- 
 sylvania, leaving before graduation to take up mercantile 
 pursuits. In the War of 1812, he served with distinction, 
 attaining the rank of colonel. In 1820 he was admitted 
 to the bar. From 1822 to 1827 he was United States con- 
 sul at Rio de Janeiro, and as charge d'affaires in 1825, 
 negotiated an important treaty with the Brazilian govern- 
 ment. After returning to his native city he engaged in 
 journalism. He was a member of the Legislature and dis- 
 played characteristic activity in other directions, becoming 
 particularly interested in banking. Among his published 
 works are: "A Short Account of the Present State of Af- 
 fairs in St. Domingo" (1804) ; "An Inquiry into the Causes 
 of the Present State of the Circulating Medium in the 
 United States" (1815); "On Currency and Banking" 
 
 73 
 
74 CENTURY OF AMERICAN SAVINGS BANKS 
 
 (1839). He was an ardent exponent of free trade, and 
 wrote on that subject, "The Principles of Free Trade," in 
 1835. He died in 1842. It is jBitting that such a man 
 should have had the honor of founding the first Savings 
 Bank to open its doors in the New World. 
 
 Condy Raguet, after a life of varied and beneficent ac- 
 tivity, lies buried in Hood Cemetery, a small graveyard in 
 Germantown, a suburb of Philadelphia, where his last rest- 
 ing place is marked by a modest stone inscribed with his 
 name and the usual date of birth and of death. 
 
 As was appropriately said of him at the Centenary Cele- 
 bration of American Savings Banks, in New York City in 
 May, 1916, by President G. Colesberry Purves, now presi- 
 dent of the great institution which Condy Raguet foimded 
 a century ago: "His portrait hangs in the place of honor 
 on the walls of the Society he established; but the seed of 
 thrift which his hand sowed in the form of the Savings 
 Bank has borne fruit a hundredfold in these institutions 
 throughout the land, and they are the real monument to 
 his memory." 
 
 FOLLOWING THE EUROPEAN EXAMPLE 
 
 A century ago, Mr. Raguet was the president of the 
 Pennsylvania Life Insurance Company, which had mod- 
 est offices in South Second Street, in the City of Brotherly 
 Love. He was not only an active executive officer but kept 
 in touch with events on the other side of the Atlantic, and 
 when he noticed in one of the English journals glowing 
 accounts of the success of the Savings Bank movement in 
 the British Isles, inaugurated a few years before (1810), 
 his alert mind naturally turned to the possibility of similar 
 beneficial results in this country. Mr. Raguet was a man 
 of action rather than a dreamer or theorist. It is related 
 that on or about the 20th of November, 1816, while on his 
 way to his office, and at the southeast corner of Fourth and 
 Chestnut streets, he met an intimate friend, — Richard Pe- 
 ters, Jr., — to whom he suggested the expediency of estab- 
 lishing a savings institution in Philadelphia. 
 
PIONEER SAVINGS BANK IN THE NEW WORLD 75 
 
 The idea seems at once to have taken a strong hold on 
 the minds of these two gentlemen, for subsequently on the 
 same day they met Thomas Hale and Clement C. Biddle, 
 in the latter's office, and after discussing the subject for 
 some time all agreed upon the propriety of establishing a 
 Savings Bank without delay. Accordingly it was decided 
 to call a meeting of a few prominent citizens on the follow- 
 ing Monday to consider and act upon the suggestion of Mr. 
 Raguet. 
 
 On Monday, November 25, 1816, five of the twelve gen- 
 tlemen who meanwhile had agreed to unite for the purpose 
 of establishing a Society after the plan of the Savings Banks 
 of Great Britain — Condy Raguet, Thomas Hale, John 
 Strawbridge, John C. Stocker and John McCrea — ^met at 
 the office of the Pennsylvania Life Insurance Company in 
 South Second Street. It was decided to establish a Society 
 under the direction of twelve Managers (subsequently in- 
 creased to twenty-five), for the purpose of receiving and 
 investing small deposits. 
 
 At this meeting Mr. Raguet submitted the plan of such 
 an association, together with some American and English 
 publications, explanatory of the objects and principles of 
 Savings Banks. This plan, after discussion, was amended 
 and at an adjourned meeting adopted, constituting the Ar- 
 ticles of Association under which "The Philadelphia Sav- 
 ing Fund Society" was organized. At the same meeting, 
 Andrew Bayard, one of Philadelphia's most distinguished 
 citizens, was vmanimously elected president of the Society. 
 
 The plan of the association having been acted upon, the 
 necessary officers elected, committees appointed to conduct 
 the business of the association, by-laws adopted, and the 
 contingent expenses provided for by the voluntary contri- 
 butions of the Managers, the business of the association 
 was commenced and continued up to March 31, 1819. 
 
 The Society's office was also the office and residence of 
 its first treasurer, George Billington, of whom it is stated 
 on high authority that at night he slept with the deposits 
 and a revolver under his pillow. 
 
76 CENTURY OF AMERICAN SAVINGS BANKS 
 
 On the 25th of February, 1819, an Act of the Legisla- 
 ture incorporating "The Philadelphia Saving Fund So- 
 ciety" was approved by the Governor of the Common- 
 wealth and accordingly, the trustees under the articles of 
 the association, viz.: William Jones, the president, and 
 Jonathan Smith, the cashier of the United States Bank, 
 transferred all the assets to the incorporated society. 
 
 It willbe remembered that in 1816 these societies in 
 England were purely voluntary, having no sanction in, nor 
 protection from the law; hence it is only natural that the 
 form they should first assume in this country should be vol- 
 untary and unincorporate. The necessity or importance 
 of a corporate existence was an after consideration, sug- 
 gested by experience or in accordance with such action taken 
 here and abroad. Boston led the world in the incorpora- 
 tion of the Provident Institution for Savings, on December 
 13, 1816, and it was not until July of the following year 
 that the British Parliament passed the necessary act for 
 the incorporation of similar institutions in that country. 
 
 THE FIRST SAVINGS DEPOSIT IN AMERICA 
 
 On Monday, December 2, 1816, the office of the Society 
 was first opened for the transaction of business on the west 
 side of Sixth Street, nearly opposite Minor Street, next door 
 to Rubicam's well-known tavern. This was the first Sav- 
 ings Bank to open its doors in America. 
 
 The first deposit made in this institution, — which was 
 the first in the New World, — was handed in by one Curtis 
 Roberts, a colored laborer, who on that ever-memorable 
 day, — December 2, 1816 — deposited five dollars with 
 Treasurer Billington and received a little passbook with the 
 proper entry. This humble citizen of the Republic per- 
 formed the worthy act all unconscious of the fact that by 
 so doing his name would go down in history, or that that 
 little seed was destined to germinate, in the space of a cen- 
 tury, into billions ! 
 
 At first the office was open on Mondays, only to receive 
 

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78 CENTURY OF AMERICAN SAVINGS BANKS 
 
 deposits, and on Thursdays, only for payments; and it was 
 not until 1835 that deposits and payments were made on 
 both days, although the office was open on all week days 
 for general business. In 1865 it was open daily for busi- 
 ness of every kind. 
 
 MANY CHANGES OF LOCATION 
 
 In the year 1818 the office was removed to the east side 
 of Sixth Street, southeast corner of Minor Street. 
 
 In the year 1821 the office was removed to the west side 
 of Decatur Street, between Sixth and Seventh Streets. 
 
 In 1826 the office was removed to the southeast corner 
 of Third and Walnut Streets, on the second floor. 
 
 In 1827 the Society purchased the house and lot No. 304 
 Walnut Street, and in the month of October of that year 
 the office was removed to this building. 
 
 The first building erected by the Society for its office was 
 the marble front building No. 306 Walnut Street, now 
 owned and occupied by the Royal Fire Insurance Com- 
 pany. This was an important event in the history of the 
 Society, and was marked by appropriate ceremonies. The 
 Building Committee consisted of three of the Society's 
 Managers, Messrs. Horace Binney, John J. Vanderkemp 
 and Francis Gumey Smith. Thomas U. Walters was the 
 architect. 
 
 In 1869 the office of the Society was removed to the build- 
 ing which it now occupies, — 700-710 Walnut Street, — ^the 
 constantly increasing business of the institution making 
 more commodious accommodations for the depositors im- 
 peratively necessary. 
 
 AMPLER FACILITIES FOUND NECESSARY 
 
 The property was purchased, and a fireproof building 
 erected under the supervision of a committee of the Man- 
 agers, consisting of Messrs. Joshua B. Lippincott, S. Mor- 
 ris Wain, Joseph Harrison, Jr., Edward Shippen and 
 Alexander Biddle. 
 
 Such had been the rapid increase in the nimiber of the 
 
PIONEER SAVINGS BANK IN THE NEW WORLD 79 
 
 depositors, that in October, 1882, the attention of the Man- 
 agers was called to the necessity of providing additional 
 accommodations for its office, in order to facilitate the trans- 
 action of its business and to provide for future wants. A 
 committee was appointed on the subject, and after careful 
 consideration they recommended the purchase of the ad- 
 joining property on Walnut Street for the purpose of in- 
 creasing the size of the office, and adding such improve- 
 ments as would facilitate the carrying out of the benevolent 
 work of the Society. The Board of Managers concurred 
 in the recommendation of the committee, and authorized 
 the purchase of the property named. A committee was ap- 
 pointed, consisting of Messrs. Joshua B. Lippincott, Sam- 
 uel Field, Edward Shippen, Edward S. Buckley, and Pem- 
 berton S. Hutchinson, to superintend the new buildings, 
 which have since been enlarged by a seventy-five-foot addi- 
 tion to the west, giving a total frontage on Walnut Street 
 of one hundred and fifty feet. 
 
 SOME FEATURES OF THE CHARTER 
 
 The fact has been noted by historians of the subject as 
 somewhat remarkable, that while Savings Banks had their 
 inception in this coimtry as a practical fact in the State of 
 Pennsylvania, through the voluntary unincorporate asso- 
 ciation of a few philanthropic citizens, they have never 
 attained in that State the rank and consequence of a gen- 
 eral system pervading the Commonwealth. In explanation 
 of this fact, the president of the Society, G. Colesberry 
 Purves, says: 
 
 It is remarkable that while the Savings Bank had its birth in 
 Pennsylvania, their growth there has been very small, only eleven, in 
 comparison with the neighboring States to the east; where indeed 
 almost all the Mutual Savings Banks are located. This may be in 
 a measure due to the Building Association, which, like the Sayings 
 Bank, imported from Great Britain, had its rise in Pennsylvania in 
 1831, and now number 1,766 in that State. Further it should be 
 said that no general Savings Bank Act was adopted in Pennsylvania 
 until 1889; so that ahnost all of the eleven Savings Banks there act 
 under special charters granted by the State. 
 
80 CENTURY OF AMERICAN SAVINGS BANKS 
 
 As in the earlier charters granted in the State of New 
 York, the corporators were designated as Managers. 
 These were limited in number to twenty-five, of whom five 
 constituted a quorum; but at least thirteen members were 
 required to be present in order to declare or fill any vacancy 
 in their number; and two-thirds of such number, or nine 
 members, must agree upon such question in order to give 
 it validity. No restrictions were imposed upon the man- 
 agers with reference to the disposition of the moneys en- 
 trusted to their care, but, as a matter of fact, they have 
 always been ultra-conservative. 
 
 Elaborate machinery was provided for the filling of va- 
 cancies occurring in the Board of Managers; each must 
 be one of the five first approved by at least nine members 
 of the board, and preferred from five by a coimcil of high 
 judicial officers. 
 
 Each Corporator of the Society, upon its organization, 
 contributed $10, forming a fund of $250, with which to 
 defray necessary expenses. The Managers took each his 
 turn in performing the clerical labor incident to the bank's 
 operation, as the fund contributed was insufficient to pay 
 clerk hire. 
 
 The rate of interest was fixed in the charter at 4.8 per 
 cent. This, by agreement with the depositors, was changed 
 to 4 per cent, until the Society should be able to pay a 
 higher rate. For a few years — 1859 to 1864 — ^the rate was 
 5.4 per cent., but finding that this depleted the surplus, the 
 authorized rate was renewed. The lowest rate paid was 
 3 per cent., from 1881 to 1907. The rate since 1909 has 
 been 3.65 per cent. 
 
 ALL DIFFICULTIES SURMOUNTED 
 
 The Society, during the century of its existence, has 
 passed through many seasons of trial but has emerged from 
 them all with its integrity unimpaired and the confidence 
 of the public in its stability constantly stronger and 
 stronger. 
 
PIONEER SAVINGS BANK IN THE NEW WORLD 81 
 
 At one time during the Civil War, a run on the Society 
 depleted its deposits to the extent of 50 per cent., but the 
 fact is pointed out that at the close of the excitement the 
 institution was relatively stronger than at its beginning; 
 that is to say, the surplus which, at the commencement of 
 the panic was 12^ per cent, had risen by the reduction of 
 the deposits to 19 per cent. 
 
 The experience of the Society in the panic of 1873 was 
 less favorable, it being almost impossible to realize at all 
 upon bonds and mortgages, while national, state and city 
 bonds were readily disposed of at or above par. 
 
 The growth of the Philadelphia Saving Fund Society 
 at first was quite moderate. At the close of the first month, 
 the Society had sixteen accounts, aggregating $1,043. At 
 the end of the thirteenth month of its operation the deposits 
 aggregated only $8,945. When the funds were transferred 
 to the Corporation on March 31, 1819, two years and four 
 months after operations were commenced, they were $45,- 
 114, belonging to 481 depositors. Thereafter, the deposits 
 increased more rapidly, amounting in 1821 to over $200,- 
 000. During the generally disastrous year of 1873, the 
 Society paid to depositors $712,445, against $422,699 re- 
 ceived. In the following year, however, there was received 
 $459,711, against $449,085 paid out. 
 
 The Society's original charter required two weeks' no- 
 tice for payments. This was afterward amended to sixty 
 days for all sums over $300, although as a matter of fact, 
 the longer notice has never been invoked by the Managers. 
 The president of the Society, G. Colesberry Purves, is au- 
 thority for the statement that while such notice was orig- 
 inally intended to apprise the bank of what demands would 
 be made upon it, it has proved to be of advantage to the 
 depositor as well, for it gives him time for reflection, and 
 not infrequently change of mind, thus preventing vmwise 
 expenditure; also in times of panic it has stopped many 
 hasty withdrawals by excited depositors. 
 
82 CENTURY OF AMERICAN SAVINGS BANKS 
 
 LITIGATION OVER "UNCLAIMED DEPOSITS" 
 
 An event in the history of the Society worth recording is 
 the attempt made, many years ago, by the State of Penn- 
 sylvania, or more properly speaking by its "Deputy Es- 
 cheater," to recover about $700,000 "unclaimed deposits" 
 which this sapient officer with the significant title held to 
 be escheated to the State, as consisting of deposits of those 
 who had died leaving no lawful claimants to the funds. 
 
 The Society very properly contested the suit, and the de- 
 cision of the Supreme Court was against the Escheater, in 
 the following words: 
 
 The proceeding to escheat surplus funds being illegal, both in its 
 object and its mode, the judge at nisi prius was right in enjoining it. 
 The act is contrary to law and is prejudicial to the interests of the 
 Society and its depositors. No one can doubt that an attempt to 
 wrest from it its surplus funds, with the apparent approbation of the 
 Court, must impair it and curtail its business, and might subject it 
 to the seizure of its deposits, forcing it either to suspend payment or 
 to impair its assets by sacrifices necessary to maintain its solvency. 
 
 This litigation cost the Society something over $10,000. 
 In order to prevent similar raids in the future, an Act of 
 the Legislature was passed, not long afterward, authorizing 
 Savings Banks to hold a contingent or surplus fund of 15 
 per cent. At the same time the act provided that deposits 
 upon which there had been no transactions for thirty years 
 were to be turned over to the State, which made itself ac- 
 countable to the principal whenever he should appear. 
 
 OFFICERS OF THE SOCIETY SINCE ORGANIZATION 
 
 The following is a complete list of the officers of the So- 
 ciety from date of organization to the present time: 
 
 Presidents: Andrew Bayard, 1816-1832; Thomas 
 Hale, 1832-1833; John C. Lowber, 1833-1834; Clement 
 C. Biddle, 1834-1855; John R. Neff, 1855-1855; Lewis 
 Wain, 1855-1863; Caleb Cope, 1864-1888; Pemberton S. 
 Hutchinson, 1888-1903; G. Colesberry Purves, 1903—. 
 
 Vice-Presidents: William Purves, 1884-1886; Pem- 
 
PIONEER SAVINGS BANK IN THE NEW WORLD 83 
 
 berton S. Hutchinson, 1886-1888; G. Colesberry Purves, 
 1902-1903 ; James M. Willcox, 1903—. 
 
 Treasurers: George Billington, 1816-1835; George 
 Greiner, 1835-1849; William Purves, 1849-1886; G. 
 Colesberry Purves, 1887-1902; James M. Willcox, 1902- 
 1903; Samuel Woodward, 1904—. 
 
 Secretaries: George Billington, 1816-1825; John C. 
 Stocker, 1825-1826; George Billington, 1826-1835; 
 George Greiner, 1835-1849; William Purves, 1849-1886; 
 G. Colesberry Purves, 1887-1902; James M. Willcox, 
 1902-1903; Samuel Woodward, 1904—. 
 
 Assistant Treasurers: G. Colesberry Purves, 1884- 
 1887; Oliver P. Comman, 1902-1905; Thomas J. Beck, 
 1906—. 
 
 Assistant Secretaries: G. Colesberry Purves, 1884- 
 1887; Samuel Woodward, 1902-1904; Alvin S. Fenimore, 
 1904—. 
 
 FINANCIAL STATEMENT 
 
 The Philadelphia Saving Fund Society to-day has the 
 largest number of depositors of any Savings Bank in the 
 United States, if not in the world, and ranks second as to 
 the amount deposited, the Emigrant Industrial Savings 
 Bank (New York City), being first.^ The following table 
 
 1 Under date of August 16, 1916, W. S. Cameron, Esq., a member of the 
 Trustee Savings Bank Inspection Committee, London, England, wrote Alex- 
 ander Cargill, Esq., Actuary of the Edinburgh (Scotland) Savings Bank, to 
 whom the author had addressed a letter of inquiry as to the largest Savings 
 Banks in Europe: 
 
 With reference to your query as to Savings Banks, if any, with larger busi- 
 ness than you quote, I am not aware of any Savings Bank, other than the 
 Post Office Savings Bank, which has attained larger results than those achieved 
 in the United States. The Post Office Savings Bank is probably out with 
 the class of institutions which you have in view, but anyhow its figures for 
 1914 were 9,281,370 depositors with £190,104,341 cash, £26,576,848 Stock to- 
 their credit, in addition to 4,233,444 small dormant accounts amounting to 
 £428,867 Cash, — an average balance of «2/ — only. 
 
 Of Trustee Savings Banks the largest is Glasgow with 272,923 accounts (not 
 depositors, for some have more than one account) with £11,719,513 Cash and 
 £744,464 Stock to credit in 1915, but this business is not done under one roof, 
 for there are 16 branches besides the Central Bank. 
 
 Of other Thrift Institutions in the United Kingdom, I think the largest is 
 the Yorkshire Penny Bank, with numerous Branches, now a Limited Liability 
 Company with considerable alteration in its original constitution, which was 
 purely philanthropic up to 1911, but has been proprietary since then, when 
 
84 CENTURY OF AMERICAN SAVINGS BANKS 
 
 gives some idea of the volume of business transacted by the 
 Society during the year 1915: 
 
 NUMBER AND AMOUNT OF DEPOSITS RECEIVED AND PAID 
 
 DURING 1915 
 
 Months Number Receipts Number Payments 
 
 January 37,970 $2,741,653.80 18,392 $2,041,573.03 
 
 February 30,268 1,949,712.48 15,658 1,915,796.40 
 
 March 34,335 2,256,593.57 19,064 2,363,519.12 
 
 April 37,573 2,403,429.34 19,609 2,483,680.51 
 
 May 32,510 2,149,246.56 18,537 2,477,627.49 
 
 June 33,459 2,173,571.66 18,208 2,390,141.66 
 
 July 30,004 2,045,198.08 17,511 1,957,606.19 
 
 August 29,755 1,882,684.50 18,306 2,071,483.84 
 
 September 30,018 1,936,352.35 16,013 1,976,619.81 
 
 October 30,939 2,003,848.68 15,994 2,281,733.43 
 
 November 31,294 2,163,508.83 15,452 2,111,833.83 
 
 December 31,937 2,224,248.23 17,513 1,899,518.40 
 
 Total 390,062 $25,930,048.08 210,257 $25,971,133.71 
 
 The Society's investments are all of the very highest 
 class, consisting of 260 different kinds of bonds, amounting 
 
 £2 Millions of Capital was needed to stiffen it. It had £20,157,809 due to de- 
 positors and other accounts in 1914, but the number of depositors is net now 
 published. In 1905 it was 518,854. 
 
 In the Dominions, I think the largest Savings Bank must be that of Vic- 
 toria, — at one time purely local, — but now part of a system covering the State 
 of Victoria with its branches and Agencies. In 1915 the Savings Bank of 
 Victoria had 721,936 accounts (including 170,894 small inoperative balances), 
 with £24,884,602 Cash and £159,426 Stock to their credit, representing the 
 combined operations of 128 Banks and Branch Banks and 323 Agencies, about 
 24 per cent, representing the share of Melbourne with its 3 officers, and its 
 64 particular Agencies. 
 
 As to Savings Banks in Foreign Countries, my information is very scanty, 
 but the largest seem to be in Germany judging by the returns of Hamburg 
 which are the only ones I have before me. There are two Savings Banks in 
 Hamburg, one established in 1827, the other in 1864. The former had in 
 1913, 287,756 accounts with 217,261,038 Marks to credit, say £11 Millions of 
 funds. The other had 241,603 accounts in 1913 with 160,664,348 Marks to 
 credit, say £8 Millions. It had also 74,554 School children's accounts with 
 592,625 Marks to credit, making together 316,157 accounts with balances amount- 
 ing to 161,256,973 Marks. It had a Central Ofdce, 10 Branches, and 88 Re- 
 ceiving Offices, whereas the older Bank seems to be conducted imder one roof. 
 
 Comparisons based on the number of accounts are fallacious, for there is no 
 common basis of dealing with small unclaimed balances, which one Savings 
 Bank may include as operative accounts and another may exclude. The bet- 
 ter test is the amount of liability due to depositors. 
 
 I fully expect that all the above statistics are already well known to you, — 
 indeed you may have fuller and more recent data than I possess. Yet they 
 may serve to confirm your own information and impressions. 
 
 The Savings Bank of New South Wales contains a larger separate unit than 
 that of Victoria, for in 1913 there were 119,355 accounts at Sydney with 
 £7,225,345 to their credit, distributed over a Central Office and 8 Branches. 
 For the whole State the accounts were 149,913 with 8,974,829 to credit. 
 
PIONEER SAVINGS BANK IN THE NEW WORLD 85 
 
 to: Railroad, $82,674,370 (par value); Public, $35,- 
 331,070 (par value); bonds and mortgages, $14,669,085; 
 real estate, $155,000 and cash, $7,477,777, making a total 
 of $137,749,486. 
 
 AN INTERESTING COMPARISON 
 
 The Philadelphia Saving Fund Society, and the Emi- 
 grant Industrial Savings Bank, New York City, being two 
 of the largest institutions in the world, the following com- 
 parative statement will be found interesting: 
 
 
 
 
 Av. am't 
 
 No. of 
 
 Am't of 
 
 Total 
 
 due each 
 
 Depositors 
 
 Deposits 
 
 Resources 
 
 Depositor 
 
 Phila. Sav. Fund Society 284,846 
 
 $125,522,321 
 
 $137,749,486 
 
 $440.67 
 
 Emigrant Industrial, N. Y. 165,572 
 
 148,557,398 
 
 159,141,939 
 
 897.23 
 
 From the date of the organization of the Society to Jan- 
 uary 1, 1916, 1,599,002 persons had opened accounts with 
 it, of which 284,846 remained open at the last named date, 
 aggregating in amount $125,522,321.59, and averaging to 
 each depositor $440.67. The Society's surplus or contin- 
 gent fund at that time amounted to $12,227,166.07. The 
 present rate of interest to depositors is 3.65 per cent, per 
 annum. 
 
 Under date of July 31, 1916, Mr. J. M. Willcox, vice- 
 president of the Philadelphia Savings Fund Society, wrote 
 the author as follows: 
 
 This institution, without question, has more depwjsitors than any 
 other private institution in the United States, and in so far as we 
 know more than any other in the world; but of the last statement I 
 am not certain, as we have not at hand the reports of the Continental 
 Savings Banks which, however, I believe are now all practically pos- 
 tal. In its report of November 20, 1915, the Edinburgh Savings 
 Bank shows in its Ordinary and Special Investment Departments 
 100,829 open accounts. The number of our transactions also I be- 
 lieve naturally far exceed those of any other. The number of receipts 
 in 1915 was 390,062, and of payments 210,257, and the average 
 amount due to eadi depositor on January 1, 1916, was $440.67. 
 
86 CENTURY OF AMERICAN SAVINGS BANKS 
 
 OFFICERS AND MANAGERS, JANUARY 1, 1916 
 
 Officers: President, G. Colesberry Purves; Vice- 
 President, James M. Willcox; Ass't Secretary, Alvin S. 
 Fenimore; Secretary and Treasurer, Samuel Woodward; 
 Ass't Treasurer, Thomas J. Beck; Solicitor, J. Percy Keat- 
 ing; Finance Committee, Francis A. Lewis, Chairman; S. 
 Pemberton Hutchinson, John T. Lewis, Jr., Thomas S. 
 Gates, Edward H. Coates, Stevens Heckscher, G. C. Purves, 
 ex-officio. 
 
 Managers: John T. Lewis, Jr., Edward H. Coates, 
 Effingham B. Morris, Arthur E. Newbold, C. S. W. Pack- 
 ard, J. Rodman Paul, Charles E. Ingersoll, G. C. Purves. 
 T. DeWitt Cuyler, Francis I. Gowen, John W. Pepper, 
 Charles Biddle, George McCall, Henry H. Collins, Charles 
 B. Penrose, M.D., John B. Morgan, James Logan Fisher, 
 Alba B. Johnson, Francis A. Lewis, James M. Willcox, 
 Pemberton S. Hutchinson, Thomas S. Gates, Stevens 
 Heckscher, John Hampton Barnes, Edward F. Beale; Rob- 
 ert H. Fels, Comptroller. 
 
 REMARKABLE GROWTH OF THE SOCIETY 
 
 The following table shows the growth of the Society by 
 ten-year periods in accounts, general deposit account and 
 a,ssets, from Dec. 1, 1816, to Dec. 31, 1916: 
 
 Number of Bal. of General 
 Accounts Deposit Account Total Assets 
 
 December 31, 1816 
 
 (One 
 
 Month) 
 
 16 
 
 $1,043.52 
 
 $1,043.52 
 
 " 
 
 ■ 1817 
 
 
 
 126 
 
 8,421.83 
 
 8,302.78 
 
 »i 
 
 • 1818, 
 
 
 
 401 
 
 39,196.71 
 
 40,405.02 
 
 March ' 
 
 • 1819 
 
 (transferred to 
 Corporation 
 
 
 
 
 
 
 P. 
 
 S. F. S.) 
 
 481 
 
 46,502.39 
 
 47,118.15 
 
 December 31, 1826 
 
 
 
 3,677 
 
 615,385.14 
 
 622,456.08 
 
 
 ' 1836 
 
 
 
 9,662 
 
 1,477,698.84 
 
 1,540,031.09 
 
 
 • 1846 
 
 
 
 11,010 
 
 1,738,115.72 
 
 1,899,319.58 
 
 
 • 1856 
 
 
 
 18,042 
 
 3,099,702.86 
 
 3,474,259.89 
 
 
 • 1866 
 
 
 
 22,398 
 
 4,608,753.25 
 
 5,151,593.31 
 
 
 • 1876 
 
 
 
 48,995 
 
 12,864,990.60 
 
 13,891,628.73 
 
 
 ' 1886 
 
 
 
 112,314 
 
 27,110,714.59 
 
 29,366,399.41 
 
 
 • 1896 
 
 
 
 165,198 
 
 41,576,204.44 
 
 46,549,237.68 
 
 fl 
 
 ' 1906 
 
 
 
 259,770 
 
 85,966,863.34 
 
 94,020,623.75 
 
 »t 
 
 • 1915 
 
 
 
 284,846 
 
 125,522,321.59 
 
 137,749,487.66 
 
PIONEER SAVINGS BANK IN THE NEW WORLD 87 
 
 PRESIDENT G. COLESBERRY PURVES 
 
 The president of the Philadelphia Saving Fund Society, 
 G. Colesberry Purves, has held that responsible position 
 since 1903, succeeding Pemberton S. Hutchinson. Mr. 
 Purves is a native of Philadelphia (born, Dec. 18, 1843), 
 the son of William and Anna (Kennedy) Purves. He was 
 graduated from Yale University in 1864, vi^ith the degree 
 of B.A., and from the University of Pennsylvania three 
 years later, with the degree of LL.B. 
 
 Mr. Purves practiced law at the Philadelphia Bar from 
 1867 to 1885, and then accepted the position of assistant 
 treasurer of the Philadelphia Saving Fund Society, becom- 
 ing its treasurer in 1867, vice-president in 1902 and then 
 its president. He is vice-president of the Mortgage Trust 
 Company, a director in the Insurance Company of North 
 America, the Farmers and Mechanics' National Bank, the 
 Mutual Insurance Company and the Society for Organiz- 
 ing Charity. In politics he is an independent; in religion, 
 a Presbyterian. He is president of the Philadelphia Lying- 
 in-Charity, and the Union Benevolent Association; trustee 
 of the Jefferson Medical College Hospital; member of the 
 Sons of the Revolution. Clubs: — Rittenhouse and Uni- 
 versity. 
 
 Synopsis of the Provisions of the Charter of the Phila- 
 delphia Saving Fund Society, Incorporated February 25, 
 1819 
 
 preamble 
 
 Whereas, A voluntary association of a number of the citizens of 
 Philadelphia and its neighborhood, under the title of the "Phila- 
 delphia Saving Fund Society," has for some time existed, and has 
 been established for the sole purpose of receiving and investing in 
 public stock, or substantial security on real estate, such small sums 
 as may be saved from the savings of tradesmen, mechanics, laborers, 
 servants and others, and of affording to industrious persons the advan- 
 tages of security and interest; and. 
 
 Whereas, The members of this Society, by their memorial to the 
 Legislature, have prayed to be perpetuated and brought into legal 
 existence, by being incorporated and established by law, with per- 
 
88 CENTURY OF AMERICAN SAVINGS BANKS 
 
 petual succession, for the purpose of receiving, holding, and improv- 
 ing, in such way as to them as may seem proper, all such real and 
 personal estate as the said institution shall become possessed of, or 
 entitled to by gift, grant, devise, bequest, purchase, deposit, loan and 
 pa)Tnent, for the purposes of the said institution. 
 
 Therefore, Be It Enacted, etc.: 
 
 1. Twenty-five persons named as corporators, who, with their suc- 
 cessors, are, in most elaborate terms, constituted a body politic and 
 corporate. 
 
 2. Rules and regulations for the conduct of the institution incor- 
 porated in the Act, substantially as follows: 
 
 1. Conduct of the institution committed to the twenty-five corpora- 
 tors, styled managers. 
 
 2. No emoluments to be received by the president or managers for 
 their services. 
 
 3. Moneys deposited to bear interest at the rate of 4 8/10 per cent., 
 and to be repaid on two weeks' notice, with interest to the time of 
 notice. 
 
 4. Various provisions regulating the details of transacting busi- 
 ness, etc. 
 

 /}/y.j^/V'yt I 
 
 r. y/rx -/.'i'/6y 
 
CHAPTER VI 
 
 BOSTON FIRST TO INCORPORATE 
 
 Massachusetts Leads the World in Giving Savings Banks the Sanc- 
 tion and Protection of the Law — "The Provident Institution for 
 Savings in the Town of Boston," Incorporated December 13, 
 1816, the Second Savings Bank to Open Its Doors in America — 
 James Savage Its Father and Founder — Copy of the Charter 
 — Officers Since Organization — Deposits by Ten- Year Periods. 
 
 To the "Old Bay State" belongs the honor, conceded to 
 her by all Savings Banks historians, of being the first au- 
 thority in the world to throw around Savings Banks the 
 sanction and protection of the law. Massachusetts was 
 weU to the fore in noting the instant success of these insti- 
 tutions abroad and in planning to duplicate them on this 
 side of the Atlantic. 
 
 One of the first men in the New World to interest him- 
 self in the subject was James Savage, of Boston. While 
 on a visit to his friend Benjamin Vaughan, at Hallowell, 
 Maine, in 1816, the plans and address of the London Prov- 
 ident Institution, which had been started a few years pre- 
 viously, fell into his hands, and he at once became deeply 
 interested. Being a practical rather than a theoretical 
 philanthropist, Mr. Savage at once saw the great impor- 
 tance of this new means of contributing to the welfare of 
 the working classes and gave it his whole-hearted support. 
 Upon his return to Boston a few weeks later he at once 
 sought to interest other prominent and influential residents 
 of "The Hub" in the worthy project. His efforts met with 
 instant success. 
 
 Mr. Savage was bom in Boston, July 13, 1784; was 
 graduated from Harvard College in 1803; admitted to the 
 
90 CENTURY OF AMERICAN SAVINGS BANKS 
 
 bar in 1807; was made a member of the General Court of 
 Massachusetts in 1812, and subsequently a senator and 
 member of the Governor's Council, and a member of the 
 Convention to revise the Constitution, in 1820. He was 
 an overseer of Harvard College from 1838 to 1853. Mr. 
 Savage was an antiquarian and genealogist of note, and a 
 member of the American Academy of Arts and Sciences 
 and of the Massachusetts Historical Society, and also one 
 of the founders of the Boston Athenaeum. He was con- 
 nected with the Boston Institution for Savings, which he 
 founded, in various capacities, till 1862. He died, March 
 8, 1873, full of years and honors, and with the sincere re- 
 spect and esteem of all his associates. 
 
 Mr. Savage's only son, James, was killed in action in the 
 Civil War. 
 
 The hopes and ideas of the founders of this institution 
 were well expressed in their appeal for recognition to the 
 Legislature of Massachusetts, as follows : 
 
 It is not by the alms of the wealthy, that the good of the lower 
 class can be generally promoted. By such donations encouragement 
 is far oftener given to idleness and hypocrisy than aid to suffering 
 worth. He is the most effective benefactor of the poor who encourages 
 them in habits of industry, sobriety and frugality. 
 
 One of the first public announcements of the movement 
 in Boston was contained in The Christian Disciple, for 
 December, 1816, a small religious monthly, published in 
 Boston. It follows : 
 
 Savings Banks 
 
 Under this novel title, it is proposed to form an institution in Bos- 
 ton, for the security and improvement of the savings of persons in 
 humble life, until required by their wants and desires. A meeting 
 of gentlemen has been called, and a large and respectable committee 
 appointed to apply to the Legislature (now in session) for an act 
 of incorporation, and to digest suitable rules and by-laws, to be pro- 
 posed to an adjourned meeting. Similar institutions exist in Eng- 
 land and Scotland; in the former place under the appellation of 
 "Provident Institutions for Savings," and in the latter of "Savings 
 Banks." The Edinburgh Review, No. 49, and the Pamphleteer, No, 
 
BOSTON FIRST TO INCORPORATE 91 
 
 14, contain essays on the subject, explaining their objects and prin- 
 ciples, and narrating their beneficent effects. In Philadelphia it is 
 proposed to establish one of these societies. We agree in the follow- 
 ing sentiment, and wish every success to the laudible schemes con- 
 templated: "It is not by the alms of the wealthy, that the good of 
 the lower classes can be generally promoted. By such donations, 
 encouragement is far oftener given to idleness and hypocrisy, than 
 aid to suffering worth. He is the most effective benefactor to the 
 poor, who encourages them in habits of industry, sobriety and fru- 
 gality." 
 
 It seems certain that at the time of the publication of 
 this notice the plans of the promoters must have been quite 
 well matured, for the act to incorporate the Provident In- 
 stitution for Savings, in the Town of Boston, was approved 
 on the 13th of December, 1816, as stated above. With 
 characteristic modesty the name of James Savage appears 
 as the .last in a list of forty-eight trustees or directors of the 
 Society thus formed. 
 
 Evidently, the measure encountered in the General Court 
 of Massachusetts little if any of the opposition which was 
 exhibited in the Legislature of New York to the incorpora- 
 tion of the Bank for Savings in the City of New York and 
 which prevented its legal authorization for several years. 
 By reason of the prevailing bank failures and heavy losses 
 to patrons, the very word "Bank" was looked upon at this 
 time with suspicion. How far the exclusion of the word 
 from the act of incorporation and the substitution of the 
 more pleasing title of "Provident Institution," may have 
 resulted in the easier sailing of the Boston charter, one can 
 only conjecture. 
 
 The Boston institution was organized and commenced 
 business in the following spring, promising to divide among 
 depositors 1 per cent, quarterly, and more if practicable. 
 The first dividend was declared in July following, accord- 
 ing to the terms of this promise. Within five years, the 
 deposits had reached the sum of $600,000, and the surplus 
 $6,200. 
 
 Boston at this time had a population of about 35,000. 
 
92 CENTURY OF AMERICAN SAVINGS BANKS 
 
 THE CHARTER 
 
 As a matter of historical interest, a copy of the charter 
 is given herewith: 
 
 AN ACT 
 
 TO INCOEPORATE THE PROVIDENT INSTITUTION FOR SAVINGS IN THE 
 TOWN or BOSTON 
 
 Section 1. Be it enacted by the Senate and House of Representa- 
 tives, in General Court assembled, and by the authority of the same, 
 That his Honor William Phillips, John Phillips, Samuel Parkman, 
 James Perkins, Thomas Dawes, John Lowell, Russell Sturgis, Jona- 
 than Hunnewell, Josiah Quincy, John D. Williams, James Prince, 
 Thomas K. Jones, Richard Sullivan, Redford Webster, William Lit- 
 tle, Samuel Snelling, Jesse Putnam, Esquires; Rev. Thomas Baldwin, 
 D.D.; Rev. William E. Channing, Rev. Charles Lowell, William 
 McKay, Elisha Ticknor, Jonathan Amory, jun., Samuel H. Walley, 
 John L. Sullivan, John Bellows, Joseph Coolidge, jun., John Rich- 
 ards, Ozias Goodwin, John Dorr, Samuel May, Gedney King, Wil- 
 liam Ropes, Andrew Ritchie, Edward Tuckerman, jun., William 
 Harris, David Greenough, Thomas Motley, Benjamin Smith, David 
 W. Child, Gideon Snow, Edward Cruft, Jacob Hiler, Jonathan 
 Phillips, William Cochran, Nathaniel G. Snelling, Lewis Tappan, 
 and James Savage, — be, and they hereby are, incorporated into a 
 Society by the name, style, and title of "The Provident Institu- 
 xroN for Savings in the Tow^n of Boston"; and that they, and 
 such others as shall be duly elected members of the said Corporation, 
 as is in this act provided, shall be and remain a body politic and 
 corporate, by the same name, style, and title forever. 
 
 Sect. 2. Be it further enacted. That the said Society and Cor- 
 poration shall be capable of receiving from any person or persons 
 disposed to obtain and enjoy the advantages of said Institution any 
 deposit or deposits of money, and to use and improve the same for 
 the purposes, and according to the directions, herein mentioned and 
 provided. 
 
 Sect. 3. Be it further enacted. That all deposits of money re- 
 ceived by the said Society shall be by the said Society used and im- 
 proved to the best advantage; and the income or profit thereof shall 
 be by them applied and divided among the persons making the said 
 deposits, their executors or administrators, in just proportion, with 
 such reasonable deductions, and the principal of such deposits may 
 be withdrawn at such times and in such manner as the said Socie^ 
 shall direct and appoint. 
 
 Sect. 4. Be it further enacted, That the said Society and Cor- 
 
BOSTON FIRST TO INCORPORATE 93 
 
 poration shall, at their Annual Meeting in December, have power to 
 elect by ballot any other person or persons as members of the said 
 Society. 
 
 Sect. S. Be it further enacted, That the said Society may have 
 a common seal, which they may change and renew at pleasure; and 
 that all deeds, conveyances, and grants, covenants and agreements, 
 made by their Treasurer or any other person, by their authority and 
 direction according to their institution, shall be good and valid; and 
 the same Corporation shall at all times have power to sue, and may 
 he sued, and may defend, and shall be held to answer, by the name, 
 style, and title aforesaid. 
 
 Sect. 6. Be it further enacted, That the said Society shall here- 
 after meet at Boston, some time in the month of December annually, 
 and as much oftener as they may judge expedient; and any seven 
 members of the said Corporation — the President, a Vice-President, 
 Treasurer, or Secretary being one — shall be a quorum; and the said 
 Society, at their meetings in December annually, shall have p)ower 
 to elect and choose a President, Vice-Presidents, and all other such 
 officers as to them shall appear necessary; which officers so chosen 
 shall continue in office one year, and until others are chosen in their 
 room; and all officers so chosen shall be under oath to the faithful 
 performance of the duties of their offices respectively. 
 
 Sect. 7. Be it further enacted. That the said Society hereby are, 
 and forever shall be, vested with the power of making By-Laws for 
 the more orderly managing the business of the Corporation; provided 
 the same are not repugnant to the Constitution or Laws of this Com- 
 monwealth. 
 
 Sect. 8. Be it further enacted, That his Honor William 
 Phillips, Esq., be, and he hereby is, authorized by public notifi- 
 cation in two of the Boston newspapers, to call the first meeting of the 
 said Society at such time and place as he shall judge proper. 
 
 In the House of Representatives, December 11, 1816. This bill, 
 having had three several readings, passed to be enacted. 
 
 Timothy Bigelow, Speaker. 
 
 In Senate, December 13, 1816. This bill, having had two several 
 
 readings, passed to be enacted. 
 December 13, 1816. Approved. 
 
 John Phillips, President. 
 John Brooks. 
 
 [An Act was passed in March, 1831, empowering the Institution 
 to hold real estate in Boston to the amount of twenty thousand dol- 
 lars.] 
 
 [An Act was passed in March, 1833, empowering the Provident 
 Institution to purchase and hold real estate in the City of Boston to 
 the amount of thirty thousand dollars.] 
 
94 CENTURY OF AMERICAN SAVINGS BANKS 
 
 [An Act was passed February, 1854, authorizing the Institution 
 to hold real estate to the amount of one hundred thousand dollars.] 
 
 OFFICERS SINCE ORGANIZATION 
 
 Presidents Since Organization: William Phillips, 
 1816-1827; Gardiner Greene, 1827-1832; Jonathan 
 Phillips, 1832-1837; Peter C. Brooks, 1837-1848; Wil- 
 liam Appleton, 1848-1861; James Savage, 1861-1862; 
 Francis C. Lowell, 1862-1864; John A. Lowell, 1864- 
 1876; James S. Amory, 1876-1882; William Perkins, 
 1882-1887; Henry Lee, 1887-1898; Augustus Lowell, 
 1898-1900; William S. Dexter, 1900-1908; Arthur T. Ly- 
 man, 1908-1915; Louis Curtis, 1915 — . 
 
 Treasurers: James Prince, 1817-1821; Elisha Tick- 
 nor, 1821-1821 ; Gardiner Greene, 1821-1824; James Sav- 
 age, 1824-1838; Peter Wainwright, Jr., 1838-1873; 
 Charles J. Morrill, 1873-1895; Henry Parkman, 1895—. 
 
 Secretaries: James Savage, 1816-1823; James Bow- 
 doin, 1823-1832; Benjamin Guild, 1832-1834; Robert 
 C. Winthrop, 1834-1838; William Parsons, 1838-1841; 
 Edward Wigglesworth, 1841-1842; Amos A. Lawrence, 
 1842-1843; Charles Brown, 1843-1844; William T. An- 
 drews, 1844-1851; Henry Lee, Jr., 1851-1852; Francis 
 E. Parker, 1852-1855; William S. Dexter, 1855-1873; Ed- 
 ward I. Browne, 1873-1882; Henry Parkman, 1882-1895; 
 Philip Dexter, 1895-1908; S. Huntington Wolcott, 1908- 
 1916; Francis C. Gray, 1916—. 
 
 DEPOSITS BY TEN-YEAR PERIODS 
 
 The following table shows the deposits in the institution 
 by ten-year periods, from the year 1820 to date: 
 
 1820 $233,034.53 1860 $6,501,950.96 1900 $38,629,876.17 
 
 1830 $986,959.29 1870 $10,648,365.76 1910 $48,748,507.70 
 
 1840 $2,071,095.59 1880 $21,559,360.03 1916 $54,151,489.98 
 
 1850 $3,330,068.80 1890 $29,582,543.44 
 
 RATES OF DIVIDENDS PAID 
 Date Per cent. Date Per cent. Date Per cent. 
 
 1817 2 1849 4 1880 4 
 
 1818 5 1850 4 1881 3 
 
 1819 5 1851 4 1882 3 
 
CT^:^^,^^:^ )^^^<>^ 
 
 '<,^coi>ezc.^ 
 
BOSTON FIRST TO INCORPORATE 95 
 
 Date 
 
 Per cent. 
 
 Date 
 
 
 Per cent. 
 
 Date 
 
 1820 .. 
 
 5 
 
 1852 
 1852 
 1853 
 1854 
 
 Extra . 
 
 4 
 
 20. 
 
 4 
 
 4 
 
 1883 
 1884 
 1885 
 1886 
 
 1821 ... ■■• 
 
 5 
 
 1822 .. 
 
 4 50 
 
 1822 Extoa '. 
 
 4 
 
 1823 
 
 4 
 
 1855 
 1856 
 1857 
 1857 
 1858 
 1859 
 
 Extra . 
 
 4 
 
 4 
 
 4 
 
 20. 
 
 4 
 
 1887 
 1888 
 1889 
 1890 
 1891 
 1892 
 
 1824 ... 
 
 4 
 
 182S .... 
 
 4 
 
 1826 
 
 4 
 
 1827 
 
 4 
 
 1827 Extra . 
 
 9.210 
 
 
 4 
 
 1828 
 
 4 
 
 1860 
 1861 
 
 
 4 
 
 1893 
 1894 
 1895 
 
 1829 
 
 4 
 
 
 4 
 
 4 
 
 1830 
 
 4 
 
 4 
 
 1862 
 1862 
 
 
 1831 
 
 Extra . 
 
 IS. 
 
 1896 
 
 1832 
 
 4 
 
 1863 
 
 
 4 
 
 1897 
 
 1832 Extra . 
 
 9 
 
 4 
 
 1864 
 1865 
 
 
 4 
 
 1898 
 
 1833 
 
 
 4 
 
 1899 
 
 1834 
 
 4 
 
 1866 
 
 
 4 
 
 1900 
 
 1835 
 
 4 
 
 1867 
 
 
 4 
 
 1901 
 
 1836 
 
 4 
 
 1867 
 
 Extra . 
 
 20. 
 
 1902 
 
 1837 
 
 4 
 
 1868 
 
 
 5 
 
 1903 
 
 1837 Extra . 
 
 9.50 
 
 1869 
 
 
 5 
 
 1904 
 
 1838 
 
 4 
 
 1870 
 
 - 
 
 5 
 
 1905 
 
 1839 
 
 4 
 
 1871 
 
 
 5 
 
 1906 
 
 1840 
 
 4 
 
 1872 
 
 
 5 
 
 1907 
 
 1841 
 
 4 
 
 1872 
 
 Extra . 
 
 8 
 
 1908 
 
 1842 
 
 4 
 
 1873 
 
 
 5 
 
 1909 
 
 1843 
 
 4 
 
 1874 
 
 
 5 
 
 1910 
 
 1844 
 
 4 
 
 1875 
 
 
 5 
 
 1911 
 
 184S 
 
 4 
 
 1876 
 
 
 S 
 
 1912 
 
 1846 
 
 4 
 
 1877 
 
 
 5 
 
 1913 
 
 1847 
 
 4 
 
 1877 
 
 Extra . 
 
 5 
 
 1914 
 
 1847 Extra . 
 
 19.265 
 
 1878 
 
 
 4 
 
 1915 
 
 1848 
 
 4 
 
 1879 
 
 
 4 
 
 1916 
 
 Per cent. 
 
 3.50 
 
 3 
 
 3.50 
 
 3.50 
 
 3.50 
 
 4 
 
 4 
 
 4 
 
 4 
 
 4 
 
 4 
 
 3.50 
 
 3.50 
 
 3.50 
 
 3.50 
 
 3.50 
 
 3.50 
 
 3.25 
 
 3.50 
 
 3.S0 
 
 3.50 
 
 3.50 
 
 3.50 
 
 3.50 
 
 3.50 
 
 4 
 
 3.75 
 
 3.50 
 
 3.75 
 
 .... 3.75 
 
 3.75 
 
 4 
 
 4 
 
 .... 4 
 
 PRESIDENT LOUIS CURTIS 
 
 Louis Curtis, who has been president of the institution 
 since 1915, succeeding Arthur T. L3TTian, was born in 
 Boston, Massachusetts, March 2, 1849. He was educated 
 at private schools at Vevey, Switzerland, 1859-1862, at 
 Lycee Imperial, Rouen, France, 1862-1865, and by private 
 tutors until 1867. In the year 1870 he was graduated from 
 Harvard University, with the degree of A.B. 
 
 Mr. Curtis entered the house of Brown Brothers & Co., 
 Boston, serving as agent and attorney from the year 1878, 
 in succession to his brother, Daniel Sargent Curtis, who 
 succeeded his father, Thomas B. Curtis, the founder of 
 the house in Boston in the year 1844, representing the firms 
 of Brown Brothers & Co., New York, and Brown, Shipley 
 
96 CENTURY OF AMERICAN SAVINGS BANKS 
 
 & Co., London. Mr. Curtis is now resident partner of the 
 above in Boston. 
 
 Mr. Curtis has been connected with the Provident In- 
 stitution for Savings as a member of the corporation since 
 1885, trustee since 1886, and a member of the board of in- 
 vestment from 1890 to January 1,1916, when he was elected 
 president. He is at present a director and member of the 
 finance committee of the Massachusetts Hospital Life In- 
 surance Company; also director and president of- the Essex 
 Company, and a director of the Pacific Mills, Lawrence, 
 Massachusetts. 
 
 OTHER OLD BAY STATE BANKS 
 
 Other early Savings Banks in the State of Massachusetts, 
 given in the order in which their charters were granted, 
 are: 
 
 Institution for Savings in Newburyport and vicinity, 
 January 31, 1820. 
 
 Provident Institution for Savings in the town of Hallo- 
 well and vicinity, February 21, 1820. (Not organized.) 
 
 Institution for Savings in the town of Roxbury (since 
 become a part of Boston) and vicinity, February 22, 1825. 
 
 New Bedford Institution for Savings, June 16, 1825. 
 
 Lynn Institution for Savings, June 20, 1826. 
 
 Provident Institution for Savings, in the town of Taun- 
 ton and vicinity, February 26, 1827. 
 
 Springfield Institution for Savings, June 16, 1827. 
 (Original charter limited the term of the corporation to 
 thirty years.) 
 
 Institution for Savings in the town of Haverhill and vi- 
 cinity, February 8, 1828. 
 
 Worcester County Institution for Savings, Februarv 8, 
 1828. 
 
 Provident Institution for Savings in the towns of Salis- 
 bury and Amesbury, February 28, 1828. 
 
 Fall River Institution for Savings, March 11, 1828. 
 
 Plymouth Institution for Savings, June 11, 1828. 
 
BOSTON FIRST TO INCORPORATE 97 
 
 Lowell Institution for Savings, February 20, 1829. 
 (Originally limited to thirty years.) 
 
 Warren Institution for Savings in the town of Charles- 
 town, February 21, 1829. 
 
 Institution for Savings in the town of Barnstable, Jan- 
 uary 29, 1831. 
 
 Provident Institution for Savings in the town of Glouces- 
 ter and vicinity, February 3, 1831. 
 
 Dedham Institution for Savings, March 19, 1831. 
 
 Institution for Savings in the town of Newton, June 17, 
 1831. 
 
 Institution for Savings in the town of Fairhaven, Febru- 
 ary 10, 1832. 
 
 We)Tnouth and Braintrep Institution for Savings, Feb- 
 ruary 16, 1833. 
 
 Savings Bank for Seamen, in the city of Boston, March 
 7, 1833 (name afterward changed to Suffolk Savings 
 Bank). 
 
 Thus, prior to 1834, when the first general act regulat- 
 ing institutions for savings was passed in Massachusetts, 
 twenty-four Savings Institutions were incorporated, all but 
 two of which were organized and commenced business. 
 Two of these, Taunton (chartered 1827), and Gloucester 
 (chartered 1831), subsequently failed. The remainder 
 appear to be still in successful operation. 
 
 It is regarded as somewhat significant that the word 
 "Bank" is employed in but one, and that in the last in the 
 above list. 
 
CHAPTER VII 
 
 MARYLAND HEARS THE CALL 
 
 The Savings Bank of Baltimore the Third to Begin Business in the 
 United States — Prominent Citizens and Capitalists Interested 
 and Active — First Deposit Taken on March 16, 1818 — Steady 
 Progress Shown Since That Time — ^List of Presidents from Date 
 of Organization, and Original Act of Incorporation. 
 
 It is believed that only two Savings Banks were incor- 
 porated in the United States prior to The Savings Bank of 
 Baltimore, Md., viz. : the Provident Institution for Savings', 
 Boston, and the Institution for Savings in the Town of 
 Salem (Massachusetts) and Vicinity. 
 
 The Baltimore institution was chartered in December, 
 1818, two years after the pioneer bank in Boston had been 
 authorized to begin business. So great was the interest 
 taken in these new institutions by the more wealthy and 
 independent, who assumed the responsibility of their man- 
 agement, as well as by the laboring, industrious and worthy 
 in moderate circumstances who became in large measure 
 the beneficiaries, that a similar interest was excited in other 
 places. Essays were published in the daily papers urging 
 the necessity and importance of Savings Banks and quoting 
 from reports of such institutions already in operation in 
 Scotland and England in confirmation of the hopes and 
 expectations of those who advocated their establishment 
 in this country. 
 
 In Baltimore, such gentlemen as the' Rev. Dr. Kemp 
 (afterward Bishop Kemp), William Lorman, Samuel I. 
 Donaldson, Isaac Burneston, Joseph Gushing, Frederick 
 W. Brune, Moses Sheppard, Chas. H. Appleton, Henry 
 Brice, David Winchester, and other prominent citizens and 
 capitalists were active in disseminating, influencing and 
 promoting an interest in the subject. 
 
 98 
 
MARYLAND HEARS THE CALL 99 
 
 THE PROJECT TAKES FORM 
 
 The first formal meeting of gentlemen interested in the 
 worthy project in the city of Baltimore appears to have 
 been on the first day of January, 1818, at Cadaby's, or 
 Indian Queen, then the principal hotel of the city, located 
 at the southeast corner of Baltimore and Hanover streets. 
 At this meeting Dr. Kemp presided, and Mr. Isaac Burnes- 
 ton acted as Secretary. The important matter which had 
 called them together was fully discussed, and in order to 
 throw valuable light on the question some of the gentlemen 
 present had fortified themselves with facts relating to the 
 year's operations of Boston's Savings Bank (Provident In- 
 stitution for Savings). These included the report of the 
 treasurer, in addition to the constitution of the pioneer 
 bank. 
 
 The subject was carefully considered from all angles, 
 and before the meeting adjourned it was resolved that it 
 was expedient to establish a "Provident Bank" in the city 
 of Baltimore. A committee consisting of David Winches- 
 ter, Charles H. Appleton and Henry Brice was appointed 
 to prepare a constitution and report thereon at an adjourned 
 meeting to be held on the 15th day of the same month, Jan- 
 uary, 1818. 
 
 At the adjourned meeting on the above date. Dr. Kemp 
 being chairman and Mr. Burneston Secretary, the commit- 
 tee reported a constitution, which was read, discussed and 
 adopted and an order passed that it be published, and that 
 an election be held for directors on the first Monday of the 
 following February. 
 
 On the first Monday in February (2d), 1818, an elec- 
 tion for directors was held, resulting in the choice of the 
 following twenty-five gentlemen, all prominent and influ- 
 ential citizens of Baltimore : 
 
 Daniel Rowland, Frederick W. Brune, Wm. R. Swift, 
 John Sinclair, Charles W-arfield, Wm. Krebs, Thomas W. 
 Griffith, Joseph Cushing, Alexander Lorman, Samuel I. 
 Donaldson, John Hoffman, Roswell L. Colt, Alexander 
 
100 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Irvine, Isaac Tyson, John McKim, Wm. Child, Henry 
 Brice. Evan T. Ellicott, William Hopkins, Thomas Shep- 
 pard, Moses Sheppard, John C. Richards, William Steuart, 
 Richard Carroll, George S. Baker. 
 
 On the 6th of February, the directors-elect met, when 
 Daniel Howland was chosen president, and the remaining 
 twenty-four directors were allotted the different months of 
 the ensuing year for duty as monthly committees of two. 
 
 Soon afterward, a special meeting of the directors was 
 held when a code of by-laws was adopted. One of these 
 by-laws provided that the office of the Bank should be kept 
 open on Monday from 11 A. M. to 1 P. M. The salary of 
 the secretary was fixed as $150 per annum. A committee 
 was appointed to ascertain from the commercial banks 
 whether the account of the Savings Bank would be kept 
 by them and interest allowed thereon, and if so, at what 
 rate. 
 
 ARRANGEMENTS MADE TO BEGIN BUSINESS 
 
 At a meeting held on the 10th of March, 1818, the com- 
 mittee reported that the Farmers and Merchants' Bank, of 
 Baltimore, with a view to aiding the commendable enter- 
 prise, would keep the Bank's account for six months and 
 ■allow interest at the rate of 5 per cent, per annum. This 
 meeting also resolved to commence receiving deposits on 
 Monday, March 16, 1818. Notice to this effect was given 
 to the daily papers and handbills calling the attention to 
 the promising new enterprise were printed and widely dis- 
 tributed. 
 
 At an adjourned meeting held January 4, 1819, it was 
 decided that $8,000 of the bank's funds be invested in the 
 6 per cent, stock of the United States, provided the Farmers 
 and Merchants' Bank should prefer paying over that 
 amount to allowing interest on funds deposited with them. 
 At this meeting a committee consisting of Samuel I. Donald- 
 son, Richard Carroll and Thomas W. Griffith, was ap- 
 pointed to obtain a charter. 
 
 The bank was first opened for business at 100 Market 
 
MARYLAND HEARS THE CALL 101 
 
 Street, on the 16th day of March, 1818. On the 25th day 
 of May of the same year, 79 accounts had been opened, the 
 total deposits being $1,568.85. 
 
 The report of the Auditors, dated January, 1820, was 
 published soon afterward, showing the amount received 
 from 256 depositors from March 16, 1818, to January 17, 
 1820, to have been $34,339.94, and that during the same 
 period there was paid to depositors the sum of $14,340.83, 
 leaving to the credit of depositors $19,999.11. 
 
 STEADY GROWTH SHOWN 
 
 The steady and uninterrupted progress of the bank from 
 the day of opening to the present time is shown in the ap- 
 pended table: 
 
 Year Depositors Deposits 
 
 1819 $12,990. 
 
 1825 91,811. 
 
 1835 2,050 536,769. 
 
 1845 5,056 1,325,821. 
 
 1855 15,170 3,909,325. 
 
 1865 20,783 5,650,814. 
 
 1875 31,006 12,203,233. 
 
 1885 45,350 15,398,955. 
 
 1895 47,138 19,763,226. 
 
 1905 51,612 27,535,089. 
 
 1915 53,482 37,336,761. 
 
 Interest Payments In 98 Years 
 Interest Extra Dividends Extra Dividends 
 
 1819 to 1889 4 % 1821 3^% 1860 6 % 
 
 1890 " 1898 3i^% 1824 6 % 1866 9 % 
 
 1899 " 1907 3 % 1827 6 % 1869 10!/4% 
 
 1908 " 1916 354% 1830 4^% 1872 10^4% 
 
 1833 6 % 1875 6 % 
 
 1836 71/4% 1892 l'/4% 
 
 1839 6 % 1895 1'/^% 
 
 1845 3 % 1907 54% 
 
 1848 6 % 1910 54% 
 
 1851 754% 1913 54% 
 
 1854 9 % 1916 54% 
 
 1857 754% „ 
 
 Total Interest paid 98 years 374 % Average 3.81% 
 
 Extra Dividends paid 98 years 119^4% 
 
 Total Interest and Extra Dividends paid 
 
 in 98 years 49354% " S.03% 
 
102 CENTURY OF AMERICAN SAVINGS BANKS 
 
 PRESIDENTS SINCE ORGANIZATION 
 
 The list of presidents, from the organization of the bank 
 to date, follows : 
 
 Daniel Rowland, 6th February, 1818; Charles Warfield, 
 6th February, 1822; Joseph A. Wallace, 4th February, 
 1824; Joseph Gushing, 19th August, 1825; Archibald 
 Stirling, 26th June, 1852; David Baldwin, 3rd February, 
 1888; Sam'l McD. Richardson, 14th June, 1888; Wm. H. 
 Conkling, 4th August, 1892. 
 
 Mr. Conkling entered the employ of the bank, as a clerk, 
 in February, 1868; was made paying teller in 1872, serv- 
 ing as such until 1888; in that year he was elected assistant 
 treasurer, then treasurer, and in 1892 was chosen presi- 
 dent. 
 
 THE ORIGINAL ACT OF INCORPORATION 
 
 As a matter of historical interest, the original act by 
 which The Savings Bank of Baltimore was incorporated, 
 is given herewith: 
 
 An Act to Incorporate the Savings Bank or Baltimore 
 
 Section I. — Be it enacted by the General Assembly of Maryland, 
 That Isaac Phillips, James Dall, John C. Keerl, George S. Baker, 
 Elisha N. Browne, John C. Richards, Robert Neilson, Evan Thomas, 
 Jr., Robert Miller, Charles H. Appleton, William Norris, John Gib- 
 son, Amos Browne, John Ready, Oliver H. Neilson, Samuel I. Don- 
 aldson, Nathaniel Williams, Richard Carroll, William Child, Marcus 
 McCausland, Thomas L. Emory, Jr., John Gadsby, George Hoffman, 
 John Hoffman, James Campbell, Luke Tieman, Robert McKim, 
 William Lorman, Fielding Lucas, Jr., James Mosher, John Brice, 
 Henry Payson, Solomon Birckhead, John Sinclair, William Gwynn, 
 William McMechen, John Mott, William Wilson, James Wilson, 
 Thomas W. Griffith, John Merryman, Joseph Cox, Henry Schroeder, 
 Daniel Chambers, Joseph K. Stapleton, O. H. Thomas, John H. 
 Rogers, John Thomas, Jr., Abner Neal, Peter Hoffman, B. H. MuUi- 
 kin, Isaac Bumeston, Isaac McPherson, A. McDonald, Joseph* Gush- 
 ing, David Harris, Talbot Jones, Alexander Irvine, George Decker, 
 William Browne, Ashton Alexander, Solomon Ettjing, George A. 
 Dunkel, Maxwell McDowell, William Taylor, John Hewes, B.N. 
 Sands, William Krebs, John McKim, Robert Miller, Thomas EUi- 
 cott, Edward Gray, James Hindman, John Ogston, Isiah Littler, 
 
MARYLAND HEARS THE CALL 103 
 
 Jesse Hunt, Elias Ellicott, Andrew EUicott, James Cheston, Robert 
 Gilmor, Roswell L. Colt, John Oliver, James A. Buchanan, Solomon 
 Betts, Peter Levering, Charles Worthington, William Hopkins, Evan 
 T. Ellicott, Isaac Tyson, Moses Sheppard, William R. Gwinn, N. 
 Brice, William Patterson, James Barroll, John Strieker, James Carey, 
 William Cooke, Gerard T. Hopkins, George Roberts, William Tyson, 
 Robert Smith, Henry Brice, James Carroll, Jr., David Winchester, 
 A. J. Schwartze, William S. Moore, William R. Swift, William Mc- 
 Donald, C. C. Jamison, Christian Mayer, Jacob Small, John Gill, 
 John Purviance, Henry Thompson, Alexander Brown, Thomas Ten- 
 ant, Isaac McKim, James H. McCuUoh, Jacob Rogers, William 
 Steuart, Vonkapff & Brune, Daniel Howland, Wm. Jenkins, Thomas 
 Sheppard, L. Matthews, John A. Morton, Jr., Henry P. Sumner, C. 
 Deshon, Levi HoUingsworth, Alexander Lorman, Joseph Todhunter, 
 William Gilmor, John Berry, and all and every other person or per- 
 sons, hereafter becoming members of the Savings Bank of Baltimore, 
 in the manner hereinafter mentioned, shall be, and are hereby created 
 and made a corporation and body politic, by the name and style of 
 The Savings Bank of Baltimore, and by that name shall have per- 
 petual succession, and be capable, by law, to hold property, sue and 
 be sued, plead and be impleaded, answer and defend, and be an- 
 swered and defended, in courts of law and equity, or in any other 
 place whatever, and to receive and make all deeds, transfers, contracts, 
 covenants, conveyances, and grants, whatsoever; and to make, have, 
 and use a common seal, and the same to change and renew at pleas- 
 ure, and generally to do every other act or thing necessary to carry 
 into effect the provisions of this act, and promote the design of said 
 corporation. 
 
 Sec. II. — And be it enacted. That the said corporation shall an- 
 nually, on the first Tuesday in February, in the City of Baltimore, 
 or at such other time or place as by the by-laws or regulations here- 
 after to be adopted may be appointed, elect from the members of said 
 corporation, twenty-five directors to serve for the term of twelve 
 months, or until others shall be chosen, who during their term of 
 service, shall have the sole management and direction of the concerns 
 of said corporation, elect a President from their own body, and be 
 authorized to make from time to time, as they may deem expedient, 
 such by-laws, or other rules, for the regulation and government of 
 themselves and the members of said corporation, and the same to 
 change, add to, or amend, as may appear necessary or proper: Pro- 
 vided always, that such by-laws or rules be not contrary to the con- 
 stitution and laws of the United States, or of the State of Maryland: 
 And provided also, that said corporation shall not be authorized to 
 make any bills or notes in the nature or description of bank notes, 
 or to loan any part of the funds deposited to any Director of said 
 corporation. 
 
104 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Sec. III. — And be it enacted, That said corporation shall be 
 capable of receiving from any free person or persons any deposit or 
 deposits of money, and that all moneys received, or to be received, 
 shall be vested in public stocks, or other securities, and such inter- 
 est be allowed to the depositors thereof as may from time to time be 
 directed or provided for by the by-laws of said corporation, the sur- 
 plus to be divided every three years among the depositors in such 
 manner as the Directors for the time being may think proper, and 
 that no member shall be liable in his person or property for any debts, 
 contracts, or engagements of the said corporation, but that the money, 
 property, rights, and credits of said corporation, and nothing more, 
 shall be liable for the same. 
 
 Sec. IV. — And be it enaaed. That the Directors of said corpora- 
 tion, or a majority of those attending at any meeting of the board, 
 may elect by ballot any other person or persons as members of The 
 Savings Bank of Baltimore. 
 
 True copy from the original law passed by both branches of the 
 Legislature at December Session, 1818. 
 
 RiCH'D HARVirOOD, 
 
 Clerk Senate. 
 
 John Brewer, 
 
 Clerk House Delegates. 
 
 STATEMENT, JANUARY 1, 1916 
 
 The statement of the Baltimore Savings Bank, of Jan- 
 uary 1, 1916, made in accordance with Section 36 of the 
 Banking Law of Maryland, showed that the institution at 
 that time had funds on hand amounting to $37,336,761.86; 
 that there was due depositors, $34,397,848.03; that the 
 guarantee fund amounted to $2,000,000; and that the un- 
 divided surplus (chargeable with nine months' accrued in- 
 terest on deposits payable April 1, 1916), had reached 
 $938,913.83. The number of open accounts on January 
 1, 1915, was 53,997; on January 1, 1916, the number was 
 53,482. 
 
 OFFICERS AND DIRECTORS 
 
 The officers and directors, Jan. 1, 1916, were as follows: 
 Officers: William H. Conkling, President; Charles 
 
 C. Homer, Jr., Vice-President; Frederick A. Hoffman, 
 
 Treasurer; Howard Ford, Asst. Treasurer. 
 
MARYLAND HEARS THE CALL 105 
 
 Directors: James A. Gary, George C. Jenkins, Doug- 
 las H. Thomas, William H. Conkling, R. Curzon Hoff- 
 man, Blanchard Randall, Henry G. Hilken, Frank N. 
 Hoen, Waldo Newcomer, John B. Ramsay, Charles A. 
 Webb, Henry B. Vocke, Henry C. Matthews, George R. 
 Willis, Frederick A. Hoffman, Harry Fahnestock, George 
 
 A. Pope, Norman James, William H. Matthai, Frederick 
 W. Wood, Charles H. Koppelman, Robert D. Hopkins, 
 Arthur G. Wellington, Charles C. Homer, Jr., William 
 
 B. Oliver. 
 
CHAPTER VIII 
 
 SALEM SECOND TO INCORPORATE 
 
 List of the Original Incorporators and Copy of the Charter Granted 
 by the Legislature, January 29, 1818 — Statement Showing 
 Remarkable Growth Since Organization — ^The School Savings 
 Bank System Being Operated Successfully — Sketch of President 
 Charles S. Rea. 
 
 To the Salem Savings Bank (originally incorporated 
 Jan. 29, 1818, as "The Institution for Savings In the Town 
 of Salem & Its Vicinity"), belongs the honor of being the 
 second Savings Bank to be incorporated in the United 
 States, the Provident Institution for Savings in the Town 
 of Boston being the first (established by act of incorpora- 
 tion, December 13, 1816). Thus the Salem institution 
 followed its famous prototype by only a little more than a 
 year, and without doubt the success of the Boston pioneer 
 was the animating cause. 
 
 It has been found impossible to obtain an account of the 
 preliminary meetings for the purpose of organizing the Sa- 
 lem bank, but it is known that the first meeting of the mem- 
 bers of the corporation was held on the evening of March 
 12, 1818, at which Willard Peele acted as chairman and 
 John W. Treadwell, secretary. At this meeting by-laws 
 were adopted governing the conduct of the institution. 
 
 PETITIONING FOR INCORPORATION 
 
 The petition to the General Court of Massachusetts (as 
 the Legislature of that State was then designated), dated 
 Jan. 7, 1818, recited that, "Whereas, 'Provident institu- 
 tions for Savings' have been found highly useful in Boston 
 and other places where they have been established, We the 
 subscribers hereby agree to become Members of such a So- 
 
 io6 
 
SALEM SECOND TO INCORPORATE 107 
 
 ciety for the Town of Salem, to be extended to the vicinity 
 if it shall be thought expedient. The object of the Society 
 IS to receive deposits of money from such persons as may 
 be disposed to make them, and to use and improve the 
 same for their benefit, according to the principles of such 
 associations, and under such regulations as may hereafter 
 be agreed upon by the Subscribers, pursuant to the provi- 
 sions of an act of incorporation if it can be obtained." 
 This petition was signed by Charles Saunders, Benjamin 
 Pierce, Richard Wheatland, Thomas C. Gushing, Nathan 
 Robinson, Stephen Webb, Moses Townsend, Gideon Bar- 
 stow, Henry Price, John Russell, Benj. H. Hathorne, Sam- 
 uel Ropes, Abijah Northey, Ephraim Emmerton, Gideon 
 Tucker, Daniel A. White, Benjamin Merrill, Benjamin R. 
 Nichols, Ichabod Tucker, William Silsbee, Samuel Ome, 
 Wm. P. Richardson, Joseph White, George S. Johonnot, 
 E. Henry Derby, John H. Andrews, Joseph Waters, Ebenr. 
 Seccomb, James Devereux, Jno. W. Treadwell, Jno. Derby, 
 Nath. Peabody, Jno. Stone, Nathaniel Bowditch, Samuel 
 Endicott, Ichabod Nichols, William Dean, John Prince, 
 Jr., David Gummins, James Gook, Timothy Bryant, James 
 Gh. King, Edward Lang, Philip Chase, George Nichols, 
 E. A. Holyoke, Jno. Osgood, Willard Peele, Joseph Pea- 
 body, Joseph Story, B. Pickman, Jun., Jno. Pickering, 
 Stephen White, Wm. Fettyplace, Robert Stone, Leverett 
 Saltonstall, H. Devereux, W. Shepard Gray, John D. 
 Treadwell, George Cleveland, Pickering Dodge, Dudley L. 
 Pickman, Stephen Phillips, Jonathan Hodges, Amos 
 Choate, Michael Webb. 
 
 THE ACT or INCORPORATION 
 
 The Act of Incorporation seems to have met with no op- 
 position, for twenty-two days later it was passed, in the 
 form of "An Act to incorporate 'The Institution for Sav- 
 ings in the Town of Salem & its Vicinity.' " Being one 
 of the very first charters granted in the United States, it is 
 deemed of sufficient historical interest to deserve a place 
 herein: 
 
108 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Section 1. Be it enacted by the Senate and House of Represen- 
 tatives in General Court assembled and by the authority of the same, 
 That Edward Augustus Holyoke, Joseph Story, Benjamin Pickman, 
 Jacob Ashton, Joseph White, Moses Townsend, Jonathan Neal) 
 Joseph Peabody, Benjamin Pickman, Jun., Nathan Robinson, Na- 
 thaniel Bowditch, David Cummins, William Silsbee, Gideon Barstow, 
 John Osgood, Willard Peele, Dudley L. Pickman, William Fetty- 
 place, John W. Treadwell, Stephen White and Leverett Saltonstall, 
 together with such as have associated with them, be and they are 
 hereby incorporated into a Society by the name of "The Institution 
 for Savings in the Town of Salem and its Vicinity," and that they, 
 and such others as shall be duly elected members of the Said Cor- 
 poration as is in this act provided, shall be and remain a body 
 politic and corporate by the same name forever. 
 
 Sect. 2. Be it further enacted that the Said Society and Cor- 
 poration shall be capable of receiving from any person or persons, 
 disposed to obtain and enjoy the advantages of Said Institution, any 
 deposit or deposits of money and to use and improve the same for 
 the purposes and according to the directions herein mentioned and 
 provided. 
 
 Sect. 3. Be it further enacted that all deposits of money, re- 
 ceived by the Said Society, shall be by the Said Society, used and im- 
 proved to the best advantage and tiie net income or profit thereof 
 shall be by them applied and divided among the persons making the 
 said deposits, their Executors or Administrators, in just proportion; 
 and the principal of such deposits may be withdrawn at such reason- 
 able times, and in such manner, as the Said Society shall direct and 
 appoint. 
 
 Sect. 4. Be it further enacted that the Said Society and Corpora- 
 tion, shall at their first meeting, and at their Annual Meetings in 
 January, have power to elect by ballot any person or persons as mem- 
 bers of the Said Society. 
 
 Sect. 5. Be it further enacted that the Said Society may have a 
 common Seal, which they may change and renew at pleasure; and 
 that all deeds, conveyances and grants, covenants and agreements 
 made by their treasurer, or any other person by their authority and 
 direction, according to their institution, shall be good and valid, and 
 the Said Corporation shall at all times, have power to sue and may 
 be sued, and may defend and shall be held to answer by the name 
 aforesaid. 
 
 Sect. 6. Be it further enacted that the Said Society shall here- 
 after meet at Salem, at such time in the month of January annually, 
 and at such other times as the Society or the President thereof may 
 direct, and any seven members of the Said Corporation, the President, 
 a Vice President, Treasurer or Secretary being one, shall be a quorum, 
 and the Said Society, at their meeting in January annually, shall 
 
SALEM SECOND TO INCORPORATE 109 
 
 have power to elect and choose a president and all other such officers, 
 as to them shall appear necessary; which officers so chosen, shall con- 
 tinue in office one year and until others are chosen in their stead, 
 and the Treasurer and Secretary so chosen, shall be under oath to 
 the faithful performance of the duties of their offices respectively. 
 
 Sect. 7. Be it further enacted that the Said Society hereby are, 
 and forever shall be, vested with the power of making Bye-Laws for 
 the more orderly managing the business of the Corporation; provided 
 the same are not repugnant to the Constitution or Laws of this Com- 
 monwealth. 
 
 Sect. 8. Be it further enacted That John Osgood, Willard Peele 
 and Stephen White, or any two of them, be and they hereby are 
 authorized, by public notification in the two newspapers printed in 
 Salem, to call the first meeting of the Said Society, at such time and 
 place as they shall judge proper. 
 
 In the House of Representatives, January 28, 1818, this Bill having 
 had three several readings, passed to be enacted. 
 
 Timothy Bigelow, Speaker. 
 
 In Senate January 29. 1818. This bill having had two several 
 readings, passed to be enacted. 
 
 John Phillips, President. 
 January 29, 1818. 
 
 Approved. 
 
 J. Brooks. 
 
 Secretary's Office Feb. 2, 1818. 
 A true copy, attest. N. Bradford, 
 
 Sec'y of Commonwealth. 
 
 The Bank opened for business April 15, 1818, and was 
 open on every Wednesday from 12 to 1 o'clock. 
 
 On October 14, 1819, there were 255 depositors. 
 
 On February 25, 1843, the name of the institution was 
 changed to the Salem Savings Bank, the original name 
 being considered antiquated and cumbersome. 
 
 STATEMENT SHOWING GROWTH SINCE ORGANIZATION 
 
 The following statement, prepared by the officers of the 
 institution especially for this work, shows its steady growth 
 since organization: ^ , ^ 
 
 *' No. of Am't of 
 
 Year Depositors Deposits 
 
 ^ . 1S10 184 $ *26,254.00 
 
 ' Apr 1838 ■■■::::::::::::::■.:: " 2.725 419:054.70 
 
 ASrl848 5,666 1,017,113.99 
 
 Apr. 858 ::: 8734 1,776,869.88 
 
no CENTURY OF AMERICAN SAVINGS BANKS 
 
 No. of Am't of 
 
 Year Depositors Deposits 
 
 Apr. 1868 12,364 $3,192,183.70 
 
 Apr. 1878 15,521 6,118,644.03 
 
 Apr. 1888 16,676 6,779,793.65 
 
 Apr. 1908 16,845 7,987,616.98 
 
 Apr. 1915 20,948 10,505,826.02 
 
 Total amount of dividends paid to January, 1916, $16,599,043.99. 
 * Six months after organization. 
 
 FIRST OFFICERS AND INCORPORATORS 
 
 Officers : 
 
 President, Edward A. Holyoke; vice-presidents, Joseph 
 White, Joseph Peabody, Benjamin Pickman, Jun., Joseph 
 Story, Jacob Ashton, Moses Townsend; treasurer, Wil- 
 liam P. Richardson; secretary, John W. Treadwell; trus- 
 tees, John Osgood, Willard Peele, Stephen Phillips, Jona- 
 than Hodges, Dudley L. Pickman, Stephen White, William 
 Fettyplace, Gideon Tucker, William P. Richardson, John 
 W. Treadwell, Nathan Robinson, William Silsbee, Gideon 
 Barstow, Pickering Dodge, Humphrey Devereux, Ebenezer 
 Seccomb, with president and vice-presidents. 
 
 Incorporators : 
 
 Rev. John Prince, Rev. Samuel Worcester, Rev. William 
 Bentley, Rev. Lucius Battes, Rev. Brown Emmerson, Rev. 
 John E. Abbot, Rev. Thomas Carlile, John Andrew, John 
 Forrester, Abel Lawrence, Benjamin Dodge, Joseph B. 
 Felt, John Punchard, Ezekiel Savage, Joshua Ward, Jun., 
 Joshua Ward, Edward Lander, Henry Pickering, Nathaniel 
 L. Rogers, John W. Rogers, Nathaniel Knight, Benj. W. 
 Crowninshield, Samuel Tucker, Isaac Newhall, Eliphalet 
 Kimball, Jacob B. Winchester, Ben L. Oliver, Nathaniel 
 West, Nathaniel West, Jr., Oliver Hubbard, Aaron Wait, 
 Jeruthl Pierce, John Dodge, Joseph Orne, William R. Lee, 
 James King, Ezra Northey, Benj. Webb, James Barr, John 
 Barr, Michael Shep'ard, Edward Stanley, John Moriarty, 
 John Crowninshield, Zach. F. Silsbee, Nathaniel Silsbee, 
 Joseph Sprague, Joseph Ropes, Amos Hovey, Jno. Saund- 
 ers, Joseph Torrey, William Procter. Of Marblehead: 
 Robert Hooper, Nathaniel Hooper, William Reed, Rev. 
 Saml. Dana, Rev. John Bartlett, Isaac Story, Joshua 
 
SALEM SECOND TO INCORPORATE 111 
 
 Prentiss, Jr., George Barker, Joseph Wilson. Of Beverly: 
 Rev. Abiel Abbot, Rev. Aliphant, Rev. Nath. W. Williams, 
 Moses Brown, Thomas Stephens, Joshua Fisher, Robert 
 Rantoul, William Burley, Nathan Dane, Thomas Davis. 
 Of Danvers: Rev. Benj. Wadsworth, Rev. Samuel Walker, 
 Fredrick Hawes, Joseph Osborn, Andrew Nichols, Thomas 
 Putnam, George Osgood, Jepe. Putnam, James Brown, 
 Ward Pool, Nathaniel Felton, Ebenezer Shillaber, Edward 
 Southwick, John W. Osgood, Sylvester Osborn. Of Lynn : 
 Dr. James Gardner, Robert W. Trevett, Jno. Phillips. 
 
 Presidents since organization: Edward A. Holyoke, 
 1818-1830; Joseph Peabody, 1830-1844; Nathaniel 
 Silsbee, 1844-1851; Daniel A. White, 1851-1861; Zaca- 
 riah F. Silsbee, 1861-1864; John Bertram, 1864-1865; 
 Joseph S. Cabot, 1865-1874; Benj. H. Silsbee, 1875- 
 1879; Peter Silver, 1879-1883; Wm. Northey, 1883- 
 1893; Edward D. Ropes, 1893-1902; Charles S. Rea, 
 1902—. 
 
 SCHOOL SAVINGS SYSTEM 
 
 The School Savings Bank system has been carried on 
 by the Salem Savings Bank since 1912, and has proved 
 successful. By means of it both thrift and practical bank- 
 ing are taught in the public schools. During the first year 
 2341 pupils, out of a total enrollment of 6204 in the city, 
 saved $1 or more each and thus secured a regular savings 
 bank account. The total of these accounts amounted to 
 over $10,000. Nearly 2000 other pupils had school bank 
 accounts of less than $1 each. These figures certainly 
 speak well for the system, and yet it must not be forgotten 
 that its social and educational value cannot be figured 
 alone in dollars and cents. 
 
 The president of the Salem Savings Bank, Charles 
 Samuel Rea, has occupied that position since 1902, having 
 previously been cashier of the Asiatic National Bank, of 
 Salem. He was born in that city, February 22, 1844, and 
 was educated in the public and private schools of his native 
 city. Mr. Rea is also a director of the Naumkeag Trust 
 Company, of Salem. 
 
CHAPTER IX 
 
 NEW YORK'S PIONEER INSTITUTION 
 
 The Bank for Savings Organized in November, 1816, and Chartered 
 March 26, 1819 — Opened on July 3, following — ^Thomas Eddy 
 and John Griscom the Leading Promoters — Extracts from the 
 First Report to the Legislature in 1820 — Investments in Real 
 Estate advocated by Governor DeWitt Clinton, and Authorized 
 by the Legislature — First Officers. 
 
 No fact in connection with the Savings Bank movement 
 in America seems better authenticated than that they had 
 their inception in the Empire State through the active ef- 
 forts of Thomas Eddy, of New York City, just as the first 
 one in Pennsylvania (which was the first to open its doors 
 in the United States), owes its existence to Condy Raguet, 
 and the first to be incorporated in this coimtry (the Provi- 
 dent Institution for Savings in the Town of Boston)-, was 
 founded by James Savage, of Boston. 
 
 Mr. Eddy was alert, progressive and wideawake, keep- 
 ing in touch with affairs on the other side of the Atlantic, 
 as well as at home. Together with many other prominent 
 men in the American metropolis, he sought not only to re- 
 lieve the prevailing distress of the working classes, but to 
 ascertain its causes. 
 
 It appears that Mr. Eddy's attention was directed toward 
 Savings Banks (having then been established about six 
 years in Scotland and England), as a promising means of 
 relief from or protection against the evils of poverty, by 
 his friend, Patrick Colquhoun, a local magistrate of Lon- 
 don, England, who was also connected with some of the 
 leading benevolent institutions of the British metropolis. 
 
 Mr. Colquhoun, writing to Mr. Eddy, from London, 
 under date of April 19, 1816, said: 
 
 112 
 

 i-^^U. 
 
NEW YORK'S PIONEER INSTITUTION 113 
 
 Among other philanthropic establishments which are yearly rising 
 in the great metropolis, we are now anxiously engaged in forming a 
 provident institution or Savings Bank, in the western district of the 
 city, upon the principle suggested and explained in my Treatise on 
 Indigence, published in 1806, but on a far more limited scale. The 
 practical effect of these establishments was first manifested in Scot- 
 land, since which they have extended to several towns in England, 
 and are likely to become very general. Their utility scarcely requires 
 explanation. The object is, to assist the laboring poor to preserve a 
 portion of their earnings for old age and to give them provident 
 habits. I send you under cover, the plan of our institution, which 
 has just commenced, and which has been the result of much discussion 
 and deliberation. 
 
 ACTIVE EFFORTS TOWARD ORGANIZATION 
 
 That Mr. Eddy, after receiving this letter, became active 
 in the organization of a similar institution in New York, 
 is shown by the following extract from the Evening Post, 
 of New York, of Monday, December 2, 1816, giving an 
 account of a meeting, undoubtedly the first, for the purpose 
 of establishing a Savings Bank: 
 
 At a meeting of a number of citizens convened in the Assembly 
 room of the City Hotel, on Friday evening, November 29, 1816, 
 pursuant to public notice, for the purpose of establishing a Savings 
 Bank, Thomas Eddy, Esq., was called to the chair and J. H. Cogges- 
 hall, Esq., appointed Secretary. The object of the meeting having 
 been stated, and the principles of the proposed institution briefly and 
 pertinently explained by Mr. James Eastbum, on motion of Mr. 
 John Griscom, seconded by Dr. Watts, it was resolved that it is expe- 
 dient to establish a Savings Bank for the City of New York. 
 
 A constitution was submitted by Mr. Zachariah Lewis, which, 
 having been read, and its principles discussed, was unanimously 
 adopted. 
 
 The following gentlemen were app>ointed directors: Henry Rut- 
 gers, Thomas R. Smith, Thomas C. Taylor, DeWitt Clinton, Archi- 
 bald Gracie, Cadwallader D. Colden, William Few, John Griscom, 
 Jeremiah Thompson, Francis B. Winthrop, Duncan P. Campbell, 
 Jos. H. Coggeshall, James Eastbum, John Pintard, Jonas Mapes, 
 Brockholst Livingston, William Bayard, Wm. H. Harrison, Rens- 
 selaer Havens, William Wilson, Richard Varick, Thomas Eddy, 
 Peter A. Jay, John Murray, Jr., John Slidell, Andrew Morris, Gilbert 
 Aspinwall, Zachariah Lewis, Thomas Buckley, Najah Taylor. 
 
114 CENTURY OF AMERICAN SAVINGS BANKS 
 
 A meeting of the directors was subsequently held, De- 
 cember 10, 1816, and several committees were appointed, 
 one to obtain a place to commence its operations, another to 
 apply to the Legislature for an act of incorporation (Peter 
 A. Jay, chairman), and one to draft an address to the 
 public (De Witt Clinton, chairman). 
 
 On the 17th of December, 1816, the following officers 
 were elected: 
 
 William Bayard, President; Noah Brown, 1st Vice-President; 
 Thomas R. Smith, 2d Vice-President; Thomas C. Taylor, 3d Vice- 
 President; Thomas Eddy, Jr., Cashier. 
 
 Meetings were also held December 24 and 31, 1816. 
 No entry of any other meeting appears on the minute book 
 of the bank vmtil April 5, 1819. 
 
 UNSUCCESSFUL EFFORTS TO OBTAIN A CHARTER 
 
 In a letter to Mr. Colquhoun, dated New York, 4th mo. 
 9th, 1817, Mr. Eddy, referring to this subject, said: 
 
 Among the many philanthropic institutions with which your country 
 abounds, there is none that appears to me more likely to be useful 
 than Savings Banks. They are certainly most admirably calculated 
 to be beneficial to the poor, by promoting among them a spirit of 
 independence, economy and industry. 
 
 Immediately on receiving from thee an account of the Provident 
 Institution in your metropolis, I proposed to a number of my friends 
 to establish a similar one in this city. A plan was formed, and a 
 number of our most respectable citizens agreed to undertake the 
 management of it; but we found that we could not go into operation 
 without an act of incorporation, for which we made an application 
 to the Legislature, and the result is not yet known. 
 
 The reasons for the failure to secure an act of incor- 
 poration until two years later, are not far to seek. The 
 term "Bank" seems to have had about the same effect upon 
 the average legislator of those days as an ensanguined rag 
 upon an infuriated bovine. To petition for the incorpora- 
 tion of any sort of Bank was to arouse suspicion at once. 
 How this prejudice became infused into the minds of the 
 law-makers is well explained by Emerson W. Keyes, in his 
 
NEW YORK'S PIONEER INSTITUTION 115 
 
 "History of Savings Banks in the United States" (1876). 
 He says: "The strife to secure charters for banking cor- 
 porations was very great, and under the imperfect system 
 relative to the security of their circulating notes, there was 
 a prevalent apprehension that through the undue expan- 
 sion and resulting debasement of the currency, disastrous 
 consequences might ensue. Hence the introduction of 
 every bill to incorporate a 'bank' was watched with 
 jealousy, both by those opposed to extending banking 
 privileges altogether, and by those who were intent only 
 upon securing a charter for themselves. The principle of 
 Sayings Banks being but little understood, their dissimi- 
 larity to banks of discount and circulation not being com- 
 prehended, it was enough that the word 'bank' appeared 
 in the title of the act, to array against it the combined 
 hostility of the foes of banks, and the friends of a bank 
 for themselves." 
 
 In addition to this, statistics show that between the years 
 1811 and 1820, nearly 200 banks failed in this country. 
 
 This fully explains the amendment suggested by the 
 legislative committee in their report of April 2, 1817, chang- 
 ing the title to the act by substituting the name of "The 
 Saving Corporation of the City of New York," for the 
 "Saving Bank of the City of New York." 
 
 While the result of the first effort to secure legislative 
 recognition was a failure, the project was by no means 
 given up by its promoters. The favorable action of the 
 Massachusetts Legislature upon a similar petition in the 
 year 1816, no doubt had a good effect, and other States 
 were following the example. It was felt that when the 
 public and the law-makers fully understood the plan and 
 scope of the proposed Savings Bank, and were able to act 
 independently of personal prejudice or popular clamor, the 
 result must be favorable. And so it proved. 
 
 JOHN GRISCOM ANOTHER PIONEER 
 
 In this most laudable work it is proper to record the 
 active efforts of John Griscom, one of the incorporators of 
 
116 CENTURY OF AMERICAN SAVINGS BANKS 
 
 the proposed Savings Bank for the City of New York. 
 Mr. Griscom was one of the leading spirits in the organiza- 
 tion of the New York Society for the Prevention of Pauper- 
 ism, out of which came the Society for the Care of Juvenile 
 Delinquents, or House of Refuge, being the first establish- 
 ment in the world on a similar plan. Throughout his life- 
 time he was devoted to philanthropic, educational and 
 scientific objects. After the adverse action of the Legisla- 
 ture upon the petition for the incorporation of a Savings 
 Bank, Mr. Griscom and his associates seem to have turned 
 to the organization of a general society, one of whose ob- 
 jects should be the establishment of a savings institution. 
 The committee appointed to draft a constitution for the 
 government of the Society for the Prevention of Pauperism, 
 consisting of John Griscom, Brockholst Livingston, Gar- 
 rett N. Bleecker, Thomas Eddy, James Eastburn, Rev. 
 Cave Jones, Zachariah Lewis, and Divie Bethune, reported 
 at a meeting of the Society held on February 6, 1818. 
 Under the fourth head, "Want of Economy," the committee 
 said: 
 
 Prodigality is comparative among the poor, it prevails to a great 
 extent in inattention to those small but frequent savings when labor 
 is plentiful, which may go to meet privation in unfavorable seasons. 
 
 We therefore proceed to point out the means which we consider 
 best calculated to ameliorate the condition of the poorer classes, and 
 to strike at the root of those evils which go to the increase of poverty 
 and its attendant miseries. The first proposition as a remedy is to 
 assist the laboring classes to make the most of their earnings by pro- 
 moting the establishment of Savings Banks, or benefit societies, life 
 insurance, etc., the good effects of such associations having been 
 abundantly proved in Europe, and in America; Boston, Philadelphia, 
 and Baltimore having each a Savings Bank. 
 
 Thus it will be seen that Thomas Eddy and John Gris- 
 com are properly to be classed as among the leading 
 pioneers in the Savings Bank movement in America. 
 
 PASSAGE or THE ACT INCORPORATING THE BANK FOR 
 SAVINGS IN THE CITY OF NEW YORK 
 
 Final favorable action upon the proposed charter of the 
 Bank for Savings in the City of New York, was taken by 
 
NEW YORK'S PIONEER INSTITUTION 117 
 
 the Legislature on March 26, 1819, and the Act became. 
 Chapter 62, of the Laws of that year. It was in the words 
 following : 
 
 Be it enacted by the people of the State of New York, represented 
 in senate and assembly, That William Bayard, John Murray, Junior, 
 Noah Brown, William Few, Brockholst Livingston, Cadwallader D. 
 Golden, George Arcularius, Thomas Buckley, Duncan B. Campbell, 
 Benjamin Clark, James Eastburn, Henry Eckford, Thomas Eddy, 
 Philip Hone, John E. Hyde, Peter A. Jay, Zachariah Lewis, Dennis 
 McCarthy, Andrew Morris, James Palmer, John Pintard, Abraham' 
 Russell, Jacob Sherred, Joseph Smith, Najah Taylor, Jeremiah 
 Thompson, William Wilson and Samuel Wood shall be and are 
 hereby constituted a body corporate and politic by the name of "The 
 Bank for Savings in the City of New York," and by that name they 
 shall have perpetual succession, and shall be persons capable of 
 suing and being sued, pleading and being impleaded, answering and 
 being answered unto, defending and being defended, in all courts and 
 places whatsoever; and may have a common seal, with power to 
 change and alter the same from time to time, and shall be capable 
 of purchasing, taking, holding and enjoying, to them and their suc- 
 cessors, any real estate, in fee simple or otherwise, and any goods, 
 chattels and personal estate which shall be necessary for the pur- 
 poses above cited, and of selling, leasing and otherwise disposing of 
 the said real or personal estate, or any part thereof, at their will and 
 pleasure: Provided always. That the clear annual value of such 
 real and personal estate, exclusive of the profits that may arise from 
 the interest accruing upon the stock, or from the sale of any stock in 
 which the deposits made in the said bank may be invested; ^ and that 
 the trustees or managers of said institution shall not directly or indi- 
 rectly receive any pay or emolument for their services, nor shall they 
 issue any notes, make any discounts, or transact any business which 
 belongs to or is transacted by incorporated banks other than is herein 
 specified: Provided also, That the funds of the said corporation 
 shall be used and appropriated to the promotion of the objects stated 
 in the preamble to this act in the manner herein mentioned, and those 
 only. 
 
 The first board under the act of incorporation met on 
 April 5, 1819, and organized with the officers named in the 
 act, viz.: William Bayard, president; John Murray, first 
 vice-president; Noah Brown, second vice-president; Wil- 
 liam Few, third vice-president. A committee was ap- 
 
 1 So in original. Probably the words "shall not exceed the sum of five 
 thousand dollars," have been omitted. 
 
118 CENTURY OF AMERICAN SAVINGS BANKS 
 
 pointed to devise the mode of operations and a code of by- 
 laws, and on the 16th of April the new by-laws were 
 adopted. 
 
 On May 25, 1819, Daniel E. Tyler was elected clerk, 
 he having to serve gratuitously, and on the 11th of August, 
 
 1819, it was resolved to pay him for his services, $125 ; and 
 on the 8th of September following he was appointed ac- 
 countant. Mr. Tyler was for some time the only salaried 
 officer, the tellers, and even the porters, etc., giving their 
 services without charge. 
 
 The success of this, the first Savings Bank in the Empire 
 State, was unequivocal. Its doors were opened to deposi- 
 tors in a room of the New York Institution, "granted to 
 the trustees by the Academy of Arts, and approved by the 
 corporation for the term of two years, gratis," on Saturday, 
 July 3, 1819, when from eighty depositors, the trustees had 
 the satisfaction of receiving the sum of $2,807. From the 
 date of opening to the close of the year, a period of six 
 months, the sum of $153,378.31 had been placed in the 
 bank by 1,527 depositors; the sum of $148,372.27 invested 
 in public funds according to law, and the sum of $6,606 
 withdrawn by depositors. Of the latter, forty-six closed 
 their accounts. 
 
 During the early period of its operation, the bank was 
 open for receiving deposits on Saturday evenings, from 
 six to nine o'clock, and on Monday from eleven a. m. to two 
 p. M. As the business of the bank increased, the days and 
 hours were extended until it became necessary to open daily 
 from teij to two o'clock, and on two days in the week in the 
 afternoon from four to six o'clock. 
 
 EXTRACTS FROM THE FIRST REPORT (1820) 
 
 These interesting facts and figures were contained in the 
 first report of the institution made to the Legislature in 
 
 1820, transmitted over the signatures of William Bayard, 
 president, and James Eastburn, secretary. The depositors 
 were classified as follows: mechanics, laborers, tradesmen 
 and domestics, 840; minors (male), 287; minors (female), 
 
NEW YORK'S PIONEER INSTITUTION 119 
 
 276; widows, 98; orphans, 20; apprentices, 15; unclassi- 
 fied, 24; total, 1527. 
 
 This report is so admirable both in form and substance, 
 that the following copious extracts are given as of the 
 greatest historical interest: 
 
 It was to be expected that an institution which, by inculcating 
 economy among the middle and lower classes of society, and inducing 
 them to spare their earnings for future exigencies, would necessarily 
 withdraw them from places of public resort, and thus excite the enmity 
 of those whose emolument was the fruit of prodigal expenditure. The 
 trustees, however, are gratified in saying that few such instances have 
 come to their knowledge. On the contrary, the classifications of 
 depositors will furnish several instances, even of public tavern-keep- 
 ers, who have brought their money to the bank for safety and increase. 
 Nor are the trustees without hope that such examples will operate 
 upon many of those whose conduct has heretofore been reprehensible. 
 A reform at the sources of waste will soon spread its influences 
 through a large portion of our population. 
 
 The board of trustees, previous to opening the books for the receipt 
 of deposits, established a system of management and inspection for 
 the bank which in its operation has proved highly beneficial. They 
 appointed, in rotation, three of their number to attend at the bank 
 as a committee for one month. It was made the duty of this com- 
 mittee to receive deposits, to see that the entries were duly made, 
 to make inquiries as to the situation of the depositors, and ask such 
 further questions as might promote the welfare either of the individual 
 or of the institution. By this means the whole of the board of trus- 
 tees have become familiar with the depositors, and while their con- 
 fidence in those to whom they have committed the safeguard and 
 improvement of their little funds has been confirmed, it has afforded 
 an opportunity, readily embraced by the trustees, of giving such 
 advice to many of the depositors as they believed would tend to pro- 
 mote careful habits and moral feeling. The gratification which they 
 have received in numerous instances has amply repaid the attending 
 committee this gratuitous labor. 
 
 The investment of the funds has been intrusted to a special com- 
 mittee, consisting of Messrs. John Mason, Jacob Sherred and William 
 Wilson, who report to the board at their monthly meeting the manner 
 in which the funds have been disposed of. The treasurer also re- 
 ports once a month the amount received from the deposits, and how 
 it has been expended. By this mode every operation is at once 
 known to each individual trustee; and such checks are furnished as 
 to prevent the possibility of the smallest loss to depositors. 
 
 The different classes of depositors will furnish various reflections 
 
120 CENTURY OF AMERICAN SAVINGS BANKS 
 
 calculated to place Banks for Savings high in the esteem of the polit- 
 ical economist, the practical philanthropist and the diligent promoter 
 of sound morals. 
 
 In every part of an active population, and particularly in large 
 cities, the difficulty of procuring the reward of labor is not so great 
 as the power to preserve it. The man who attends to the regular 
 discharge of his duties, and is enabled to lay up a weekly sum from 
 his hard-earned income, is too often the dupe of the idle, the profli- 
 gate, the designing, or the unfortunate. Incaution, and sometimes 
 an excusable vanity, prompts the possessor of an increasing fund to 
 reveal it to his less prosperous neighbor. The desire of accumulation, 
 and the hope of bettering his condition, will induce the listener to 
 try the means with which his friends can furnish him on some object 
 of speculation. He tries, and both are ruined. There are others 
 who live only to prey upon society; they insinuate themselves into 
 the confidence of the unsuspecting; give the most plausible reasons 
 for the small sums they ask, and the strongest assurances of a speedy 
 repayment. The money is loaned; but the lender too soon finds that 
 the fruit of his labor is gone forever. 
 
 Many cases have come before the trustees wherein the above was 
 justified by ample details. The causes, as after stated by the suffer- 
 ers themselves, arose alike from their want of some secure place of 
 deposit, and their ignorance how to improve what they had laid up. 
 The sums are generally too small to be received at any of the banks; 
 and where this is not the case, it was found equally as difficult to 
 retain it as if it had been actually in the owner's hands; the tempta- 
 tion to loan was the same. Though many depositors understood 
 how to invest their money in public stocks, yet anticipating an early 
 use for it, or fearing a loss from the fluctuation of the funds, they 
 preferred letting it lie useless. In numerous instances, sums from 
 $100 to $300 had lain unimproved for many years, while others had 
 loaned and lost the whole. The Banks for Savings provide almost 
 the only remedy; they give security to the depositor, improve his little 
 stock, and, at fixed periods, allow him to withdraw the whole, if his 
 inclination or interest should prompt him. 
 
 The value of an institution is to be estimated by the evil which it 
 prevents, or by the good which it produces. In some the effects are 
 more remote, in others more immediate. Banks for Savings are among 
 the latter; the attempt is no sooner made than the most salutary ef- 
 fects follow. It has formed the most pleasing and interesting part 
 of the duty of the monthly committee to observe and note these effects. 
 
 The effect on the moral habits is not more certain than striking; 
 he who has learned to be economical has first gotten rid of pernicious 
 modes of spending money. Every time he adds to his amount he 
 has an additional motive for perseverance. In the provision he is 
 making for futurity is associated all which can gratify him as a 
 
NEW YORK'S PIONEER INSTITUTION 121 
 
 father, a husband, a guardian or a friend. The talent which heaven 
 has committed to his care he improves for the objects of his affec- 
 tions; this, again, endears them to him, and thus the sum of human 
 happiness is increased and extended. It is impossible for men con- 
 tinuing to act on such principles to be immoral. 
 
 The trustees are glad to report, that the habit of saving among the 
 depositors becomes very soon not only delightful, but permanent. 
 Those who have brought their one dollar, are anxious to increase it 
 to five, and so on. The number of re-deposits sufficiently confirms 
 this fact; and such has been the effects on the emigrants from Great 
 Britain, that the very guineas which they received from the Banks 
 for Savings at home, they have deposited in the one in this city imme- 
 diately after landing. 
 
 There are several classes of depositors which the trustees cannot 
 forbear to remark upon. 
 
 Seamen are proverbially improvident, not so much, perhaps, from 
 a love of waste, as from a total ignorance how to dispose of their 
 money. Having no one to direct them, the wages which they have 
 earned, amidst storms and tempests, they scatter on shore without 
 reflection. Of this useful class of men, a few have found their way 
 to our bank, and the trustees will do all in their power to increase 
 the number. One seaman in one of the regular traders for Liverpool, 
 brought home with him, in silver, $360; his captain directed him 
 to the Bank for Savings. He soon deposited his burden, and appeared 
 heartily pleased that, under the guidance of his commander, he had 
 at last found a harbor of safety for his small property. 
 
 The clergy are a body of gentlemen, perhaps, more entitled to our 
 gratitude and care, than any other in the community. Their means 
 in general are small, their families usually large, and, from the nature 
 of their office, they are prevented by trade to increase their income. 
 Many of them, however, can save a little, and they have availed 
 themselves of the bank to deposit it for improvement. When the trus- 
 tees look around on the number of destitute widows of once respectable 
 and useful clergymen, they cannot but hail the institution as the 
 means of affording, by the provident care of the living, comfort, and 
 perhaps independence, for future widows and orphans. 
 
 The attention which has been paid by parents and guardians, since 
 the opening of our bank, to the future comfort and security of minors, 
 is not one of the least blessings which shall flow from this institu- 
 tion. The deposits for this class are very numerous; and while it is 
 calculated to excite the gratitude of the young beings, for whose 
 use these deposits have been made, it holds out to them, when arrived 
 at maturity, the example and the means by which succeeding genera- 
 tions are to be benefited and improved. 
 
 As parents, as citizens, and as men, the trustees exult in the pros- 
 pects which the Bank for Savings holds out to this growing city and 
 
122 CENTURY OF AMERICAN SAVINGS BANKS 
 
 State. The habits which a resort to it induce, hold out the best 
 pledge for a reduction in the public burdens, as they are connected 
 with indigence and want. They tend to inspire a spirit of independ- 
 ence, and in their moral operation lessen crime, poverty and disease. 
 They teach man to depend up)on his own exertions; encourage in- 
 dustry, frugality, cleanliness, and self-respect; and effectually pre- 
 vent those who are so fortunate as to be influenced by them, from 
 applying either to public provisions or private bounty for support. 
 
 The trustees take this opportunity of thanking the gentlemen con- 
 nected as tellers, clerks and porters in the different banks, for the 
 cheerful manner in which they have rendered their services on the 
 evenings of deposit. Their kindness was both acceptable and useful. 
 
 In conclusion : The trustees are fully aware that they have under- 
 taken an arduous task; but in the approbation of the public authori- 
 ties, the countenance of their fellow-citizens, and the increasing com- 
 fort of the community, they will have a full reward. 
 
 According to the New York Evening Post, of December 
 31, 1897, on the nights the Bank for Savings was open for 
 business, the treasurer used to carry the deposits home in a 
 little hair-covered trunk, the Bank not then owning a safe. 
 That trunk is now one of the Bank's most prized posses- 
 sions. 
 
 INVESTMENTS IN REAL ESTATE LOANS AUTHORIZED 
 
 The above report was accompanied by an application 
 for an amendment of the Bank's charter so as to authorize 
 investments in loans upon real estate in the City of New 
 York or to the corporation of that city, which application 
 had the hearty endorsement of Governor DeWitt Clinton, 
 who, in his message to the Legislature in that year said: 
 
 The Bank for Savings in the City of New York, instituted at the 
 last session, to cherish meritorious industry, to encourage frugality 
 and retrenchment, and to promote the welfare of families, the cause 
 of morality, and the good order of society, has already manifested 
 its claims to your confidence by an accumulation of more than one 
 hundred and fifty thousand dollars in small deposits, and by shed- 
 ding a benign influence on society. The application of this institu- 
 tion to authorize loans on real estate, as well as any other provisions 
 subservient to its salutary objects, will undoubtedly receive your sanc- 
 tion. 
 
NEW YORK'S PIONEER INSTITUTION 
 
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124 CENTURY OF AMERICAN SAVINGS BANKS 
 
 As might have been expected with such an endorsement, 
 the application was readily granted by the Legislature. 
 Prior to the passage of this legislation, the Bank was "re- 
 strained from vesting moneys except in government securi- 
 ties or in stock, created and issued under and ifi virtue of 
 any law of the United States or of New York." The trus- 
 tees complained that the price of such stock was fluctuating 
 and that it produced but 6 per cent, interest, or less, for it 
 could not always be purchased at par. A provision was 
 also contained in the amendatory bill that minors deposit- 
 ing in the institution might withdraw the same to the amount 
 of $250, though no guardian had been appointed, provided 
 such deposit were made by the minor personally, and not 
 by another, for his benefit. It was also provided that the 
 books of the Bank should at all times be open to the comp- 
 troller of the State or such other person or persons as the 
 Legislature might designate for inspection and examination. 
 
 The proposition that deposits of persons deceased, with- 
 out leaving any representative, might, after sufficient time 
 had elapsed, be applied to the objects of the institution, was 
 not acted upon. 
 
 FIRST ADDRESS TO THE PUBLIC (1819) 
 
 Below is given a copy of the first address to the public, 
 or prospectus, issued by the Bank for Savings in the City 
 of New York, as well worthy of preservation: 
 
 Explaining the objects of the above bank, which is now ready to 
 receive deposits every Monday, from 11 A. m. to 2 p. m., and every 
 Saturday evening, from 6 to 9 o'clock, in the New York Institution 
 (formerly the Alms-house), in Chambers Street. 
 
 The Legislature of the State having at their last session incor- 
 porated this institution, the Directors now offer its advantages to 
 all classes of their fellow-citizens. 
 
 It is generally known that in Great Britain institutions of this 
 kind have produced the most beneficial effects, and in this country 
 circumstances seem still more favorable to their utility. Several of 
 them are known in successful operation in our sister States. 
 
 It is a common remark, that the unconditional and indiscriminate 
 relief of the indigent increases the amount of poverty. It is often 
 an injury to the poor themselves. By inducing them to rely on 
 gratuitous and undeserved assistance, it destroys their sense of dignity 
 
NEW YORK'S PIONEER INSTITUTION 125 
 
 and self-respect, degrades them in their own estimation, and reduces 
 them to the abject condition of idle indifference and daily depend- 
 ence. 
 
 This institution is liable to no such objections. It is not a com- 
 mon charitable institution, although it will prove emphatically char- 
 itable in its ultimate effects. It will help none but those who are 
 willing to help themselves. 
 
 The Act of Incorporation, and the regulations for the govenmient 
 of this bank, will so fully explain its design that little more need 
 be said respecting it. Its object is as plain as it is useful and salu- 
 tary. 
 
 It is intended to furnish a secure place of deposit for the savings 
 of Mechanics, Manufacturers, Mantua-makers, Cartmen, Seamen, 
 Laborers; in short, of all who wish to lay up a fund for sickness, for 
 the wants of a family or for old age. 
 
 To many industrious persons, who have saved a little property and 
 who do not wish to employ it in trade, this bank will also be a 
 desirable institution. The risk of loaning their money to individuals, 
 and the losses which frequently result from it, will here be entirely 
 avoided. 
 
 The utmost facility will be given to the receiving and paying mon- 
 eys at the bank; and the amount deposited will be invested in such 
 funds as the Directors may deem perfectly secure. They will not in 
 any case whatsoever loan any part of the money to individuals. 
 
 It is thought expedient that no sum less than a dollar be received, 
 nor any part of a dollar in larger sums. It is desirable that all 
 drafts on the bank should be in even sums. The intention of this 
 regulation is to lessen the labor of the bookkeeper, and consequently 
 to diminish the expense of the institution. 
 
 When the deposits of any individual amount to five dollars, they 
 will begin to draw interest in the manner directed and explained in 
 the by-laws; and the interest, if not called for, will be added to the 
 principal, and be itself productive of interest. 
 
 The immense profit which arises from a rigid system of economy, 
 and from depositing even small savings at interest, probably exceeds 
 the most sanguine expectations ; the sum of one dollar deposited weekly 
 for a period of sixty years would amount at the end of that tinie, 
 with its accumulation of interest, to upward of twenty thousand 
 dollars. 
 
 The Directors owe it both to the public and themselves distinctly 
 to declare, that they entirely disclaim the idea of receiving any per- 
 sonal emolument or advantage in any shape whatever. It is equally 
 their intention that the bank itself shall not be a gaining concern. In 
 case the little savings arising from the reduction of interest, and all 
 other sources, shall be more than sufficient to defray the necessary 
 expenses of the institution, they will advance the rate of interest 
 
126 CENTURY OF AMERICAN SAVINGS BANKS 
 
 paid to the depositors. They are only desirous of making the bank 
 support itself. 
 
 From this brief statement of the principles of the institution its 
 object will be fully understood, and the Directors cannot but hope 
 that it will meet the approbation and encouragement of every member 
 of the community. They are persuaded that its natural effects will 
 be to increase the happiness and comfort of the poor. 
 
 A pecuniary gain to the indigent is not the only advantage to be 
 expected from this institution. Their moral feelings it is hoped will 
 be greatly benefited. It must have a direct tendency to induce habits 
 of frugality, forethought, of self-assistance and self-respect. 
 
 There are few spectacles more truly gratifying, or more honorable 
 to human nature, than a poor man surmounting, by his own exer- 
 tions, the difficulties of his situation, and training up his family in 
 the ways of honor and virtue, of industry and independence. 
 
 To encourage the exertions, and to animate the hopes of such as 
 these, this institution has been formed; and the Directors have now 
 only to express the wish that all classes of their fellow-citizens may 
 be induced to promote, by their influence and example, its progress 
 and success. 
 
 Signed in behalf of the Board of Directors, 
 
 William Bayard, President. 
 John Murray, Jun., Treasurer. 
 
 New York, June, 1819. 
 
 PRESIDENTS SINCE ORGANIZATION 
 
 The following is a list of the presidents since organiza- 
 tion, March 26, 1819, to January 1, 1916: 
 
 Names Elected Resigned 
 
 William Bayard 1819 Died in office 1826 
 
 William Few 1826 Died in office 1828 
 
 John Pintard 1828 1841 
 
 Philip Hone 1841 .... Died in office 1851 
 
 Najah Taylor 1851 .... Died in office 1860 
 
 Benjamin L. Swan 1860 .... Declined to serve 
 
 Marshall S. Bidwell 1860 Died in office 1872 
 
 John C. Green 1872 .... Died in office 1875 
 
 Robert Lenox Kennedy 1875 Dec. re-elec'n 1885 
 
 Wyllis Blackstone 1885 Died in office 1885 
 
 Merritt Trimble 1885 Died in office 1903 
 
 William W. Smith 1903 Died in office 1906 
 
 Walter Trimble 1907 Continues in office 
 
 PRESENT OFFICERS AND TRUSTEES 
 
 Officers: Walter Trimble, President; Frederic W. 
 Stevens, Vice-President; Charles S. Brown, Vice-President; 
 
NEW YORK'S PIONEER INSTITUTION 127 
 
 Adrian Iselin, Jr., Vice-President; James Knowles, Comp- 
 troller; Lewis B. Gawtry, Secretary. 
 
 Trustees: Walter Trimble, Frederic W. Stevens, 
 Charles S. Brown, Adrian Iselin, Jr., Lewis B. Gawtry, 
 Chas. A. Sherman, Henry W. de Forest, W. Irving Clark, 
 William J. Riker, William W. Appleton, Thomas Dimond, 
 Robert Bacon, Henry R. Hoyt, August Belmont, Charles 
 H, Tweed, William Sloane, James Knowles, Thomas 
 Denny, John E. Cowdin, James S. Alexander, Nicholas 
 Biddle, George F. Baker, Jr., Otto M. Eidlitz, George E, 
 Roosevelt, Thatcher M. Brown, Lewis C. Ledyard, Jr., 
 Julian L. Peabody. 
 
 On July 1, 1916, the bank had assets of $106,366,499.- 
 04, of which $93,611,458.60 belonged to 146,204 deposi- 
 tors. At the same date, the surplus (par value) had 
 reached the sum of $12,755,040.44. 
 
 Walter Trimble, who has been president of the Bank for 
 Savings since January, 1907, is a practicing lawyer; born 
 in New York City, March 7, 1857, his ancestors on both 
 sides being Quakers; was educated at preparatory schools. 
 Harvard College and Law School and Columbia Law 
 School. Mr. Trimble's father, Merritt Trimble, was presi- 
 dent of this bank from 1885 to 1903, dying in office in 
 the latter year, and his grandfather, George T. Trimble, 
 was a trustee, 1852-72, and one of the second vice-presi- 
 dents from 1870 to 1872, dying in office in the latter year. 
 
 BANK FOR SAVINGS IN THE CITY OF NEW YORK 
 
 Incorporated 1819 
 
 
 
 
 
 Due 
 
 Open 
 
 Year 
 
 Deposited 
 
 Withdrawn 
 
 Depositors 
 
 Dividends 
 
 Accounts 
 
 1819 
 
 $ 154,801 
 
 $ 6,606 
 
 $ 148,195 
 
 $ 1,422 
 
 1,481 
 
 1825 
 
 635,891 
 
 615,011 
 
 1,432,668 
 
 52,319 
 
 9,983 
 
 1835 
 
 1,694,398 
 
 1,151,084 
 
 3,652,156 
 
 131,511 
 
 25,714 
 
 1845 
 
 1,938,156 
 
 1,321,102 
 
 5,275,190 
 
 200,702 
 
 35,293 
 
 1855 
 
 2,765,062 
 
 2,453,064 
 
 7,548,001 
 
 590,735 
 
 47,830 
 
 1865 
 
 5,425,356 
 
 4,722,870 
 
 13,715,136 
 
 1,070,270 
 
 61,654 
 
 1875 
 
 4,306,444 
 
 4,481,124 
 
 21,695,401 
 
 1,287,090 
 
 66,429 
 
 1885 
 
 7,817,104 
 
 8,708,194 
 
 39,046,583 
 
 1,283,987 
 
 107,615 
 
 1895 
 
 9,514,028 
 
 8,646,152 
 
 51,254,883 
 
 1,869,450 
 
 120,364 
 
 1905 
 
 18,782,431 
 
 13,814,110 
 
 82,825,497 
 
 2,969,688 
 
 155,975 
 
 1915 
 
 14,158,395 
 
 17,940,465 
 
 92,402,600 
 
 3,066,800 
 
 146,065 
 
CHAPTER X 
 
 CONNECTICUT SIXTH IN LINE 
 
 Incorporation of the Society for Savings, Hartford, on June 1, 1819 — 
 First Opened for Receipt of Deposits in July Following — ^The 
 Incorporators and First Officers — Rapid Growth Shown — Quar- 
 ters Several Times Outgrown — ^Present Officers and Trustees. 
 
 The charter of the Society for Savings, Hartford, Con- 
 necticut, was approved by Gov. Oliver Wolcott on June 1, 
 1819; the first meeting of the incorporators was held in the 
 State House, on June 9, of the same year. 
 
 No mention of a Savings Bank appears in the Hartford 
 newspapers until the advertisement of this bank for busi- 
 ness, in July, 1819. The institution first threw open its 
 doors on the 14th day of that month, when thirty-two de- 
 posits were received, aggregating $530. On that day books 
 were issued, among others, to Elisha Colt, Jr., George 
 Beach, Jr., John L. Bunce and Isaac C. Perkins. 
 
 OFFICERS AND INCORPORATORS 
 
 The officers and incorporators were as follows: 
 President, Daniel Wadsworth; Vice-Presidents, Ward 
 Woodbridge, James H. Wells, Michael Olcott, John T. 
 Peters, David Porter, Michael Bull, Charles Sigourney, 
 John Russ, Jeremiah Brown, Isaac Perkins, David Wat- 
 kinson, William Ely; Trustees, Cyprian Nichols, Mason 
 F. Cogswell, Henry Hudson, Samuel Tudor, Jr., Russell 
 Bunce, James B. Hosmer, Charles Hosmer, Thomas Day, 
 George Goodwin, Jr., Lorenzo Bull, James R. Wood- 
 bridge, James M. Goodwin, Joseph B. Gilbert, John Butler, 
 Henry Kilbourn, Christopher Colt, Theodore Pease, Bar- 
 zillai Hudson, Jr., Roderick Terry, Horace Burr, George 
 
 128 
 
CbNNECTICUT SIXTH IN LINE 129 
 
 Beach, Normand Smith, Thomas K. Brace, Jesse Savage; 
 Secretary, James M. Goodwin; Treasurer, Elisha Colt. 
 
 Twelve vice-presidents and twenty-four trustees were 
 chosen at that time, and the number never has been 
 changed. 
 
 STEADY AND RAPID GROWTH SHOWN 
 
 At the end of the first four and one-half months, to De- 
 cember 1, 1819, the total deposits were $4,227.59. Four 
 and one-half years later, Jime 1, 1824, they amounted to 
 $61,380.02. They have increased each subsequent decade, 
 in round numbers as follows : 
 
 Year Total Deposits 
 
 June 1, 1834 $ 298,000 
 
 June 1, 1844 824,000 
 
 June 1, 1854 2,572,000 
 
 June 1, 1864 5,207,000 
 
 June 1, 1874 7,376,000 
 
 June 1, 1884 9,969,000 
 
 June 1, 1894 15,705,000 
 
 June 1, 1904 26,037,000 
 
 June 1, 1914 37,524,172 
 
 On June 1, 1914, there were 72,884 open accounts, rep- 
 resenting deposits of $37,524,172.67, and the assets of the 
 bank were $38,766,607.21. On December 1, 1915, the 
 total deposits amounted to $38,387,030.37, and the assets 
 to $39,775,188.08. 
 
 Dividends were paid at the rate of 5 per cent, per annum 
 until December, 1835, and thereafter they were at the rate 
 of 6 per cent, in December and 5 per cent, in June, making 
 Sy2 per cent, per annum until 1849, when 6 per cent, be- 
 came the rule for nearly thirty years, with the exception of 
 1863 and 1864, when 5 per cent, only was paid. In 1877, 
 the rate of 5 per cent, was again paid and since that time 
 4 per cent, has been the regular rate, except that an extra 
 dividend of 1 per cent, was paid on "six months money" 
 in 1890. 
 
 At the start, the bank was open only part of one after- 
 noon each week. For many years past it has been open 
 for business from 9 a. m. until 4 p. m., except on holidays 
 and Sundays, and half of Saturdays. 
 
130 CENTURY OF AMERICAN SAVINGS BANKS 
 QUARTERS SEVERAL TIMES OUTGROWN 
 
 The first deposits were received by Treasurer Colt at his 
 office in the State House, but the business soon afterward 
 was removed to his house on Church Street. After Mr. 
 Langdon's appointment, the business of the bank was trans- 
 acted in his store on Main Street and thereafter for a short 
 time in a small room on Asylum Street, near Main. In 
 1833 a lot was purchased on Pratt Street, and a small one- 
 story banking house, 24 x 46 feet, of brick, was erected at 
 a cost of $2,500. During the year 1860, the business hav- 
 ing outgrown the banking house, this first structure was 
 torn down and a new and larger one of stone and brick, 
 and two stories in height, was erected in its place. In 
 1891, the business of the institution had again outgrown 
 what were considered commodious quarters in 1860, and 
 an extra lot adjoining the one on Pratt Street was bought. 
 Upon this was begun the erection of the present large and 
 handsome building, occupied exclusively by the bank, be- 
 ing four stories in front, and one story in rear, thirty-five 
 feet in height with an expansive dome. During the erec- 
 tion of the present banking house, the business of the bank 
 was carried on at No. 288 Main Street, and in May, 1893, 
 the new building was opened for business. 
 
 In 1822 "a suitable trunk or box for valuables" was pro- 
 cured for the treasurer. An ordinary iron safe was used in 
 which to place the "valuables" in the first building. In 
 the second building was built a vault for the safe keeping 
 of the account books, but the cash and securities were kept 
 in what was then called a burglar-proof safe. In the 
 present structure are fire- and burglar-proof vaults — one of 
 steel, 12x15 feet, in which many millions of securities are 
 kept behind doors of the most modern construction, and the 
 other of brick and steel, 14 x 23 feet, and two stories in 
 height, in which are kept valuable books and papers. The 
 evolution from the small tin box to the present security 
 vault shows in itself the substantial growth of the institu- 
 tion and the magnitude of its needs. 
 
CONNECTICUT SIXTH IN LINE 131 
 
 PRESIDENTS SINCE ORGANIZATION 
 
 The presidents of the bank, since its organization to the 
 present, have been: Daniel Wadsworth, elected 1819; 
 Ward Woodbridge, elected 1828; James B. Hosmer, 
 elected 1851; Roland Mather, elected 1879; John C. Par- 
 sons, elected 1890; Francis B. Cooley, elected 1898; Jona- 
 than B. Bunce, elected 1904; Charles E. Gross, elected 
 1912. 
 
 The treasurers have been: Elisha Colt, until 1827; 
 James M. Goodwin, until 1829; Reuben Langdon, until 
 1849; Olcott Allen, until 1873; Zalmon A. Storrs, until 
 1890; A. E. Hart, until the present. 
 
 PRESENT OFFICERS AND TRUSTEES 
 
 The present officers and trustees are as follows: 
 
 President, Charles E. Gross; Treasurer, A. E. Hart; 
 Assistant Treasurer, Sidney W. Crofut; 2d Assistant Treas- 
 urer, Frank I. Prentice. 
 
 Vice-Presidents: Theodore Lyman, Atwood Collins, 
 Daniel R. Howe, Meigs H. Whaples, William B. Clark, 
 James Nichols, William C. Skinner, Samuel G. Dunham, 
 Silas Chapman, Jr., Charles H. Northam, Lyman B. 
 Brainerd, Francis Parsons. 
 
 Trustees: Charles E. Gross, A. E. Hart, George H. 
 Burt, John S. Camp, Charles P. Cooley, Lucius A. Barbour, 
 James H. Bidwell, John O. Enders, Charles S. Hills, 
 Charles E. Chase, Walter L. Goodwin, John Y. Taylor, 
 George G. Williams, Guy E. Beardsley, Robert C. Glazier, 
 Charles L. Goodwin, William D. Morgan, Charles L. 
 Spencer, Sidney W. Crofut, Charles Wells Gross, Harold 
 G. Hart, Archibald A. Welch, Richard F. Jones, A. E.. 
 Hart, Secretary, 
 
CHAPTER XI 
 
 RHODE ISLAND'S EARLIEST BANKS 
 
 The Savings Bank of Newport Incorporated June 1, 1819, and the 
 Providence Institution for Savings in October of the Same Year 
 — ^No Further Incorporations Until 1828 — History of these Pio- 
 neer Banks of the Smallest State — Financial Statements and 
 Rates of Dividends Paid — ^Two Vigorous Century Plants. 
 
 The first Savings Bank incorporated in the State of 
 Rhode Island was "The Savings Bank of Newport," June 
 1, 1819. In October of the same year the Providence In- 
 stitution for Savings was incorporated. The Bristol Insti- 
 tution for Savings was also legally authorized in the same 
 year, but was not organized under that charter. It was 
 reincorporated in 1841. Thus the smallest State in the 
 Union, in 1819, had incorporated three Savings Banks, 
 while no other State except Massachusetts had chartered 
 more than two. The two institutions which organized are 
 in a flourishing condition at the present date, — ^within three 
 years of their centenary — and have most worthily fulfilled 
 Tthe expectations founded upon them. This fact speaks 
 more than mere words could do as to the faithfulness with 
 which the trust has been administered. 
 
 No more Savings Banks were incorporated until 1828, 
 when the Pawtucket Institution for Savings was chartered, 
 with powers substantially the same as those conferred upon 
 the Providence Institution. The Pawtucket bank, how- 
 ever, did not organize until 1836, under a reenactment of 
 substantially the old form of charter. The aggregate 
 amount of deposits which it might receive was limited in 
 the act to $100,000, which limitation was extended in 1846 
 
 to $300,000, Subsequent legislation must have been in- 
 
 132 
 
RHODE ISLAND'S EARLIEST BANKS 133 
 
 voked to remove this restriction also, for in December, 
 1873, it held deposits aggregating more than $2,000,000. 
 
 The policy adopted in Rhode Island as well as in some 
 of the other States, was to provide for a large body of 
 corporators, who were to choose from their number the 
 president, vice-presidents and a designated number of 
 directors, who together should constitute a board of trus- 
 tees to whom the management of the affairs of the institu- 
 tion was committed. In the case of the Providence Institu- 
 tion the corporators were no fewer than 126 in number, 
 but seven of these constituted a quorum. 
 
 Such a form of organization doubtless possesses certain 
 advantages over that of a smaller number of corporators 
 who are themselves the board of trustees. One of these 
 advantages is the association of a large number of persons 
 of character and influence, having a responsible connection 
 with the institution, and being in a degree interested in its 
 success and prosperity. The name, fame and credit of the 
 institution thus would be more widely extended than if 
 limited to a much smaller number. Another incidental 
 advantage of this form of organization would be the ease 
 with which the responsible management could, at each re- 
 curring anniversary meeting, he re-formed, and discordant 
 elements eliminated. 
 
 What disadvantages such a system may possess is not 
 entirely clear. 
 
 Examination of these early charters shows that while an 
 effort was made to give legislative direction and limitation 
 to the investments of Savings Banks by designating "public 
 stocks, either of the United States, this State or some of the 
 towns thereof," and also bank stock, as those in which it 
 should be the duty of the trustees to invest, the practical 
 force of the limitation was destroyed by the further men- 
 tion of "private securities, at the discretion of a standing 
 committee of the board," which practically left the range 
 of investments imlimited. 
 
 Not until 1858 was there any general law designed to 
 promote uniformity in respect to investments and to im- 
 
134 CENTURY OF AMERICAN SAVINGS BANKS 
 
 pose upon all Savings Banks alike certain definite limita- 
 tions to their discretion. 
 
 The earliest action of the Rhode Island Legislature to- 
 ward compelling trustees of Savings Banks to account to 
 the State for the manner in which their trust was executed, 
 was the adoption of a resolution by the General Assembly 
 at the June session in 1848, requiring these institutions to 
 make return of their condition on the first Monday in July 
 following. There were then seven institutions of this class 
 in operation in the State. 
 
 The prohibition against loaning any of the moneys of 
 the institution to trustees was enforced in the most practical 
 manner by making all who even by their presence and 
 silence countenanced such a loan, personally responsible 
 for the same. 
 
 THE SAVINGS BANK OF NEW^PORT 
 
 The Savings Bank of Newport, Newport, R. I., is one 
 of the oldest in the country, having been incorporated June 
 1, 1819. If there were any special facts or circumstances 
 leading up to the incorporation, it has been foxmd impos- 
 sible to obtain them. 
 
 The corporators, named in the charter, were : Robinson 
 Potter, Dutee J. Pearce, James Townsend, Thomas Town- 
 send, Jr., Benjamin Hadwin, David Melville, Archibald 
 Munro, Harvey Sessions, Joseph Lyon, Jr., Wm. H. Rath- 
 bone, Stephen Bowen, Noah Barker, S. Dean, Wm. Tilley, 
 Jr., George Irish, Nicholas G. Boss, James Lovie, Andrew 
 Hunter, Gilbert Chace, David M. Coggeshall, W. A. 
 Smith, Mercier J. Burdick, John W. Cahoone, John Barber, 
 Solomon G. Weaver, Isaac Burdick, R. B. Cranston, E, P. 
 Sherman, John Cahoone, Wm. Coggeshall, John Slocum, 
 John W. Stevens, George Wanton, Thomas Brinley, Benja- 
 min B. Mumf, C. F. Allen, John L. Boss, Jr., Solomon 
 Townsend, Thomas Melvill, Josiah C. Shaw, Thomas W. 
 Brown, Charles Cotton, George W. Cole, Wm. James 
 Tilley, William Lovie, Stephen H. Cahoone, George Engs, 
 William S. Nichols, John F. Townsend, C. M. Thurston, 
 
RHODE ISLAND'S EARLIEST BANKS 135 
 
 James Taylor, Anthony V. Taylor, Isaac Gould, Charles 
 Feke, William Ellery, Jr., David Williams. 
 
 The first directors were: David King, 1819-1835; 
 Edward W. Lawton, 1819-1830; Job Sherman, 1819- 
 1847; Benjamin Hazard, 1819-1821; Richard K. Ran- 
 dolph, 1819; Dutee J. Pearce, 1819-1832; James Stevens, 
 1819-1824; Nicholas G. Boss, 1819-1830; Stephen T. 
 Northam, 1819-1855; John Slocum, 1819-1830; James 
 Taylor, 1819-1832; Harvey Sessions, 1819-1832; Benj. 
 
 B. Mumford, 1819-1826; Nathaniel Sweet, 1819-1845 
 Charles Cotton, 1819-1831; Robinson Potter, 1819-1835 
 George Engs, 1819-1846; David Melville, 1819-1856 
 Isaac Gould, 1819-1853; Stephen Bowen, 1819-1828 
 S. Fowler Gardner, 1819-1835; Josiah C. Shaw, 1819- 
 1821; James Townsend, 1819-1826; Wm. F. Dillingham, 
 1819-1824; John P. Mann, 1819-1821; John Cahoone, 
 1819-1835. 
 
 PRINCIPAL OFFICERS SINCE ORGANIZATION 
 
 The principal officers, from the beginning to the year 
 1916, were as follows: 
 
 Presidents: Stephen T. Northam, 1819-1835; George 
 Engs, 1836-1846; John Stevens, 1847-1848; Benjamin 
 Finch, 1849-1878; Richard Cornell, 1879-1888; James 
 
 C. Swan, 1889-1898; Charles E. Hammett, Jr., 1899- 
 1903; J. Truman Burdick, 1903-1908; Wm. H. Hammett, 
 1909— 
 
 Vice-Presidents: Samuel Brown, 1861-1864; David J. 
 Gould, 1865-1878; James C. Swan, 1879-1888; Charles 
 E. Hammett, Jr., 1889-1903; Thomas A. Lawton, 1889- 
 1906; Benj. B. H. Sherman, 1906-1907; Henry C. Stevens, 
 1907-1911; William Paine Sheffield, 1911— 
 
 Treasurers: Benjamin Hadwin, 1819-1835; Joseph 
 Martin, 1835-1836; Henry C. Martin, 1836-1839; Charles 
 Gyles, 1840-1848; Samuel S. Gyles, 1849-1863; William 
 H. Sherman, 1864-1894; Grant P. Taylor, 1894— 
 
 Assistant Treasurer: H. G. Wilks, 1906— 
 
 Secretaries: George Mimiford, 1819-1824; George T. 
 
136 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Weaver, 1824; Benjamin B. Rowland, 1825-1877; Wil- 
 liam G. Stevens, 1878-1902; William H. Hammett, 1902-^ 
 1909; William P. Carr, 1909— 
 
 FINANCIAL STATEMENT 
 
 The general balance sheet of June 30, 1915, for which 
 the author is indebted to George H. Newhall, Bank Com- 
 missioner for the State of Rhode Island, shows that on the 
 date mentioned the assets and liabilities of the institu- 
 tion balanced at $10,638,344.69. The assets included: 
 Bonds of the United States $200,000; bonds of States and 
 territories, $275,000; bonds of cities, counties, etc., in New 
 England and New York, $1,830,000; bonds of cities, etc., 
 other than New England or New York, $475,000; railroad 
 and terminal bonds and equipment notes, $1,306,830; 
 electric and street railroad and other bonds, $1,601,222; 
 loans on mortgages of real estate, $4,303,082 ; bank build- 
 ing, $50,000; deposits in banks and trust companies, $272,- 
 231; cash on hand, $28,434. 
 
 Included in the liabilities were: Deposits, $9,579,888; 
 surplus, $399,005; profit and loss, $158,970; guaranty 
 fund, $500,000. The surplus, profit and loss, and guar- 
 anty fund, based on securities at book values, amounted 
 to $1,057,976; the same at estimated market values, 
 $909,788. 
 
 The following additional facts and figures have been 
 obtained : 
 
 MISCELLANEOUS 
 
 Amount of deposits, last report $ 9 289,489 19 
 
 Amount deposited during year 1 296 803 38 
 
 Dividends credited during year '364196 71 
 
 Total $10,950,489 28 
 
 Withdrawals during year 1,370,601 01 
 
 Amount of deposits at end of year $9,579,888 27 
 
 Number of accounts of less than $500 6,838 
 
 Number of accounts of $500 and less than $1,000 1^123 
 
 Number of accoimts of $1,000 and upwards 2,^X1 
 
 Total 10,278 
 
RHODE ISLAND'S EARLIEST BANKS 137 
 
 Largest amount due one depositor <l;ifiQ 14S 71 
 
 Average balance at end of year .'.'.'.'.'.'.'.'.'.'.'..'. $932 07 
 
 Number of accounts at beginning of year IfTm 
 
 Number opened during year l'3ll 
 
 Total , J .^1; 
 
 Number closed during year !.!!!!!.'!!!!!.!! 1187 
 
 Total number at end of the year 10 278 
 
 Number of loans not exceeding $3,000 each '.'.'.'.'.'.'.'.'..'. l'798 
 
 Aggregate amount of same «2 133 S92' 79 
 
 Whole number of loans on real estate 2 110 
 
 Average amount of same « 2 045 99 
 
 Amount loaned on real estate diu-ing year 379275 00 
 
 Number of new real estate loans made during year 228 
 
 Average rate of interest received on loans 5 per cent. 
 
 Rate of dividends paid during the year 4 per cent. 
 
 Rate of last dividend 2 per cent. 
 
 Average rate of dividends for last 3 years 4 per cent. 
 
 Interest begins third Saturday of January, April, July and October. 
 Interest is credited third Satiurday of January and July. 
 Annual meeting of corporation, Friday preceding third Saturday of July. 
 Total expenses for the year, exclusive of state taxes and expense of annual 
 audit : — 
 
 Amount paid for salaries $12,600 00 
 
 Amount paid for other expenses 6,706 29 
 
 Total $19,306 29 
 
 PRESENT OFFICERS AND TRUSTEES 
 
 (Elected July 14, 1916.) 
 
 Wm. H. Hammett, president; Wm. Paine Sheffield, vice- 
 president; G. P. Taylor, treasurer; H. G. Wilks, assistant 
 treasurer; Wm. P. Carr, secretary; E. S. Burdick, book- 
 keeper; A. L. Slocum, clerk; Clark Burdick, counsel. 
 
 Trustees: Anthony Stewart, Peter King, Wm. P. Carr, 
 Bradford Norman, William K. Covell, Wm. P. Buffum, 
 Wm. W. Covell, G. P. Taylor, Wm. H. Hammett, Wm. 
 Paine Sheffield, Wm. A. Sherman, H. C. Stevens, T. T. 
 Pitman. 
 
 Auditing Committee: William P. Buffum, William W. 
 Covell. 
 
 Standing Committee: Wm. H. Harnmett, Wm. A. Sher- 
 man, Wm. P. Carr, Bradford Norman; Wm. P. Carr, 
 secretary. 
 
138 CENTURY OF AMERICAN SAVINGS BANKS 
 STATEMENT OF DEPOSITS AND DIVIDENDS 
 
 The following is a statement of the deposits made in this 
 bank by ten-year periods since 1828 (prior to which time 
 the records are incomplete), and annually since 1907 : 
 
 Date Amount of Amount of 
 
 Deposits Dividends 
 
 jg2g f Jan $ 23,263 25 $ 488 07 
 
 July 26,339 20 564 52 
 
 Jan 73,539 31 1,727 68 
 
 July 73,70151 1,739 06 
 
 ,„.„ f Jan 109,925 39 2,996 67 
 
 ^"^'' \ July 112,336 42 3,097 77 
 
 ,a„/Jan 622,578 07 17,258 92 
 
 ^''^^ 1 July 643,679 47 17,791 32 
 
 1868 I J^" 1,849,773 90 67,504 20 
 
 1878 /Jan 4,516,23184 128,256 06 
 
 I July 4,390,813 36 104,952 91 
 
 1888 I J^ 5,659,009 95 106,627 38 
 
 July 1,938,790 39 70,755 54 
 
 Jan 4,516,231 84 128,256 06 
 
 July 4,390,813 36 104,952 91 
 
 Jan 5,659,009 95 106,627 38 
 
 July 5,676,289 44 107,993 97 
 
 1808 /Jan 6,839,126 98 130,233 88 
 
 **^* l July 6,897,108 92 131,547 98 
 
 lonfi/Jan 7,113,564 25 130,070 40 
 
 ^^"^ \ July 7,155,046 91 131,948 63 
 
 1907 7,361,630 85 
 
 1908 7,648,692 87 
 
 1909 8,023,077 12 
 
 1910 8,343,979 46 
 
 1911 8,691,568 39 
 
 1912 9,015,918 48 
 
 1913 9,235,144 27 
 
 1914 9,550,368 19 
 
 1915 9,802,717 19 
 
 1916 10,265,867 58 (to Oct. 27, 1916) 
 
 The present rate of interest is 4 per cent. 
 
 The bank has paid dividends continuously with one ex- 
 ception (January, 1844), since April, 1820, when the rate 
 was 5 per cent. In January, 1821, it dropped to IJ^; in 
 July, following, it was 2; January, 1822, it was 5; July, 
 4J^, and from that date to 1828 it was 5 per cent, con- 
 tinuously. 
 
 PROVISIONS OF THE ORIGINAL CHARTER 
 
 The principal provisions of the charter of the Savings 
 Bank of Newport, R. I., were as follows: 
 
 There were fifty-seven incorporators named in the Act. It was 
 
RHODE ISLAND'S EARLIEST BANKS 139 
 
 authorized to receive deposits of money, and to use and improve the 
 same for the purposes and in accordance with the directions mentioned 
 in the Act. 
 
 All deposits were required to be invested in public stocks, or other 
 securities, to the best advantage. 
 
 The profits were to be divided and applied among the depositors in 
 just proportion, with such reasonable deductions as the management 
 might require. 
 
 The deposits were subject to withdrawal at such times and in such 
 manner as the corporation should direct. 
 
 The corporators were to choose annually twenty-five directors, to 
 have the management of the institution; they were also to have the 
 power to choose other persons corporators. 
 
 Embodied in the Act was an elaborate system of by-laws for the 
 government of the corporation. Among these were the following : 
 
 Not less than one dollar received, and not less than five dollars put 
 at interest. 
 
 Deposits to be invested in the stocks of the United States, of the 
 State of Rhode Island, of some of the banks in the town of Newport, 
 or in that of the National Bank, or in private securities at the discre- 
 tion of a standing committee of three persons elected annually by the 
 directors; or the moneys might be loaned to one of the incorporated 
 banks in Newport. 
 
 No director or officer to borrow any of the funds of the corporation. 
 
 Dividends to be declared in April and October, at the rate of five 
 per cent, per annum, on sums deposited three and six months. 
 
 Extra dividends once in three years. 
 
 Moneys to be withdrawn only on the third Wednesday of January, 
 April, July and October, and on one week's notice in writing of inten- 
 tion to withdraw. 
 
 Directors to serve without compensation. 
 
 Directors not to be held responsible for any losses that might occur, 
 from whatever cause, except their wilful, corrupt misconduct, in which 
 case only those present and guilty of the misconduct were to be an- 
 swerable for the same. 
 
 The proposed payment of five per cent, as the stated interest was 
 merely an experiment, and the directors pledged themselves to increase 
 the rate so soon as exp>erience proved it to be practicable. 
 
 The amount of deposits at no time was to exceed an aggregate of 
 $200,000. 
 
 No deposit was to be received from any person at one time or on 
 one day greater than $100, except in the case of seamen wishing to 
 deposit their wages. 
 
 Of course many of these earlier restrictions were removed 
 by subsequent legislation. 
 
140 CENTURY OF AMERICAN SAVINGS BANKS 
 
 By the provisions of an Act of the General Assembly of 
 Rhode Island, passed at the May session, 1881, the bank 
 was permitted to receive deposits in the aggregate not ex- 
 ceeding ten million dollars. 
 
 By Act passed at the January (1898) session, it was 
 provided that the bank might discriminate between de- 
 posits by declaring and paying smaller dividends on the 
 excess of any deposit over two thousand dollars than on 
 the residue of the deposit : but such difference in dividends 
 was not to exceed 1 per cent, per annum, nor be made 
 against deposits for charitable purposes. 
 
 THE PROVIDENCE INSTITUTION FOR SAVINGS, 
 PROVIDENCE, R. I. 
 
 The Providence Institution for Savings, Providence, R. 
 I., was incorporated in October, 1819. On the 20th day 
 of November following, the institution received its first de- 
 posits. These were twenty-seven accounts, amounting in 
 all to the sum of $1,014. 
 
 At the close of business, July 15, 1916, the bank's re- 
 sources and liabilities balanced at $31,535,642.13; of the 
 liabilities, $29,895,989.88 was due the 53,707 depositors. 
 
 The dividend on July 17, 1916, was at the rate of 4 
 per cent. 
 
 PRESIDENTS SINCE ORGANIZATION 
 
 Thomas P. Ives was president, from the commencement 
 of the institution, in 1819, to 1835. 
 
 Sullivan Dorr was elected president in October, 1835, 
 but it does not appear that he accepted, or ever attended a 
 meeting after his election. 
 
 Benjamin Hoppin was president from October 3, 1836, 
 to May 27, 1865. 
 
 Robert H. Ives was president from October, 1865, to 
 July, 1875. 
 
 William Goddard was president from October, 1875, to 
 April, 1900. 
 
RHODE ISLAND'S EARLIEST BANKS 141 
 
 Gilbert A. Phillips was president from April, 1900, to 
 November, 1908. 
 
 Edward D. Pearce has been president from November, 
 1908, to the present time. 
 
 The bank was first opened in a room on South Main 
 Street which it occupied vmtil 1837, when the building was 
 destroyed by fire, and the institution was then moved to 
 the basement of the Providence Bank. In 1854 a new 
 building was erected, just south of the Providence Bank, 
 and on May 1st, 1854, it was opened for business. The 
 present bank building was erected in 1898, on the site of 
 the old building, additional land having been purchased 
 for that purpose. The present location has been occupied 
 by the institution since May, 1854. The building now 
 occupied was opened for business, March 7, 1898. 
 
 CONDITION AT THE CLOSE OF BUSINESS, JULY IS, 1916 
 
 RESOURCES 
 
 United States Bonds $1,000,000.00 
 
 State Bonds 1,505,012.00 
 
 City Bonds 3,845,670.00 
 
 Town Bonds 282,645.00 
 
 County Bonds 97,250.00 
 
 Railroad Bonds 11,178,633.00 
 
 Street Railroad Bonds 2,693,250.00 
 
 Miscellaneous Bonds 671,531.00 
 
 Bank and Trust Company Stocks 944,645.00 
 
 Other Stocks 845,800.00 $23,064,436.00 
 
 Loans on Mortgages in Rhode Island $1,828,370.00 
 
 Loans on Mortgages in other States 2,980,115.00 4,808,485.00 
 
 Loans on Personal Security, and on Collateral 2,083,341.82 
 
 Real Estate, including Banking House 76,000.00 
 
 Cash on hand and in Banks 1,503,379.31 
 
 $31,535,642.13 
 
 LIABILITIES 
 
 Amount due 53,707 Depositors $29,895,989.88 
 
 Federal Income Tax (collected) ;:• • :AA'„W«"AA 
 
 Guaranty Fund $ 400,000.00 
 
 s,^^^..!^:. ::::::::.: %,239,642.25 1,639.642.25 
 
 $31,535,642.13 
 PRESENT OrnCERS AND TRUSTEES 
 
 Edward D. Pearce, president; Howard O. Sturges, first 
 
142 CENTURY OF AMERICAN SAVINGS BANKS 
 
 vice-president; Frank W. Matteson, second vice-president; 
 Henry D. Sharpe, third vice-president. 
 
 Board of Investment: Edward D. Pearce, Frank W. 
 Matteson, Howard O. Sturges, Henry D. Sharpe, John 
 Ormsbee Ames. 
 
 Board of Trustees: Edward D. Pearce, Howard O. 
 Sturges, Samuel R. Dorrance, Horatio N. Campbell, Wil- 
 liam Gammell, Robert W. Taft, Henry D. Sharpe, Robert 
 H. I. Goddard, Jr., Frank W. Matteson, John Ormsbee 
 Ames, William L. Hodgman, Jesse H. Metcalf. 
 
 LeB. Bradford, treasurer; John H. Ormsbee, clerk. 
 
THE PATROON 
 
CHAPTER XII 
 
 NEW YORK'S SECOND INSTITUTION 
 
 Incorporation of the Albany Savings Bank, March 24, 1820— 
 Opened for Business, June 10, 1820 — Early Restrictions on 
 Withdrawals — First Loan on Bond and Mortgage, to Stephen 
 Van Rensselaer— The Bank's Handsome Home— Officers Since 
 Organization — ^The Original By-Laws. 
 
 The Albany Savings Bank ranks not only as one of the 
 strongest, but is the second oldest in the State of New York, 
 the Bank for Savings in the City of New York antedating 
 it by one year as an incorporated institution. Within four 
 years it will be able to celebrate its centenary. 
 
 The petition of William James, Charles R. Webster, 
 Jesse Buel, John Townsend and Joseph Alexander, of the 
 City of Albany, praying for the passage of an act authoriz- 
 ing the establishment of a Savings Bank in the City of 
 Albany was presented in the Assembly, January 28, 1820, 
 and referred to a select committee consisting of Messrs. 
 McKown, Irving and Sharpe. Just one week later, the 
 committee reported: 
 
 That they have considered the subject referred to them, and are 
 of the opinion, unanimously, that the experience which has been had 
 in the establishment of Savings Banks, under proper regulations, has 
 sufficiently tested their importance to public morals, and their great 
 benefit to those classes of society who are usually the most improvi- 
 dent. 
 
 The committee refer to the annual report of the Savings Bank in 
 the city of New York, as the best comment on the practical utility of 
 such an institution, and they have directed their chairman to ask 
 for leave to bring in a bill conformable to the prayer of the peti- 
 tioners. 
 
 Here is convincing proof that by this time the prejudice 
 in the legislative as well as the popular mind against Sav- 
 
 143 
 
144 CENTURY OF AMERICAN SAVINGS BANKS 
 
 ings Banks, — ^no matter what might still have been the 
 feeling toward banks in general, — had disappeared. The 
 beneficent character of these institutions was so clearly 
 shown, as a result of their practical operation even for a 
 short time, that all objections at once fell to the ground. 
 From that time on it was plain sailing. 
 
 The bill encountered no opposition whatever; the ayes 
 and noes were not called for in any stage of its progress. 
 It passed the Assembly March 18, and the Senate on the 
 23d day of the same month and was returned from the 
 council of revision on the 24th, approved. 
 
 The incorporators and first managers, named in the Act 
 (Chap. 100, L. 1820), were: Stephen Van Rensselaer, 
 president; William James, 1st vice-president; Joseph 
 Alexander, 2d vice-president; John Townsend, 3d vice- 
 president; Charles R. Webster, Jesse Buel, Thomas Russell, 
 Volkert P. Douw, John W. Yates, William Durant, Douw 
 Fonda, Simeon DeWitt, Peter Boyd, John Spencer, John 
 L. Winne, William McHarg, Matthew Gill, Harmanus 
 Bleecker, and Silvanus P. Jermain. 
 
 SOME EARLY RESTRICTIONS 
 
 The first meeting of the board of managers was held in 
 the rooms of the Chamber of Commerce on May 16, 1820, 
 and a committee was appointed to prepare a system of by- 
 laws. The bank was opened for the reception of deposits 
 every Saturday evening from six to nine o'clock, but no 
 moneys could be withdrawn except on the third Wednesday 
 of January, April, July and October. An attending com- 
 mittee was to be at the bank during the time it should be 
 open to keep the minutes, etc., and to note particularly the 
 amount deposited and drawn out and report the same to 
 the board of managers ; there was also a funding committee, 
 which met every Monday afternoon at four o'clock to invest 
 such svmis as had been deposited on the Saturday previous. 
 
 It was the duty of the secretary, besides keeping the 
 minutes of the meetings, etc., "to cause to be provided fuel, 
 candles, etc., for the accommodation of the board of man- 
 
NEW YORK'S SECOND INSTITUTION 145 
 
 agers." It also appears that the board of managers had 
 the right to compel any depositor to withdraw his account, 
 after suitable notice, and we find that this privilege was 
 often exercised during the first eight years and a number 
 .of depositors were notified to withdraw their money. This 
 would seem to have been the case when the accounts were 
 upwards of three hundred dollars. 
 
 The bank was first opened for business at the New York 
 State Bank, on Saturday, June 10, 1820, with Joseph 
 Alexander, Volkert P. Douw and Silvanus P. Jermain as 
 the attending trustees. The first depositor was Joseph T. 
 Rice, whose occupation was recorded as that of a silver- 
 smith. The other depositors on that day were one carpen- 
 ter, one cartman, one clerk, three gentlemen, one laborer, 
 five mechanics, two merchants, one seamstress, one servant, 
 one waiter (Adam Blake, father of the late proprietor of 
 the Kenmore Hotel), one widow and one whose occupation 
 was not given. All of these deposits have been drawn out, 
 but an account that was opened on the next business day, 
 by the deposit of one dollar, was not closed until the month 
 of Jxme, 1881 ; the deposits actually made on this account 
 totalled six dollars, but with the accumulation of interest 
 it amounted to about one hundred dollars. 
 
 In 1827 the Legislature passed an amendment to the 
 articles of incorporation so as to allow the moneys of the 
 institution to be invested in the stocks of the State or of the 
 United States, or in the stock of any or either of the banks 
 in the cities of Albany or Troy, or to loan its moneys to 
 said banks or to the City of Albany. 
 
 In 1828 an arrangement was made by which the Com- 
 mercial Bank, of Albany, took the deposits of the Savings 
 Bank and agreed to do the business without expense to the 
 latter; all investments, however, to be made in that class 
 of securities authorized by law for the Savings Bank. 
 From time to time other amendments of the bank's charter 
 were made by the Legislature so as to enlarge the scope of 
 investments. 
 
 In the fall of 1844 the following resolution was adopted: 
 
146 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Resolved. That the Savings Bank be opened hereafter for the re- 
 ception of deposits from females only on Wednesday afternoons of 
 each week from four to five o'clock, and also as heretofore, on Satur- 
 day of each week between the hours of five and seven p. m. 
 
 The first loan on bond and mortgage was to Stephen Van 
 Rensselaer for thirty thousand dollars on his lumber yards 
 and stone mill, the trustees having directly authorized the 
 Commercial Bank to make such loan. In 1847 the con- 
 tract with the Commercial Bank was modified so that, in 
 addition to paying the interest on the deposits, etc., it should 
 pay the trustees of the Savings Bank the sum of two thou- 
 sand dollars per annum, to go to a surplus fund. At this 
 time, the deposits having risen to about five hundred thou- 
 sand dollars, it was resolved that the bank should be opened 
 daily for the transaction of business during the usual bank- 
 ing hours, except on holidays. 
 
 In 1 844 a seal was adopted bearing the following device : 
 In the center a view of the City Hall from the southwest. 
 The motto within a scroll in large letters, "economy." 
 The legend inscribed within a circle around the above de- 
 vice: "the ALBANY SAVINGS BANK — Incorporated 1820." 
 
 In 1861 the contract with the Commercial Bank was ex- 
 tended for one year, that institution agreeing to pay three 
 thousand dollars a year to the surplus fund, and the Sav- 
 ings Bank agreeing "to pay any deficiency that may arise 
 from non-payment of interest, including the interest due 
 July 1, 1861, on State of Tennessee bonds; also on the other 
 securities and real estate on which the interest or rent may 
 have been unpaid on said first day of July, 1861, for the 
 six months then preceding which may be and remain un- 
 paid for same during the extension of the contract." 
 
 The first action looking to separation of the Savings 
 Bank and the Commercial Bank, was taken on April 23, 
 1870, and at the same time a committee of seven was ap- 
 pointed to take into consideration the purchase of suitable 
 real estate for a bank building and make such other and 
 further changes in the general management of the institu- 
 tion as they might deem expedient. The complete separa- 
 
NEW YORK'S SECOND INSTITUTION 147 
 
 tion of the two institutions took place on the first day of 
 July, 1871, when Henry H. Martin was appointed treas- 
 urer. 
 
 At the time of the moving of the Savings Bank to No. 
 71 State Street, its assets were $2,839,570.28, of which sum 
 $2,714,355.01 was due depositors, and $125,215.27 was 
 surplus. The number of accounts in the bank at this time 
 was 7,380. 
 
 THE bank's handsome HOME 
 
 The land upon which stands the present beautiful struc- 
 ture of the Albany Savings Bank, on North Pearl Street 
 and Maiden Lane, cost $145,000. The plans accepted 
 were those of Henry Ives Cobb, of Chicago; the total cost 
 of the building and vault was about $240,000, not includ- 
 ing the furniture, desks and counters. The building is one 
 story in height, with basement, and is devoted exclusively 
 to the business of the bank. In respect to both beauty and 
 utility, the structure is admirable, compelling universal ad- 
 miration. The handsome trustees' meeting room has a 
 vaulted paneled ceiling and open fireplace, and in the 
 mahogany panels are portraits of the former presidents of 
 the bank. Each one of these portraits has been presented 
 to the bank by descendants of the respective officers. Its 
 cost was about $400,000; of this amount, $100,000 has been 
 taken out of the surplus and charged to profit and loss. 
 The building occupied from 1875 to 1899, at State and 
 Chapel Streets, was sold to the City of Albany for the sum 
 of one himdred thousand dollars. The present edifice was 
 finished in April, 1899. 
 
 The building is one story in height, with basement, and 
 is devoted exclusively to the business of the bank. It has 
 a frontage on North Pearl Street of 106 feet and a depth 
 of 87 feet on Maiden Lane. The height of the building is 
 46 feet eight inches to the top of the roof; this is surmounted 
 by a dome of about 48 feet in height; the entire height from 
 the floor of the banking room to the apex of the dome is 94 
 feet. The main entrance on North Pearl Street has a 
 
148 CENTURY OF AMERICAN SAVINGS BANKS 
 
 broad stoop of five steps leading to a loggia containing the 
 main doors leading into the bank. The pediment of this 
 loggia is supported by six immense granite monoliths, 
 thirty feet long and weighing about twenty tons apiece. 
 The pillar cap is carved in the Corinthian order of archi- 
 tecture. This dome is fifty feet in diameter and covers the 
 entire width of the main banking room below. It is con- 
 structed of steel frames into which are set sheets of plate 
 glass, thus giving ample light to the entire banking room. 
 
 This main banking room is one of the finest and most 
 imposing in the State, lighted through the dome, which acts 
 as an immense skylight during the day and as a lantern 
 during the night, for it is fitted with a large number of 
 electric lights so arranged that a perfect flood of light can 
 be thrown into the banking room, producing the effect of 
 sunlight. The floors are of Tennessee marble, of a uni- 
 form selected color, and the entire banking room is wain- 
 scoted with a pure white statuary marble sixteen feet high, 
 topped with a handsomely carved molding. At the south 
 end of the banking room is a magnificent fireplace con- 
 structed of marble of antique design, and over the mantle 
 an allegorical picture in mosaic, representing "Thrift and 
 Frugality." There are other handsome rooms for the pur- 
 poses of the bank, and in the basement, dining room, lava- 
 tories, cloak rooms, vaults for the storage of papers, books, 
 etc., engine rooms, heating apparatus, electric motors, etc. 
 
 The vault, on the main floor, is built of thick plates of 
 open-hearth steel and chrome steel with heavy steel doors 
 and four huge time locks. Inside the vaults are safes for 
 keeping money and securities. 
 
 At the time of the incorporation of the Albany Savings 
 Bank, there were in the country ten Savings Banks, with 
 8,635 depositors and $1,138,576 on deposit. The average 
 amount due each depositor was $131.86, and the average 
 per capita in the United States was 12 cents. To-day 
 (June, 1916) the average due each depositor is $442.83, 
 and the average per capita amounts to $49.91, with the 
 nation's population estimated at 100,125,000. 
 
NEW YORK'S SECOND INSTITUTION 149 
 
 OITICERS SINCE ORGANIZATION 
 
 The following is a complete list of the officers of the 
 Albany Savings Bank, since its organization in 1820: 
 
 Presidents: Stephen Van Rensselaer, 1820-1839; John 
 Townsend, 1840-1854; Gerrit Y. Lansing, 1854-1862; 
 Rufus H. King, 1863-1867; Harmon Pumpelly, 1867- 
 1882; Henry H. Martin, 1882-1886; J. Howard King, 
 1886-1900; William Bayard Van Rensselaer, 1900-1909; 
 Marcus T. Hun, 1909—. 
 
 First Vice-Presidents: William James, 1820-1832; 
 Peter Boyd, 1840-1843; Joseph Alexander, 1843-1846; 
 Teunis Van Vechten, 1846-1854; Rufus H. King, 1854- 
 1863; Jacob H. Ten Eyck, 1863-1872; Frederick J. Bar- 
 nard, 1872-1876; Robert H. Pruyn, 1876-1882; Henry 
 H. Martin, 1882-1882; J. Howard King, 1882-1886; 
 Matthew Hale, 1886-1897; William Bayard Van Rens- 
 selaer, 1897-1900; Marcus T. Hun, 1900-1909; Ledyard 
 Cogswell, 1909 — . 
 
 Second Vice-Presidents: Joseph Alexander, 1820- 
 1840; Teunis Van Vechten, 1840-1846; Samuel Stevens, 
 1846-1854; Jacob H. Ten Eyck, 1854-1863; Harmon 
 Pumpelly, 1863-1867; Frederick J. Barnard, 1867-1872; 
 Robert H. Pruyn, 1872-1876; Ezra P. Prentice, 1876- 
 1876; J. Howard King, 1876-1882; Marcus T. Hun, 
 1882-1900; James D. Wasson, 1900-1912; Thomas I. 
 Van Antwerp, 1912 — . 
 
 Third Vice-Presidents: John Townsend, 1820-1840; 
 Samuel Stevens, 1840-1846; John L. Winne, 1846-1849; 
 Gerrit Y. Lansing, 1849-1854; John L. Schoolcraft, 1854- 
 1860; Frederick J. Barnard, 1863-1867; Robert H. Pruyn^ 
 1867-1872; Ezra P. Prentice, 1872-1876 (office discon- 
 tinued). 
 
 Treasurers: John W. Yates, 1820-1828; Henry Bar- 
 tow, 1828-1840; James Taylor, 1840-1854; Andrew 
 White, 1854-1858; Visscher Ten Eyck, 1858-1863; 
 Eliphalet Wicks, 1863-1867; James Martin, 1867-1871; 
 Henry H. Martin, 1871-1882; Theodore Townsend, 1882- 
 
ISO CENTURY OF AMERICAN SAVINGS BANKS 
 
 1905; Benjamin W. Johnson, 1905-1913; Henry D. 
 Rodgers, 1913—. 
 
 Secretaries: Silvanus P. Jermain, 1820-1842; Wil- 
 liam McHarg, 1842-1845; Robert H. Pruyn, 1845-1863; 
 Franklin Townsend, 1863-1876; Theodore Townsend, 
 1876-1882; William Kidd, 1882-1895; Ledyard Cogs- 
 well, 1895-1912; Frederick Tillinghast, 1912-1914; 
 Frederick Townsend, 1914 — . 
 
 Assistant Treasurers: Benjamin W. Johnson, 1883- 
 1905; Henry D. Rodgers, 1905-1913; Edward J. Toole, 
 1913—. 
 
 Assistant Secretary: John T. Perry, 1905 — . 
 
 PRESIDENT MARCUS T. HUN 
 
 Marcus TuUius Hun, who has been president of the 
 Albany Savings Bank since 1909, was bom in Albany, 
 N. Y., May 22, 1845, the son of Dr. Thomas and Lydia 
 Louisa (Reynolds) Hun; was educated principally at the 
 Albany Academy, Dummer Academy, Byfield, Massachu- 
 setts, Union College and the Albany Law School ; admitted 
 to the bar at Albany, in 1866 ; has been a practicing lawyer 
 since that time. In January, 1872, Mr. Hun was ap- 
 pointed deputy attorney general of the State of New York, 
 serving for two terms and meanwhile continuing the prac- 
 tice of the law with his brother. 
 
 Mr. Hun was for many years — 1874-1905 — ^the official 
 reporter of the Supreme Court of New York, issuing alto- 
 gether, 200 volumes of these reports; he declined reappoint- 
 ment in 1905. Mr. Hun was for a number of years ac- 
 tively interested in public affairs; organized a Citizens' 
 Association, the executive committee of which was known 
 as the Committee of Thirteen. In the capacity of counsel 
 to this Committee, Mr. Hun conducted successful litigation 
 to prevent the payment of fraudulent claims against the 
 City of Albany, and did much to purify the civic affairs of 
 his native city; in 1885 was presented a service of silver 
 by citizens in recognition of his valuable and gratuitous 
 work in this important field. 
 
NEW YORK'S SECOND INSTITUTION 151 
 
 Mr. Hun was a director of the New York State National 
 Bank for a quarter of a century, and a trustee of the Al- 
 bany Trust Company for several years. In the fall of 
 1909 he was elected president of the Albany Savings Bank, 
 of which institution he had been for many years a trustee; 
 upon his election to the presidency of this bank, Mr. Hun 
 severed his official connection with all other financial in- 
 stitutions. Mr. Hun's ancestors have resided in Albany 
 for six generations. He was married in Albany, December 
 21, 1875, to Miss Mary K. Van der Poel. 
 
 THE ORIGINAL BY-LAWS 
 
 As a matter of historical interest, an exact copy of the 
 original by-laws is given herewith: 
 
 I. The institution shall be denominated the "Albany Savings 
 Bank," and the concerns thereof shall be conducted by a President, 
 three Vice-Presidents and fifteen trustees, who together shall consti- 
 tute a Board of Managers. 
 
 II. The Board of Managers shall meet at least four times in 
 every year, five of whom, with the President, or one of the Vice- 
 Presidents, shall be a quorum. 
 
 III. The Managers shall select a Treasurer from their own Board, 
 and shall appoint such other persons as they may deem necessary to 
 be employed in the Bank; the three of their own number shall be 
 appointed as a monthly attending Committee, whose duty it shall be, 
 either together or singly, to attend at the Bank during the time it 
 shall be open, and to have the general superintendence and manage- 
 ment of it during the recess of the Board. 
 
 IV. The monthly attending Committee shall keep minutes of their 
 proceedings, and shall lay them before the Board of managers, at 
 each regular meeting, noting particularly the amount deposited and 
 drawn out each day. 
 
 V. No President, Vice-President, or Trustee shall receive, directly 
 or indirectly, any pay or emoluments for his services, nor be respon- 
 sible for any loss whatever. 
 
 VI. .Deposits of one Dollar, or any number of Dollars, shall be 
 received, but no fractional parts of a Dollar. 
 
 VII. On the third Wednesday of July and January in every year, 
 there shall be declared and paid a dividend of two and a half per 
 centum, or five per centum per annum, on all sums above five Dol- 
 lars, which shall have been deposited for the space of six months 
 previous to the first of July and first of January, and one half that 
 
152 CENTURY OF AMERICAN SAVINGS BANKS 
 
 amount on all other sums above five Dollars which shall have been 
 deposited three months or more previous to the above dates, but no 
 dividend shall be allowed on any sum which shall not have been de- 
 posited at least three months. 
 
 VIII. No interest shall be paid on any sums withdrawn for the 
 period which may have elapsed since the last dividend; nor shall 
 any interest be paid on any sums which shall have been withdrawn 
 before any dividend shall have been declared. 
 
 IX. All moneys deposited in the Bank, except such sums as may 
 be deemed necessary to reserve for immediate purposes, shall be in- 
 vested in government securities, or in stock of the United States or of 
 this State, or as may be hereafter provided by law. 
 
 X. All dividends which shall not have been called for within 
 three months after they shall have been declared, shall be added to 
 the principal of the depositor, and shall be entitled to dividends as 
 much as the original deposit. 
 
 XI. Dividends may be received either personally, by the order 
 in writing of the depositors, or by letter of attorney. Money de- 
 posited shall only be drawn out by the depositor, or by some person 
 legally authorized by the depositor; but no person shall receive any 
 part of his or her principal or interest without producing the original 
 book, that such pa)Tnents may be entered therein. No money can 
 be withdrawn except on the third Wednesday in January, April, July 
 and October; and one week's notice before the day of drawing must 
 be given to the Treasurer, and no less sum than five Dollars of the 
 capital of any depositor shall be withdrawn, unless the whole sum 
 deposited be less than that amount. All moneys received by the 
 Treasurer shall be in specie, or in bills taken in deposit at par by 
 the incorporated Banks in the City of Albany, and all payments shall 
 be made in the same manner. All checks must be drawn by the 
 Treasurer and countersigned by the President, or one of the Vice- 
 Presidents, provided neither of said Officers act as Treasurer. 
 
 XII. All deposits shall be entered in the book of this corpora- 
 tion, and a duplicate shall be given to each depositor, in which the 
 sum paid by him or her shall be entered, and which shall be his or 
 her voucher, and the evidence of his or her property in the said in- 
 stitution. 
 
 XIII. The Managers invest the attending Committee with power 
 to close the account, or to refuse the deposits of any individual, when- 
 ever they may deem it expedient. 
 
 XIV. On the decease of any depositor, the amount standing to 
 the credit of the deceased, shall be paid to his or her legal repre- 
 sentative when lawfully demanded. 
 
 XV. At the stated meeting of the Board of Managers in January 
 of each year, they shall make a particular statement of their accounts. 
 
NEW YORK'S SECOND INSTITUTION 153 
 
 to exhibit to the Legislature of this State, and a duplicate thereof 
 to the Common Council of the City of Albany. 
 
 XVI. There shall be a Funding Committee of three Managers, 
 who, together with the Treasurer, shall meet at four o'clock every 
 Monday afternoon, or oftener if necessary, for the purpose of invest- 
 ing the funds. 
 
 XVII. On making the first deposit the depositor shall be required 
 to subscribe and thereby signify his or her assent to the regulations 
 and by-laws of the institution. 
 
 XVIII. The Bank shall be open for the reception of deposits on 
 Saturday evenings, from 6 to 9 o'clock. 
 
 XIX. The Managers may at any time make such other regula- 
 tions or alterations in those previously made, as may be deemed 
 necessary; and all such by-laws and alterations shall be equally bind- 
 ing on all depositors as those by them subscribed, after the same shall 
 have been duly made known. 
 
 XX. It shall be the duty of the Secretary to keep a book in which 
 shall be entered the proceedings of the Board of Managers at every 
 meeting; to notify the Managers of the meetings and the Committees 
 of their terms of service, and to cause to be provided the fuel, candles, 
 etc., for their accommodation. 
 
 XXI. It shall be the duty of the Treasurer to receive the money 
 from the Committee on Monday of every week and to deposit it on 
 the same day in the Bank or Banks that the Managers may direct; 
 and to inform the Funding Committee of the sum on hand. 
 
 XXII. It shall be the duty of the Accountant to attend at the 
 Bank during Bank hours, and to enter the deposits in the books of 
 the Bank, and of the depositors, and to comply with the instructions 
 of the Treasurer and attending Committee. 
 
 XXIII. It shall be the duty of the Funding Committee to attend 
 every Monday afternoon, and to invest the money deposited as they 
 shall see fit; and they are empowered to call upon the Treasurer for 
 the balance in his hands, and to report to him the investment of the 
 said monies. No transfer of stock shall be made above five thou- 
 sand Dollars, without a special order of the Board of Managers. 
 
 XXIV. The Managers shall be at liberty to return the amount 
 of all or any part of the deposits, on giving two months' notice of such 
 intention. 
 
 XXV. All monies shall be deposited and invested in the name of 
 the "Albany Savings Bank." 
 
 XXVI. The Managers are empowered to fill up any vacancy which 
 may occur in their number by ballot. All nominations to fill such 
 vacancies must be made at least one regular meeting before the elec- 
 tion. 
 
 XXVII. The monthly attending Committee shall have the general 
 
1S4 CENTURY OF AMERICAN SAVINGS BANKS 
 
 superintendence of the Bank during their month; and in case of the 
 death, absence, or inability of any member or members of that Com- 
 mittee, it shall be the duty of the Secretary to notify the like number 
 from the next monthly Committee, beginning at the first name on the 
 list and proceeding from month to month until the vacancy shall be 
 filled; and it shall be the duty of such members, when so notified, to 
 give their attendance accordingly. 
 XXVIII. No deposits shall be received from any corporate bodies. 
 
 ALBANY SAVINGS BANK 
 
 
 
 Incorpoeatku 1820 
 
 
 
 
 
 
 Due 
 
 
 Open 
 
 Year 
 
 Deposited 
 
 Withdrawn 
 
 Depositors 
 
 Dividends 
 
 Accounts 
 
 1820 
 
 $19;957 
 
 $803 
 
 $19,143 
 
 $460 
 
 No record 
 
 1825 
 
 10,992 
 
 8,956 
 
 36,856 
 
 1,664 
 
 No record 
 
 1835 
 
 121,313 
 
 77,922 
 
 250,411 
 
 10,230 
 
 882 
 
 1845 
 
 219,768 
 
 154,129 
 
 493,575 
 
 19,669 
 
 2,314 
 
 1855 
 
 462,356 
 
 494,016 
 
 1,082,982 
 
 46,537 
 
 4,711 
 
 1865 
 
 1,041,578 
 
 1,379,326 
 
 1,976,496 
 
 79,700 
 
 7,129 
 
 1875 
 
 1,838,526 
 
 1,565,209 
 
 4,577,467 
 
 236,065 
 
 9,797 
 
 1885 
 
 2,416,220 
 
 2,511,124 
 
 8,411,242 
 
 269,001 
 
 17,047 
 
 1895 
 
 4,505,945 
 
 3,662,884 
 
 17,660,883 
 
 641,877 
 
 30,079 
 
 1905 
 
 7,242,089 
 
 6,407,833 
 
 31,716,070 
 
 1,031,847 
 
 46,746 
 
 1915 
 
 6,849,991 
 
 7,061,584 
 
 35,525,159 
 
 1,332,710 
 
 52,538 
 
CHAPTER XIII 
 
 POSTAL SAVINGS BANKS IN EUROPE AND AMERICA 
 
 Sir Charles Sykes the First to Propose Their Establishment— Ready 
 Means of Introducing the Money Order System— An Instant 
 Success in England— Other Countries Follow— Features of the 
 System Described— Bitter Opposition in the United States 
 Finally Overcome, and the Plan Is Inaugurated in 1911. with 
 Moderate Success — ^Late Statistics. 
 
 To Mr. Charles Sykes, afterward Sir Charles Sykes, of 
 Huddersfield, England, must be given the credit of having 
 first proposed the establishment of Post Office Savings 
 Banks. This was in the year 1859. Savings Banks had 
 then been in successful operation for practically half a 
 century throughout the civilized world. Mr. Sykes was a 
 member of a local banking company, and had been giving 
 the subject of extending the benefits of Savings Banks much 
 thought. Having conceived the idea of using the Post 
 Offices of the country for that purpose, he wrote Mr. Glad- 
 stone, then Chancellor of the Exchequer : 
 
 It will be scarcely credited that at the present time (1859), there 
 are in the United Kingdom fifteen counties in which there are no 
 Savings Banks (under government control), and although difficult 
 to ascertain the exact number of towns, there are probably one hun- 
 dred with a population varying from 10,000 to 30,000 each, and 
 nearly two thousand other towns and places, with populations rang- 
 ing between 1,000 and 10,000, all without Savings Banks! Com- 
 pared with ordinary banks, there are nearly five hundred towns or 
 places in the United Kingdom in each of which there are one or 
 more private or joint-stock banks; but in none of them does there 
 exist a single Savings Bank to aid in promoting those habits of fore- 
 thought and thrift so essential to the progress and prosperity of the 
 people. Concurrently with this absence of Savings Banks, the aggre- 
 gate income of the working classes has, through the general pros- 
 perity, gone on increasing until it has now reached a magnitude 
 beyond all former experience. 
 
 There were additional reasons for the adoption of new 
 
 iSS 
 
156 CENTURY OF AMERICAN SAVINGS BANKS 
 
 depositories for the savings of the people in the fact that 
 more than one-half of the regular banks were open only 
 one day in the week, and then for only a few hours. It 
 seemed quite apparent to every one except those most closely 
 concerned in their management, that the Trustee Banks 
 were not properly catering to their patrons. 
 
 PRACTICABILITY OF THE PLAN SOON PROVED 
 
 Mr. Sykes' plan had the further merit of costing the 
 Government very little for administration, and in addition 
 it afforded a ready means of introducing the money order 
 system. Its entire practicability was at once apparent to 
 the Government, and in two years' time Post Office Banks 
 were an accomplished fact. They became an instant suc- 
 cess. At the close of the year 1908, no fewer than 15,275 
 offices had been established, with over eleven million of 
 depositors, having credits aggregating over 160,000,000 
 pounds sterling. In addition to this, there were over 20,- 
 000,000 pounds sterling invested in Government stock for 
 153,262 depositors, so that at the date stated there were over 
 184,000,000 pounds sterling to the credit of Post Office 
 depositors. It is safe to say that not even the founder of 
 the system could have anticipated any such stupendous suc- 
 cess. 
 
 The effect upon the Trustee Banks was, of course, 
 marked. While at the close of the year 1861, the number 
 of these banks was 643, with deposits amounting to 41,- 
 000,000 pounds, twenty-seven years later their number had 
 been reduced to about one-half, though the deposits in- 
 creased by from five to six millions sterling. This is ex- 
 plained by the fact that very many of the Trustee Banks, 
 by reason of inefficient management, and loss of popular 
 confidence had given up the struggle, while the larger, 
 stronger and better conducted institutions more than main- 
 tained their own. 
 
 On this subject, James Henry Hamilton says, in his 
 work, "Savings and Savings Institutions," p. 355: "The 
 most unique incident of the growth of the state system 
 
POSTAL SAVINGS BANKS 157 
 
 (Postal Savings) in England has been the marked ten- 
 dency to absorb the patronage that has been built up by the 
 trustee banks. There is a decided tendency to a monopoly 
 of the field, and the annual reduction in the number of 
 institutions of the trustee type points to their final extinc- 
 tion, with the exception of a few well entrenched institu- 
 tions which tend to assume the character of investment 
 societies rather than savings banks — and at no very dis- 
 tant date. This condition cannot be accounted for on the 
 ground of any scarcity of the trustee spirit — there is per- 
 haps more of it in England than in any other country. 
 The chief reason must be found in the superior adaptation 
 of the post-office system to the needs of the working class; 
 it cannot be assigned to any doctrinal preference for a 
 public institution. The fact that the one class is regarded 
 as absolutely solvent and that there is more or less of risk 
 to deposits in the other is doubtless an important factor." 
 
 THEIR RAPID GROWTH IN GREAT BRITAIN 
 
 From their beginning in 1861, the success of the Post 
 Office Savings Banks in Great Britain has been remarkable, 
 as shown by the appended table: 
 
 Year 
 
 No. of 
 
 No. of 
 
 Amount of 
 
 To December 
 
 Offices 
 
 Depositors 
 
 Credit 
 
 ' 1862 
 
 2,535 
 
 178,495 
 
 £ 1,698,221 
 
 1871 
 
 4,335 
 
 1,303,492 
 
 17,025,004 
 
 1881 
 
 6,513 
 
 2,607,612 
 
 36,194,495 
 
 1891 
 
 10,063 
 
 5,118,395 
 
 71,608,002 
 
 1892 
 
 10,519 
 
 5,452,316 
 
 75,853,079 
 
 1893 
 
 11,018 
 
 5,748,239 
 
 80,597,641 
 
 1894 
 
 11,323 
 
 6,108,763 
 
 89,266,066 
 
 1895 
 
 11,518 
 
 6,453,597 
 
 97,868,975 
 
 1896 
 
 11,897 
 
 6,802,035 
 
 108,098,641 
 
 1897 
 
 12,212 
 
 7,239,761 
 
 115,896,783 
 
 1898 
 
 12,582 
 
 7,630,502 
 
 123,144,099 
 
 1899 
 
 12,995 
 
 8,046,680 
 
 130,118,605 
 
 1900 
 
 13,341 
 
 8,439,983 
 
 135,549,645 
 
 1901 
 
 13,672 
 
 8,787,675 
 
 140,392,916 
 
 1902 
 
 14,048 
 
 9,133,161 
 
 144,605,088 
 
 1903 
 
 14,362 
 
 9,403,852 
 
 146,135,147 
 
 1904 
 
 14,614 
 
 9,673,717 
 
 148,339,354 
 
 1905 
 
 14,862 
 
 9,963,049 
 
 152,111,140 
 
 1906 
 
 15,074 
 
 10,332,784 
 
 155,996,446 
 
 1907 
 
 15,213 
 
 10,692,555 
 
 157,500,077 
 
 1908 
 
 15,275 
 
 11,018,251 
 
 160,648,214 
 
 1913 
 
 
 13,198,609 
 
 182,248,661 
 
158 CENTURY OF AMERICAN SAVINGS BANKS 
 
 The unequivocal success of Post Office Savings Banks 
 in England led other continental countries, as well as 
 British colonies, to follow in the same lines, and Canada 
 inaugurated them in 1868, Belgium in 1870, Italy in 1876, 
 Netherlands in 1881, France and Sweden in 1882, Austria 
 in 1883, Hungary in 1886, and later, Russia, Finland, 
 Australia, Africa and Japan. Everywhere they seem to 
 have fully met governmental and popular expectations. 
 
 FEATURES OF THE SYSTEM DESCRIBED 
 
 The general features of Post Office Savings Banks 
 which, though differing in some details in various coun- 
 tries, are substantially the same, are thus described in the 
 New International Encyclopedia (p. 303): 
 
 Deposits may be made by any person at any postoffice. Deposi- 
 tors are provided with passbooks in which the amount of the deposit 
 is entered by the local office, and within a few days an official re- 
 ceipt is mailed to the depositor from the general office. In rural 
 communities carriers are allowed to receive deposits. To encour- 
 age employees to extend the system, Holland, Finland and Russia 
 allow local officials commissions upon passbooks issued and deposits 
 entered. Most countries provide for a minimum and maximum de- 
 posit. The minimum is usually about 20 cents, but a card is issued 
 upon which stamps may be affixed until they amount to that sum, 
 when the card is taken by the bank and the deposit is credited. This 
 device has been found especially adapted for use in schools. In 
 England and France the fund representing the aggregate deposits is 
 invested in government bonds. In the o&er countries a wider lati- 
 tude of investment is permitted, such as municipal and corporate 
 bonds, real estate, mortgages, and even personal security. The de- 
 posit is in all cases guaranteed by the Government. Interest on de- 
 posits is computed annually, the usual rate being 3 per cent. The 
 maximum deposit is £200 in England and 1,000 lire in Italy. If 
 this sum be exceeded no interest is allowed on the excess. With- 
 drawals, like deposits, may be made from any postoffice. A delay 
 of a few days is usually necessary for withdrawal, though a system 
 of withdrawal by telegraph has been provided. Postal Savings Banks 
 usually serve two other functions besides receiving deposits. These 
 are: (1) the providing of annuities and the writing of life insur- 
 ance; (2) serving their customers as agents in purchasing govern- 
 ment securities. Austria and Hungary have gone a step farther and 
 provided for accounts subject to check. 
 
POSTAL SAVINGS BANKS 159 
 
 These institutions are now operated in all the principal 
 nations of the world except Germany. That they fill a real 
 need, and add incalculably to the saving power of the coun- 
 tries that have adopted them, cannot be questioned. All 
 the theoretical objections to them seem to have disappeared 
 in practice. 
 
 POSTAL SAVINGS BANKS IN AMERICA 
 
 In the United States, the opposition to Postal Savings 
 Banks was bitter and determined, and for many years suc- 
 cessful. It was predicated largely upon the fact that the 
 country had, after many years, succeeded in building up a 
 splendid system of Mutual Savings Banks, to which men 
 of ability and experience gave gratuitous service, and that 
 this vast trust, aggregating thousands of millions of dol- 
 lars, had been most wisely and faithfully administered. It 
 was argued that governmental supervision in the case of 
 the National Banks had proved of great value to the people, 
 and that a similar policy of oversight of the savings in- 
 stitutions would be equally beneficial, if for no other reason 
 than to establish a uniform system of examination which 
 is now left to the varying laws of the different States. 
 
 Myron T. Herrick, of Cleveland, Ohio, voiced the prin- 
 cipal objections to this innovation, when he said, before 
 the Savings Banks Association of the State of New York, 
 in 1898: 
 
 It is difficult to see how the interests of the depositors in Savings 
 Banks can be served by placing these deposits with the postmasters 
 throughout the country, whose terms of office are unstable and sub- 
 ject to frequent changes, and who are not generally appointed because 
 of any aptitude for the banking business. The bankers cannot see 
 how tiiese deposits would be surrounded with any greater safeguard, 
 stowed away in the depository of some crossroad postmaster, than 
 if they were resting in the custody of the Savings Banks in highly 
 efficient burglar-proof vaults provided especially for their keeping. 
 Nor can the banker from his point of view appreciate the argument 
 of the postal savings advocate that greater fre&dom of circulation is 
 to be given these funds by their transfer from the numerous banks 
 throughout the country to the government centers, thus depriving the 
 localities from which the deposits may be collected of the present 
 legitimate use of these funds. 
 
160 CENTURY OF AMERICAN SAVINGS BANKS 
 THE CONGRESS GIVES ASSENT 
 
 These and other arguments prevailed for a time, but at 
 last, on June 25, 1910, Congress passed the necessary Act 
 and the Postal Savings Banks System of the United States 
 went into operation January 3, 1911, by the opening of 
 such banks in each State. By the terms of the Act, they 
 were placed in the control of a Board of Trustees, con- 
 sisting of the Postmaster-General, the Secretary of the 
 Treasury and the Attorney-General, with the security of 
 the United States Government for repayment. 
 
 Any person over the age of ten years was permitted to 
 make deposits, but no one was allowed to have more than 
 one postal savings bank account in his or her own right. 
 The maximum amount of deposits was $100 in a calendar 
 month, and the minimum, one dollar, but to provide for 
 smaller deposits a postal savings card is issued for ten 
 cents, to which may be attached postal savings stamps, 
 which, when filled, will be accepted in lieu of one dollar. 
 The interest rate allowed is 2 per cent., credited once a 
 year, and the highest balance permitted to one person is 
 $500. Upon making the first deposit a certificate of de- 
 posit is issued, which is to be surrendered when paid and 
 canceled, or in the event of making a subsequent deposit 
 is to be surrendered for one calling for a higher amount. 
 An initial appropriation of $100,000 was made to cover 
 the cost of putting the law in operation, and this was sup- 
 plemented by another of $500,000. The funds received 
 are to be deposited in National and State banks at 2J4 per 
 cent, interest; 5 per cent, of these deposits may be with- 
 drawn and kept in the Treasury of the United States as a 
 reserve. Not over 30 per cent, of the funds deposited may 
 be withdrawn by the trustees for investment in United 
 States bonds, the remaining 65 per cent, to remain on de- 
 posit in the banks in each State qualifying as depositories. 
 These funds, however, may be withdrawn under the di- 
 rection of the President "when in his judgment the general 
 welfare and interests of the United States requires." 
 
POSTAL SAVINGS BANKS 161 
 
 TIME ALONE CAN DECIDE WHAT IS BEST 
 
 After an exhaustive analysis of the subject, Hamilton 
 reaches the conclusion that the Post Office type is the best 
 adapted to do the work which representatives of the other 
 types leave undone, and that it is on the whole the best 
 fitted to the social needs of people of all sorts of social con- 
 ditions. To bring the system to a still greater degree of 
 perfection, he suggests the following improvements: Free- 
 dom of withdrawal and deposit through any office, by post 
 or by wire (where the postoffice includes a telegraph serv- 
 ice) without cost to the depositor; the right of depositing 
 and withdrawing through letter carriers; and the distribu- 
 tion of all the net earnings among the depositors in the form 
 of interest. While he believes the Trustee system is well 
 adapted to a community which combines conservatism with 
 considerable philanthropic spirit, and conceding its advan- 
 tage of extraordinary elasticity of form, he regards it liable 
 to degenerate into an investment society for the better con- 
 ditioned classes, and not to be relied upon to reach into the 
 small communities nor to cover a wide extent of territory. 
 In reaching such a conclusion, it is possible that this care- 
 ful student and painstaking investigator overlooks, or at 
 any rate tmderestimates the influence of the comparatively 
 modem development known as "banking by mail," by 
 means of which many of the larger Savings Banks of the 
 Trustee class, particularly in New York State, serve widely 
 separated communities that have no convenient Savings 
 Bank in their territory with great satisfaction. 
 
 Bolles ("Practical Banking," 1884), says, on the sub- 
 ject of the relative permanence of the different forms of 
 savings banking: "Our examination of the functions of 
 a Savings Bank brings us to the conclusion that it is simply 
 a money making corporation — an association of small 
 capitalists who combine for the purpose of having their 
 small investments possess an earning power by aggrega- 
 tion. . . . The entire resources of the bank, whether cred- 
 ited to depositors or to surplus, are the absolute property 
 
162 CENTURY OF AMERICAN SAVINGS BANKS 
 
 of depositors as an association. The trustees are a body 
 whose constitution is somewhat anomalous, being the un- 
 paid custodians of money not their own, but whose duties 
 are assumed as a public burden and as a distinction. This 
 latter peculiarity, the constitution of a board of trustees, 
 which is independent of the real proprietors of the con- 
 cern, seems to me the only point which gives a Savings 
 Bank as now organized, a right to be called a benevolent 
 institution. It is benevolent for the trustees to give their 
 time and services without compensation in the management 
 of the money of others. It is not benevolent, however, to 
 invest a man's money and pay him over the proceeds. Al- 
 though in practice this plan of organization has worked 
 better than the one where there is a body of stockholders 
 whose capital is substituted for a surplus as guaranteed to 
 depositors, yet it is by no means proved that the advantage 
 would not be on the side of the latter form, which eliminates 
 all pretense of benevolence and makes the Savings Bank 
 what we believe it to be, a pure matter of business. Of the 
 three forms of associated banking, viz., the mutual, the 
 stock, or business-like form, and the government, which, 
 of late years, is becoming the subject of experiment, time 
 alone can decide which will serve as the fittest." 
 
 NOT AS YET A FORMIDABLE RIVAL 
 
 Without doubt, the Postal Savings Banks meet the re- 
 quirements of a certain class in our great cities. These are 
 for the most part foreigners, those who seem to have a con- 
 stitutional distrust of all banking institutions except those 
 directly connected with or conducted by the Government. 
 They are quite content with a small rate of interest. They 
 save in very small amounts, when they save at all. 
 
 But that the Postal Savings Banks will prove formidable 
 competitors of the regular Savings Banks to any such ex- 
 tent as they have in Europe, especially in Great Britain, 
 seems improbable. It may be added that the class of de- 
 positors above referred to is one of the least desirable for 
 Savings Banks. Being extremely emotional and easily in- 
 
POSTAL SAVINGS BANKS 163 
 
 fluenced by rumor, they are among the first to withdraw 
 their money in cases of panic and the most frequent causes 
 of runs upon perfectly solvent and well-managed institu- 
 tions. For these and other reasons, the establishment of 
 Postal Savings Banks is to be considered a move in the 
 direction of financial stability. 
 
 Every person in the country over the age of ten years 
 may now open an account in a Postal Savings Bank. 
 Prior to July 1, 1916, such banks were restricted to the 
 patrons of the post offices where the bank was located. 
 Persons residing at considerable distances from post offices 
 may now open accounts with the nearest postmaster. 
 
 The department is preparing to issue a leaflet in twenty- 
 two languages, describing the Postal Savings Bank and its 
 operation, for distribution among foreign residents of the 
 United States. Of 500,000 depositors in the Postal Sav- 
 ings Banks in this country, about 200,000, or 40 per cent., 
 are of foreign birth. 
 
 STATISTICS or POSTAL SAVINGS BANKS, 
 UNITED STATES 
 
 Balance to the credit of depositors, June 30, 1914, $43,- 
 444,271; deposits during fiscal year 1915, $70,314,858 
 deposits withdrawn during fiscal year, $48,074,421 
 balance to credit of depositors, June 30, 1915, $65,684,708 
 balance on deposit in banks, June 30, 1915, $60,086,- 
 318.94. 
 
 The nimiber of depositors was 524,414, showing an 
 average of more than $125 for each depositor. 
 
 All June records* for postal savings deposits were 
 eclipsed in 1916, when a net gain of more than $3,800,000' 
 was shown, quadrupling the net increase for June, 1915., 
 The gains were general throughout the country, notably ini 
 the smaller industrial centers, according to figures given out 
 at the New York Post Office. 
 
 Country-wide prosperity of wage earners and liberalizing 
 postal savings legislation of May 18, which removed the 
 limit on deposits of $100 a month and increased the amount 
 
164 CENTURY OF AMERICAN SAVINGS BANKS 
 
 that may be accepted from a depositor to $1,000, are given 
 as causes for the increase. 
 
 On June 30, 7,701 Post Offices were accepting deposits 
 in the United States, Alaska, Porto Rico, and Hawaii. All 
 but 854 of the depository offices were of the Presidential 
 grade. The number of depositors approximated 603,000, 
 with $86,000,000 standing to their credit. Of this sum, 
 $73,000,000, or over four-fifths, was accumulated at the 
 448 offices having deposits of $20,000 and over. Of the 
 Post Offices having $100,000 on deposit, five showed a gain 
 of more than 100 per cent, in the fiscal year. 
 
CHAPTER XIV 
 
 SCHOOL BANKS AS AN AUXILIARY 
 
 Their Real Value Now Generally Conceded — Pioneer Work of John 
 H. Thiiy— The System Firmly Established— Long Island Plan 
 Fully Described — Indirect Results of Marked Value— New 
 York's Splendid Campaign — ^Late Statistics — Duties and Obli- 
 gations of the Schools Toward Pupils, Parents and the State. 
 
 As an auxiliary to the regular institutions for systematic 
 accumulation by wage-earners, the School Savings Bank 
 has proved its worth, as well from the standpoint of dollars 
 and cents as for its distinctly educational value in the in- 
 culcation of habits of thrift. 
 
 That little word thrift is pregnant with meaning. It sig- 
 nifies much more than the mere putting of a few dollars in 
 a bank each week or month. It means economy, industry, 
 forehandedness, the care of little things and their proper 
 uses. It is evident that children who are taught to practice 
 thrift will grow up useful, helpful, self-reliant, careful — 
 in a word, thrifty. 
 
 The home, of course, is the proper place to begin this 
 training, and parents are charged with the initiative, but it 
 would seem that home instruction can be profitably fol- 
 lowed up systematically in the schools of the nation. The 
 plan of establishing School Savings Banks, now being re- 
 vived throughout New York and in many other States 
 should be encouraged in every possible way. 
 
 Man is very largely the creature of his environment. 
 Habit governs much of his coming and going, from the 
 cradle to the grave. Habits formed in youth being always 
 the strongest, it is of supreme importance that they should. 
 
 be GOOD HABITS. 
 
 There are few habits more worthy of cultivation than 
 
 I6S 
 
166 CENTURY OF AMERICAN SAVINGS BANKS 
 
 that of systematic saving. To send a child to the bank 
 to make his or her own deposit is most wise; it instills a 
 personal pride in the account that is hardly ever effaced. 
 The child feels the joy of real ownership, sees the account 
 constantly growing, and realizes what saving means and 
 how rapidly money breeds money. It teaches self-reliance 
 and independence as nothing else ever does. 
 
 Victor A. Lersner, Comptroller of the Williamsburgh 
 Savings Bank of Brooklyn, has well said: "None will 
 deny that the Mutual Savings Bank system at least is a 
 quasi-national institution, and if we can develop School 
 Savings Banking to its fullest possibility I fully believe 
 that we can make better future citizens of our present day 
 youth than through any other instrumentality." 
 
 School Savings Banks originated in France — the home 
 of thrift — in the year 1834. Their growth was not rapid, 
 and it was many years later before any considerable num- 
 ber were to be found. Their spread throughout Europe 
 was largely due to the constant efforts of Prof. Francois 
 Laurent, of the University of Ghent. 
 
 JOHN H. THIRY A PATHFINDER 
 
 It appears to be a fact that the first attempt of this kind 
 in the United States was in Beloit, Wisconsin, in the year 
 1876, by Serena F. Merrill. However, the greater part of 
 the credit of giving these institutions a permanent footing 
 in this country belongs to the late John H. Thiry, a native 
 of Belgium and a citizen of the United States by adoption. 
 Having become deeply impressed with the extravagance of 
 American children, and realizing that improvidence in 
 youth means improvidence if not poverty in old age, Mr. 
 Thiry sought a remedy, and concluded that it was to be 
 foimd in two places, the home and the school, and that 
 the one should be made to cooperate actively with the other. 
 The schools taught many things, he argued, then why not 
 thrift? 
 
 Being a trustee of the public schools of Long Island City, 
 to which place he had retired after a successful business 
 
SCHOOL BANKS AS AN AUXILIARY 167 
 
 career in New York as a dealer in old and rare books, Mr. 
 Thiry found no difficulty in gaining the consent of his 
 fellow trustees to try the experiment; it succeeded, and up 
 to the time of his death, in 1911, Mr. Thiry was the School 
 Savings Bank's best friend, "its ardent and constant ad- 
 vocate and its only statistician, — even copyrighting his 
 forms so as to keep in touch with those who would use 
 them." 
 
 It was Mr. Thiry's custom, for a number of years, to go 
 to the public schools of Long Island City and offer com- 
 petitive cash prizes for the pupils who showed the greatest 
 improvement in writing, spelling and arithmetic. At the 
 time these prizes were distributed, Mr. Thiry would usually 
 pay them in silver dollars, which seemed to the children 
 more valuable than paper money, and he would ask the 
 recipients, "What are you going to do with it?" After 
 listening to the child's reply, he would suggest that the 
 money be placed in a Savings Bank. 
 
 As a result of the efforts of Mr. Thiry, ably supple- 
 mented by those of Mrs. Sara L. Oberholtzer, of Phila- 
 delphia, and others, the movement in recent years has 
 spread rapidly. Their purpose has been admirably stated 
 by Abraham London, teacher in Public School No. 122, 
 Brooklyn. It is "to promote the habits of thrift and saving 
 among children, to acquaint them with the meaning and use 
 of banking forms, and to give to the children managing the 
 bank an insight into banking business and banking 
 methods." The money thus saved which otherwise might 
 have been spent — and largely misspent — is not the prime 
 consideration; the highest recommendation of these insti- 
 tutions is in their educational value, in their character- 
 building. It is this feature which has made successful 
 appeal to educators and thinkers throughout the country. 
 To use Mr. Thiry's own words: 
 
 Here, then, is the field, the inspiration, and the aim of the school 
 banking system. It takes the principles of frugality and thrift down 
 into the training-ground of the young — the public schools — and con- 
 firms them in those habits upon which success in their future strug- 
 
168 CENTURY OF AMERICAN SAVINGS BANKS 
 
 gles for competence will depend. By so doing it fosters the morals, 
 for a better manhood is inseparable from a frugal life. Thus school 
 banking is in thorough harmony with the school; for, as the school 
 aims at making a good citizen, so likewise does school banking. It 
 is an object-lesson in political economy, and is of telling import 
 when the pupil at last crosses the line which divides the worlds of 
 business and study. 
 
 THE SYSTEM NOW FIRMLY ESTABLISHED 
 
 It would be difficult to state the benefits of School Sav- 
 ings Banks in a more forcible way. And it is encouraging 
 to be able to add that, from doubtful experiments made in 
 the year 1885, the system has now become firmly estab- 
 lished, being in successful operation in thirty-seven States; 
 it has besides, given rise to philanthropic organizations of 
 a more general character, such as the Penny Provident 
 Fund of New York, the Provident Savings Bank of Balti- 
 more, and the Stamp Savings System of Grand Rapids, 
 Michigan. 
 
 The pioneer in this movement in the State of New York 
 was Long Island City. Here in the year 1885, it was the 
 privilege of Mr. J. H. Smedley to open the first School Sav- 
 ings Bank account in the East, under Mr. Thiry's direction. 
 The department is still in a very flourishing condition, with 
 three thousand accounts and an aggregate of about $60,000 
 on deposit. 
 
 THE LONG ISLAND PLAN DESCRIBED 
 
 Various plans of conducting School Savings Banks have 
 been suggested and tried. The Long Island plan, which is 
 one of the most successful, seems worthy of a detailed de- 
 scription. These rules and regulations seem to be the 
 shortest and simplest that could be devised; they were 
 drawn up after five years' trial of the system in the schools 
 of Long Island City, Bayshore, Islip, Babylon and else- 
 where. In themselves they constitute a valuable lesson in 
 order and discipline, which also has its educational value. 
 These regulations have proved to be a great improvement 
 upon the European plan and have received the enthusiastic 
 
 -^.-^ 
 
SCHOOL BANKS AS AN AUXILIARY 169 
 
 endorsement of prominent educators in both continents. 
 
 The cooperation of the Savings Bank nearest the school 
 is a necessity. If the Savings Bank officials are willing 
 to receive the deposits of the scholars, the school superin- 
 tendent, or the principal, should fiix the day and hour (the 
 most convenient to both) when the deposit of the money 
 may be made, and this deposit should be promptly attended 
 to on the day of collection. 
 
 When the superintendent, or principal, has fixed the day 
 and hour for receiving the savings of the scholars, he may 
 briefly address the children, during the closing exercises of 
 the previous Friday, and call their attention to the benefits 
 and advantages of the practical lessons of thrift and econ- 
 omy as about to be exemplified to them by the new system, 
 at the same time dwelling upon the great injury they are 
 doing themselves by spending their pocket money for 
 candies, chewing gum, cigarettes, etc. He will also inform 
 them that their teachers will be ready, on such a day, to 
 receive all sums from a cent to a dollar, and that the money 
 collected will be deposited in the Savings Bank in the name 
 of the principal as trustee, to be transferred to the scholar 
 when the sum amounts to one dollar and over. A regular 
 bank book will be delivered to the scholar on the last Fri- 
 day in the six months' period, and the scholar will return 
 this book to his or her teacher the following Monday. This 
 bank book constitutes the pupil a creditor of the Savings 
 Bank, and frees the teacher from all responsibilities in the 
 financial transaction. The deposit will always be subject 
 to the depositor's order — that is, it can be withdrawn from 
 the Bank whenever desired. It is one of the fundamental 
 principles of the Savings Bank, and it is important besides, 
 that the pupil who has saved his pennies should know this 
 fact. This will remove the fear of possible loss, and en- 
 courage the thought that he will find the fruit of his priva- 
 tions when needed. 
 
 During the course of the collection of the savings, the 
 teacher is expected to give the pupils, from time to time, 
 by precise facts, the general principle of saving, and seek 
 
170 CENTURY OF AMERICAN SAVINGS BANKS 
 
 to inculcate in the children and in their parents a clear idea 
 of the character of the School Savings Bank. ^ 
 
 Every Monday, only, and before the morning session, at' 
 nine o'clock, the teacher of each class, in calling the roll, 
 receives the savings of the pupils — one cent and upwards. 
 In calling a name the child must say, if he has anything 
 to deposit, "Yes, one cent"; or, "Yes, five cents"; or what- 
 ever he has. He must immediately rise from his seat and 
 deliver his money, with his weekly card, to the teacher, who 
 counts the money and inscribes the amount in the Monday 
 column of the roll book, and upon the weekly card upon 
 which the name of the pupil, the teacher, and the amounts 
 of previous deposits are inscribed. This card must be kept 
 by the pupil, iand must be presented every Monday if a 
 deposit is to be added to it. In calling the roll, if nothing 
 has been saved, the pupil must answer "No," and the 
 teacher makes a mark to that effect, at the same time mark- 
 ing the attendance. When the teacher has concluded call- 
 ing the roll and collecting the money, he or she sends the 
 money in a sealed envelope to the principal who is the de 
 facto temporary treasurer. Ten to fifteen minutes is con- 
 sidered sufficient to call the roll and collect the money of a 
 class of fifty scholars. Of course the first collection will 
 require a little more time, possibly half an hour. And it 
 may be remarked that the teacher of each class does not 
 require any other book in which to inscribe the deposits of 
 the scholars than the ordinary roll book, the amount of 
 the deposits to be inscribed in the Monday colvmin if the 
 day selected for that purpose be Monday. 
 
 The principal receives, immediately after collection, in a 
 sealed envelope, the amount collected by each teacher sepa- 
 rately, and at the close of the afternoon session he sends 
 the money to the Bank. 
 
 At the first general deposit of the money of a school sent 
 to the bank by the principal, he receives a bank book in 
 which is deposited the total amount collected by the several 
 teachers in his school each week. At the semi-annual 
 period, the teachers send to the Bank, on the list furnished 
 
SCHOOL BANKS AS AN AUXILIARY 171 
 
 to them, the name, amounts, and book numbers of each 
 scholar in their class. As the list of each class is received 
 separately by the cashier, he returns to the school the bank 
 books of each class, tied in a separate bundle, with the list, 
 and this avoids confusion. 
 
 The teacher cannot withdraw any funds personally. 
 Money is withdrawn upon application of the owner of a 
 bank book, and approval of the parents to the principal, 
 who fills out a blank. 
 
 The weekly card, which is copyrighted, is furnished by 
 the bank. They cost about $2 per thousand, and author- 
 ization to print and use them is accorded free on applica- 
 tion. 
 
 Amounts less than one dollar are not credited to the in- 
 dividual scholar. Such money is kept in the bank to the 
 credit of the principal in what is called "A General School 
 Fund," until the scholar has deposited one dollar, and then 
 a bank book is given. As a general rule, the bank books 
 of the scholars are kept by the principal in the school. 
 They are sent to the bank once in six months to add the new 
 deposits for the past period. The bank books are returned 
 to the principal. The principal allows the scholars to take 
 their bank books home once every six months, on Friday, 
 to be returned the following Monday. 
 
 When the scholar has deposited one dollar or more, he 
 is entitled to a bank book free of cost, but deposits will 
 draw interest only when the amount is five dollars, or over. 
 
 So long as the scholar attends school, the bank book is 
 kept by the principal, but when a scholar leaves school the 
 bank book will be surrendered to the child, who can then 
 withdraw the money at any time with the parent's consent, 
 by procuring the signature of the principal, without which 
 the deposits cannot be withdrawn. 
 
 During the two months' summer vacation, as the 
 teachers are supposed to be out of the city, if any scholar 
 depositor wishes to withdraw any portion of his money, or 
 add to his deposit, the cashier of the bank will deal with the 
 scholar depositors as he does with all his adult patrons, 
 
172 CENTURY OF AMERICAN SAVINGS BANKS 
 
 excepting that his mother, or father, must countersign all 
 drafts. 
 
 FOSTERS GOOD HABITS AMONG PUPILS 
 
 By conducting the transactions of this system with 
 punctuality and regularity, the teacher will foster the habit 
 in the pupil of being regular and punctual in all his acts. 
 
 As may be seen, provision has been made to satisfy these 
 three conditions: 
 
 First: To make the mechanism as sure and simple as 
 possible. 
 
 Second: To reduce to the minimum the work and the 
 responsibility of the teacher. 
 
 Third: To give the School Savings Bank all the educa- 
 tional value possible. 
 
 A Savings Bank is above all an establishment of public 
 utility, enjoying some privileges : it is not a Banking House 
 choosing its depositors. It is open to every one who may 
 want to save, and more especially to the poorer classes of 
 society. When the pupil leaves the school, he may con- 
 tinue his economical habits without changing his relation 
 to the bank — that is, he may continue to use the same 
 book. 
 
 The money deposited in the Savings Bank by pupils, is 
 subject to the same rules and regulations, and under the 
 same conditions that the money deposited by grown people 
 is. 
 
 The extension of the system of School Savings Banks 
 throughout the schools of the Union, will, at the same time, 
 give an impetus to many small Savings Banks in the rural 
 districts, especially where the people are not acquainted with 
 the rules and the benefits of these institutions. 
 
 In the early times an old stocking, a hole in the floor, or 
 a crevice in the wall, were considered a sufficient method 
 for such of the poor who cared to save anything, and if that 
 crude method proved unsatisfactory to any one, it was not 
 possible to obtain better. 
 
 The new system will popularize the idea of economizing, 
 
SCHOOL BANKS AS AN AUXILIARY 173 
 
 and will help, to a certain extent, the progress of Savings 
 Banks. 
 
 THE BROOKLYN PLAN 
 
 Another successful plan is that devised by Mr. A. C. 
 Clark, a Brooklyn school teacher, and known as the Brook- 
 lyn plan. This has the advantage of conforming quitie 
 closely to the actual methods in use in regular Savings 
 Banks. 
 
 Largely as the result of a systematic propaganda by the 
 Savings Bank section of the American Bankers' Association, 
 in the year 1912, there has been a decided revival of interest 
 in the subject, especially throughout the Middle West. 
 
 The first School Savings Bank of the Brooklyn type in- 
 augurated in Chicago was on April 8, 1914, since which 
 time a total of sixty-one Savings Banks have been estab- 
 lished. Thirty of the regular banks in the Illinois metrop- 
 olis cooperate with the schools ; the results for the sixty-one 
 school banks from the time the first one was installed to 
 June 30, 1915, are summarized as follows: Total number 
 of accounts opened, 13,638; total nimaber of accounts 
 closed, 7,316; number of accounts remaining open, 6,322; 
 total deposits received, $27,115.94; total interest paid by 
 depository banks, $74.25; total withdrawals, $10,254.60; 
 total transfers from school savings banks to interest-bear- 
 ing accounts at regular banks, $11,200.90; total remaining 
 on deposit, $5,734.69. 
 
 WORKING OP THE SYSTEM IN THE WEST 
 
 The experience of the City of Minneapolis, Minnesota, 
 with the School Savings Bank system is interesting, if not 
 typical. The city has a population of some 325,000. 
 About eight years ago the system was taken over by the 
 largest Mutual Savings Bank in the city — ^the Farmers and 
 Mechanics' — which has over 70,000 depositors. The un- 
 dertaking was assumed at the request of the Associated 
 Charities, the Clearing House Association of banks and the 
 Board of Education of the city. All expenses are met by 
 
174 CENTURY OF AMERICAN SAVINGS BANKS 
 
 the bank, which operates the stamp plan, not the pass book 
 system. Principals and teachers are not required to do the 
 actual work in connection with the system, although they 
 are asked to encourage the pupils to use it. The bank 
 sends to the school its own representatives, young women 
 who give their entire time to the work. No interest is paid 
 on stamp deposits until they are transferred to regular in- 
 terest bank accounts. The cost to the bank is about two 
 and a half times interest at current rates on the average 
 amount of school stamp deposits; but the promoters of the 
 plan are content to have a deficit for the present, at least, 
 inasmuch as the institution was established for the purpose 
 of encouraging habits of thrift and economy in the com- 
 mimity; and no objection was ever made by any of the 
 bank's depositors to this expense. 
 
 The results of seven years' operation of the system in 
 Minneapolis is shown in the appended table: 
 
 1909 1915 
 
 No. of children depositors at end of school year 9,712 30,486 
 
 1908-9 1914-5 
 
 Am't deposited for the year $25,033 $69,208 
 
 A'mt of interest accounts opeijed in school year $6,726 $40,653 
 
 1909 1915 
 
 Deposits at end of year $14,178 $41,504 
 
 Total am't in 7 years deposited on stamp ac't $349,008 
 
 No. of children who have opened regular interest bank 
 
 accounts 14,819 
 
 Am't transferred to regular interest bank acc'ts $170,494 
 
 One of the surprises of the system, mentioned by Mr. 
 N. F. Hawley, Treasurer of the Farmers and Mechanics' 
 Savings Bank, Minneapolis, and President of the Savings 
 Bank Section of the American Bankers' Association, is the 
 number of cases in which the small accumulations of school 
 savings have provided the means of additional schooling. 
 Mr. Hawley well says in summing up the matter of ad- 
 vantages and disadvantages: 
 
 The two fundamental reasons for carrying on the work are, after 
 all, these: Its educational training and the resultant prosperity of 
 the community. Other considerations such as the profits of the bank 
 or the money saved which might otherwise be misspent — these are 
 
SCHOOL BANKS AS AN AUXILIARY 175 
 
 minor matters. The general effect on the community ought to appeal 
 to the banks. When the city or town prospers the bank will. When 
 the people are thriftless, the banks will lose deposits. The most 
 selfish view of the matter, therefore, ought to warrant the necessary 
 time, effort and expense on the part of the banks until the public 
 authorities take the matter over. Even if the banks cannot see im- 
 mediate returns, nevertheless have they not a duty? They cannot 
 restrict all consideration to selfish reasons alone. Banks are public 
 servants, performing public services. They have obligations they 
 cannot ignore. Why should not bankers rise into the class of physi- 
 cians and teachers who recognize obligations which they owe to the 
 public whether they are compensated or not? 
 
 INDIRECT RESULTS VERY VALUABLE 
 
 Answering the question, "Does it pay?" it may be said, 
 speaking from the standpoint of actual bank balances, that 
 it does not, but from the many indirectly valuable in- 
 fluences, emphatically, "Yes." One of these influences has 
 been that upon the parents, many of whom have received 
 their first suggestion along the line of savings from this 
 very school system, and have opened accounts which never 
 would have been opened but for the constant nagging which 
 the children gave their parents on school day for some 
 money, be it little or much. In many cases also it has been 
 noticed that children ask their parents if there is not some 
 odd work about the house or elsewhere which they might 
 do to enable them to earn some money with which to make 
 deposits in the School Savings Banks. 
 
 Again, where sickness and distress have visited a family 
 imexpectedly, many a mother, and some fathers, have gone 
 down to the bank and withdrawn a portion of the money 
 which their children were fortimate enough to have saved. 
 The many good words of these people for the School Sys- 
 tem indicate their kindly feeling for the scheme of saving 
 which enabled them to turn themselves under adverse cir- 
 cumstances, even though the amount was small. 
 
 It should be remembered that in the inculcation of 
 economy, the fair sex may be more helpful than the men. 
 In the household of the workman and artisan, it is the 
 woman who has charge of and regulates the everyday de- 
 
176 CENTURY OF AMERICAN SAVINGS BANKS 
 
 tails of expenditures. It is she who, by wise economy, can 
 lay aside small sums so as to provide for the larger ex- 
 penses, such as rent, provisions, etc. An old adage says: 
 "The woman erects or ruins the house." A prominent 
 educator has said: "In bringing up a boy, you make a 
 man; when you bring up a girl, you bring up a family." 
 Hence the importance of forming in young girls habits of 
 economy and frugality. 
 
 It is claimed further by those who have carefully watched 
 the operation of School Savings Banks that by reason of 
 their operation and the lessons of thrift they inculcate, 
 there is a noticeable decrease in the tendency on the part 
 of school children to buy things that are not necessary, 
 especially various sorts of cheap confections, some of which 
 have a detrimental effect upon the health of pupils. The 
 fact has also been pointed out that the cooperation between 
 parents and children in the matter of economy and thrift, 
 results in greater confidence on the part of the parents, 
 particularly those of foreign birth, in the savings institu- 
 tions. 
 
 These facts being undisputed, it is to be hoped that mem- 
 bers of school boards will not be merely complacent in the 
 matter, but will take the initiative in carrying on such work 
 as a part of the regular curriculum in the schools in their 
 charge. 
 
 NEW York's splendid campaign 
 
 "One hundred new School Savings Banks for New York 
 City during the Thrift Centennial Year," was the watch- 
 word of the campaign in the metropolis which began on 
 the first of March, 1916. The results of that work up to 
 the 1st of July, 1916, showed that the aim of the campaign 
 had been set far too low, for the mark of one hundred was 
 reached and passed. 
 
 The Board of Education, working in conjunction with 
 the Savings Bank section of the American Bankers' Asso- 
 ciation and the Savings Banks of the greater city, began 
 about the first of February, to lay before the principals of 
 
SCHOOL BANKS AS AN AUXILIARY 177 
 
 the five hundred odd schools of the city the value to be 
 derived from the persistent teaching of thrift. This was 
 accomplished by the use of an active newspaper campaign 
 and a monthly letter sent out by the Savings Bank section. 
 
 The Board of Education provided a teacher, A. N. Clark, 
 who had originated the so-called Brooklyn system of pub- 
 lic school banking, and who had worked successfully with 
 it for over six years, to give instruction in the operation 
 of the system to those desiring to start a school bank. 
 
 The Savings Bank section and the Savings Banks of the 
 city perfected an arrangement with a large printing house 
 to provide complete sets of stationery and equipment suffi- 
 cient for 1,000 accounts upon the call of the school princi- 
 pals, the Savings Banks advancing the funds necessary for 
 these initial equipments. As a result, every objection here- 
 tofore advanced against the installation of school banks 
 was removed. In many of the schools the banks were ac- 
 tually installed for the principals, thus removing the final 
 objection of lack of time to attend to the matter or the plea 
 of pressure of other school duties. 
 
 Up to the end of June, 1916, 105 applications for new 
 School Savings Banks had been received by the Board of 
 Education, and of these over eighty had been installed and 
 placed in operation. The remainder will be ready to open 
 during the first weeks of the fall term. The new school 
 banks are all in a flourishing condition, meeting with the 
 hearty approval and active support of the children, teach- 
 ers and parents. The parents of the pupils are also be- 
 coming actively interested as the movement spreads, and 
 are beginning to demand the extension of the system to more 
 schools. The Department of Education has an enrollment 
 of about 800,000 children, of whom about 200,000 are now 
 enjoying the privileges extended to them through their 
 school bank. 
 
 It was the intention to carry on the campaign through the 
 fall and winter, with the expectation that instead of one 
 hundred new school banks the city would be able to point 
 to at least 250 as the result of its year's work. 
 
178 CENTURY OF AMERICAN SAVINGS BANKS 
 
 One of the most successful public school banks is that 
 conducted at public school No. 147, Manhattan, of which 
 William A. Kettman is principal. The bank was opened 
 on March 3, 1916, and closed its books for the year on June 
 23 following. The total deposits for this period were 
 $3,234.36; the number of depositors exceeded 1,800. 
 Nearly one hundred pupils have opened regular savings 
 accounts with the Metropolitan Savings Bank. In spite of 
 heavy withdrawals by 200 of the graduating class and by 
 others needing money for vacation expenses, the school 
 bank reopened in September with a cash balance of 
 $1,798.46. 
 
 One of the sad events of the year 1915, was the an- 
 nouncement of the failure of the Pittsburgh Bank for Sav- 
 ings, which had among its depositors 41,000 school children 
 who had placed in that institution for safe-keeping $167,- 
 136.68 of their little accumulations. It was stated that the 
 failure was in no way due to dishonesty on the part of the 
 bank's management, but rather to unwise or unprofitable 
 investments. The event, however, was turned to gladness 
 when the announcement was made by the Associated Press 
 on Christmas eve, that one of Pittsburgh's big-hearted and 
 noble-minded millionaires, H. C. Frick, had offered to pay 
 in full as a Christmas gift every school account on the 
 bank's books. It is such splendid deeds as this of Mr. 
 Frick's that renew our faith in human nature. 
 
 It should be understood that the failed concern was not 
 a Mutual or Trustee bank, but did a general business. 
 
 SCHOOL SAVINGS BANK STATISTICS 
 
 In the year 1914, the Savings Bank Section of the Amer- 
 ican Bankers Association arranged with the Comptroller 
 of the Currency of the United States to gather statistics 
 relating to the School Savings Banks of the country. The 
 States having such banks were: New Hampshire, Maine, 
 Vermont, Rhode Island, Massachusetts, Connecticut, New 
 Jersey, New York, Pennsylvania, Delaware, District of 
 Columbia, Virginia, South Carolina, Georgia, Alabama, 
 
SCHOOL BANKS AS AN AUXILIARY 179 
 
 Texas, Arkansas, Kentucky, Ohio, Indiana, Illinois, Mich- 
 igan, Wisconsin, Minnesota, Iowa, Missouri, North Da- 
 kota, South Dakota, Kansas, Montana, New Mexico, Ne- 
 braska, Washington, Oregon, California, Nevada, Arizona. 
 The total number of cities having established such banks 
 was 280, New England showing 75, Eastern States 74, 
 Southern States IS, Middle Western States 80, Western 
 States 16, Pacific States 20. The appended table, show- 
 ing statistics as of January 1, 1915, gives further details 
 of interest: 
 
 Number Number 
 of of 
 
 Schools Pupils 
 Individual schools .. 283 136,282 
 
 Systems M82 704,722 
 
 Over the counter 160 87,780 
 
 
 Number of 
 
 
 accounts 
 
 
 transferred 
 
 Number A mount 
 
 to regular 
 
 of of 
 
 bank 
 
 Depositors Deposits 
 
 accounts 
 
 37,051 $305,195.57 
 
 11,783 
 
 334,964 1,170,068.67 
 
 91,476 
 
 26,525 317,375.86 
 
 1,736 
 
 Total U.S. (280) cities 1,925 928,784 398,540 $1,792,640.10 104,995 
 
 Note: The individual school system is not under the control of the super- 
 intendent of schools or board of education. The term "systems,"' refers to 
 the savings systems installed in all schools by the board of education or super- 
 intendents, the accounts being kept in the superintendent's office. The term 
 "over the counter" is applied to those schools where the deposits are not 
 collected in the school, the system being operated directly through the bank. 
 
 Since the above table was prepared, a large number of additional schools, 
 including more than one hundred in Greater New York, have joined the 
 movement, as one of the direct results of the thrift campaign conducted by 
 the associated bankers of the American Bankers Association, the Savings Banks 
 Association of the State of New York, and others. 
 
 In the State of New York, prior to the present thrift 
 movement, there were 110 schools, in twenty-four cities, 
 having school savings systems, with 28,334 depositors and 
 an aggregate of $139,545.34 of deposits. The number of 
 accoimts transferred to regular Savings Bank accounts was 
 6,400. 
 
 DUTIES OF THE SCHOOLS 
 
 The closely allied question whether the schools of the 
 country should teach, besides thrift, preparedness and 
 patriotism, has led many educators of prominence to in- 
 quire seriously whether the schools can carry an additional 
 load, for it has long been the custom to say, " The public 
 
180 CENTURY OF AMERICAN SAVINGS BANKS 
 
 schools should teach it," whenever any one thinks he has 
 discovered a defect in a community. Thus, the schools 
 have added to the old fundamentals, cooking, sewing, draw- 
 ing, music, manual training, vocational courses and crafts- 
 work. 
 
 Dr. A. R. Brubacher, president of the New York State 
 College for Teachers, Albany, New York, recently expressed 
 some sane and sensible views on the subject of military 
 training in the schools. In his opinion the demand to add 
 training for the national defense has a prior claim over any 
 or all of these. He does not believe that anjiihing of a 
 practical nature in the way of training in maneuvers or in 
 practice with the machinery of war is practicable, but he 
 does think that chemistry might be taught in a way that 
 will contribute to the national defense, as well as physical 
 fitness and a spirit of loyal patriotism. A recent report 
 showed that less than 10 per cent, of the men applying for 
 service in the United States marine corps during the year 
 1915 were fovmd physically fit. School medical inspec- 
 tion has demonstrated that only about 25 per cent, of the 
 children are free from serious physical defects. 
 
 Dr. Brubacher maintains that it is the bounden duty of 
 the schools to train the children of the land to be ready 
 to serve their coimtry and, if need be, to sacrifice all for 
 it. Deep and loyal love of country is a prerequisite to ade- 
 quate national defense. 
 
 "We are as yet an undisciplined people," says Dr. Bru- 
 bacher. "We are not accustomed to make sacrifices for 
 the commonwealth. We are noted for lack of obedience. 
 Our Regular Army and National Guard officers say the 
 recruit finds it hard to obey. We are a willful people. Per- 
 sonal liberty is our dearest possession. Obedience is not 
 one of the conspicuous virtues of American homes. We 
 lack respect for public men and public things. We delight 
 in derogatory remarks about our aldermen, our policemen, 
 our legislators, — even about our governors and presidents. 
 We grumble over the tax rate. We avoid taxes. We 
 avoid our duty. We regard office holding as a privilege 
 
SCHOOL BANKS AS AN AUXILIARY 181 
 
 instead of as a duty. We recognize few or no duties to 
 the State, and accept its benefits as a matter of course." 
 
 Dr. Brubacher believes it to be the duty of the schools 
 to teach a new civics, a civics that will awaken the boys and 
 girls to the fact that the State is a beneficent institution to 
 which they are indebted for all they enjoy in the way of 
 public education, public health, public safety and tranquil- 
 lity, property rights, liberty and justice — everything that 
 contributes to the pursuit of happiness. When the boys 
 and girls of the land realize this, they will be ready to recog- 
 nize their duties to the State. It is much more than a mere 
 rhetorical figure to say that the safety of the nation is in 
 the hands of its teachers. They can train the youth to be 
 virile, brave and loyal, and in so doing they will lay the 
 real basis for a national defense. Add to this the virtue 
 of thrift, and the future of the nation will be secure for 
 all time. 
 
 Another progressive teacher. Superintendent John M. 
 Mills, of Ogden, Utah, believes every child ought to be 
 taught to work and that the only way to do this is to smash 
 the school machine. He told members of the National 
 Teachers Association, assembled in New York in July, 
 1916, of schools in Ogden where the girls above twelve 
 years of age make their own clothing and boys make things 
 in the shops that are useful and necessary. "A sentiment 
 should be developed in every community," said Superin- 
 tendent Mills, "that a boy who graduates from high school 
 without knowing how to make a living should consider him- 
 self not only imeducated, but disgraced. Every child 
 should be taught to work at home. A little work scattered) 
 through all the years of the child's life will do more toward 
 giving him a point of view, an incentive, a motive in life- 
 and real character than an)i:hing he can get out of books."' 
 
CHAPTER XV 
 
 DEVELOPMENT OF SAVINGS BANK LEGISLATION 
 
 Serious Objections to the Special Incorporation Plan — First Charters 
 Varied Widely as to Privileges and Powers — Early Beginnings 
 of the System of State Regulation — First General Investment 
 and Organization Laws — First General Law Enacted in 1875, 
 Pursuant to Constitutional Requirement — Railway Bonds First 
 Made Legal in 1898 — Salutary Results of State Examinations. 
 
 In the early history of the State of New York all banks, 
 whether commercial or savings, were incorporated by spe- 
 cial acts of the Legislature. This plan possessed obvious 
 disadvantages. In the first place, it occupied much of the 
 time of the legislators that should have been given to other 
 needed work; second, it afforded opportunities to individual 
 banks to secure special powers, privileges and immunities 
 not possessed by others, opportunities which the promoters 
 of many institutions did not hesitate to utilize to the fullest 
 extent. 
 
 Again, the number of trustees designated in the acts of 
 incorporation was not uniform, varying from nine to as 
 many as forty-five; neither was there any uniformity con- 
 cerning reports of operations. Examinations by state offi- 
 cials were either lacking altogether or merely perfunctory. 
 Some of the charters required annual reports to the Legis- 
 lature, while others required none at all, and in some cases 
 they were directed to be made to the Common Council of 
 the city in which the bank was located. Usually the char- 
 ters provided that the books should be open to the inspec- 
 tion of the State Comptroller, or such persons as he or the 
 Legislature might designate. 
 
 These early charters also granted wide latitude in the 
 
 matter of investment of funds on deposit. Some provided 
 
 for investment in bond and mortgage, in government and 
 
 182 
 
DEVELOPMENT OF SAVINGS BANK LEGISLATION 183 
 
 state bonds ; others made it lawful for a trustee to be a bor- 
 rower of the funds of the bank, others, again, strictly pro- 
 hibited this dangerous practice; some charters permitted 
 the entire amount of money deposited to be invested or 
 loaned at the sole discretion of the trustees, while in others 
 the rule of investment was limited. A law of 1853 pro- 
 hibited Savings Banks in the counties of New York and 
 Kings from lending on notes, bills of exchange, drafts or 
 any other personal securities whatever, a provision so man- 
 ifestly wise and proper that it should have applied not only 
 to two counties but to every similar institution in the State. 
 From time to time these old charters were amended and 
 improved, and as the institutions grew there was witnessed 
 a gradual increase of substantial investments — more money 
 was put into state, city and county bonds, bond and mort- 
 gage loans increased, displacing the borrowing by individ- 
 ual trustees, the collateral and other forms of loans. While 
 in a general way the powers of Savings Banks were defined 
 and limited, the admirable statutory regulation now in force 
 was not attempted, nor was there any uniform method of 
 ascertaining and stating the values of securities held. 
 Within certain limitations, trustees were permitted great 
 freedom of management. During the entire banking his- 
 tory of the State up to the year 1875, general laws regu- 
 lating Savings Banks were surprisingly few. 
 
 FIRST STATUTORY REFERENCE TO SAVINGS BANKS 
 
 The first reference to a Savings Bank in the statutes of 
 New York occurs in Chapter 62, of the Laws of 1819, which 
 incorporated "The Bank for Savings in the City of New 
 York." This act is noteworthy because of its recital of the 
 motives underlying and prompting Savings Bank legisla- 
 tion. It begins : 
 
 Whereas, the Society for the Prevention of Pauperism in the City 
 of New York have petitioned the Legislature for the laudible pur- 
 pose of encouraging in the community habits of industry and econ- 
 omy by receiving and vesting in government securities, or stock 
 created and issued under and by virtue of any law of the United 
 
184 CENTURY OF AMERICAN SAVINGS BANKS 
 
 States or of this State, and in no other way, such small sums of 
 money as may be saved from the earnings of trades-men, mechanics, 
 laborers, miners, servants, and others, thereby affording the two-fold 
 advantage of security and interest, and the Legislature considering 
 it their duty to cherish all audible attempts to ameliorate the condi- 
 tion of the poor and laboring classes of the community, etc. 
 
 No general act affecting all Savings Banks was passed 
 by the Legislature until the year 1835. It is noteworthy 
 that this first enactment applying to all Savings Banks in 
 the State (Sec. 2, of Chapter 262, L. 1835), relates to so- 
 called "unclaimed deposits," otherwise known as dormant 
 accounts. Apparently the superstition that very large sums 
 remained unclaimed in these institutions throughout the 
 State had arisen at this early date. 
 
 Chapter 347 of the laws of 1839 is the next general act 
 affecting Savings Bank interests. Section 1 of that law 
 again relates to dormant, or unclaimed deposits, and ex- 
 tends to three years the period during which the account 
 may remain undisturbed without acquiring a dormant char- 
 acter. Section 2 authorizes the bank commissioners or 
 either of them to visit and inspect Savings Banks whenever 
 they deem it proper, and also requires the commissioner to 
 report to the Legislature the general condition of said banks 
 not less than once in three years. Section 3 authorizes the 
 board of trustees of Savings Banks to accumulate gradually 
 and hold invested in like securities as authorized by the act 
 incorporating said bank a surplus fund not exceeding 10 
 per cent, on the amount of deposits in said banks . . . "to 
 the end that in case of a reduction in the market price of the 
 securities or public stock held or to he held by said banks 
 or any of them below the par value thereof any loss to the 
 depositors by reason of such reduction may be prevented 
 or made good to them by means of said surplus fund. ..." 
 
 BEGINNINGS OF A SYSTEM OF STATE IlEGULATION 
 
 While the Savings Banks of the State continued to do 
 business, each under its own separate charter, the follow- 
 ing additional acts were passed to regulate them all, and in 
 these acts are to be found the beginnings of many practices 
 
DEVELOPMENT OF SAVINGS BANK LEGISLATION 185 
 
 which have come to be regarded as essential to good Savings 
 Bank management: 
 
 Chapter 478 of the laws of 1847 authorized a Savings Bank to 
 deposit funds left with it in the state banks. 
 
 Chapter 437 of the laws of 1849 was another regulating unclaimed 
 deposits. 
 
 Chapter 91 of the laws of 1850 protected Savings Banks in pay- 
 ing to married women without the consent of their husbands the 
 amount which they had deposited. 
 
 Chapter 257 of the laws of 1853 regulated call loans in New 
 York and Kings counties, and forbids interlocking directorates in 
 banks in which the Savings Bank deposits its funds. It establishes 
 a preference for Savings Bank deposits if the financial institution 
 where they are deposited should fail. 
 
 Chapter 492 of the laws of 1853 somewhat modifies the provision 
 of the law last above described in regard to interlocking directorates 
 so as to permit these to exist when the directors or trustees hold their 
 office ex-officio. 
 
 Chapter 72 of the laws of 1854 authorizes Savings Banks to deposit 
 funds in trust companies as well as state banks. 
 
 Chapter 336 of the laws of 1855 provides for the distribution of 
 the assets of failed Savings Banks by the receivers thereof. 
 
 Chapter 136 of the laws of 1857 appears to be the first law deal- 
 ing directly with the reports which Savings Banks are to make to 
 the Superintendent of Banks, with the examination he is to make, 
 etc., etc. 
 
 Section 132 of the laws of 1858 forbids the use of the title "Sav- 
 ings Bank" by other financial institutions. 
 
 Section 136 of the laws of 1858 amends chapter 257 of the laws 
 of 1853 in regard to the investments of Savings Banks in Kings 
 County and New York. 
 
 THE FIRST GENERAL INVESTMENT ACT 
 
 Chapter 315 of the laws of 1863 is the first general in- 
 vestment law applicable to all the Savings Banks of the 
 State. It provides that it shall be 
 
 . . . lawful for the trustees of Savings Banks and institutions for 
 savings to loan the funds of such banks and institutions on the 
 bonds of counties and cities of this State authorized to be issued by 
 the Legislature, provided that by the terms of the act authorizing 
 such issue, provision be made for the payment of such bonds by a 
 tax for that purpose. 
 
186 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Chapter 1 13 of the laws of 1864 permits loans to be made 
 on county bonds; section 7 of Chapter 761 of the laws of 
 1866 authorizes local taxing officers to assess and tax the 
 surplus of Savings Banks; Chapter 32 of the laws of 1867 
 and Chapter 861 of the laws of the same year both relate 
 to the same subject of the taxation of the surplus; Chapter 
 845 of the laws of 1868 makes certain regulations as to 
 investments and reduces the number of trustees permitted 
 to twenty-one. 
 
 In the year 1857, the Legislature gave to the Superintend- 
 ent of the Banking Department power to supervise the banks 
 of the State, but aside from that act, there were few statu- 
 tory restrictions compelling the trustees to conduct their 
 affairs in any way materially different from the require- 
 ments laid down in the individual charters. From this 
 time on the banks began to gain in deposits in increasing 
 ratio up to 1874, as is shown by the following table (the 
 total of deposits being given in millions) : 
 
 January 1, 1858 $41,000,000. January 1, 1866 $115,000,000. 
 
 January 1, 
 
 1859 
 
 48,000,000. 
 
 January 1, 
 
 1867 
 
 131,000,000. 
 
 January 1, 
 
 1860 
 
 58,000,000. 
 
 January 1, 
 
 1868 
 
 151,000,000. 
 
 January 1, 
 
 1861 
 
 67,000,000. 
 
 January 1, 
 
 1869 
 
 169,000,000. 
 
 January 1, 
 
 1862 
 
 64,000,000. 
 
 January 1, 
 
 1870 
 
 194,000,000. 
 
 January 1, 
 
 1863 
 
 76,000,000. 
 
 January 1, 
 
 1871 
 
 230,000,000. 
 
 January 1, 
 
 1864 
 
 93,000,000. 
 
 January 1, 
 
 1872 
 
 267,000,000. 
 
 January 1, 
 
 1865 
 
 111,000,000. 
 
 January 1, 
 
 1874 
 
 285,000,000. 
 
 The whole number of Savings Banks reporting in 1874 
 was 155. Seventy-six banks paid their deposits upon de- 
 mand through the panic of 1873; only five required notice 
 and adhered to it. Thirty-nine required notice, but these 
 last limited the scope of its operations very much, exercis- 
 ing their discretion in each case where money was de- 
 manded as to enforcing or waiving the rule. 
 
 In New York that year, some of the larger banks re- 
 ceived notice of intention to withdraw considerable sums in 
 the aggregate, but upon the expiration of the term only a 
 small portion of the sums so noticed was withdrawn. The 
 fact shows very clearly that these depositors were, actuated 
 by fear or by the intention to reinvest their money, the first 
 
DEVELOPMENT OF SAVINGS BANK LEGISLATION 187 
 
 being the more probable, as the duration of the period when 
 notice was required was limited to a very few weeks. 
 
 The statement of the investments of the banks shows that 
 the "public stocks" were a medium of exchange to a large 
 extent in liquidating. The amount loaned on "public 
 stocks" January 1, 1873, was fourteen millions, while the 
 amount loaned January 1, 1874, upon the same security was 
 five million dollars. 
 
 Late in the Sixties, the general need for uniformity in the 
 laws governing Savings Banks began to be strongly felt by 
 the State Banking Department. The constant and rapid 
 growth of these institutions of thrift, their power in the so- 
 cial economy of the time, their beneficent effects upon the 
 working classes, their value as a public institution to the 
 citizens at large, the volimie of accumulated capital they 
 were beginning to control, the investment of large sums to 
 forward government, state and other public improvements, 
 besides supplying private enterprises, plainly indicated that 
 existing laws were crude, insufficient, incongruous, conflict- 
 ing, and in many cases permitted a laxity of management 
 and control dangerous to the whole system. 
 
 riRST GENERAI, ORGANIZATION LAW 
 
 In the year 1869, by reason of the large increase in ap- 
 plications for charters, the first general law relative to the 
 organization of Savings Banks in this State (Chapter 213, 
 L. 1869), was passed. This act required all persons de- 
 sirous of organizing Savings Banks to set forth a statement 
 for the information of the Superintendent of the Banking 
 Department, and to obtain his approval of the proposed 
 charter before it could be submitted to the Legislature for 
 passage. 
 
 Notwithstanding the enactment of this statute, the powers, 
 rights and liabilities of the several Savings Banks in the 
 State of New York continued to vary considerably, affect- 
 ing their stability and rendering supervision increasingly 
 difficult. 
 
 Section 4 of chapter 977 of the laws of 1869 authorizes 
 
188 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Savings Banks to invest in municipal bonds given in aid 
 of railroads. 
 
 Chapter 693 of the laws of 1871 amends chapter 136 of 
 the laws of 1857 by giving the Superintendent more power, 
 including the right to issue subpoenas for the attendance 
 of witnesses, and the production of books and papers, and 
 an increased ability to suppress dangerous practices. 
 
 Chapter 907 of the laws of 1871 authorizes Savings 
 Banks to deposit in banks and trust companies at interest, 
 not over 20 per cent, of the capital of such banks or trust 
 companies, provided the trustees direct such deposit by vote 
 in which no trustee who is a director of such bank or trust 
 company shall take part. This law also provides for the 
 fixing of the number of trustees which shall constitute a 
 quorum of the board. 
 
 A GENERAL SAVINGS BANK LAW^ ENACTED 
 
 During the early Seventies a number of Savings Banks 
 went into liquidation. It was believed that the diversity 
 of investments permitted by the special charters made ade- 
 quate supervision of the investments practically impossible 
 and rendered the whole system properly subject to suspi- 
 cion on the part of the public. To remedy this situation 
 an amendment to the Constitution of the State was intro- 
 duced at the constitutional convention of 1874. This finds 
 place, without change in section four of article eight of the 
 present Constitution, and is as follows: 
 
 The Legislature shall by general law conform all charters of Sav- 
 ings Banks or institutions for savings to a uniformity of powers, 
 rights, and liabilities, and all charters thereafter granted to such 
 corporations shall be made to conform to such general laws and to 
 such amendments as may be made thereto, and no such corporation 
 shall have any capital stock nor shall the trustees thereof or any 
 of them have any interest whatever direct or indirect in the profits 
 of such corporation, and no director or trustee of any such bank or 
 institution shall be interested in any loan or use of any money or 
 property of such bank or institution for savings. 
 
 Pursuant to the mandatory provisions of this article, 
 which was adopted by the people at the ensuing election and 
 
DEVELOPMENT OF SAVINGS BANK LEGISLATION 189 
 
 became a part of the Constitution of the State, the Legisla- 
 ture enacted at its next session the first General Savings 
 Bank law. This was known as chapter 371 of the laws 
 of 1875. From that time on all Savings Bank legislation 
 has taken the form of amendments to this act, or of new 
 acts to be substituted for it. This act contains fifty-four 
 sections, many of which have been separately amended 
 from time to time. The whole act has been revised and 
 reenacted on four occasions, to wit: — By chapter 409 of 
 the laws of 1882, by chapter 689 of the laws of 1892, by 
 chapter 10 of the laws of 1909, and by chapter 369 of the 
 laws of 1914. In all these revisions, except the last, the 
 substance of the law remained practically unchanged. In 
 the last, however, many changes were introduced by the 
 Commission Appointed to Revise the Banking Law. 
 
 At the time of the enactment of the law of 1875 invest- 
 ments of Savings Banks were strictly limited to United 
 States bonds, New York State bonds, bonds of States which 
 had not defaulted in the payment of principal or interest 
 within ten years of the date of the investment, and bonds 
 of cities, counties, towns and villages in New York State. 
 In addition Savings Banks might invest in real estate mort- 
 gages up to 50 per cent, of the appraised value of improved 
 real estate, but not more than 60 per cent, of the deposits 
 of any bank could be invested in mortgages. By chapter 
 134 of the laws of 1880 banks were allowed to invest in 
 interest-bearing obligations of the city or county in which 
 the bank was situated. By chapter 287 of the laws of the 
 same year bonds of the District of Columbia were added 
 to the list. By chapter 524 of the laws of 1887 bonds of 
 any city or county in New York State were added. 
 
 School Districts and Union Free School Districts came 
 in under chapter 373 of the laws of 1888. 
 
 By chapter 525 of the laws of 1890 the percentage of 
 deposits which might be invested in real estate mortgages 
 was raised from 60 to 65 per cent. 
 
 By chapter 440 of the laws of 1893 Savings Banks were 
 permitted to purchase bonds of the city of Boston and 
 
190 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Worcester, Massachusetts, St. Louis, Missouri, Cleveland, 
 Ohio, Detroit, Michigan, Providence, Rhode Island, and 
 New Haven, Connecticut, provided the bonded indebted- 
 ness of such cities did not exceed 7 per cent, of the valua- 
 tion for the purposes of taxation. 
 
 Chapter 813 of the laws of 1895 added Cambridge, 
 Lowell and Fall River, Massachusetts ; Cincinnati and To- 
 ledo, Ohio ; Grand Rapids, Michigan, Hartford, Connecti- 
 cut, Portland, Maine, Philadelphia, Pittsburgh, Allegheny, 
 Reading and Scranton, Pennsylvania, Minneapolis and St. 
 Paul, Minnesota, Des Moines, Iowa, Milwaukee, Wiscon- 
 sin, Louisville, Kentucky, Paterson and Trenton, New Jer- 
 sey, Baltimore, Maryland, to the list. Springfield, Massa- 
 chusetts, was added by chapter 454 of the laws of 1896. 
 
 Other cities were added by name by chapter 386 of the 
 laws of 1897 and chapter 598 of the laws of 1902. 
 
 RAILWAY BONDS MADE LEGAL INVESTMENTS 
 
 Railway bonds were first made legal investments for Sav- 
 ings Banks by the provisions of chapter 236 of the laws 
 of 1898. This amendment permitted investments in first 
 mortgage bonds on railways situated in the State of New 
 York, and was practically the same as subdivision (a) in 
 the present investment section. 
 
 Section 386 of the laws of 1899 gave a considerable list 
 of railroads by name, beginning with the Chicago & North- 
 western Railway Co., and ending with the Fonda, Johns- 
 town & Gloversville Railroad. Savings Banks were per- 
 mitted to purchase first mortgage bonds, or the bonds which 
 were secured by first mortgage, on a part of these roads. 
 
 Chapter 42 of the laws of 1900 added the Chicago & 
 Alton to the Savings Bank list. 
 
 Chapter 440 of the laws of 1902 added practically what 
 is now subdivision (c) of the investment section. 
 
 Chapter 640 of the laws of 1903 finally capped the climax 
 of railroad legislation by legalizing the refunding bonds 
 of the Fonda, Johnstown & Gloversville road without add- 
 
DEVELOPMENT OF SAVINGS BANK LEGISLATION 191 
 
 ing any of the safety requirements which had been thrown 
 around the other railroad bonds legalized for Savings Bank 
 investments. 
 
 Undoubtedly this act, together with the issuing of a first 
 and Refunding mortgage bond by the Chicago, Rock Island 
 & Pacific Railway Company, which technically complied 
 with the letter of the New York State Savings Bank law 
 but which seemed to violate its spirit, had a great deal to 
 do in causing the enactment of chapter 401 of the laws 
 of 1905. By this law both the railroad and the city sub- 
 divisions of the investment section were modified by doing 
 away with the names of the particular cities and railroads 
 and setting up certain requirements as to size, location, 
 earning capacity and financial record, by which to deter- 
 mine the cities or corporations whose obligations could be 
 purchased by Savings Banks. This act was amended by 
 chapter 581 of the laws of 1906 in such a way as to pre- 
 vent bonds which had once become legal for Savings Bank 
 investment from being illegalized by the merger of the com- 
 pany which issued them with some other company. Sub- 
 division four of the investment section was amended by 
 chapter 100 of the laws of 1912 and subdivision three was 
 amended by chapter 416 of the laws of 1913. No changes 
 of consequence were made in the investment section at the 
 time of the revision of the Banking Law in 1914 and no 
 changes have been made since the law was enacted except 
 the amendment made by chapter 515, laws 1915, which 
 preserved the legality for investment of the bonds of the 
 New York Central & Hudson River Railroad in spite of 
 the termination of the corporate life of that company, and 
 the formation of the present corporation. 
 
 The General Law of 1875 was unquestionably a desir- 
 able innovation in the delimitation of the powers of Savings 
 Banks in the State of New York. It is furthermore note- 
 worthy as being the most thorough and comprehensive en- 
 actment on the statute books of any State up to that time, 
 and it is the foundation of all subsequent laws in the Em- 
 
192 CENTURY OF AMERICAN SAVINGS BANKS 
 
 pire State governing Savings Bank organization and man- 
 agement. By its provisions, all these institutions were 
 standardized to identical powers, rights and liabilities. 
 
 One notable amendment to this law was made in 1877, 
 by which each Savings Bank was permitted to carry a sur- 
 plus fund of 15 per centum of its deposits, instead of 10 
 per centum, the permissible surplus since 1839. In the 
 event that the surplus of any Savings Bank should exceed 
 15 per cent, of its deposits, the law requires that at least 
 once in three years, the excess over 15 per centum should 
 be equitably disbursed to depositors, as an extra dividend, 
 in addition to the regular dividends. 
 
 SALUTARY RESULTS OF EXAMINATIONS 
 
 In the matter of examinations, the constant supervision 
 of the Banking Department, the yearly examination of 
 assets and liabilities, and the semi-annual reports demanded 
 by law have done incalculable good. Practices of a doubt- 
 ful nature are quickly corrected, illegal investments with- 
 drawn or sold. The blanks now in use have been perfected 
 to such a degree that, with few exceptions, all items re- 
 ported are susceptible of proof through former reports. In 
 the early days, there was no tmiform method of stating val- 
 ues of securities held; to-day, a uniform practice exists 
 whereby all banks alike state the value of their investments. 
 That the Savings Banks of New York are the admiration 
 of the people of the United States is very largely due to 
 the investment laws, which render these institutions and 
 their investments safe beyond any contingency. Each de- 
 positor rests secure in the return of every dollar of his 
 deposit. 
 
 Bond and mortgage loans always have been allowed as 
 an investment; the charter of every Savings Bank provides 
 for them. The security, taking into consideration all the 
 restrictions commonly imposed as to proportionate value 
 based upon appraisal, income, improvement, neighborhood, 
 character, etc., is unquestioned. As a convertible or liquid 
 security, however, they have no value. 
 
DEVELOPMENT OF SAVINGS BANK LEGISLATION 193 
 
 This form of security has stood the test of time, for, 
 though a slo\(^ asset, they are, by the same token, when con- 
 servatively made, of the highest order of excellence. Their 
 earning power is greater than that of any other form of 
 security permitted. It is safe to say that the present sur- 
 plus of the combined 141 banks of the State of New York 
 represents, almost exclusively, excess earnings from real 
 estate loans. The rates on loans vary from 4 to 5^ per 
 cent.; the average may be conservatively stated as 4J4 per 
 cent. With such a basis of earning power, covering 60 to 
 65 per cent, of the total deposits of the State, each bank is 
 in a position to meet expense of management and pay a 
 fair return to the depositors, besides setting aside to undi- 
 vided profits a sum to meet the surplus requirements of the 
 revised Banking Law of 1814. 
 
 The gradual decrease in the making of collateral loans 
 is commendable. Such loans, though restricted to the 
 pledge of securities legal for investment, are seldom of 
 advantage as a liquid investment, and money thus invested 
 would find a more profitable return by the purchase of 
 securities or loans on bond and mortgage. 
 
 In a Savings institution the security of the principal is, 
 beyond question, the first consideration. The enactment 
 of a law prohibiting the deposit of funds in Banks of Dis- 
 count operated under the National Bank Act, imless in some 
 way they are made preferred creditors, as is now done with 
 deposits made in State Banks and Trust Companies, might 
 be a subject for general discussion. This protection would 
 have to be by statutory preference, or through personal 
 bond or guaranty of a board of directors. 
 
 It hardly would be edifying to review the history of the 
 other sections of the Savings Bank act with the detail 
 thought advisable in regard to those regulating investments ; 
 but in order to make the matter accessible to those inter- 
 ested in a technical way, there has been added to this chap- 
 ter a table which gives in detail all Savings Bank legislation 
 down to the present time. 
 
 This chapter ought not to be concluded without remark- 
 
194 
 
 CENTURY OF AMERICAN SAVINGS BANKS 
 
 ing upon the changed attitude of the Legislature toward Sav- 
 ings Banks in general. Of late years, the lawmakers have 
 exhibited much greater confidence in the officers of Savings 
 Banks, and have seemed more and more disposed to meet 
 their views in legislative matters. At least, the members of 
 the Legislature show an increased willingness to listen pa- 
 tiently and with open mind to the arguments of those who 
 represent the Savings Banks of the State, either in favor of 
 or in opposition to proposed legislation, and constantly in- 
 creasing intelligent appreciation of all that these beneficent 
 institutions really stand for. 
 
 SCHEDULE OF STATUTES AFFECTING SAVINGS BANKS 
 
 General Savings Bank Statutes 
 
 Laws relating to Investments 
 
 Chapter 
 
 Laws of Chapter 
 
 213 
 
 371 
 
 409 
 
 689 
 
 10 
 
 369 
 
 1869 
 1875 
 1882 
 1892 
 1909 
 1914 
 
 Laws relating to Trustees 
 Chapter Laws of 
 
 929 
 
 415 
 
 453 
 
 153 
 
 237 
 
 94 
 
 113 
 
 1895 
 1895 
 1896 
 1908 
 1912 
 1913 
 1913 
 
 Laws relating to Depositors 
 Chapter Laws of 
 
 91 1850 
 
 347 1878 
 
 247 1907 
 
 Laws relating to Surplus 
 Chapter Laws of 
 
 569 1886 
 
 406 1901 
 
 Laws relating to School Savings 
 
 Banes 
 
 Chapter Laws of 
 
 568 1904 
 
 478 
 
 257 
 
 492 
 
 72 
 
 136 
 
 315 
 
 113 
 
 214 
 
 845 
 
 907 
 
 660 
 
 907 
 
 134 
 
 287 
 
 524 
 
 373 
 
 525 
 
 440 
 
 178 
 
 813 
 
 454 
 
 386 
 
 236 
 
 556 
 
 386 
 
 42 
 
 440 
 
 598 
 
 328 
 
 640 
 
 401 
 
 581 
 
 100 
 
 416 
 
 515 
 
 Laws of 
 
 . 1847 
 
 . 1853 
 
 . 1853 
 
 . 1854 
 
 . 1858 
 
 . 1863 
 
 . 1864 
 
 . 1865 
 
 . 1868 
 
 . 1869 
 
 . 1871 
 
 . 1871 
 
 . 1880 
 
 . 1880 
 
 . 1887 
 
 . 1888 
 
 . 1890 
 
 . 1893 
 
 . 1894 
 
 . 1895 
 
 . 1896 
 
 . 1897 
 
 . 1898 
 
 . 1898 
 
 . 1899 
 
 . 1900 
 
 . 1902 
 
 . 1902 
 
 . 1903 
 
 .. 1903 
 
 ,. 1905 
 
 . 1906 
 
 ,. 1912 
 
 . 1913 
 
 .. 1915 
 
DEVELOPMENT OF SAVINGS BANK LEGISLATION 195 
 
 Laws relating to Reports and re- 
 lations OP Banks to the Bank- 
 ing Department 
 
 Chapter Laws of 
 
 136 1857 
 
 693 1871 
 
 252 1878 
 
 333 1898 
 
 253 1901 
 
 472 1901 
 
 297 1905 
 
 394 1905 
 
 416 1905 
 
 118 1905 
 
 481 1906 
 
 408 1907 
 
 123 1908 
 
 155 1908 
 
 126 1910 
 
 707 :.. 1911 
 
 708 1911 
 
 104 1912 
 
 482 1913 
 
 Laws relating to Delinquent Cor- 
 porations, Dissolution of Cor- 
 porations, ETC. 
 
 Chapter Laws of 
 
 336 1855 
 
 372 1878 
 
 178 1880 
 
 439 1883 
 
 504 1884 
 
 930 1895 
 
 693 1904 
 
 143 1908 
 
 126 1910 
 
 452 1910 
 
 Laws relating to methods op doing 
 business 
 
 Chapter Laws of 
 
 262 1835 
 
 347 1839 
 
 437 1849 
 
 256 1877 
 
 347 1878 
 
 48 1884 
 
 517 1887 
 
 414 1889 
 
 39 1895 
 
 124 1908 
 
 154 1908 
 
 Laws relating to taxation, ad- 
 vertising AND miscellaneous RE- 
 STRICTIONS 
 
 Chapter Laws of 
 
 132 1858 
 
 761 1866 
 
 32 1867 
 
 861 1867 
 
 373 1881 
 
 477 1885 
 
 397 1892 
 
 929 1895 
 
 452 1896 
 
 908 1895 
 
 410 1898 
 
 148 1902 
 
 248 1905 
 
 456 1905 
 
 564 1905 
 
 572 1905 
 
 133 1908 
 
 157 1908 
 
 169 1908 
 
 240 1909 
 
 402 1909> 
 
 497 190?» 
 
 126 1910 
 
 398 1910» 
 
 634 19101 
 
 585 1911 
 
 101 1912' 
 
 208 1912- 
 
 211 1912; 
 
 342 1912- 
 
 102 1913i 
 
 334 19131 
 
 357 1913- 
 
 670 1913; 
 
 794 1913! 
 
CHAPTER XVI 
 
 MORTGAGE AS A SAVINGS BANK INVESTMENT 
 
 The Difficulties of Proper Appraisal — Good Bonds Not Easy to Ob- 
 tain — How Some Borrowers "Milk" the Property — Brokers and 
 the Manner in Which They Operate — "Filtered Mortgages" — 
 Title Examination Exceedingly Important — ^Title Companies 
 Bear Losses When They Come — Forged Mortgages Not Uncom- 
 mon — Steady Demand for Guaranteed Mortgages. 
 
 Mortgages form a substantial proportion of the invest- 
 ment of almost every Savings Bank in New York State. 
 There is perhaps no investment that is so secure or pays 
 so well as a good mortgage. On the other hand, there is 
 hardly any investment much worse than a bad mortgage. 
 
 It is important that those who are in charge of the finan- 
 cial interests of a Savings Bank should give to the question 
 of real estate mortgages most careful consideration. A 
 Savings Bank is peculiarly subject to opportunities to make 
 bad mortgages. The officers and trustees are apt to be be- 
 set by friends who want to place their mortgages with the 
 'bank and it is possible to produce appraisals of certain 
 classes of real estate men that would seem to justify the 
 making of almost any loan. It is easy to make loans for 
 friends but difficult sometimes to collect them. 
 
 A mortgage never ought to be made by a Savings Bank 
 
 without the most careful scrutiny, and extra care should be 
 
 exercised if the application comes through some one closely 
 
 connected with the institution. Such mortgages may not 
 
 show their real character at once. They may run on for 
 
 years, interest and taxes being paid but the equity growing 
 
 less every year, and when the final loss does come it may 
 
 be a very bad one. 
 
 Savings Banks are allowed to loan 40 per cent, of the 
 
 196 
 
MORTGAGE AS A SAVINGS BANK INVESTMENT 197 
 
 value of unimproved property and 60 per cent, of the value 
 of improved property but at present loans on unimproved 
 property are not at all popular. Few lenders will make 
 such loans, and Savings Banks should be extremely wary 
 of them. Vacant property is useful only to a builder who 
 is ready to improve it, or to a capitalist who will pay taxes 
 and interest and look to the far future for his return. The 
 average investor wants as security for his loan property that 
 will pay interest and carrying charges if he ever lias to 
 take it in at a foreclosure sale. The Savings Bank is in 
 the same position, for if it must buy property it should be 
 property for which there is a ready sale. It is no part of 
 the business of a Savings Bank to speculate on future profits 
 in real estate. 
 
 DIFFICULTIES OF PROPER APPRAISAL 
 
 The determination of the value of the property is left to 
 a committee of the bank's trustees, who, in turn, must be 
 guided by the judgment of real estate appraisers. Apprais- 
 ing is not an exact science. There are in the City of New 
 York alone, some four or five thousand men who seem to 
 feel qualified to act as real estate appraisers. Many of 
 these would be willing to appraise property in any portion 
 of the City of New York, from the Battery to Yonkers line, 
 and a great many of them would be willing to extend their 
 appraisals from the East River to Montauk Point. They 
 seem to think that because they have conducted a real estate 
 office for a few years, have secured a few mortgages and 
 made a few sales, they are gifted with an inspired knowl- 
 edge of the value of real estate in any portion of Greater 
 New York. 
 
 As a matter of fact, it is very difficult for any one ap- 
 praiser to be familiar with more than a limited amount of 
 territory. The ability to appraise property requires a num- 
 ber of things : 
 
 First. — A very retentive memory for values. 
 
 Second. — Some opportunity to acquire inside knowledge 
 of the prices at which property has been sold. As a rule, 
 
198 CENTURY OF AMERICAN SAVINGS BANKS 
 
 this means being actively engaged in the sale of property 
 or being personally acquainted with people who have bought 
 and sold it. Very few men are apt to have this opportunity 
 except within a limited district, for owners do not talk truth- 
 fully about prices paid except to very close friends. 
 
 Third. — As a rule, the proper appraisal of property re- 
 quires a plant showing all transfers and private information 
 in regard to sales. This plant must be posted up to date, 
 with all available information, and if it covers more than a 
 limited district, it is an expensive luxury for any appraiser 
 to possess. 
 
 Fourth. — An appraiser must have a knowledge of the 
 general conditions in a neighborhood, knowing whether the 
 movement of values is upward or downward. He must 
 know the trend of business and residence and whether a cer- 
 tain piece of property has a future. As a rule, he also must 
 know something as to whether or not it has a past. Cer- 
 tain houses in New York City have been erected by builders 
 with so poor a reputation that the mere name of the builder 
 is enough to defeat a sale of the property. A well-informed 
 real estate man knows that the repair bill in such case, will 
 be a very serious matter. 
 
 Fifth. — ^An appraiser, above all things, must be honest 
 not only with the parties for whom he is working but with 
 himself. If an appraiser owns property in the neighbor- 
 hood or is interested in the sale of properties nearby, he is 
 very apt to look at property with a more roseate view than 
 would be the case with a man whose judgment is entirely un- 
 biased. Thus, we are met with the dilemma that the man 
 who knows most about the property is the man who has 
 bought and sold property in the neighborhood and yet, on 
 the other hand, he is likely to be the man who has interests 
 in that neighborhood and to be most prejudiced in its fa- 
 vor. 
 
 The solution of the problem is to know the real character 
 of the man who is appraising for you and to know whether 
 he has your own interest at heart. One must know that his 
 appraisal is given not to help some friend who owns the 
 
MORTGAGE AS A SAVINGS BANK INVESTMENT 199 
 
 property or to help himself, because he owns adjoining prop- 
 erty or property across the street. 
 
 Of course, it is hardly possible for a Savings Bank to 
 have enough appraisers in its own employ to have one for 
 every district in the city. However, if a Savings Bank has 
 one honest appraiser in its own employ, a man who is above 
 temptation and above reproach, and this man is responsible 
 for all appraisals for loans by the bank, he probably can 
 keep the bank out of trouble by making use of other ap- 
 praisers in districts with which he is not himself familiar. 
 Sometimes this information can be secured without expense 
 from other appraisers who are personal friends; many ap- 
 praisers trade back and forth in this way. Sometimes it 
 can be secured only by paying for it, and in such cases, the 
 bank's own appraiser should be allowed to order an ap- 
 praisal from the man who can do it the best. A few dollars 
 spent on appraisals from the right source often will save 
 thousands of dollars in foreclosure losses. 
 
 In cities of 50,000 inhabitants or less, it may be possible 
 to depend on the knowledge of one man for valuations for 
 the whole surrounding district, and in such communities the 
 moral risk also is easier to ascertain. In a great city like 
 New York, where people are strangers and where loans are 
 made to borrowers entirely unknown to the bank, the chief 
 dependence must be the value of the property itself. 
 
 GOOD BONDS NOT EASY TO OBTAIN 
 
 Of course, it is well to get a good bond, if possible, but 
 it is hard to find out what bonds are good and what bonds 
 are not. In the smaller communities people's personal af- 
 fairs are better known, and a Savings Bank in the locality 
 can tell whether the borrower has the reputation of paying 
 his debts. It also is possible to know more about his per- 
 sonal resources and to know whether or not he will feel a 
 moral obligation to pay off the mortgage, even if the prop- 
 erty should so depreciate in value that it would not sell for 
 enough at a foreclosure sale to meet the indebtedness. 
 
 It is well to regard with suspicion loans where the owner 
 
200 CENTURY OF AMERICAN SAVINGS BANKS 
 
 himself refuses to go on the bond, although, very often, this 
 indicates only careful forethought on the part of the bor- 
 rower. That is, he may be a man who is in the habit of 
 paying his debts and who does not want to assimie any 
 responsibility he can avoid. Such a man will pay $25 to 
 some one without resources to induce him to sign the bond. 
 The real owner thus is free and the bank has no personal 
 security. If the value of the property thoroughly justifies 
 the loan, perhaps no harm will result, but in accepting such 
 a bond, — which is known as a dummy bond, — the lender 
 has given up one chance of collecting his money, viz., the 
 personal responsibility of the owner. 
 
 HOW SOME BORROWERS "mILK" THE PROPERTY 
 
 There is considerable psychology in the matter of bonds. 
 The best lender is the one who can look into the future and 
 see what the borrower will do when trouble comes. There 
 are individuals who borrow all they can on a piece of real 
 estate with the distinct intention of spending nothing for 
 repairs, collecting every possible cent of income from the 
 property, and then letting it go, after running up as large 
 a bill as possible for interests and taxes. This is what is 
 known as milking the property. 
 
 On the other hand, there are individuals who will hold 
 on to a piece of property long after every one else knows 
 they have a very bad bargain. Of course, these people are 
 largely owners who are living in their own houses. The 
 mortgage on a man's home has an interest for him beyond 
 any mere business venture. He thinks of what his friends 
 and neighbors will say if the family has to move out be- 
 cause the mortgage has been foreclosed. Home owners 
 often submit to desperate economies and sometimes succeed 
 in paying off a mortgage and saving the home where there 
 seemed to be little hope of success. This is the kind of 
 man behind a mortgage that saves lenders from losses. 
 
 In New York City, the title guarantee companies make a 
 large proportion of the loans that are made and their method 
 of handling their mortgages may well be followed as far as 
 
MORTGAGE AS A SAVINGS BANK INVESTMENT 201 
 
 possible by a Savings Bank that is doing enough business 
 to justify the expense involved. The method of procedure 
 is much the same in all of the companies. Applications are 
 received by one or more application clerks who become per- 
 sonally familiar with the brokers who are in the habit of 
 presenting such applications. These application clerks also 
 receive applications direct from the owners. As the fees 
 charged are the same to owners or brokers, the broker must 
 make his commission from the borrower and in some way 
 justify his employment. 
 
 BROKERS AND HOW THEY OPERATE 
 
 When the borrower wishes a very liberal loan, the best 
 broker is one who is supposed to know the lenders who will 
 lend liberally. By trying a loan in one place after another, 
 he very often succeeds in getting more on the property than 
 the owner could get himself, as the owner would not know 
 where to go. How much this business is in the hands of 
 brokers may be judged from the fact that in one of the 
 largest lending institutions in New York City, nine-tenths 
 of the applications received are from brokers. How many 
 applications are good may be judged also from the fact that 
 this same institution probably accepts not more than one 
 out of every twenty of the applications that are presented to 
 it. This shows how much care must be used in selecting 
 mortgages. This is particularly true in times when money 
 is plentiful. These times are apt to come when real estate 
 is not very active and applications are scarce. The tempta- 
 tion to accept loans is stronger at such periods, but the great- 
 est care must be taken then because, as a rule, in periods 
 of real estate stagnation it is only the poor loans that are 
 offered. The actual holders of them become worried and 
 insist that the owners find new borrowers, or the owners, in 
 hard straits, try to increase the loans beyond the proper 
 amounts. 
 
 This idea was well expressed by a New York company 
 which issued an advertisement under the heading, "Filtered 
 Mortgages." The advertisement ran: 
 
202 CENTURY OF AMERICAN SAVINGS BANKS 
 
 It is dangerous to drink when the well is low unless the water is 
 carefully filtered. It is dangerous to invest your money in mort- 
 gages when the demand for them exceeds the supply, unless you get 
 them from people capable of making a proper selection. Just now 
 it is difficult to get good mortgages and many poor loans are finding 
 takers. 
 
 In a large lending institution, the application clerks soon 
 get to know many of the "chestnuts," as the impossible loans 
 are called. These are presented by one broker after an- 
 other and the application clerks save time for themselves 
 and the brokers by saying at once that the application has 
 been presented and declined at an earlier date. An appli- 
 cation clerk also must have sufficient knowledge of values 
 to make suggestions to applicants and so secure loans on 
 slightly better terms than those at which they were first 
 offered. Most companies, however, make it a rule that the 
 clerk must receive any application that the borrower in- 
 sists upon leaving, because opinions as to values differ very 
 materially and any company that depends on one man to 
 accept or decline its loans is apt to take some poor ones and 
 lose some good ones. 
 
 Applications received by the application clerk are re- 
 ferred to the appraisers, each application going to the ap- 
 praiser most familiar with the district in which the property 
 is located. The appraiser makes his report to an afternoon 
 committee which, in one large institution, meets every day. 
 This committee is composed of all of the appraisers and of 
 the men in the company most familiar with mortgage mat- 
 ters. Such loans as are clearly imdesirable are declined at 
 once; those that are unquestionably good are accepted after 
 discussion by the cormnittee to make sure that the majority 
 agree on the merits of the loai^. Those loans that are doubt- 
 ful are postponed for future consideration. 
 
 On one day of each week, a meeting of the regular mort- 
 gage committee is held. This is composed of certain trus- 
 tees of the company familiar with real estate matters. They 
 confirm the action of the sub-committee so far as acceptances 
 are concerned, and pass on the loans as to which the sub- 
 committee has been in doubt. 
 
MORTGAGE AS A SAVINGS BANK INVESTMENT 203 
 TITLE EXAMINATION EXCEEDINGLY IMPORTANT 
 
 The examination of the title to the property is a very 
 important matter. Most Savings Banks have attorneys who 
 are thoroughly familiar with real estate matters, and the 
 examination of the title is usually left to them. During the 
 past thirty years, however, the title companies have been 
 assuming more and more responsibility for title examina- 
 tion, and the attorneys have been devoting themselves to 
 other lines of law work. Some Savings Banks have taken 
 the position definitely, that they must have title insurance 
 policies in connection with every loan made. The state 
 laws require that a Savings Bank must have either an ab- 
 stract of title prepared by some one representing it, or a title 
 policy. Both are not necessary. There are undoubtedly 
 troubles in connection with real estate titles that no lawyer 
 or title company can discover. These are the claims that 
 arise when a mortgage has been executed by a man claim- 
 ing to be single, and after his death some one appears claim- 
 ing to have been secretly married to him. Such a widow, 
 if she proves her claim, is entitled to a certain interest in 
 the property and the possibility of loss to the bank is a very 
 real one. 
 
 TITLE COMPANIES BEAR THE LOSSES 
 
 There are other troubles in connection with the misinter- 
 pretatioli of wills or the improper conduct of exceedingly 
 technical suits for the foreclosure or partition of real estate. 
 The best of lawyers will differ as to certain steps in such 
 suits, and the courts may differ with the lawyers. The title 
 companies frankly admit these troubles and their inability 
 to circumvent them. They must pay when losses come. 
 To a large corporation that makes provision by a proper 
 guarantee fund to take care of these losses, they amount to 
 very little in the long run, but in individual cases they are 
 apt to be heavy. The principle of insurance is well estab- 
 lished in this country, and it is only reasonable that Savings 
 Banks should take advantage of it. 
 
204 CENTURY OF AMERICAN SAVINGS BANKS 
 
 The title companies are willing, and in fact prefer, to 
 deal with an institution through its regular attorneys, and 
 provisions are made by the title companies for the compen- 
 sation of the attorneys so that the bank can, if it insists, 
 secure a policy of title insurance with each transaction with- 
 out any expense whatever to the bank itself, and at the same 
 time the matter is taken care of in a way that makes it rea- 
 sonably profitable to the bank's attorneys. A very large 
 number of attorneys representing Savings Banks do this 
 of their own volition, as they prefer to have the protection 
 of the policy for the bank, in addition to the care and per- 
 sonal attention that the attorney can give. Of course, in 
 smaller communities, where the title companies have not 
 yet come, the bank must depend on the best legal services 
 it can secure. 
 
 FORGED MORTGAGES NOT UNCOMMON 
 
 Great care must be taken in populous communities to pre- 
 vent forged mortgages. There have been a good many 
 cases in the last fifty years where people have falsely rep- 
 resented themselves as the owners of property and actually 
 secured mortgages from unsuspecting lenders. The real 
 owner knows nothing of the transaction until he receives his 
 interest notice and begins to investigate. Then the lender 
 finds that he has no mortgage on the property at all, and 
 that his money has been turned over to some one who has 
 given in exchange for it a mortgage executed by one who is 
 not the owner and who has forged the owner's name. A 
 good attorney will be on the lookout for anything of this 
 kind, and will insist on identifications and other evidences 
 that will stamp the transaction as genuine. The risk is 
 avoided if a policy is secured from a title company. 
 
 The care of the mortgages after they are made and the 
 collection of interest are important items. An interest no- 
 tice should be sent out sufficiently in advance of the time 
 to insure the owner being prepared to pay the interest on the 
 day it is due. If the interest is not paid, it should be fol- 
 lowed very shortly by another notice, and if response of 
 
MORTGAGE AS A SAVINGS BANK INVESTMENT 205 
 
 some sort is not immediate the matter should be turned over 
 to the bank's attorneys for action. 
 
 Of course, there are cases where a borrower will be a lit- 
 tle slow in his interest, but where its payment is reasonably 
 sure. Some one in the bank with discretion should have 
 all of these cases presented to him; action should be taken 
 in regard to each one of them, and a careful diary record 
 kept. Fire insurance expirations should be looked after 
 with absolute accuracy so that such insurance should never 
 imder any conditions be permitted to lapse. 
 
 PAYMENT OF TAXES AND ASSESSMENTS 
 
 The payment of taxes, water rates and assessments should 
 be placed in the care of some responsible individual. The 
 safest thing to do is to have independent tax searches made 
 by one of the title companies and brought down to date at 
 least once every year. The attention of the owner should 
 be called to taxes that have remained unpaid a few months 
 beyond the date they are due, and payment should be in- 
 sisted upon. 
 
 There are times when it pays to be lenient with both taxes 
 and interest, but this must be done with good judgment, for 
 it is wonderful how such taxes and interest can add to the 
 mortgage indebtedness when the foreclosure suit is com- 
 pleted. It is not entirely safe to depend upon the produc- 
 tion of tax receipts in communities where the tax matter is 
 a complicated one, as it is in New York City. Mistakes on 
 the part of public officials occur frequently, and a man may 
 be pa)dng taxes on his neighbor's house without any knowl- 
 edge of the fact. The title company search each year is a 
 very valuable check against errors of this kind. 
 
 The renewal of mortgages when due should not be made 
 in a routine way. The property should be re-inspected by 
 the bank's appraiser and a revaluation obtained from him. 
 This should be done with the same care as was used when 
 the loan was originally made. If the mortgage is a good 
 one and the bank wants to be sure of it for a certain period 
 for the future, a definite extension should be arranged with 
 
206 CENTURY OF AMERICAN SAVINGS BANKS 
 
 the borroweiv If, on the other hand, the neighborhood is 
 changing, it is to the advantage of the bank that the mort- 
 gage should run along overdue. This gives the bank the 
 privilege of calling it at any time. If the value has be- 
 come less, payments in reduction of the loan should be in- 
 sisted upon. If the borrower cannot at once pay down the 
 full amount required, it often is possible to arrange to get 
 payments of certain definite sums on each interest day. 
 This results in bringing the mortgage down to a point where 
 it is safe, and involves no great hardship to the owner. 
 Often it is wiser when depreciations have brought about 
 changes that imperil the safety of the bank's investment, to 
 take payments and so get back to safety gradually, rather 
 than by foreclosure to load the bank with a piece of prop- 
 erty that may be unsalable and whose future can be worked 
 out far better by the owner than by the bank itself. 
 
 Everlasting discretion, aided by the best of professional 
 real estate knowledge as to values, is the only rule the bank 
 can follow to get safely through the difficult situations that 
 are bound to occur in connection with real estate mortgages. 
 As a whole, they are the very best class of investments for 
 the bank because the period of a mortgage loan is compara- 
 tively short, and if a loan is watched with care there is 
 always the opportunity to get out safely and reinvest the 
 money in other directions. They are not like the bonds 
 whose maturity is fifty years awav and whose decreasing 
 value in a falling market makes the bank statements vm- 
 pleasant to look at. The opportunity to get out and re- 
 invest comes within a reasonable period. 
 
 GUARANTEED MORTGAGES IN DEMAND 
 
 For private investment, the guaranteed mortgage grad- 
 ually has been replacing the mortgage where the investor 
 depends upon his own judgment. It pays one-half of one 
 per cent, less than the actual interest paid by the borrower, 
 this one-half of one per cent, being retained by the com- 
 pany guaranteeing the pajTnent of principal and interest as 
 its compensation for the work and the risk. A guaranteed 
 
MORTGAGE AS A SAVINGS BANK INVESTMENT 207 
 
 mortgage requires no care whatever on the part of the bank. 
 Provided the bank is dealing with a guarantee company 
 that is beyond all question solvent and prudent, it can buy 
 its mortgages over the counter with no more risk than if they 
 were government bonds. 
 
 One of the largest guarantee companies in New York 
 advertises freely that it has returned to investors since or- 
 ganization more than $500,000,000, and that in its entire 
 history no investor ever lost a dollar. The safety of the 
 investor in the past is equally true of three other companies 
 in the same line of business, although when the far future 
 is looked to, it seems wiser to deal with the larger com- 
 panies. 
 
 The guarantee company picks out the investment and 
 takes care of the collection of interest, sending its own check 
 on the day the interest is due, whether or not it has suc- 
 ceeded in collecting it from the borrower. It also looks 
 after payment of taxes and fire insurance and any questions 
 of depreciation of the mortgaged property, so that the bank 
 has no care of any kind. The whole question is whether 
 or not the bank wants to give up the one-half of one per cent, 
 or do the work and take the risk that the guarantee com- 
 pany assvimes. Offset against the one-half of one per cent, 
 is, of course, considerable saving of clerk hire that must be 
 paid by the bank and which cannot be charged to the bor- 
 rower. The question is an open one among the Savings 
 Bank fraternity, each plan having its advocates. 
 
 PAYMENTS FOR REAL ESTATE ACQUIRED BY FORECLOSURE 
 
 According to the report of the Superintendent of Banks 
 for the year 1915, the bond and mortgage investments of 
 the Savings Banks of the State of New York aggregated 
 $1,043,325,012.46. Payments by seventy-seven banks for 
 real estate acquired by foreclosure totaled $6,773,846.42, 
 divided by counties as follows: 
 
 Albany, $579,748.00; Bronx, $129,199.98; Cayuga, 
 $2,385.06; Columbia, $6,100.05; Dutchess, $135,241.11; 
 Erie, $27,095.94; Jefferson, $28,212.12; Kings, $874,- 
 
208 CENTURY OF AMERICAN SAVINGS BANKS 
 
 537.31; Monroe, $19,246,73; New York, $4,312,752.70; 
 Niagara, $40,484.61; Oneida, $2,518.15; Onondaga, $30,- 
 874.72; Orange, $4,403.85; Oswego, $9,713.11; Putnam, 
 $4,314.65; Queens, $169,503.74; Richmond, $16,965.21; 
 Suffolk, $103,778.50; Ulster, $3,340.00; Westchester, 
 $273,430.53. 
 
CHAPTER XVII 
 
 INVESTMENT IN RAILROAD BONDS 
 
 History and Principal Features of This Portion of the Savings Bank 
 Law — ^The Revision of 1905 a Step in the Direction of Uni- 
 formity — Application of the Law to the Refunding of Mort- 
 gages — Brief History of the Working of the Statute in the Ten 
 Years Since Its Enactment — Operation Becomes Automatic — 
 Changed Conditions Require Great Care — Some Interesting 
 Comparisons. 
 
 Investment in railroad bonds by the Savings Banks of 
 the State dates from the enactment of the present subdivi- 
 sion (a) of the law in the year 1898. 
 
 This subdivision legalized certain bonds of railroad cor- 
 porations of the State, and also bonds of corporations of 
 any other State whose railroads are connected with and 
 controlled and operated as part of the system of a railroad 
 corporation of this State. 
 
 The principal requirement of this subdivision is that the 
 corporation at no time within five years next preceding the 
 date of any investment shall have failed to pay the prin- 
 cipal and interest of all its mortgage bonds, and in divi- 
 dends to its stockholders during each of said five years, an 
 amount at least equal to 4 per cent, upon all its outstand- 
 ing capital stock, and that the amount of stock upon which 
 each dividend is paid shall have equaled at least one-third 
 of its mortgage debt. 
 
 Subsequently, subdivisions (b), (c), and (d) were added 
 to the law, which legalized various issues of bonds of the 
 corporations specifically named in said subdivisions. 
 
 Subdivision (b) specifically named the following: 
 
 Chicago & Northwestern R. R., Chicago, Burlington & 
 Quincy R. R., Michigan Central R. R., Illinois Central 
 R. R., Pennsylvania R. R., Delaware & Hudson Company, 
 Delaware, Lackawanna & Western R. R., New York, New 
 
 209 
 
210 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Haven & Hartford R. R., Boston & Maine R. R., Maine 
 Central R. R., Chicago & Alton R. R., Morris & Essex 
 R. R., Central R. R. of New Jersey, United New Jersey 
 R. R. & Canal Co. 
 
 The principal requirements of this subdivision are that 
 at the time of making the investment the corporation shall 
 have earned and paid regular dividends of not less thaii 
 4 per cent, on all its issues of capital stock for the ten years 
 next preceding such investment, and that its capital stock 
 shall equal or exceed in amount one-third of its bonded 
 indebtedness. 
 
 Subdivision (c) specifically names the following: 
 
 Chicago, Milwaukee & St. Paul Ry., Chicago, Rock 
 Island & Pacific Ry. 
 
 The principal requirements of this subdivision are that 
 bonds of these corporations will remain a legal investment 
 so long as the corporation shall continue to earn and pay 
 at least 4 per cent, dividends per annum on its outstanding 
 capital stock, and that its capital stock shall equal or exceed 
 in amount one-third of all its bonded indebtedness. 
 
 Subdivision (d) specifically names the following: 
 
 Fonda, Johnstown & Gloversville R. R., Buffalo Creek 
 R. R. 
 
 This subdivision only requires that the Fonda, Johns- 
 town & Gloversville Railroad Company's capital stock shall 
 equal or exceed in amount one-third of its bonded indebted- 
 ness. This subdivision has no dividend payment require- 
 ment. 
 
 THE REVISION OF 1905 
 
 Prior to 1905, the above subdivisions were the only laws 
 governing this class of investments, and, as shown, there 
 was no uniformity, the laws being made by special legis- 
 lation. 
 
 During the year 1905, the laws regulating the invest- 
 ments of Savings Banks were revised. That part relating 
 to the investment in railroad bonds was revised by the addi- 
 tion of subdivisions (e), (f), (g), (h) and (i), and also 
 
INVESTMENT IN RAILROAD BONDS 211 
 
 by adding to subdivisions (b), (c) and (d) the following: 
 "Provided that the bonds authorized by this paragraph are 
 secured by a mortgage dated, executed and recorded prior 
 to January 1st, 1905." 
 
 This was for the purpose of requiring all subsequent is- 
 sues of bonds of the corporations named in said subdivi- 
 sions (b), (c) and (d) secured by mortgages dated after 
 January 1, 1905, to comply with the requirements of one 
 of the new subdivisions (e), (f), (g), (h) or (i). 
 
 The purpose for which the new subdivisions were added 
 was the creation of a standard with which a corporation 
 must comply and continue to comply in order to make its 
 bonds a legal investment for the Savings Banks of the State. 
 
 This standard is embodied in subdivisions (e) and (f), 
 and is as follows: 
 
 REQUIREMENTS OF THE CORPORATION 
 
 (a) Owns in fee 500 miles of standard gauge railway, or in case 
 it owns less than 500 miles of standard gauge railway its gross earn- 
 ings for five years shall not have been less than ten million dollars 
 each year. 
 
 (b) Have paid each year the matured principal and interest of 
 all its mortgage indebtedness for five years prior to making the in- 
 vestment. 
 
 (c) Paid in dividends each year for five years prior to making 
 the investment to its stockholders an amount at least equal to 4 per 
 cent, upon all of its outstanding capital stock. 
 
 (d) The gross earnings each year shall not have been less in 
 amount than five times the amount necessary to pay the interest pay- 
 able during that year upon its entire outstanding indebtedness and 
 the rentals for said year of all leased lines. 
 
 This standard, as will be seen from the above, is prin- 
 cipally based on the gross earnings of the corporation, as 
 the law requires these to be at least five times the interest 
 on all its indebtedness and rentals of leased lines. It may 
 be of interest to know how this standard was arrived at. 
 
 It was found that prior to the year 1905, the principal 
 railroads of the United States required about 70 per cent, 
 of their gross earnings to pay their operating expenses and 
 taxes, leaving 30 per cent, for the payment of interest and 
 
212 CENTURY OF AMERICAN SAVINGS BANKS 
 
 rentals and dividends. This 30 per cent, was divided as 
 follows: 20 per cent, for the payment of interest and 
 rentals of leased lines and the balance, 10 per cent., for the 
 payment of dividends, which the law requires to be at least 
 equal to 4 per cent, on its outstanding capital stock. The 
 above put in tabular form, would be as follows: 
 
 Gross Earnings 100 Per Cent. 
 
 Operating Expenses and Taxes 70 Per Cent. 
 
 Interest and Rentals 20 Per Cent. 
 
 Dividends and surplus 10 Per Cent. 
 
 100 Per Cent. 100 Per Cent. 
 
 Five times the Interest and Rentals (20 per cent.) is the 
 gross earnings required under the standard (100 per cent.). 
 Subdivision (e), in addition to establishing the above 
 standard, also provides how the bonds of the corporations 
 complying must be secured by mortgage in order to have 
 them become a legal investment. This is that the bond 
 must be secured by a mortgage which is at the time of mak- 
 ing the investment, or was at the date of the mortgage, 
 
 (1) A first mortgage upon not less than 75 per cent, of the rail- 
 way owned in fee by the company at the date of the mortgage; 
 
 (2) A refunding mortgage issued to retire all prior lien mort- 
 gage debts of the company and covering at least 75 per cent, of the 
 railroad owned in fee at the date of the mortgage; also that the mile- 
 age covered is 25 per cent, greater than is covered by any one of the 
 prior mortgages to be refunded; and also, that the bonds it secures 
 mature at a later date than any bond which it is given to refund. 
 
 This subdivision also has the provision that no bonds 
 so secured shall be a legal investment in case the mortgage 
 securing the same shall authorize a total issue of bonds 
 which together with all outstanding prior debts of said com- 
 pany (after deducting therefrom in case of a refunding 
 mortgage, the bonds reserved to retire prior debts at ma- 
 turity), shall exceed three times the outstanding capital 
 stock of the said company at the time of making said invest- 
 ment. 
 
 This provision was made for the purpose of limiting the 
 investment to the bonds of a corporation which are secured 
 
INVESTMENT IN RAILROAD BONDS 213 
 
 by a mortgage which does not authorize an amount which, 
 together with all prior debts, would be an amount in excess 
 of three times its outstanding capital stock. 
 
 As for example, a corporation with a capital stock of 
 ten million dollars and a funded debt consisting of the fol- 
 lowing: 
 
 $20,000,000 collateral trust bonds dated January 2, 1900, which 
 are secured by the deposit of stock and bonds of subsidiary com- 
 panies. 
 
 $20,000,000 first mortgage bonds dated January 2, 1902. These 
 being secured on the entire property of the company owned in fee. 
 
 The first mortgage bonds described above would not be 
 a legal investment (although the corporation complied with 
 the standard) , for the following reasons : As the first mort- 
 gage was dated subsequent to the collateral trust, the col- 
 lateral trust bonds are "prior debts" which must be added 
 to the authorized issue of the first mortgage, making an 
 amount in excess of three times the $10,000,000 capital 
 stock. 
 
 APPLICATION TO REFUNDING OF MORTGAGES 
 
 The application of this provision to a refunding mort- 
 gage is also of interest, especially as this subdivision uses 
 two expressions in defining debts, namely, "prior lien mort- 
 gage debts" and "prior debts." 
 
 "Prior lien mortgage debt" of a necessity must be a 
 "prior debt" to a refunding mortgage, but all "prior debts" 
 may not necessarily be "prior lien mortgage debts"; as, for 
 example, take a corporation with a capital stock of $10i-- 
 000,000, and a funded debt consisting of the following : 
 
 $1,000,000 first mortgage bonds dated January 2, 1900, secured! 
 on 100 miles owned in fee. 
 
 $9,000,000 first mortgage bonds dated January 2, 1910, secured! 
 on 400 miles of road owned in fee. 
 
 $20,000,000 collateral trust bonds dated January 2, 1911, being 
 secured by a deposit of stock and bonds of its subsidiary companies. 
 
 In the year 1914, the corporation desired to raise $10,- 
 000,000 more in addition to its present first mortgage bonds 
 
214 CENTURY OF AMERICAN SAVINGS BANKS 
 
 on its 500 miles of road owned in fee, and at the same time 
 provide for the refunding of its first mortgage bonds which 
 would require $10,000,000, making the total authorized is- 
 sue $20,000,000. 
 
 Such a refunding mortgage would not comply with this 
 provision for the reason that at the date of the execution 
 of the refunding mortgage the company had outstanding, 
 ' as shown above, $30,000,000 "prior debts," consisting of 
 $10,000,000 first mortgage bonds, and $20,000,000 collat- 
 eral trust bonds, which must be added to the $20,000,000 
 authorized under the refunding mortgage, making a total 
 of $50,000,000. After deducting the $10,000,000 bonds 
 reserved to retire the first mortgage bonds, the result is an 
 authorized debt of $40,000,000, an amount in excess of 
 three times its capital stock. 
 
 SUBDIVISION (g) : 
 
 This subdivision legalizes underlying bonds of a cor- 
 poration that has complied with the standard that are 
 "prior lien mortgage bonds" to a refunding mortgage of 
 such a corporation, provided that said refunding mortgage 
 bonds are a legal investment. 
 
 I SUBDIVISION (h) : 
 
 This subdivision makes legal first mortgage bonds and 
 Tefunding mortgage bonds, and underlying bonds to such 
 refunding mortgage, described in subdivisions (e) and (g), 
 •of a railroad corporation which has complied with the 
 standard, except that it does not own in fee 500 miles of 
 arailroad, provided that the bonds are guaranteed, principal 
 and interest, by endorsement or assumed by a corporation 
 which owns in fee 500 miles of railroad and has complied 
 with the standard and whose first mortgage bonds or re- 
 funding mortgage bonds are a legal investment. 
 
 SUBDIVISION (i): 
 
 This subdivision legalizes the first mortgage bonds, au- 
 thorized not to exceed $20,000 per mile of road, of a rail- 
 
INVESTMENT IN RAILROAD BONDS 215 
 
 road corporation not necessarily complying with the stand- 
 ard, but whose capital stock is owned by, and its railroad 
 operated by, a railroad corporation which has complied 
 with the standard, and whose last issued refunding mort- 
 gage is a legal investment, provided they are guaranteed, 
 principal and interest, by endorsement by said corporation 
 complying with the standard. 
 
 Both subdivisions (h) and (i) contained a provision that 
 no bonds so guaranteed or assumed shall be a legal invest- 
 ment in case the mortgage securing the same shall authorize 
 a total issue of bonds which together with all the outstand- 
 ing "prior debts" of the corporation making said guarantee 
 or so assuming said bonds, including therein the authorized 
 amount of all previously guaranteed or assumed bonds, 
 shall exceed three times the capital stock of said corporation 
 at the time of making said investment. 
 
 WORKING OF THE REVISED LAW 
 
 The law as revised in 1905 has now been in operation 
 ten years, and a brief history of its working may be of 
 interest. As shown above, subdivision (a) of the law re- 
 mains operative. This relates to New York State corpora- 
 tions. In 1905, the following corporations complied with 
 this subdivision: 
 
 New York Central & Hudson River R. R. System (now 
 the New York Central Railroad), Buffalo, Rochester & 
 Pittsburgh Ry., Genesee & Wyoming R. R., Manhattan Ele- 
 vated R. R., Cairo R. R. 
 
 All of these corporations have continued to comply with 
 this subdivision with the exception of the Cairo Railroad 
 Company. 
 
 Subdivisions (b), (c) and (d) were closed except as to 
 the bonds of the corporations specifically named secured 
 by mortgages dated prior to January 1, 1905. Therefore, 
 the present law practically consists of subdivisions (a), 
 (e), (f), (g), (h) and (i). 
 
 Subdivision (e), and those following, treat of railroad 
 corporations outside the State; therefore, all railroads out- 
 
216 CENTURY OF AMERICAN SAVINGS BANKS 
 
 side of the State, not part of the system of a corporation of 
 this State, must conform to the standard in order to make 
 their bonds a legal investment. 
 
 In 1905, the date of the creation of this standard, the 
 following railroad corporations had complied each year for 
 the previous five years, viz. : 
 
 Pennsylvania R. R., Lake Shore 8z Michigan Southern 
 Ry., Chicago & Northwestern Ry., Chicago, Rock Island & 
 Pacific Ry., Chicago, St. Paul, Minneapolis & Omaha Ry., 
 Chicago, Burlington & Quincy R. R., Chicago, Milwaukee 
 & St. Paul Ry., Illinois Central R. R., Delaware, Lacka- 
 wanna & Western R. R., Delaware & Hudson Company, 
 Michigan Central R. R., New York, New Haven & Hart- 
 ford R. R., Pittsburgh, Fort Wayne & Chicago Ry., United 
 New Jersey Railroad & Canal Co. 
 
 Of the above fourteen corporations, all have continued 
 to comply with the standard with the exception of the Chi- 
 cago, Rock Island & Pacific Ry. Co., and the New York, 
 New Haven & Hartford R. R. Co. 
 
 During the past ten years, the following additional cor- 
 porations have complied with the standard for a period of 
 at least five years: 
 
 Atchison, Topeka & Santa Fe Ry., Atlantic Coast Line 
 R. R., Boston & Maine R. R., Baltimore & Ohio R. R., Cen- 
 tral Pacific Ry., Cleveland, Cincinnati, Chicago & St. Louis 
 Ry., Chicago & Eastern Illinois R. R., Great Northern Ry., 
 Lehigh Valley R. R., Louisville & Nashville R. R., Minne- 
 apolis, St. Paul & Sault Ste. Marie Ry., Missouri Pacific 
 Ry., Mobile & Ohio R. R., Norfolk & Western Ry., North- 
 ern Pacific Ry., Philadelphia, Baltimore k Washington 
 R. R., Pittsburgh, Cincinnati, Chicago & St. Louis Ry., 
 Southern Pacific R. R., Union Pacific R. R., Vandalia R. R. 
 
 Of the above twenty corporations, all, with the exception 
 of the following, continued to comply with the standard: 
 
 Boston & Maine R. R., Central Pacific Ry., Cleveland, 
 Cincinnati, Chicago & St. Louis Ry., Chicago & Eastern 
 Illinois R. R., Missouri Pacific Ry., Pittsburgh, Cincinnati, 
 Chicago & St. Louis Ry., Vandalia R. R. 
 
INVESTMENT IN RAILROAD BONDS 217 
 
 AUTOMATIC OPERATION OF THE LAW 
 
 From the above, it will be seen that during this period 
 of ten years, thirty-four railroad corporations have complied 
 with this standard, nine of which have failed to continue to 
 comply. 
 
 In the year 1905, the bonds of the various railroads then 
 complying with the law, that were a legal investment 
 amounted to $1,163,401,859. During this period of ten 
 years, without any further legislation, by the automatic 
 operation of the law, the bonds of the various railroad cor- 
 porations that at present comply with the standard and are 
 a legal investment for the Savings Banks, increased to a 
 total of $3,011,415,917. In other words, the amount of 
 railroad bonds that the Savings Banks may invest in, has 
 increased in the past ten years, 159 per cent. 
 
 In 1905, the resources of the Savings Banks of the State 
 of New York were $1,31 1,993,505. During this period of 
 ten years they have increased to $1,912,204,573, being the 
 resources as of January 1, 1915, an increase of 45 per cent.; 
 that is, the resources of the Savings Banks have increased 
 only 45 per cent., whereas the railroad bonds legal for in- 
 vestments have increased 159 per cent. 
 
 A fact of interest in connection with this increase of bonds 
 legal for investment is that during this period the States of 
 Massachusetts, Connecticut and Vermont revised their Sav- 
 ings Bank, laws regarding investment in railroad bonds, and 
 adopted the New York standard, so that now the Savings 
 Banks of these States are competitors with New York for 
 this class of investment. 
 
 The combined resources of the Savings Banks of the 
 States of New York, Massachusetts and Connecticut, in 
 1915, were $3,217,668,434. As stated above, the railroad 
 bonds that were legal investments in 1915 in the State of 
 New York amovmted to $3,011,415,917, almost all of which 
 are also legal in the other States. 
 
218 CENTURY OF AMERICAN SAVINGS BANKS 
 CHANGED CONDITIONS REQUIRE EXTRA CARE 
 
 During the ten years that this standard has been in opera- 
 tion, the management of our railroad corporations by the 
 enactment of national and state laws, has very largely been 
 taken out of the hands of their respective boards of directors 
 and delegated to those constituting the Interstate Commerce 
 Commission, and the various state commissions. 
 
 Another change is that formerly these corporations were 
 regarded as private enterprises, whereas now they are con- 
 sidered public utilities; or in other words public machines, 
 created for the purpose of performing a public necessity. 
 But no provision has been made to supply capital required 
 for the maintenance of these machines, or the creation of 
 additional ones, except through private investment. 
 
 Under these changed conditions, it is most important that 
 the standard adopted be a safe and just one. As stated 
 above, this standard which is embodied in the Savings Bank 
 laws, was arrived at by taking the records of the principal 
 railroad corporations for the five years prior to 1905 for the 
 purpose of ascertaining what percentage of their gross earn- 
 ings was required for their operating expenses and taxes, 
 and what was left for the capital investment. It was found 
 that 70 per cent, was a fair margin for operating expenses 
 and taxes, leaving 30 per cent, for the capital invested. 
 The corporations taken for this purpose were the following: 
 
 Pennsylvania R. R., Lake Shore & Michigan Southern 
 Ry., Chicago & Northwestern Ry., Chicago, Rock Island & 
 Pacific Ry., Chicago, St. Paul, Minneapolis 8z Omaha Ry., 
 Chicago, Burlington & Quincy R. R., Chicago, Milwaukee 
 & St. Paul Ry., Illinois Central R. R. 
 
 The combined gross earnings of these companies for the 
 year 1905 were $449,611,394, and their operating expenses 
 and taxes, $311,231,924, or 69.2 per cent, of the gross earn- 
 ings, leaving $138,379,470 for the capital invested, or 30.8 
 per cent, of the gross earnings. 
 
 For the year 1915, the combined gross earnings of these 
 same companies were $646,538,826, and their operating ex- 
 
INVESTMENT IN RAILROAD BONDS 219 
 
 penses and taxes, $499,123,772, or 77.2 per cent, of the 
 gross earnings, leaving $147,415,054 for the capital in- 
 vested, or 22.8 per cent, of the gross earnings. 
 
 From the above it will be seen that although the percent- 
 age of gross during this period, left for the capital invested, 
 decreased from 30.8 per cent, to 22.8 per cent., the actual 
 amount of money increased, due to the fact that the gross 
 earnings during that period increased very largely; there- 
 fore, it is necessary to take into account the miles of road 
 that performed the service each year, and also the services 
 performed for the public. 
 
 SOME INTERESTING COMPARISONS 
 
 In 1905, the combined miles of road operated was 41,445 
 miles, and the services performed for the public, measured 
 by the number of tons of freight and passengers carried one 
 mile,' were 50,084,557,354, showing that on the average, 
 each mile of road operated performed 1,208,458 units of 
 service. For each unit of service performed, the average 
 amount received was .00897. The operating expenses and 
 taxes for each unit of service were .00621, leaving for the 
 capital invested, .00276 per mile of service. 
 
 In 1915, the miles of road operated by these same cor- 
 porations were 48,743, and the units of service performed 
 for the public were 72,424,236,778 for each mile of road 
 performing 1,485,879 units of service. The average 
 amoxmt received for each unit of service performed was 
 .00894, and the cost of operating expenses and taxes was 
 .00689, leaving for the capital invested, .00205 per mile of 
 service. 
 
 It will be seen that during this period, on the average; 
 each mile of road operated by these corporations, increased 
 its services performed for the public from 1,208,458 units 
 of service in 1905, to 1,485,879 in 1915, an increase of 277,- 
 421 imits, or 23 per cent., and that in 1905 they received 
 from the public for each unit of service .00897, whereas in 
 1915 they received only .00894, and that the cost of per- 
 forming this service per unit of service was in 1905, .00621, 
 
220 CENTURY OF AMERICAN SAVINGS BANKS 
 
 whereas in 1915 it was .00689, an increase of .00068, or 11 
 per cent., leaving for the capital invested from each unit of 
 service performed, .00276 in 1905, and .00205 in 1915, a 
 decrease of .00071, or 26 per cent. 
 
 The 30.8 per cent, of the combined gross earnings of 
 these companies available for capital invested, was $138,- 
 379,470 in 1905. If we divide this by the 41,445 miles 
 of road operated, we have $3,338, the average per mile of 
 road operated. This capitalized at 4 per cent, shows a 
 value of $83,450 for each mile. In 1915 the combined 
 gross earnings available for capital invested was $147,- 
 415,054, and the miles operated that year were 48,743, 
 which make only $3,024 earned by each mile of road oper- 
 ated; and capitalized at 4 per cent., the value for this year 
 is only $75,600, a decrease of $7,850. 
 
 The standard requires that the gross earnings of the cor- 
 poration shall be five times its interest and rentals. In 
 1905 the combined payments made by these corporations 
 for interest and rentals of leased lines, were $62,593,396; 
 five times this is $312,966,980. The actual gross earnings 
 were $449,611,394, or $136,644,414 in excess of the amount 
 required. In 1915 the interest and rentals paid were $86,- 
 001,288, five times which is $430,006,440, and the actual 
 earnings were $646,538,826, or $216,532,386 in excess of 
 the amount required, showing that during this period their 
 gross earnings have increased at a proper ratio to their in- 
 terest and rental payments required under the law. In 
 1905 the combined payments of these corporations in divi- 
 dends were $55,894,637 on capital stock of $846,880,073, 
 an average rate of 6.60 per cent. In 1915 the dividend 
 payments were $77,222,350 on capital stock of $1,266,- 
 904,488, an average rate of 6.09 per cent. 
 
 Of the nine corporations which during the past ten years 
 complied with the standard and subsequently failed to com- 
 ply, all but three complied each year for the past ten years 
 with the requirements that their gross earnings shall be at 
 least five times their interest and rentals, but they failed 
 to pay the required amount in dividends, due to the fact 
 
INVESTMENT IN RAILROAD BONDS 221 
 
 that the percentage of their gross earnings available for 
 capital had fallen below 30 per cent. 
 
 From this record, it is clear that if the Savings Bank 
 standard is to be maintained either the public will have 
 to pay more for the services performed, or those operating 
 the machinery that performs the services must receive less. 
 
 If our railroads are to continue to be considered public 
 utilities, and not private enterprises, and the capital re- 
 quired for their continuance and enlargement is to be sup- 
 plied by private investors, is not the division adopted under 
 this standard fair and just? If so, is it not the duty of 
 those having the power by recent laws to maintain this 
 standard to take into consideration this interest, as well 
 as the interest of those who use the services performed? 
 
CHAPTER XVIII 
 
 LIQUIDITY OF INVESTMENTS 
 
 How Can Savings Banks Meet Extraordinary Demands Without 
 the Necessity of Notice of Withdrawal or the Sacrifice of Val- 
 ues? — One of the Few Remaining Big Problems — Consensus of 
 Banking Men as to Convertible Assets — Coimty Bonds and 
 Their Availability — Demand for Municipals — Financial Panics 
 and Their Lessons. 
 
 There can be no doubt that one of the most serious 
 questions in reference to Savings Bank management at the 
 present time is that of liquidity of investments. In what 
 way can provision be made so that in times of emergency 
 such portion of their securities as may be necessary can be 
 quickly converted into cash and all demands of depositors 
 met? 
 
 This is one of the leading Savings Bank problems re- 
 maining imsolved. It is commanding the best thought of 
 some of the foremost bankers of the country, as well as the 
 Banking Departments of the several States. 
 
 Permanency of investment, together with the necessary 
 liquidity to meet all situations as they may arise, is the 
 ideal. This ideal has been admirably set forth by Andrew 
 Mills, of the Dry Dock Savings Bank, New York City: 
 
 First: Security, as absolute as human judgment can determine. 
 
 Second: The first being assured, then the security yielding the 
 largest income. 
 
 Third: Availability, so that in case of necessity the security can 
 be disposed of without needless sacrifice. 
 
 SAVINGS BANK INVESTMENTS IN NEW YORK 
 
 By the terms of the law of New York, Savings Banks 
 are restricted to the following investments : 
 
LIQUIDITY OF INVESTMENTS 223 
 
 1. The stocks or bonds or interest-bearing notes or obligations of 
 the United States. 
 
 2. Bonds or stocks of the State of New York. 
 
 3. Bonds or stocks of States of the Union as to which default has 
 not occurred for a certain time (ninety days). 
 
 4. Stocks or bonds of cities, counties, towns, villages, school dis- 
 tricts or poor districts of the State of New York. 
 
 5. The stocks or bonds of certain incorporated cities of the United 
 States which have not defaulted in the payment of any part of the 
 principal or interest. 
 
 6. Bonds and mortgages on unincumbered real estate situated in 
 this State, to the extent of 60 per cent, of the appraised value thereof. 
 (Not more than 65 per cent, of the whole amount of deposits and 
 guaranty fund shall be so loaned or invested.) 
 
 7. The bonds of certain railroad corporations, as fully explained 
 in another chapter. (Not more than 25 per cent, of the assets of 
 any Savings Bank shall be loaned or invested in railroad bonds.) 
 
 8. Promissory notes payable to the order of the Savings Bank, 
 secured by the pledge of stocks or bonds as enumerated above, or by 
 the railroad bonds described in the subdivision (7) relating thereto. 
 
 9. Real estate used for banking purposes from portions of which 
 not required for its own use a revenue may be derived; such real 
 estate as shall be conveyed to it in satisfaction of debts previously 
 contracted in the course of its business; such as it shall purchase at 
 sales under judgments, decrees or mortgages held by it. 
 
 It will be readily conceded that none of this class of 
 investments is sufficiently liquid to enable the banks to pay 
 extraordinary demands at sight. Bank managers gener- 
 ally look upon the ninety-day clause very much as they do 
 the clearing house certificate — an unfortunate necessity, un- 
 der the present condition of the law. 
 
 As a means of relief from this undesirable condition, it 
 has been proposed that Savings Banks be permitted to in- 
 vest a certain proportion of their deposits in short-time obli- 
 gations which can be readily converted into cash in the open 
 market, or if a proper amendment to the Federal Reserve 
 law is made, no time within which to convert securities will 
 be necessary. It is the opinion of many modem, progres- 
 sive bankers that certain short-time loans would admirably 
 meet Mr. Mills' three principles; that while looking always 
 to the safety of the funds in their charge, banks should 
 
224 CENTURY OF AMERICAN SAVINGS BANKS 
 
 carry at all times as a secondary reserve, a goodly percentage 
 of short-time and readily convertible assets. 
 In the opinion of the Federal Reserve Board: 
 
 The acceptance is the standard form of paper in the world's dis- 
 count market, and both on this account, and because of its acknowl- 
 edged liquidity, universally commands a preferential rate. By rea- 
 son of its being readily marketable, it is widely regarded as a most 
 desirable paper in the secondary reserves of the banks and will help' 
 to provide an acceptable substitute for the call loan. 
 
 Such acceptances are available as collateral against the issue of 
 Federal Reserve notes, and the bank will sanction a slight preferen- 
 tial in favor of acceptances bearing the endorsement of member 
 banks. 
 
 A recent law of Connecticut gives Mutual Savings Banks 
 the right to invest 3 per cent, of their deposits and surplus 
 in such acceptances, thus recognizing the safety and liquid- 
 ity of this class of securities. 
 
 CONSENSUS AS TO CONVERTIBLE ASSETS 
 
 It has been truly said that it is the ability to pay de- 
 positors on demand that constitutes good banking and in- 
 spires general confidence. To use the language of George 
 E. Edwards, president of the Dollar Savings Bank, New 
 York: "Your funds may be invested in securities of the 
 highest order, your loans made with the greatest care, but 
 if whenever there is a depression depositors are required to 
 give notice of withdrawal their confidence is shaken and 
 they will eventually cease doing business with Savings 
 Banks and deposit their moneys with institutions which 
 will pay without notice." It is the understanding of the 
 depositor that his money is payable on demand and the 
 presentation of his pass book. If instead of this, he is 
 compelled to wait for varying periods of from ten to ninety 
 days, he naturally feels "peeved," and frequently resolves 
 to go elsewhere. 
 
 Of course it is not true that the object of the notice of 
 withdrawal is to discourage the depositor from withdrawing 
 his money; it is necessary in order to enable the bank to 
 convert its securities into cash. 
 
LIQUIDITY OF INVESTMENTS 225 
 
 George E. Edwards recently conducted an inquiry 
 throughout the country as to whether it is good policy for 
 Savings Banks to invest their funds in certain loans which 
 could be readily turned into cash in the event of an emer- 
 gency, and as to what portion of their securities should be 
 of a liquid character. A composite of the opinions re- 
 ceived is to the effect that under certain suitable restrictions 
 it might be a desirable policy for Savings Banks to invest 
 a certain proportion of their assets in a form more readily 
 convertible than is now the case. The general feeling of 
 financial men in the section about New York is that com- 
 mercial paper should not be held by Savings Banks of a 
 mutual character. In the Southern States, where there is 
 but one mutual bank in 190 Savings Banks, in the Middle 
 West and West, where the proportion is almost as great, 
 and in California, where the proportion is as one to 179, 
 liquidity of assets, with arguments in favor of investments 
 in commercial paper, is strongly urged. 
 
 THE AVAILABILITY OF COUNTY BONDS 
 
 It is believed by many progressive bankers that the atti- 
 tude of the Savings Banks Association of the State of New 
 York toward the admission of bonds of representative coun- 
 ties outside of New York is not well taken, for while it is 
 true that in the old days many counties issued railroad aid 
 bonds and got into trouble, there were always good prac- 
 tical reasons behind such troubles, and which no longer 
 exist. Perhaps properly selected county bonds are as good 
 as if not better than the average run of municipal bonds of 
 even the larger places. 
 
 An instance in point may be given. Jersey City, Ho- 
 boken and Bayonne are all eligible for the investment of 
 funds of the New York Savings Banks, whereas, Hudson 
 County, in which these three cities are located, is not elig- 
 ible. This is despite the fact that under the New Jersey 
 law, which is unique in that respect, the coimty has first 
 call on tax revenues. It would seem, therefore, that if 
 there is to be any preference, it should lie with the county 
 
226 CENTURY OF AMERICAN SAVINGS BANKS 
 
 bond in that State. It might be arranged, through a per- 
 centage limitation, to allow banks within the State to buy 
 municipal bonds of considerably smaller communities than 
 the law now provides for, thus increasing the scope of the 
 Savings Bank law and affording opportunity for a better 
 income yield. 
 
 It is true that the Savings Bank demand is not now very 
 much of a factor in fixing prices of municipal bonds; but 
 it seems likely that the situation in this respect will change 
 in the near future so that the Savings Bank demand will 
 again play an important part. The scope of the Railroad 
 Act in New York State has been much greater relatively 
 than that applying to municipal securities, so that there 
 is not so much room for advisable expansion there. It 
 seems reasonable that the best grade of railway equipments 
 might be advantageously admitted, and that the best grade 
 of public utility corporations could be added. Several of 
 the New England States have gone a considerable distance 
 in this respect and with quite satisfactory results. 
 
 The question also has been asked why it should be good 
 policy for a Savings Bank to continue an investment in 
 certain bonds whether or not the money could be more 
 profitably employed in other bonds or in other directions. 
 Throughout the investment banking business there is a 
 definite knowledge that through changing conditions cer- 
 tain bonds have a peculiar value outside of the Savings 
 Bank field and often bring prices entirely out of line of 
 their value from the Savings Bank standpoint. 
 
 THE POSITION OF MUNICIPALS 
 
 For years past very many banks refused to part with 
 bonds which, because of some local exemption feature, had 
 become valuable, due to changing conditions, and where 
 the same funds, if released, could be reemployed to much 
 better advantage. For example, for a great many years 
 Detroit bonds were about the only securities in the State 
 of Michigan which carried an exemption from local tax, 
 and as this tax was very heavy, it made an entirely artificial 
 
LIQUIDITY OF INVESTMENTS 227 
 
 value for such bonds. Some few banks did sell their bonds 
 at extremely high prices and invested the proceeds in 
 equally high-grade municipal bonds to yield a much better 
 return. Other banks, however, continued to hold their 
 bonds and in the course of time a very much broader exemp- 
 tion was afforded to Michigan municipals, with the result 
 Detroit bonds no longer brought the extremely high prices 
 which at one time they attained. 
 
 A good many banks also hold Ohio tax-free municipals 
 year in and year out when they could have had, say one- 
 half per cent, more income on equally good municipals of 
 other States. It is true that this difference in a large meas- 
 ure still maintains, but in the meantime the bank has lost, 
 say one-half of one per cent, per annum on the money. 
 Also, it is entirely likely that agitation may be started at 
 almost any time changing the tax conditions in Ohio, which 
 would materially reduce the relative prices of Ohio tax- 
 free municipals. 
 
 Municipals, especially those of the United States, are in 
 a class by themselves, and the demand at present far ex- 
 ceeds the supply. It is noticeable that fewer municipalities 
 are planning to offer bonds for sale, and the great profits 
 made by American business men and the freedom from 
 operation of the Income Tax Law, with its new amend- 
 ment doubling the normal amount, has created a demand 
 for municipal issues that apparently cannot be met. 
 
 In the matter of bond investments for Savings Banks, 
 particularly as to municipal securities, there is a serious 
 question whether too much attention has not been paid to 
 the mere matter of the size of the community. It is a well 
 known fact that for many years past selected and properly 
 sponsored loans of comparatively small communities, while 
 not intrinsically sound, have a high degree of marketabil- 
 ity. It has been found that in panicky times, municipals; 
 of all grades could be disposed of to relatively better advan- 
 tage than almost any other form of security, for while the 
 very high grade railroads could be easily liquidated the 
 market prices were very quick to drop, so that the conver- 
 
228 CENTURY OF AMERICAN SAVINGS BANKS 
 
 sion of large amounts under such conditions was only pos- 
 sible at considerable recessions in price. It seems to fol- 
 low that in the extension of the municipal investments of 
 banks more attention should be paid to the character of 
 the securities and less to the mere size of the municipalities. 
 In the matter of mortgage loans, the fact has been noted 
 that many banks which cannot secure a sufficient quantity 
 of desirable real estate loans at home are disposed to go to 
 New York to complete their line. They seem to think it 
 possible to get desirable loans to net a rate in excess of 
 what home institutions find it necessary to take. It is a 
 matter of general observation that many inferior loans, both 
 guaranteed and without guarantee, find their way into the 
 up State banks which are not considered good enough for 
 the local institutions. Of course, it stands to reason that 
 no real estate committee of such a bank, from a casual visit 
 to the metropolis, can have sufficient knowledge of local 
 real estate values and conditions to make their opinion of 
 such loans of any value. 
 
 RISK CONCENTRATION AND RISK DISTRIBUTION 
 
 A great many foolish and impracticable schemes have 
 been proposed by amateur bankers to secure risk concentra- 
 tion and risk distribution with a view of establishing greater 
 safety. One of these is the proposition to refuse to pur- 
 chase securities of railroads within a certain geographical 
 "division, such as the region west of an imaginary line mark- 
 ing equal division of population in the United States. 
 
 The intrinsic merits of a security and the physical con- 
 dition of the property, as well as the details of management, 
 are of vastly greater importance than the mere matter of 
 location, whether east, west, north or south of any imag- 
 inary line. A survey of comparatively recent events in 
 New England and New York in connection with railways 
 and their management, will serve to corroborate this idea. 
 While to some extent it may be true that the Western States 
 are the experiment ground of the country, and that western 
 railway property is apparently more likely to be affected 
 
LIQUIDITY OF INVESTMENTS 229 
 
 by adverse legislation than similar property in the East, 
 the latter section has no monopoly of the virtue of the coun- 
 try. 
 
 The wise trustee or other officer of a Savings Bank is 
 he who uses his knowledge, judgment, discretion and com- 
 mon sense in dealing with the important question of in- 
 vestments, paying little attention to the mere matter of 
 geographical divisions so long as the security is the best. 
 
 PANICS AND THEIR LESSONS 
 
 Financial panics in the United States have been all too 
 numerous, owing largely to unwise currency, tariff and 
 other laws. It is now confidently hoped that under pres- 
 ent statutes, and especially since the creation of the Fed- 
 eral Reserve Banks, no such financial storms as have been 
 witnessed in the past, with all their suffering, demoraliza- 
 tion, lack of employment and widespread loss, will be pos- 
 sible in the future. 
 
 The history of these disturbances shows, among other 
 things, the urgent need of liquidity of assets sufficient to 
 avoid serious losses to Savings Banks through inability to 
 convert securities into cash to meet the demands of unrea- 
 soning depositors. 
 
 The first of a long series was in 1837, and it was also 
 one of the most severe. It was a period of territorial and 
 business expansion leading, as usually happens, to undue 
 extension of credit and speculation. The construction of 
 the Erie Canal, finished in 1825, in addition to numerous 
 other inland waterways, had opened to settlement vast 
 tracts of virgin soil, causing a remarkable increase of popu- 
 lation in some of the middle western States. From 1829 
 to 1845 the number of banks in the country increased from 
 329 to 707. 
 
 The panic left disaster and demoralization in its wake. 
 Values of real estate in New York City depreciated more 
 than forty millions of dollars in six months ; in two months 
 there were more than 250 failures, and a decline of twenty 
 millions in the value of stocks of railroads and canals which 
 
230 CENTURY OF AMERICAN SAVINGS BANKS 
 
 centered in New York; the value of merchandise in ware- 
 houses fell 30 per cent, and worst of all, within a few weeks 
 more than twenty thousand people were thrown out of em- 
 ployment. 
 
 Somewhat similar disturbances occurred in 1857, 1866 
 (at the close of the Civil War), 1873, 1884 and 1907. The 
 disturbance of 1873 was more than a panic, it was the 
 beginning of a long period of financial and industrial 
 depression, due in part to the enactment of unwise currency 
 laws, and in many ways was the legitimate outcome of ill- 
 adjusted production and inflated credit. One outstanding 
 feature was the enormous boom in railway construction, 
 which showed an increase of no less than twenty-five thou- 
 sand miles in four years. 
 
 In all of these financial disturbances Savings Banks, in 
 common with other financial institutions, suffered severely, 
 and not a few were compelled to close their doors tem- 
 porarily or permanently. 
 
 THE PANIC or 1907 
 
 Because it is the most recent, and by reason of the les- 
 sons learned therefrom by banking men of all classes lead- 
 ing to the enactment of wiser laws, more detailed reference 
 will be made to the panic of 1907. 
 
 The first definite shock came with the closing of the 
 Knickerbocker Trust Company, of New York City, on 
 Tuesday afternoon, October 22, after a run on the insti- 
 tution manifesting itself at the tellers' windows and 
 through the clearings as well. Other failures were pre- 
 dicted, and there was increasing evidence of alarm through- 
 out the city and the State. The conditions seemed to jus- 
 tify the apprehension on the part of the leaders among the 
 Savings Banks, and it was thought wise that a meeting of 
 the presidents of these institutions should be called in New 
 York to consider what protective measures, if any, ought 
 to be adopted in the interest of all the Savings Banks. 
 
 This meeting was held on the afternoon of Friday, Octo- 
 ber 25, in the trustees' room of the Dry Dock Savings Bank, 
 
LIQUIDITY OF INVESTMENTS 231 
 
 and Andrew Mills, the president of that institution pre- 
 sided. Nearly all the Savings Banks of the city were rep- 
 resented by their respective presidents. 
 
 In the meantime, several other failures of less important 
 state institutions had occurred, but in the discussion which 
 followed at this meeting, it was clear that there was a de- 
 cided difference of opinion as to the seriousness of the sit- 
 uation. 
 
 There were those, led by Wm. H. S. Wood, president of 
 the Bowery Savings Bank, who believed that the worst was 
 over, that there would be no further trouble and that if the 
 Savings Banks should take action leading to the general 
 postponement of depositors' demands, it would reflect dis- 
 credit on the institutions and on the city, from which they 
 would not recover for years. 
 
 Mr. Mills took the contrary position and, representing 
 the views of many present, strongly advocated that all of 
 the banks avail themselves of the provision in their pass- 
 books and postpone further payments in accordance there- 
 with. 
 
 The new Superintendent of Banks, Clark Williams, who 
 had been appointed by Governor Hughes only two days 
 before, had been invited to attend the meeting, and at this 
 jimcture was requested to give his opinion as to the proper 
 course to be pursued. As he rose to do so, he was called 
 to the telephone; meanwhile the discussion on each side of 
 the question continued. Upon his return Superintendent 
 Williams apologized for the interruption of the speaker, and 
 announced that report had just been made by the chief ex- 
 aminer of the Department that the Terminal Bank, the 
 Williamsburgh Trust Company, the Jenkins Trust Com- 
 pany and the First National Bank of Brooklyn had just 
 closed their doors. 
 
 Little more was said. A resolution was duly passed 
 advocating the application of the thirty or the sixty-day 
 rule, and in five minutes the room was clear of presi- 
 dents of Savings Banks who were on the way to their re- 
 spective institutions to establish the enforcement of the pro- 
 
232 CENTURY OF AMERICAN SAVINGS BANKS 
 
 vision which wisely had been written into their contracts 
 with depositors for the protection of their interests as well 
 as those of the banks. 
 
 A FORGOTTEN INCIDENT RECALLED 
 
 As already stated, the Savings Banks of New York City 
 generally invoked the rule postponing depositors' demands 
 for thirty or sixty days. As the intensity of the panic con- 
 ditions increased during these periods of enforced suspen- 
 sion of payments, it became clear that to meet accumulated 
 demands many of the Savings Banks would be forced to 
 imdergo liquidation of assets to an extent that might prove 
 disastrous. 
 
 The statutes of the State provided no means of availing 
 of the assets of a bank except by sale, and to sell securities 
 in the then demoralized markets would have been ruinous. 
 As the time for the resumption of payments to depositors 
 drew near, the officers of a number of Savings Banks con- 
 sulted with the Superintendent of Banks as to what might 
 be done in the premises. 
 
 The rulings of the Attorneys General of the State had 
 been universally to the effect that the laws of the State as 
 applied to Savings Banks were permissive only, so far as 
 by their express terms they allowed certain action to be 
 taken, and that procedure outside or in excess of these 
 express provisions was not warranted. With a full knowl- 
 edge of this situation, but with a keen appreciation of the 
 disastrous consequences following a strict interpretation of 
 the statutes, the Superintendent took the law into his own 
 hands and advised the Savings Banks that if they desired 
 to secure the currency necessary to meet depositors' demands 
 through the hypothecation of their securities rather than by 
 their sale he would approve such action and stand behind 
 them to the limit. A number of the banks followed his 
 advice, though the ruling was never made a matter of 
 record. 
 
 In connection with this businesslike handling of a deli- 
 cate situation, an interesting incident occurred. The offi- 
 
LIQUIDITY OF INVESTMENTS 233 
 
 cer of a Savings Bank who at one time had been con- 
 nected with the Banking Department wrote to Superintend- 
 ent Williams asking if it were lawful for Savings Banks 
 to borrow on their securities, giving his opinion that it was 
 not, and stating that he was requesting the Attorney Gen- 
 eral to render a formal opinion on the question. 
 
 The Superintendent is understood to have made no re- 
 sponse to the inquiry, and to have telephoned to the Attor- 
 ney General's office requesting that if a letter bearing on 
 the envelope a certain imprint was received, it be left un- 
 opened, and that no official recognition be given it; that 
 this course was suggested for the public good and that the 
 Superintendent would be responsible for the results. 
 
 Shortly thereafter an act was passed enabling Savings 
 Banks to hypothecate their securities for loans under proper 
 restrictions, which was only one of a score of banking laws 
 the necessity for which was determined by the panic of 1907. 
 
CHAPTER XIX 
 
 RELATIONS OF SAVINGS BANKS, DISCOUNT BANKS 
 AND TRUST COMPANIES 
 
 Each Class of Institution Entitled to Its Own Field— The Trust 
 Company a Comparatively Modem American Institution — Chief 
 Distinguishing Feature Its Trust Powers — What It May Do — 
 Sound Versus Unsound Banking — Popular Ignorance of Savings 
 Bank Principles — Interest Departments Operated by Discount 
 Banks and Trust Companies — Should the Banking Law Be 
 Changed ? 
 
 In considering the relations between Savings Banks and 
 those doing a purely commercial business, several funda- 
 mental facts should be constantly kept in mind. The first 
 is their radically different character and purpose. The 
 savings institution was primarily organized, and during the 
 century of its history has been sedulously maintained, not 
 for the purpose of making money but as a place for the 
 safe keeping of money. The increase of the principal is 
 merely an incident. 
 
 By reason of their trust relations, the managers of Sav- 
 ings Banks are properly held to a much stricter accoimt- 
 ability than the directors of discount banks or trust com- 
 panies, a fact which always should be kept in mind, but 
 unfortunately is not. When trustees lose sight of this, they 
 are in imminent danger of crossing the line of safety. 
 
 Each class of banking institution has its own particular 
 field, and the lines of demarcation are entirely clear. 
 Neither should encroach in the slightest degree upon the 
 domain of the other. It is the function of the Savings 
 Bank to serve those who are not fitted by knowledge, expe- 
 rience or habit to safely invest their money, when saved. 
 The discount bank is most thoroughly equipped with 
 
 234 
 
RELATIONS OF SAVINGS AND OTHER BANKS 235 
 
 money, skill, experience and acquaintance to make ex- 
 changes, and in many other ways be of great value in the 
 business world. While the Savings Bank receives and in- 
 vests money, the discount bank opens its doors to users and 
 borrowers of money for pay. One serves by receiving 
 and keeping; the other by lending. One aims at profit; 
 the other never makes profit an end. While the Savings 
 Bank is a receiving reservoir for little springs, the discount 
 bank is a distributing reservoir of accumulated capital. 
 
 Thus in motive and aim the two classes of institutions 
 are wholly different. The business of the ordinary bank 
 of deposit and discount, both state and national, consists 
 in receiving deposits of money upon which interest may or 
 may not be allowed; in making advances of money, prin- 
 cipally in the way of discounting notes and in effecting the 
 transmission of money from one place to another. Its dis- 
 posable means consists of the capital paid in by sharehold- 
 ers, the money deposited with it by customers, the notes it 
 can circulate and the money it receives in the course of 
 transmission, and which of course it must repay at another 
 place. 
 
 THE TRUST COMPANY AND ITS FUNCTIONS 
 
 The trust company may properly be considered a mod- 
 ern institution, for while one or two date back a century, 
 the great majority have come into existence within the past 
 thirty or forty years. One of these corporations, doing 
 business in the city of Philadelphia, was organized in 1812, 
 another in 1832. New York has one such whose existence 
 dates back to the year 1822. 
 
 The trust company is a distinctly American institution. 
 Originally designed for the purpose of insuring lives and 
 granting annuities, the tendency toward specialization has 
 had a marked influence upon these great financial corpora- 
 tions, as it has upon almost every department of business 
 and social life. The business of life insurance has be- 
 come far greater than that of the loan and trust companies. 
 
 The trust company has been not inaptly termed "the de- 
 
236 CENTURY OF AMERICAN SAVINGS BANKS 
 
 partment store of banking," in that it can do for a man 
 whatever he needs done in a financial way, dead or alive. 
 It can accept deposits, make loans, receive savings accounts, 
 and buy a bond or a share of stock for a client, but it can- 
 not issue banknotes. It has broader powers than either 
 national or state banks, for it is endowed by law with "trust 
 powers" denied to all others. 
 
 The chief distinguishing feature of the trust company is 
 in these trust powers. It may be the executor of your will. 
 It may be the guardian of your children. You may have 
 your estate left in its care; in such case it will make the 
 investments, collect the rents, pay the bills and turn the 
 proceeds over to whomsoever you designate. It may trans- 
 fer stock for corporations. It may act as the trustee in a 
 mortgage bond issue and hold the security that protects 
 the issue. It has broad, useful, necessary powers, and has 
 become an indispensable part of our present financial 
 scheme. It would be difficult to do business on modern 
 lines without it. 
 
 The chief benefit of the trust company to the individual 
 lies in its power to act as executor or trustee of estates. If 
 you make your will and name an individual as your execu- 
 tor, he may die before you, and another must be named. 
 He may die before your estate is settled and another must 
 take up the work where he lays it down. All sorts of com- 
 plications are possible. The trust company, however, never 
 dies ; its life is perpetual. It is surrounded by many legal 
 safeguards. It must invest the money of estates in certain 
 prescribed securities; it has a force of trained men who 
 know how to make investments, keep books and render 
 proper account to the legal authorities and to the bene- 
 ficiaries. It has the machinery to do things right. The 
 fees for these services are usually no more than those an 
 individual would be entitled to. A trust company can do 
 all that a bank can do, all that an individual can do and 
 many things that neither can do. 
 
 That there is a distinct and useful field for these cor- 
 porations in the financial world is conclusively proved by 
 
RELATIONS OF SAVINGS AND OTHER BANKS 237 
 
 their rapid multiplication and their equally remarkable in- 
 dividual growth. At the close of the year 1915, there were 
 eighty-one trust companies in the State of New York, hav- 
 ing total resources of $2,155,537,274, showing an increase 
 in resources over the previous year of more than $440,- 
 000,000. Their total deposits on the date mentioned were 
 in excess of $1,837,000,000. 
 
 NARROW LIMITS OF EMERGENCY RESOURCES 
 
 The development of trust companies has been especially 
 noticeable in New York State because the financial center 
 of the country is here. This development has kept pace 
 with the country's financial growth in other directions, be- 
 ing particularly evident during the extraordinary prosper- 
 ity which obtained during the ten years prior to the mone- 
 tary crisis of 1907. 
 
 It is not the wish of the author to imply that trust com- 
 panies generally did unsound banking, but it remains true 
 that they had the opportunity and that it was the wisdom 
 and discretion of their directors and officers rather than 
 charter or statute limitations which restrained them from 
 such a course. The severe disturbance of 1907 revealed 
 their weaknesses, where such existed. The chief error of 
 the management was that, relying upon a reasonably even 
 continuance of deposits, they had invested demand deposits 
 in loans and securities of such a character that they could 
 not be realized upon with sufficient rapidity to meet the 
 demands of depositors, though they may have been entirely 
 good, considering only their ultimate pajonent. 
 
 In this crisis the trust companies were without the power 
 of the Savings Banks to demand sixty or ninety da^s' no- 
 tice for the withdrawal of deposits, and also were without 
 the resources of banks of issue which could take out addi- 
 tional circulation and by that means meet the demands of 
 depositors or of borrowers. Nor could they go to a cen- 
 tral bank which had the sole power of issue and by a pledge 
 of their assets secure currency which only the central bank 
 could supply. The resource of clearing house certificates, 
 
238 CENTURY OF AMERICAN SAVINGS BANKS 
 
 of which the members of the clearing house in New York 
 and of smaller associations in many other cities availed 
 themselves, was also denied to the trust companies. 
 
 Looking back over those trying times, it is exceedingly 
 creditable to the trust companies that they passed success- 
 fully through so severe a monetary crisis, considering the 
 narrow limits of the emergency resources which they pos- 
 sessed. It will probably be a long time before we again 
 see so sharp a crisis as was experienced in the fall of 1907. 
 Taking to heart the lessons then learned, many trust com- 
 panies since that time, aided by the legislation enacted by 
 the State of New York under the advice and recommenda- 
 tion of the Superintendent of the Banking Department, 
 have placed themselves in a much more secure position, 
 should a similar financial crisis occur. Their efforts have 
 been directed as much toward securing greater liquidity in 
 their assets as toward a greater degree of safety in loans 
 and investments. 
 
 The use of the trust company as a place of deposit for 
 large accounts to be held against exceptional opportunity 
 for investment, should be discouraged in every proper way. 
 Savings Banks, as is well known, make use of the best trust 
 companies as depositories for funds which may be waiting 
 briefly for investment, or against the exceptional demand 
 upon the Savings Banks which an industrial depression 
 at any time might cause. 
 
 IGNORANCE OF SAVINGS BANKS PRINCIPLES 
 
 The popular ignorance of the principles upon which 
 Savings Banks are organized and conducted truly is sur- 
 prising. Many intelligent young men and women are un- 
 aware that Savings Banks of the Trustee or Mutual type 
 have neither stock nor stockholders, and hence are under 
 no necessity or pressure, as banks of discount and trust 
 companies are, to earn and declare dividends so as to make 
 as favorable a showing as possible in respect of profits. 
 This fact alone sets the Savings Bank apart and adds very 
 materially to its permanence and safety. 
 
RELATIONS OF SAVINGS BANKS 239 
 
 As an instance of this popular ignorance with reference 
 to the functions of Savings Banks, during the year 1915 
 many institutions for savings in the larger cities of the 
 country were confronted by threats by self-appointed pro- 
 tectors of neutrality to organize depositors of foreign birth 
 to withdraw their deposits from Savings Banks that had 
 invested their funds in the $500,000,000 loan to England 
 and France! These sapient meddlers and trouble-makers 
 overlooked the trivial fact that investments in such loans 
 is wholly beyond the power of Mutual Savings Banks. 
 
 In the strict sense of the word, Savings Banks do not 
 conduct a banking business, have no check accounts, and 
 therefore are not banks at all. Where commercial banks 
 are permitted to have a Savings Department, the funds on 
 deposit are not infrequently used by the bank in their 
 ordinary business. "This," says Fiske, in The Modern 
 Bank, "is a bad system. It subjects the savings deposits 
 to risks inconsistent with the legitimate purpose of such 
 institutions. When a man makes a deposit in a commer- 
 cial bank, he entrusts the fimds to it for its own use. It 
 makes him its creditor. He is entitled to no increment 
 from the use of the funds, imless it agrees to pay him in- 
 terest, and has only a claim upon it for the amount due 
 him. The Savings Bank takes deposits, not for its own 
 use, but for safe keeping, and the sole use and benefit of 
 the depositors. The prime consideration is safety, not 
 profit or income." 
 
 It is true that there may be a surplus or guaranty fund 
 accumulated as a security against depreciation of invest- 
 ments or other contingencies, but this always remains the 
 property of the depositors and for their security. It is in a 
 commercial sense "undivided profits" of the bank. The 
 funds are placed in trust for the depositors collectively, and 
 they are supposed to realize all the profits, after the neces- 
 sary expenses of administration have been deducted and 
 the legal reserve taken care of. 
 
 A fact always to be remembered is the matter of legal 
 restrictions applicable to the two classes of institutions. 
 
240 CENTURY OF AMERICAN SAVINGS BANKS 
 
 The criticism frequently has been made that the Banking 
 Law of the State of New York is not by any means har- 
 monious in all its parts, in that it gives certain institutions 
 large powers with respect to the receiving and investment 
 of deposits, and certain other institutions limited powers in 
 the same direction. The result is that the latter class of 
 banks, laboring under decided disadvantage — a distinct 
 handicap — find that serious inroads are being made upon 
 their distinctive field, which they are powerless to prevent. 
 That this condition does not make for safety and stability, 
 which always must be the first consideration with respect 
 to Savings Banks, no student of banking will be likely to 
 deny. 
 
 SOME SAMPLE ADVERTISEMENTS 
 
 Both the discount banks and the trust companies are 
 clever advertisers; they do not let slip many opportunities 
 to keep the public posted as to their particular advantages. 
 Samples of their advertisements are appended: 
 
 The -—Trust Company 
 
 Four per cent. Interest paid on Special 
 Time Deposits of $250 or over. 
 
 Deposits made on or before Feb- 
 ruary 3d draw Interest from the ist. 
 
 Assets over $9,000,000 
 
RELATIONS OF SAVINGS BANKS 241 
 
 The - Bank 
 
 New York. 
 
 CAPITAL AND SURPLUS, $2,500,000 
 
 THIS bank will pay 4 per cent, interest after January i, 1915, 
 on accounts of $500 and upwards if left undisturbed for 
 six months, offering the following liberal feature: Interest will 
 be paid from the date the deposit is made, which means an extra 
 profit to you. 
 
 SPECIAL THREE MONTHS' DEPOSITS 
 We also have an arrangement to pay 3J/^ per cent, on accounts 
 of five hundred dollars or more. It is only necessary for you to 
 carry this money on deposit for three months to receive interest; 
 after that period the money may be withdrawn at any time and 
 interest will be paid to date of withdrawal. 
 
 Some banks and trust companies have also opened "In- 
 terest Departments," paying 4 per cent, on monthly bal- 
 ances, thus making a still further bid for the people's sav- 
 ings which naturally belong to the savings institutions. 
 How to meet this competition is a question that is puzzling 
 many Savings Bank managers and trustees throughout the 
 State. Being restricted to first mortgages on real estate, 
 municipal and other high-class securities, and cut off from 
 the industrial bonds and stocks that pay much larger inter- 
 est, they find themselves seriously handicapped in the race. 
 The Savings Bank's earnings are not large; therefore it 
 cannot afford to pay large interest rates ; but the safety of 
 the investment is ever uppermost, and for those who are 
 looking for security together with moderate profits no bet- 
 ter plan exists than that offered by the savings institutions 
 of the mutual type. For those who wish to speculate, there 
 are billions of dollars' worth of securities, covering all kinds 
 of enterprises and establishments from Maine to California. 
 
242 CENTURY OF AMERICAN SAVINGS BANKS 
 Here is an advertisement from a great New York daily: 
 
 To Savings Bank Depositors 
 
 Your money in the Savings Bank is part of your capital. 
 Capital is accumulated labor. 
 
 Your accumulated labor is fairly safe, but not working hard 
 when it only pays you four per cent, per year. 
 Long experience has shown that a few hundred dollars in- 
 vested in lots earn ten per cent, to fifty per cent, per year. 
 Lots right off Broadway within a few hundred feet of a 
 subway station. (238th Street.) 
 You take no risks — you run no chances. 
 
 70 PER CENT. ON MORTGAGE. TITLES INSURED FREE. 
 
 Savings Bank books taken as deposit on purchase of lots. 
 
 There are also the "Christmas Clubs" which for several 
 years past discount banks in many of the larger cities have 
 been operating. These take the money of savers and keep 
 it until the holidays, hut pay no interest. Deposits are 
 received by mail for this purpose. 
 
 A bad practice which does not prevail to the extent which 
 it did some years ago, is that of private business corpora- 
 tions receiving money from their employees, paying inter- 
 est on the same and making loans. One concern, believed 
 to be absolutely solvent, has accumulated in this manner, 
 according to well-founded report, about $300,000. Some 
 others have not as good a reputation for solvency. This 
 kind of business, it is well known, is contrary to the pro- 
 visions of the State Banking Law. 
 
 As far back as the year 1870, the Superintendent of 
 the Banking Department recommended that all private 
 bankers be placed under his supervision, but the opposition 
 was successful in defeating it for many years, until the en- 
 actment of the present law. 
 
RELATIONS OF SAVINGS BANKS 243 
 
 r>'<- 
 
 MR. HUNT'S WELL-CONSIDERED PAPER 
 
 In a well-considered paper on the subject of "The Rela- 
 tion of Savings Banks with Trust Companies, National 
 Banks and Postal Savings Banks," read before the Savings 
 Banks Association of the State of New York, May 20, 1915, 
 by Isaac L. Hunt, of Watertown, New York, this whole 
 subject was dispassionately treated. Mr. Hunt expressed 
 the opinion that the banking law of the State of New York 
 is not harmonious in all its parts, in that certain banks have 
 large powers, both with regard to the receiving of deposits, 
 as well as in the making of investments, while certain other 
 banks possess limited powers in these directions ; the result 
 is that these different classes of banking institutions are 
 forced to compete unequally as to deposits and as to invest- 
 ments. This condition works disadvantageously to those 
 banks whose powers are limited, and to the advantage of 
 those banks that have greater powers as to deposits and 
 investments, and in this respect he regards the banking 
 system of New York as inharmonious, if not self-destruc- 
 tive. 
 
 Doubtless, this destructive principle was incorporated in 
 the New York State banking law more from lack of com- 
 prehensive grasp of the whole situation than from malev- 
 olent design, illustrating the weakness of human judgment 
 in the creation of laws that will operate justly and har- 
 moniously upon all the interests involved. It calls atten- 
 tion to the need of remedial legislation that shall adjust 
 these conflicting conditions, in order that the banking sys- 
 tem of the State shall give to each class of banks full au- 
 thority to exercise their powers without destroying one an- 
 other. 
 
 Dismissing the idea that Postal Savings Banks will ever 
 prove serious competitors of the Savings Banks, Mr. Hunt 
 proceeds to say: 
 
 Not so, however, with National Banks. National Banks are in 
 lively competition with the Trust Companies in the State to secure 
 deposits from the people. They compete also directly with Savings 
 
244 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Banks in securing deposits. Lately, National Banks have increased 
 the rates of interest on certificates of deposit and resorted to various 
 plans and schemes for the purpose of inducing the public to deposit 
 their money with them. By these artificial means vast sums of 
 money are secured, much of which, no doubt, is, strictly speaking. 
 Savings Banks money, and ought to be deposited in Savings Banks 
 instead of National Banks. 
 
 With a view of having their assets as liquid as possible, 
 National Banks invest their funds in bonds, notes and com- 
 mercial paper. Hence, Mr. Hunt reaches the conclusion 
 that the real competitors of the Savings Banks in the matter 
 of investments, are the trust companies. By well-under- 
 stood means some secure not only the money of the rich but 
 the savings of the middle and even the poorer classes. The 
 money thus obtained they loan customers and invest in va- 
 rious securities yielding a large rate of interest. That such 
 a condition makes for instability and danger, is too patent 
 to need any argument. Upon this point, Mr. Hunt well 
 says: 
 
 Such are the temptations in the business world to take risks to 
 secure gains, that it needs no argument to prove that the savings of 
 the poor — of the laborers — of those in advanced years, and of trust 
 funds should only be invested in the soundest kind of securities, and 
 that the law regulating the deposits of such classes of people ought 
 to compel investment in lines of security of the most permanent 
 value. The law does regulate the investment of Savings Banks on 
 such lines, but the trust companies are at liberty to invest this kind 
 of deposit in commercial securities that will yield the largest re- 
 turn. 
 
 When the law authorizing Trust Companies was put upon the 
 statute books, there should have been a section compelling them to 
 segregate the money deposited in their savings departments and 
 invest the same in a line of Savings Bank securities, the same as 
 Savings Banks, in the interest of safety to the depositors. An effort 
 to amend the law now in this particular would be both unwise and 
 inexpedient. It would provoke the opposition of the National Banks 
 and Trust Companies, and would produce a controversy among the 
 banks that would be unfortunate if not disastrous. 
 
 This is a clear statement of a condition that has long 
 been fully understood in the banking world ; it is not in the 
 
RELATIONS OF SAVINGS BANKS 245 
 
 least overdrawn. If it be deemed inadvisable, at the pres- 
 ent time, to attempt to change the law governing trust com- 
 panies, the officers and trustees of Savings Banks can still 
 do much to cause the public to understand the true situa- 
 tion; then, no matter what may happen, they will have 
 the satisfaction of knowing that they have done their duty 
 toward the owners of the nearly two billions of dollars that 
 have been entrusted to the Savings Banks of this State by 
 its provident people. 
 
 The whole community must face the solution of this and 
 other problems with open minds and in a spirit of fairness 
 and impartiality, and although the banking millennium of 
 complete cooperation and absolute solvency may still be 
 a long way off, it is the duty of officers and trustees of Sav- 
 ings Banks in this State to bring nearer and nearer the 
 time when every depositor in every bank in the Common- 
 wealth shall feel that his money is as safe in one of these 
 institutions as if deposited in the Treasury of the United 
 States. 
 
 If vmsound methods are allowed to prevail in banking 
 affairs, sooner or later there will come a day of reckoning. 
 
CHAPTER XX 
 
 DORMANCY OF ACCOUNTS 
 
 Some Popular Misapprehensions Corrected — Systematic Efforts by 
 Bank Officials to Minimize These Accounts — Their Aggregate 
 Much Less than is Popularly Supposed — Some of the Leading 
 Causes of Dormancy — Such Accounts Never Outlawed — ^Their 
 Annual Publication Now Required — Some Very Interesting 
 Cases Given in Detail, Showing Remarkable Detective Ability — 
 Grateful Recipients. 
 
 One of the most troublesome questions in connection 
 with the management of Savings Banks is that of dormant 
 accounts — ^unclaimed deposits, some have improperly 
 termed them, forgetting that there is no such thing as an 
 unclaimed deposit, for any deposit is likely to be claimed, 
 and as a matter of fact very many have been claimed and 
 paid over to the rightful owners or their legal representa- 
 tives long years after they had first become dormant. 
 
 Despite a popular impression to the contrary, none of 
 the officials of Savings Banks in this State desire these ac- 
 counts; on the other hand, they expend very considerable 
 sums annually in systematic efforts to discover the true 
 owners, with a view of inducing them to keep the accounts 
 active or close them out permanently. 
 
 The aggregate amount of these dormant accounts is very 
 much less than is commonly supposed. The subject was 
 brought to the attention of the Constitutional Convention 
 which met at Albany in 1894. This convention sent out 
 a circular to each Savings Bank in the State, calling for a 
 report of all such accoimts. The reports which were re- 
 ceived showed that all the Savings Banks combined had, 
 at that date, but about five thousand of this class of ac- 
 counts. In most cases, the amounts were very small. A 
 
 246 
 
DORMANCY OF ACCOUNTS 247 
 
 considerable portion belonged originally to soldiers who 
 never returned from the Civil War, and to sailors who had 
 gone down to the sea in ships and had never returned. 
 The aggregate of these five thousand accounts, out of a total 
 of a million and three-quarters, proved to be but one-fifth 
 of one per cent, of the Savings Banks liabilities. This is 
 to be accounted for by the fact that it is the common prac- 
 tice for ofi&cials of these institutions to exhaust every means 
 of finding the true owners and tendering them the money, 
 or by constant care and vigilance prevent accounts from 
 becoming dormant. 
 
 It was also foimd, as a result of this inquiry, that over 
 fifty banks in this State were without a single accoimt of 
 this character, and that only twenty-two had more than 
 twenty-five dormant accounts each. Half of the whole 
 sum — or about $800,000 — ^was held by a single bank in 
 New York City, and more than one-sixth of it by another. 
 In the year 1899, the aggregate of these accounts was given 
 as a million and a half of dollars out of a total of seven 
 hundred millions in the banks of the State. 
 
 In some of the oldest banks in the State, the amount of 
 these dormant accounts is between $10,000 and $40,000. 
 The Rochester Savings Bank, for example, in 1911, had 
 deposits aggregating more than $25,000,000, while the total 
 of its dormant accounts was only $9,434.19. The Albany 
 Savings Bank, one of the oldest in the State, had but $27,- 
 000 of these accounts. 
 
 The Auburn, New York, Savings Bank has 13,425 open 
 accounts, of which only twenty-seven, aggregating on Jan- 
 uary 1, 1916, $2,270.17, are dormant. The Rome, New 
 York, Savings Bank, which has been organized sixty-five 
 years, during which time it has had over 47,500 depositors, 
 on May 8, 1916, had only twenty-two dormant accounts, the 
 total amount of which did not exceed $500. The Broad- 
 way Savings Institution, New York City, on May 9, 1916, 
 had seventy-one dormant accounts, which totaled $7,444.06. 
 By diligent, systematic efforts they are reduced to an aver- 
 age of two or three each year. 
 
248 CENTURY OF AMERICAN SAVINGS BANKS 
 SOME or THE LEADING CAUSES OF DORMANCY 
 
 Accounts become dormant through various causes — 
 deaths in army and navy; sailors whose whereabouts are 
 unknown, if living ; sudden death, shipwreck, insanity, f or- 
 getfulness and absolute ignorance of business methods. 
 Frequently elderly people place a certain amoimt for burial 
 purposes and die without revealing the fact; others draw 
 the principal and forget to withdraw the interest or dividend 
 which, in the course of years, accumulates to a considerable 
 smn. 
 
 One woman was found not long ago in New York who 
 made the statement to the bank's officers that she had not 
 applied for her money because she thought she had lost it 
 when she lost the passbook. Another woman did not call 
 at the bank for twenty-three years, being afraid her hus- 
 band would get the money and spend it. Another was very 
 angry that the bank had advertised for her, because her 
 children would learn of the deposit and she would have to 
 use the money for her own support and would be deprived 
 of their help. 
 
 Women are not the only ones with whom banks have had 
 similar experiences. One case came to light in which a 
 prominent gentleman in New York (since deceased) was 
 very angry that he had been advertised for, and even went 
 so far as to deny the signature he had given on opening the 
 account; but as the amount was quite large, he finally, at 
 the request of the bank, "accepted a check." 
 
 The officers of the Bank for Savings, New York City, 
 recall one instance in which a long, successful search re- 
 sulted disastrously for the discovered heir to an account 
 which had been opened in 1822. This was only three 
 years after the bank first opened for business. The heir, 
 a woman, had always been an exemplary, hard-working 
 person; but the possession of so much money — a fortune in 
 her eyes — started her on the road to dissipation. She never 
 did another stroke of work to the time of her death, which 
 occurred within one year after receipt of the money. 
 
DORMANCY OF ACCOUNTS 249 
 
 Many instances might be related of bank books having 
 been found in old trunks or other places where they had 
 lain neglected and forgotten for thirty and even forty years. 
 In one instance, a passbook showing a considerable balance 
 had been used by children to scribble and draw pictures 
 on. An advertisement for the heirs of the original de- 
 positor came to the notice of a benevolent minister on Long 
 Island, and through his efforts the money was paid them. 
 One of the heirs, a young woman, called at the bank shortly 
 after the receipt of the money and invited the president to 
 her wedding. 
 
 The faith shown by some of the oldest depositors in the 
 institutions they patronize is surprising. James Knowles, 
 comptroller of the Bank for Savings, New York, writes: 
 "We have had many cases of depositors where accounts had 
 become dormant and who had seen our advertisement for 
 them or their heirs but had not taken the trouble to come 
 to the bank for years. When at last they did come we have 
 found the advertisements carefully pinned in the passbooks. 
 On inquiry why they had not called before, the invariable 
 answer has been: 'I knew the bank was all right.' " 
 
 Under modern methods, with the increased information 
 required in the opening of accounts and the prompt follow- 
 ing up of any possible cases by correspondence, it may be 
 safely said that dormant accounts are practically a thing 
 of the past. 
 
 EXCELLENT RESULTS OF SYSTEMATIC WORK 
 
 With a view of instituting a system that should have for 
 its object the minimizing of these dormant accounts so far 
 as possible. Bank Superintendent F. D. Kilburn, in the 
 year 1899 addressed a communication to each Savings 
 Bank in the State in which he outlined a plan for the avoid- 
 ance of the accumulation of dormant accounts which, in 
 his opinion, was sure to produce the desired results. 
 
 This system was suggested by Mr. Bryan H. Smith, pres- 
 ident of the Brooklyn Savings Bank, and many years ago 
 was put in force in that institution; also, substantially the 
 
250 CENTURY OF AMERICAN SAVINGS BANKS 
 
 same plan was used in the Onondaga County Savings Bank. 
 
 "The institutions which have been longer established," 
 said the Superintendent, "have a more difficult task before 
 them than that which confronts the comparatively new 
 banks, but with which they must not fail to grapple reso- 
 lutely, and to the performance of which they are bound to 
 apply themselves energetically and persistently. Every 
 month's delay will make the work harder and more intri- 
 cate, and failure altogether to take it up may prove to be 
 most unfortunate." 
 
 The system referred to by the Superintendent is as fol- 
 lows : 
 
 On each account upon your ledgers place a signal denoting the 
 last date when interest was entered in the passbook; a deposit or 
 draft will also indicate the last date that the book was presented. 
 
 From these ledgers draw off lists of inactive accounts by years to 
 a blank book kept for the purpose, giving number of the account, its 
 amount, name of the depositor and his last known address. Then 
 notify these depositors by mail or otherwise to call at the bank and 
 have their interest credited. When a depositor appears, erase his 
 name from the blank book and place a new signal on the ledger. 
 If the notification is by mail, and it is returned imclaimed, or the 
 depositor fails to call, a man should be employed to make personal 
 inquiries and pursue the investigation as far as may be done con- 
 sistently with reasonable regard for expense and the difficulties aris- 
 ing in each case. This system should be employed in all cases where 
 one or more years have elapsed since the whereabouts of a depositor 
 was known, or since the book was presented for interest entry. 
 
 No claim was made by the Superintendent that this would 
 remedy, to any great extent, the long-standing dormant ac- 
 counts, but it was his opinion that if faithfully followed it 
 would prevent future dormant accounts. 
 
 The author addressed a letter to the Comptroller of the 
 Brooklyn Savings Bank, under date of July 21, 1916, ask- 
 ing for some account of their experience with the system, 
 and in reply received the following : 
 
 The system of tracing dormant accounts instituted during the time 
 Mr. Smith was president of this bank is as follows: We listed all 
 accounts that had been inactive for five years past, and each succeed- 
 ing year made an additional list upon the same basis. 
 
DORMANCY OF ACCOUNTS 2S1 
 
 After sending a circular letter requesting that the book be pre- 
 sented for credit of interest, and getting in a large majority of them, 
 we sent a further request to the remainder, and finally employed a 
 tracer. 
 
 This scheme has borne such satisfactory results that we hav^ con- 
 tinued it to this day, with the net result that last year out of our 
 72,000 open accounts, we had but four to report as dormant. At the 
 present writing we have one to report this year, and it is possible 
 that that one will be eliminated. At the same time, our tracer is 
 working on the old accounts constituting our "Deposits Suspended," 
 with the result that many of these also have been eliminated. The 
 man who does this particular work is a good investigator, has spent 
 a large amount of time and accomplished very satisfactory results. 
 
 In response to a similar inquiry, D. E. Petit, treasurer 
 of the Onondaga County Savings Bank, Syracuse, above 
 referred to, replied under date of July 22, 1916: 
 
 Our system is as follows: When an account becomes automatically 
 dormant, it is transferred to our dormant account ledger. The ledger 
 is alphabetically arranged, and contains the following columns: 
 
 Date of Transfer. 
 
 Eook No. 
 
 Page. 
 
 Name. 
 
 Address Given. 
 
 Last Known Address 
 
 Account Opened. 
 
 Last Transaction. 
 
 Amount Dr. 
 
 Amount Cr. 
 
 Efforts to Locate. 
 
 Reported to the Department. 
 
 Final Disposition. 
 
 Remarks. 
 On looking over the register I find entries which indicate that the 
 efforts to find these depositors have been quite consistent and thor- 
 ough. That these efforts have been successful is evident from the 
 fact that our dormant accounts amount to only $6,111, from the 
 organization of the bank, in 1855, to the present time. In view of 
 this fact, it is amusing to see old soldiers strutting about the bank 
 claiming that our building was erected with unclaimed deposits of 
 Civil War soldiers. I recently tried to correct the popular impres- 
 sion as to the amount of these accounts in a newspaper interview. I 
 suppose you have had like experience. 
 
252 CENTURY OF AMERICAN SAVINGS BANKS 
 DORMANT ACCOUNTS NEVER OUTLAWED 
 
 No account is ever outlawed in the State of New York; 
 the statute of limitations cannot be invoked. However, if 
 an account shows no transactions for a long period of time, 
 it is properly regarded as dormant and ceases to share in 
 dividends. Until such time as the principal of the account 
 is demanded, the dividends earned benefit the owners of 
 all active accounts. 
 
 The practice is not uniform. Some banks stop interest 
 after a stipulated period of from ten to twenty-two years; 
 and in cases where the dormant accoimts have been paid 
 over to the rightful owners, interest at the regular rate has 
 been figured and added to the balance. A few banks con- 
 tinue to pay interest so long as the account remains on the 
 books of the bank. In the State of New York, the period 
 of time required to make an account dormant is generally 
 twenty-two years. 
 
 As stated, it is the approved practice among most insti- 
 tutions in the State to institute a rigid system of keeping 
 track of these inactive accounts and searching out the own- 
 ers so as to minimize, so far as possible, the accounts so 
 held. This is not only good practice but a worthy work, 
 and when success has crowned the efforts of the banks' offi- 
 cers they have shared the happiness of those to whom the 
 money rightfully belonged. A few hundred dollars is a 
 small fortune to those who have never known anything 
 but a struggle for existence from day to day, as is the case 
 with thousands in the great cities, and most of the old ac- 
 counts that have been traced have gone to people in poor or 
 even desperate circumstances. Numerous instances of this 
 will be cited later on in this chapter. 
 
 There would seem to be no doubt that the officers of the 
 various banks are much better qualified to take care of 
 these accounts than any one else — even the lawmakers — 
 yet for many years this class of accounts seems to have been 
 the particular "garne" of the legislators, especially those 
 from the large cities. The hunting was good, and appar- 
 
DORMANCY OF ACCOUNTS 253 
 
 ently, there was no "closed season." There seemed to be 
 an unshakable opinion in the average legislative mind — a 
 belief, by the way, wholly unfounded — that many million 
 dollar marble banking houses had been built with fimds 
 taken from these so-called "unclaimed deposits." 
 
 The favorite plan which found many earnest advocates 
 among the lawmakers, was to exploit the names and amounts 
 through the newspapers, or otherwise, inviting claimants. 
 No doubt there would have been a plethora of these, had 
 such a bill been passed, and one result, at least, would have 
 been to quickly galvanize life into these sleeping accounts. 
 Happily, wiser counsels prevailed, and for a ntmiber of 
 years past the solons have seemed content to leave the mat- 
 ter where it properly belongs — in the hands of the banks 
 themselves. 
 
 It is true that in some commonwealths — ^notably Massa- 
 chusetts and Pennsylvania — ^the State ultimately comes into 
 possession of these accounts. In those States, after the 
 expiration of thirty years, the money is paid over to the 
 State treasurer, who must hold himself ready, at all times, 
 to pay the same to the rightful owners upon presentation 
 of proper legal proof. It is difficult to imagine any 
 grounds upon which the State could, in any event, lay claim 
 to these accounts.^ 
 
 ^ Emerson W. Keyes, in his "History of Savings Banks in the United 
 States," (1878), says on this point: 
 
 "I maintain that no lapse of time during which the depositor fails or neg- 
 lects to present himself or his book at the bank can create any claim on be- 
 half of the State to the moneys thus deposited. The daily experience of the 
 older Savings Banks is a perpetually recurring refutation of the hypothesis 
 that after the lapse of ten, or even of twenty or more years, without inter- 
 course with the institution, the death of the depositor is to be presumed. 
 But granted, that after some period, say fifty years, this presumption^ might 
 safely and justly be made, we are still as far as ever from finding title, or 
 claim of title, upon any known legal or equitable hypothesis or theory, in the 
 State, to the money of such presumably deceased depositor, for it is im- 
 possible, upon any basis of reason, or upon any rational theory of probabilities, 
 to create a presumption that he died intestate and without heirs. And until 
 both the decease and the failure of heirs can be established, either conclusively 
 or presumptively, the State can have and can make no claim, not directly 
 opposed to those ri^ts of personal property conserved by the fundamental 
 law of the State, which is higher than any legislature; while, with both these 
 incidents conclusively established, the claim of the State may be successfully 
 preferred, though the deposit is but two hours old." 
 
254 CENTURY OF AMERICAN SAVINGS BANKS 
 
 THEIR PUBLICATION NOW REQUIRED 
 
 The revised Savings Bank Law of the State of New York 
 (Article 274), provides that on or about the first of Sep- 
 tember in each year, all Savings Banks shall report to the 
 Superintendent of Banks all such dormant accounts of ten 
 dollars or more, giving the name of the depositor in full. 
 Such accounts are to be published once each week for two 
 successive weeks in a local newspaper, and once in a news- 
 paper in the City of Albany. Very wisely, it is not re- 
 quired that the amounts be published. 
 
 The suggestion has been made that inasmuch as Savings 
 Banks may not charge off on their books or legally use 
 these uncalled for balances, some provision might be made 
 by law for the use of these funds in the promotion of thrift. 
 One Savings Bank official asks: "Would it not be reason- 
 able that the expenditure now being made in some of the 
 cities of the State to promote school savings should become 
 a proper charge against certain dormant accounts, which 
 accounts, after the lapse of the term of years of advertising 
 could be placed in charge of the State Banking Depart- 
 ment?" 
 
 It may be safely said that on the whole the advertising 
 of dormant accounts is an advantage, as in cases where it 
 does not bring forth an applicant it helps to establish the 
 fact that the balance is never likely to be called for. In 
 some cases, the complications involved in making just dis- 
 tribution of funds to descendants whose portion would be 
 very small, has deterred bank officials from doing any- 
 thing with a dormant balance. 
 
 Perhaps every bank having dormant accounts has had the 
 experience of calls from persons whose parents or relatives 
 were of the same name as the owner of dormant accounts, 
 which owner, after full investigation has proved to be an- 
 other party in no way connected with the applicant for the 
 balance of the account. 
 
 Although it is the usual practice of banks to stop adding 
 interest on the ledger after twenty-two years and to note 
 
DORMANCY OF ACCOUNTS 255 
 
 the account as dormant, yet as a rule Savings Banks pay 
 interest to the date of withdrawal by the proper authority, 
 not as a matter of legal right, but as a favor on the part of 
 the bank. 
 
 In one particular case which occurred in New York City, 
 it was decided by the bank officials, by reason of the un- 
 usual amount of time and expense involved, to allow but 
 one-half the amount of interest which would have accrued 
 after the date when the account became dormant. The 
 heirs were not at all grateful — indeed, they even threatened 
 to bring suit for the entire amount which would have ac- 
 crued, but subsided when convinced they had no right to 
 anything beyond the twenty-two year limit. No doubt 
 many banks have had the experience of depositors turning 
 up in response to the search and calmly stating they knew 
 all about the accoimt, were quite satisfied it was in safe 
 hands and did not feel there was any need to inquire about 
 it. One such man turned up from Australia, in the case 
 of a dormant account in the City of New York. 
 
 GRATEFUL RECIPIENTS 
 
 One of the clerks in the Greenwich (New York) Savings 
 Bank, in working over the dormant accounts, noticed the 
 names of two ladies whom he had known for years and 
 recognized as old friends of his family.' Investigation 
 showed that the accounts belonged to these ladies, but that 
 they had quite forgotten about them although they were in 
 straitened circumstances. Something like $1,500 apiece 
 was paid to them — a most welcome windfall in time of 
 real need. 
 
 Another case, connected with the Bank for Savings, New 
 York City, is worthy of special notice. After a long and 
 somewhat expensive search, under the personal direction of 
 the president of the bank, the heirs were found, in extreme 
 poverty, in Ireland. To say that such a letter as the fol- 
 lowing, fully repaid the trouble of investigation, but mildly 
 expresses it: 
 
256 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Frankford, Ireland, May 16, 1900. 
 Dear Sir: 
 
 1 received your very welcome letter enclosing the two drafts, and 
 I must say that you have dealt most liberally in giving one so much 
 for the trifling trouble I took in the matter. 
 
 When I received the drafts I took them to the wretched hovel 
 occupied by James Larkin and his brother, William, and told them 
 the good news. James burst into tears and called down a thousand 
 blessings upon "the good bank man" and upon me, and he says he 
 will pray for us as long as he lives; and William, who has been in 
 bed with chronic asthma for the last fortnight, seemed to be just as 
 glad as his brother at the good news. When their excitement had 
 abated somewhat they asked me to read your letter for them, when 
 expressions of gratitude both to you and to me were made use of at 
 every line. They then asked me to advance them the small sum of 
 four shillings until I could get the draft cashed, which I did at 
 once. This will show you what extreme poverty they were in at the 
 time, for they told me they had spared everything, living upon little 
 or nothing until that morning when they had neither money nor food. 
 
 I have often, as it were, acted the part of a Providence to people, 
 relieving or setting them right when all hope seemed to have de- 
 parted, as far as my small means would allow, but I never saw any 
 one show more gratitude for anything than the poor Larkins on this 
 occasion. 
 
 If there be a God, — and I am old-fashioned enough to believe 
 that there is, — I feel assured that He will bless you for your great 
 kindness and charity to this poor blind man. 
 
 Wishing you every happiness in this life and the next, and again 
 thanking you. 
 
 Your faithful friend, 
 
 (Signed) T. Goodisson. 
 
 CASES FROM THE BOWERY SAVINGS BANK, NEW YORK 
 
 For many years past, the Bowery Savings Bank, New 
 York, has made a specialty of these dormant accounts, 
 being determined to keep the number as small as possible, 
 and with that end in view placed the matter in charge of 
 an expert in that line — ^Mr. Joseph G. Liddle — to whom 
 the author is indebted for full and interesting details of 
 some of the leading cases handled by him. It may not be 
 out of place to add that these cases exhibit, on the part of 
 Mr. Liddle, remarkable detective ability, perseverance, in- 
 genuity and resourcefulness. All of the cases given are 
 
DORMANCY OF ACCOUNTS 257 
 
 full of human interest, and some of them read more like 
 romance than the reality they undoubtedly are. 
 
 STORY OF THE CULLMANN ACCOUNT 
 
 One of the most interesting and difficult, and at the same 
 time one of the most successful cases with which Mr. Lid- 
 die has been connected is that of the CuUmann Account. 
 It is given substantially in his own language : 
 
 Account No. 172,894, in the Bowery Savings Bank. New York. 
 Frederick Collmann, Turner, January, 1861 
 
 425 Fifth Street. 
 
 Transferred to 
 Account No. 202,797 January, 1863. 
 
 Eliza Colknan, 
 180 Ludlow Street. 
 Widow. 
 
 Transferred to 
 
 Account No. 263,223 January, 1866. 
 
 Eliza Culhnann. 
 
 638 East 13th Street. 
 
 Widow. 
 
 Julius and Mary 
 
 For William, Charles and Franz. 
 
 Transferred to 
 Account No. 352.909 March 31, 1873. 
 
 Eliza Culhnann, 
 404 East nth Street. 
 Sews. 
 Widow. 
 
 Julius and Mary 
 F'or William, Charles and Franz. 
 
 As shown above, this account was originally opened by 
 Frederick Collmann (or Cullmann), a turner, in January, 
 1861. In the course of time, the account became dormant 
 and search by letters and advertisements was unfruitful 
 of results until, after a number of years, in response to 
 one of the bank's advertisements, a letter was received from 
 a gentleman of the name of William Cullmann, in which 
 
258 CENTURY OF AMERICAN SAVINGS BANKS 
 
 he stated that the similarity of the name to that of his 
 mother had attracted his attention. He was invited to call 
 at the bank, and after several interviews, the following 
 story was elicited: 
 
 Frederick CuUmann, his father, was a prosperous pipe- 
 maker, the shock of whose sudden death so upset the men- 
 tal balance of his mother that she became subject to period- 
 ical fits of insanity; still she kept the little family together 
 for a number of years, until one day she had one of her 
 attacks on the street, was taken care of by the police and 
 placed in an insane asylum. The three children were sent 
 to one of the city institutions and cared for until of proper 
 age, when they were indentured to various parties. Thus 
 the family was scattered. The names of the three chil- 
 dren agreed with the beneficiaries named in the account in 
 question, and the story appeared to match the bank's rec- ' 
 ords, but unfortunately the correspondent could not re- 
 member the addresses of his family during the years pre- 
 vious to 1873, except that at one time they lived in a house 
 on the East Side opposite a graveyard. Examination of 
 city maps developed the fact that one of the addresses given 
 by the bank's depositor fitted that description exactly, and 
 the correspondent completed the link by pointing out the 
 exact house, the number of which agreed with that given 
 by the depositor. He was asked to search among his pa- 
 pers for a signature of either his father or mother, but hav- 
 ing lost many papers in moving from place to place, he 
 doubted his ability to furnish what was asked for. In a 
 few days, however, he submitted the following: 
 
 The original papers issued by the surrogate to his mother, 
 Eliza CuUmann, as administratrix of the estate of Fred- 
 erick CuUmann ; this paper matched the copy filed with the 
 bank when the account was transferred from the name of 
 Frederick CuUmann to that of his widow, Eliza. 
 
 An old wallet belonging to his father, whose name as 
 written on the flap bore a strong resemblance to the signa- 
 ture on the account opened by Frederick CuUmann. 
 
DORMANCY OF ACCOUNTS 259 
 
 The cover of his mother's old workbox, bearing her 
 name, evidently written by herself, as the resemblance to 
 the signature on the bank's books was very striking. 
 
 Sundry other docmnents, viz.: Certificate showing the 
 marriage of Frederick CuUmann to Eliza Warner; certifi- 
 cates showing the christening of the various children; and 
 other papers showing membership of Frederick Cullmann 
 in various societies, such as the fire department, etc. 
 
 All this evidence served to connect his mother with the 
 account in question. When told that over eleven hundred 
 dollars belonging to his mother had been in the bank all 
 these years, he was deeply affected, and with tears in his 
 eyes said: "If we had only known this, our family would 
 not have been broken up — we would have been able to keep 
 together." 
 
 He was advised how to proceed in the premises; to take 
 out letters of administration, etc., and the bank would pay 
 the accovmt, all of which he promised to do. It appeared 
 later, that there was another boy, besides William, Charles 
 and Franz, and that the inability of William to locate this 
 missing one, caused him to become disgusted and to drop 
 the whole matter. This was in 1898. Three years later, 
 as the bank still held the book representing this account, 
 and as Mr. Cullmann had done nothing, he was requested 
 to again call at the bank, which he did. At this interview, 
 Mr. Cullmann stated that his every move seemed to be 
 blocked and he regretted having ever heard of the matter 
 for it revived memories long since dead. So far as he was. 
 concerned, he declined to have anything further to do with' 
 the accoimt, but was perfectly willing to have Mr. Liddle- 
 undertake to solve the mystery, which the latter started out: 
 to do, with the full consent of the bank's officers. 
 
 Very early in the search, it occurred to Mr. Liddle to» 
 ascertain whether Eliza Cullmann (with the cunning of the 
 insane), had placed money in other banks. Much to his 
 surprise Mr. Liddle found an account in the Metropolitan 
 
260 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Savings Bank amounting to over two thousand dollars. 
 This account read as follows: 
 
 Andrew Miller or Eliza CuUmann 
 
 in trust for 
 William, Franz, Charles and Mary, 
 
 her children. 
 
 In none of his interviews did Mr. CuUmann ever men- 
 tion that there was a sister, and Mr. Liddle found that he 
 had utterly forgotten her, she being very young when they 
 were placed on Randalls Island, and he himself not more 
 than nine years old at that time. When her name was men- 
 tioned, however, he, remembered her. 
 
 According to Mr. ^CuUmann, the children, after being 
 on Randalls Island for a number of years, were indentured 
 to various parties; he himself was given to a Mr. Withers, 
 a horseman, and Franz went to a woman in Connecticut. 
 These two became dissatisfied after a few months, and ran 
 away, returning to New York and eventually finding each 
 other. In the meantime, the mother was discharged from 
 the insane asylum as cured, and in due time she and the 
 two boys were reunited and remained together until she 
 had another attack of insanity, when William, to protect 
 liimself and Franz, had to call in the police and put her in 
 Ttheir charge. The boys were so young that they had lost 
 interest in the other two children, and perhaps felt also 
 that wherever they were, they were better off than they would 
 he at home under the existing conditions. 
 
 The problems Mr. Liddle had to solve were these: 
 
 1. To discover the whereabouts of Eliza CuUmann, the 
 mother, and of Charles and Mary CuUmann, the missing 
 children. 
 
 2. If any or all were dead, the time and place of death. 
 William and Franz, after coming together never lost sight 
 
 of each other, and at various times, when they had the time 
 and leisure, tried to work out the above problems, without 
 success. 
 
 Eliza CuUmann having fallen into the hands of the 
 
DORMANCY OF ACCOUNTS 261 
 
 police, Mr. Liddle made a search of the police records. 
 Many changes in boundaries of police precincts were made 
 in thirty years, but finally he located the stationhouse and 
 found this record : 
 
 17th Police Precinct, in 1874. (Now knovm as the ISth.) 
 Date, November 16, 1874. Time, 7:15 a. m. 
 
 Name, Elizabeth Coleman. 
 Age, 36 Years. 
 Color, white. 
 Birthplace, Germany. 
 Occupation, housework. 
 Condition, married. 
 Address, 11 First Street. 
 Charge, insanity. 
 
 Complainant, William Coleman, 11 First Street. 
 Arrest made by Officer Tuthill. 
 Committed to care of Commissioner of Charities and Correction by 
 
 Judge Kilbreth. 
 
 This evidently was the record wanted; the change of 
 name was easily explained by the fact that the arrest was 
 made by an Irish officer, who would be very apt to give a 
 phonetic rendering. Continuing his search, Mr. Liddle 
 found that on November 17, 1874, Elizabeth (or Eliza) 
 Coleman was admitted to the asylum at Wards Island, 
 and died at Harts Island, April 3, 1886. 
 
 The records of Manhattan Hospital, Wards Island, New 
 York City, settled the time and place of the death of the 
 mother, and on the strength of it the surrogate issued letters 
 of administration to William Cullmann, the eldest son. 
 
 Mr. Liddle was assured that the records of Randalls 
 Island failed to show that the four Cullmann children had 
 ever been committed there, although William Cullmann 
 asserted it again and again. He said that while on the 
 island he was a member of the drum corps and remembered 
 distinctly visits made to the island by "Boss" Tweed and 
 Tom Brennan; also a trip to New York to attend the 
 funeral of some famous man — ^he thought it was Admiral 
 Farragut. Mr. Liddle was not satisfied, and finally, in 
 April, 1902, paid a visit to the island in company with Mr. 
 
262 CENTURY OF AMERICAN SAVINGS BANKS 
 
 CuUmann, and as a result, found the records he sought, 
 showing that William, aged 13 years, Frank, 11 years, 
 Charles, 9 years, and Mary, 7 years, had been committed 
 to Randalls Island, June 9, 1869. The records also 
 showed to whom the children had been discharged, Frank, 
 to Amelia P. Fenn, New Haven, Connecticut, Charles, to 
 Isaac Van Nostrand, Clarkstown, Rockland County, New 
 York, Mary, to Amelia P. Fenn, New Haven, Connecticut, 
 and William, to D. D. Withers, Madison, Morris County, 
 New Jersey. 
 
 These records, which were made in the years 1871 and 
 1872, gave Mr. Liddle the desired starting point, but it 
 seemed almost hopeless to expect to find the two children 
 after the lapse of so long a time (thirty-two years). By 
 very clever work, he discovered that Mary was married and 
 living at Yalesville, Connecticut. The adopted child for 
 years had believed she was the daughter of Mrs. Fenn, the 
 latter having allowed the child to grow up in entire ignor- 
 ance of both her family and her real name. Mary's amaze- 
 ment when informed that she had three brothers, two wjiose 
 whereabouts was known, and the third to be found, was 
 described as pathetic indeed. Two weeks later, Mr. Liddle 
 had the extreme pleasure of bringing William and Mary 
 together, after a separation of over thirty years. William 
 recognized her at once, by the marked resemblance to her 
 mother. The meeting is described as having been very 
 touching. This was in July, 1902. 
 
 The story of how Mr. Liddle later found Charlie, by 
 means of photographs he had secured, circularizing the en- 
 tire county of Rockland, and using the advertising columns 
 of the New York Sunday papers, is equally romantic and 
 interesting. It was his extreme pleasure, a few evenings 
 before Christmas, 1902, to sit down to dinner in the home 
 of William and witness the reunion of the three brothers, 
 so long separated. Mary was not present on that occa- 
 sion, but all the children had a reunion later, and were 
 delighted at being together. Charlie never knew any other 
 name than Coleman, and for a long time did not use that, 
 
DORMANCY OF ACCOUNTS 263 
 
 being known by a name selected by himself. It was very 
 singular, when the brothers came to compare notes, to find 
 that some twenty years before, Charlie and William worked 
 in the same building and yet never came in contact with 
 each other; and that Frank, the other brother, was fre- 
 quently in the same building to see William. 
 
 One of the most gratifying features of this remarkable 
 case is the fact that all the children, in spite of their early 
 disadvantages turned out well, William being married hap- 
 pily, with a good position and three lusty children; Frank, 
 a bachelor, an expert in his line and making a comfortable 
 living; Mary happily married to a sensible fellow who 
 owns his own home in the country, but with no children 
 to enjoy its advantages; Charlie, a skilled mechanic in his 
 line, married and well thought of in the village on Long 
 Island where he resides. 
 
 This story rims along so nicely, and all the facts dove- 
 tail so exactly, that it is not easy to realize how much time, 
 labor and thought had to be expended before the end of 
 the tangle appeared. It might, not inappropriately, be 
 compacred to the finished work of a dressmaker — so many 
 invisible stitches were necessary to produce the final effect. 
 
 THE CASE OF THOMAS MC CULLEN 
 
 In September, 1866, a man by the name of Thomas 
 McCuUen became a depositor in the Bowery Savings Bank, 
 New York. Passbook No. 273,730 was issued to him and 
 his residence given as 7 Cherry Street, New York City. 
 The account ran along with drafts and deposits until the 
 passbook became full, when the balance was transferred to 
 a new account, No. 402,736, his residence being then given 
 as 138 or 188 Grand Street, New York City; occupation, 
 a silversmith; parents' names, Patrick and Mary, and trans- 
 ferred from accoimt No. 273,730. 
 
 Accoimt No. 402,736 became dormant in May, 1896, 
 imder the rules of the bank, no transaction, either deposit 
 or draft or credit of interest having been made in twenty 
 years. 
 
264 CENTURY OF AMERICAN SAVINGS BANKS 
 
 For some years prior to 1894, the bank made diligent 
 effort to locate this Thomas McCullen, but without result, 
 and after the account had become dormant increased en- 
 deavors resulted in no clew. 
 
 In the fall of 1899, Mr. Liddle caused a circular to be 
 printed and circulated seeking information about this de- 
 positor. Copies were sent to all the manufacturing silver- 
 smiths in New York, Brooklyn, Jersey City, New Jersey, 
 and also to the centers of that industry in Connecticut, 
 Massachusetts and Rhode Island. 
 
 Mr. Alfred Woodward, foreman of the establishment of 
 George W. Shiebler & Co., corner of St. Marks and Under- 
 bill Avenues, Brooklyn, received one of the circulars and 
 wrote that he remembered a Thomas McCullen, who worked 
 with him in a silver manufacturing concern in John Street, 
 New York, owned by a firm known as Wood & Hughes. 
 Mr. Liddle interviewed Woodward and learned that while 
 the latter had not seen his friend McCullen for twenty-five 
 years, he was quite sure that he had a brother living in 
 Philadelphia, Pennsylvania. 
 
 In due time, Mr. Liddle received a letter from one 
 Michael F. McCullen, who had received one of the letters 
 sent to all the persons of that surname living in Phila- 
 delphia. He claimed to be a nephew of said Thomas Mc- 
 Cullen, and in answer to requests for proofs, stated that 
 the given names of the parents of his uncle were Patrick 
 and Mary; he also forwarded for inspection a prayer book 
 presented by his uncle, some twenty-five years before, to a 
 sister of his (now deceased) , and also a photograph of his 
 uncle Thomas. On the fly leaf of the prayer book was a 
 presentation address and the signature of the uncle. 
 
 During Mr. Liddle's first interview with Mr. Woodward, 
 he stated he knew his friend McCullen had an account in 
 the Bowery Savings Bank. He identified the photograph 
 as being a good picture of his friend McCullen. This was 
 enlarged from a tintype by Mr. Liddle's orders, so that each 
 relative might have a copy. 
 
 The Bowery Savings Bank, being satisfied from the evi- 
 
DORMANCY OF ACCOUNTS 265 
 
 dence submitted by Mr. Liddle that he had found the rela- 
 tives, informed them of the deposit in that bank, and left 
 the matter in their hands to wrestle with. 
 
 About a month later, the Seamens Bank for Savings, in 
 making search for Thomas McCuUen, a depositor on ac- 
 count No. 147,794, got in touch with a man who had been 
 interviewed by Mr. Liddle some years previously in regard 
 to the depositor in the Bowery Bank, and as a result he was 
 asked to call at the Seamens Bank and see if there was 
 any connection between the two McCuUens. Upon com- 
 paring notes it was found that account No. 147,794 in the 
 Seamens Bank was opened January 20, 1874, by Thomas 
 McCullen, residence No. 69 Madison Street, New York 
 City; occupation, silversmith; parents' names, Patrick and 
 Mary; brothers, Michael and Peter; sisters, Bridget and 
 Alice; born in 1829, in Louth, Ireland. 
 
 In Mr. Liddle's correspondence with Michael F. Mc- 
 Cullen, of Philadelphia, he wrote that when his uncle 
 Thomas last visited them, more than twenty-five years be- 
 fore, they were living at 769 South Sixth Street, Phila- 
 delphia, and Mr. Liddle was shown at the Seamens Bank 
 an old letter they had received from their depositor, Thomas 
 McCullen, containing a request that the bank forward to 
 him a certain sum of money, and asking that it be sent to 
 769 South Sixth Street, Philadelphia, which was done. 
 
 In March or April, 1900, while transacting some busi- 
 ness at the Dime Savings Bank of Williamsburgh, Brooklyn, 
 Mr. Geckler, the secretary, called Mr. Liddle's attention to 
 a list of names of depositors in failed Savings Banks, pub- 
 lished some eight or ten years before. In this list was the 
 name of Thomas McCullen. Mr. Liddle at once wrote the 
 Banking Department at Albany, regarding all the names 
 he recognized as those of owners of dormant accounts in 
 the Bowery Bank. On April 4, 1900, Mr. Liddle received 
 a letter from the Banking Department, extracts from which 
 follow: 
 
 2d Paragraph. "I have looked the matter up and am satisfied the 
 names you give are genuine, and therefore do not hesitate to give you 
 
266 CENTURY OF- AMERICAN SAVINGS BANKS 
 
 the amounts due each depositor, as shown by the books of this De- 
 partment." 
 
 6th Paragraph. "Thomas McCullen, Bond Street Savings Bank, 
 No. 25097, amount due, $1,075.44." 
 
 On April 11, 1900, Mr. Liddle sent to the Banking De- 
 partment a tracing of the signature of Thomas McCullen, 
 and on the 14th of the same month received a reply to 
 the effect that a careful examination of the signature of 
 Thomas McCullen, shown on the signature book of the 
 failed bank had been made, and that it agreed with the 
 tracing received from Mr. Liddle in all particulars, ex- 
 cept that the "M" in McCullen was written like this: 
 
 .^ instead of like ^IC 
 
 The information given by him to the bank at the time 
 of making his first deposit was as follows: 
 
 Date of deposit, October, 1874. 
 Residence, No. 198 Grand Street. 
 Age, forty-five. 
 Bom in Ireland. 
 
 Application for letters of administration was made to 
 the surrogate of New York County by Michael F. Mc- 
 Cullen, of Philadelphia, Pennsylvania, early in 1901, and 
 the matter was referred to Judge William N. Cohen, for- 
 merly a Justice of the Supreme Court of New York, to 
 inquire into the relationship of the petitioner to Thomas 
 McCullen. All the evidence herein set forth was mar- 
 shaled at the various hearings held before Judge Cohen, 
 and his report to the surrogate was such that letters of 
 administration were issued, and so far as the Bowery and 
 the Seamens Banks were concerned the accounts belonging 
 to Thomas McCullen were declared collectible by the ad- 
 ministrator of the estate of Thomas McCullen. 
 
 The amounts found in each of the three banks were as 
 follows : 
 
DORMANCY OF ACCOUNTS 267 
 
 Bowery Savings Bank, ac't 402,736, am't $3,236.84 
 
 Seamens Savings Bank, ac't 147,794, am't 1,385.07 
 
 The failed Bond Street Sav. Bk., ac't 25,097, am't 1,075.44 
 
 $5,697.35 
 
 STORY OF THE ACCOUNT OF ELLEN A 
 
 Account No. 383.435. 
 
 Name, Ellen A . 
 
 Address, Baxter Street, New York City. 
 
 . Occupation, Day's work. 
 Parents' names, Pat and Catherine. 
 Condition, Single woman. 
 Amount, October 29, 1902, $4,942.50. 
 Last transaction, in April, 1886. 
 
 Mr. Liddle says of this account: "In working on my 
 ledgers, my attention was frequently attracted to this ac- 
 count, first, because it was the largest account in the bank; 
 second, because of the fact that no transaction had been 
 made on it since 1886; and third, because it seemed strange 
 to me that a person in her condition in life should be able 
 to go so many years without needing some money to tide 
 over a possible hard time. 
 
 "As the account would become dormant in a few years, I 
 thought it wise to take steps to find out, if possible, what 
 had become of her, in order that the account might not be- 
 come dead. 
 
 "In conversation with one of the older clerks with refer- 
 ence to the account, he stated that the name of Ellen A 
 
 was very familiar, and if he was not mistaken, a woman of 
 that name was a regular visitor at the bank each interest 
 period; and if I would wait a few days she would prob- 
 ably be in, as she had a number of accounts in the bank. 
 
 "When she appeared, I was called and had an interview 
 with her, during which I suggested that she bring all her 
 bank books on our bank, so that they could be written up 
 and balanced. I impressed upon her to be sure to bring 
 them all. 
 
 "In compliance with my request, a few days later she 
 appeared with three bank books, showing aggregate 
 
268 CENTURY OF AMERICAN SAVINGS BANKS 
 
 amounts of more than $8,000; these books enabled me to 
 trace back to the origin of the accounts, the result of which 
 proved conclusively her ownership of account No. 383,435. 
 
 "It appeared that she had been in the habit of leaving 
 all her books in the bank; that at the time of the death of 
 her husband, she had so much domestic trouble that for a 
 period of six or seven years she did not go to the bank; that 
 when she did call to get her books, she felt that one was 
 missing, but was not sure, and believing the bank people 
 were honest, she let it go at that. Her faith in the bank 
 was not misplaced, for we had the satisfaction of placing in 
 her hands a duplicate book for the amount of $4,942.50. 
 
 "The aggregate of the four accounts was more than $13,- 
 000; two of the accounts were in trust for a deceased sis- 
 ter; one was in her own maiden name and one in her mar- 
 ried name. This was a clear violation of law, and we sug- 
 gested to her the advisability of withdrawing the money 
 and placing it in other banks, but it appeared that she had 
 an account in every bank we mentioned. Finally we per- 
 suaded her to close all the accounts she had and open trust 
 accounts for her nephews and nieces, and in that way make 
 a partial distribution of her money. She being old and 
 illiterate, we did not desire to turn her out into the street 
 with a small fortune on her person. She left $12,000 in 
 our bank. She is still hale and hearty, and continues to 
 go out to day's work, lives by herself in a rear tenement, 
 and even now, from her daily wage she deposits her savings 
 from time to time in the various Savings Banks. In talk- 
 ing with her, I could not help noticing how healthy she 
 looked ; she had very few wrinkles in her face, and she was 
 plump and of fine color. Few women whose lines have 
 been laid in pleasanter places reach the age of this little 
 apple woman and show so few signs of her years as she 
 does." 
 
 "Dated, February 26, 1903." 
 
 (Since the above story was written, Ellen A has 
 
 died and her estate is in process of settlement. This little 
 
DORMANCY OF ACCOUNTS 269 
 
 old woman, denying herself needed comforts, left Savings 
 Bank accoimts amounting to about $35,000, which amount 
 is to be divided among her four nieces and nephews. 
 Neither her relatives nor neighbors had any idea that Ellen 
 possessed any property at all, believing she depended upon 
 her daily labor for the necessities of life. One pleasant 
 thought in connection with this woman's estate is that it 
 will go into the hands of relatives who are thrifty and will 
 know how to take care of it, and get more comfort out of 
 it than did the one who amassed it, but could not take it 
 "across the river.") 
 
 THE COLWELL CASE 
 
 Account No. 330,327. 
 
 Name, Edward Colwell. 
 
 Residence (February, 1870), Madison, New Jersey. 
 
 Occupation, Laborer. 
 
 Amount of Account, $4,522.24. 
 
 Last transaction, February, 1885. 
 
 Passbook in the custody of the bank. 
 
 Signature, a cross-mark. 
 
 Mr. Liddle thus describes his action in this case: 
 "I felt that there must be some good reason why a labor- 
 ing man should apparently have forgotten so handsome a 
 bank accoimt, and was convinced that the depositor was 
 dead. 
 
 "I paid a visit to Morristown, New Jersey, the county 
 seat, and examined the surrogate's records, without result. 
 I then visited Madison, intending to hunt up old residents 
 and quiz them. In wandering about the village, I noticed 
 on the window of one of the public buildings the sign, 
 'Vital Statistics.' Of course I dropped in and got in con- 
 versation with the registrar. When asked if his records 
 showed the death of a man named Edward C , he re- 
 plied: 'Why, yes; he died some six or seven years ago. 
 He was a queer old fellow — ^never went to church — and yet 
 when his will was probated it was found that he had left 
 money to two of the churches in the town and also a pres- 
 ent to each pallbearer whom he named to act as such. He 
 
270 CENTURY OF AMERICAN SAVINGS BANKS 
 
 left quite a large estate, consisting principally of mortgages 
 on property in New York City.' 
 
 "While the registrar was speaking, he got down his rec- 
 ord and found the record of the death of the man by the 
 name of Edward Caldwell, and proceeded to give a tran- 
 script of the same. The record read : 
 
 Edward Caldwell. 
 
 80 years old. 
 
 Died September 8. 1892. 
 
 Dr. J. H. O'Reilly, Med. Attendant. 
 
 "I was much disappointed, as I could see no connection 
 between the two parties, but a little later it struck me that 
 possibly there might have been some mistake in the spelling 
 of the name, and I decided to look into this phase of the 
 matter. 
 
 "Remembering that a part of the estate of Caldwell con- 
 sisted of mortgages in New York, I knew that ancillary 
 papers would be necessary, and making a search in the 
 office of the surrogate of New York I found Edward Cald- 
 well's will and that it was signed with a cross-mark. I felt 
 that this similarity in signature warranted further investi- 
 gation, so I wrote to the State Board of Health of New Jer- 
 sey and got a transcript of the death of Edward Caldwell. 
 The parents' names agreed so closely with those of our de- 
 positor that I took another trip to Morristown to see what 
 the estate consisted of, in the hope that he had had other 
 bank accounts. I found that besides two accounts in New 
 Jersey Savings Banks, his estate included accounts in the 
 Seamens Bank for Savings, the Emigrant Industrial Sav- 
 ings Bank and the Bank for Savings, all of New York. 
 
 "These accounts, I learned, were all collected by the 
 executor of the estate of Edward Caldwell, on ancillary 
 papers. 
 
 "The Emigrant Industrial paid out $2,976.46 
 
 "The Bank for Savings " " 1,411.43 
 
 "The Seamen's " " 1,792.86 
 
 "The Bowery Savings Bank had on Sept. 1892 $3,412.24 
 
 Accumulated interest 1,110.00 4,522.24 
 
DORMANCY OF ACCOUNTS 271 
 
 "When Mr. Burroughs, the surviving executor, was lo- 
 cated, and notified of this nest egg belonging to the Edward 
 Caldwell or Colwell estate, he was amazed. The bank, 
 later, paid this sum to the executor, on presentation of 
 proper proofs." 
 
 CASES FROM THE UNION SQUARE SAVINGS BANK 
 
 For many years the Union Square Savings Bank, New 
 York, Wm. H. Rockwood, president, has made a special 
 study of this class of accounts, and its of&cers have put forth 
 systematic efforts with a view of minimizing them. A few 
 actual examples (omitting real names), cannot fail to prove 
 of interest: 
 
 Book No. — . John F. T. G . A farmer at Wil- 
 liam Street, New York. Account opened May 17, 1851, by 
 a deposit of $350, this being the only transaction ever made 
 on the passbook. In 1903, through an inquiry letter to a 
 Mrs. , in Harlem, it was found that letters of adminis- 
 tration were then in process of being granted to the grand- 
 nephew of the depositor, the latter having died unmarried 
 in 1852. These letters were applied for in order to secure 
 possession of an account made by the depositor in the Bank 
 for Savings, New York, a balance of about $3,000. The 
 balance in the Union Square Savings Bank was paid to the 
 administrator upon his filing with it a bond of indemnity 
 from the National Surety Company, of New York, and a 
 
 certified copy of the family history. The balance, 
 
 paid May 14, 1903, was $2,363.42; interest on the account 
 having ceased January 1, 1889, by order of the board of 
 trustees. Had the amount still continued interest-bear- 
 ing, it would have been $3,812.81. The administrator 
 was a poor man engaged on one of the Brooklyn car 
 lines. 
 
 Book No. — . Robert L. McL. . A seaman, in 
 
 1852, withdrew all but $9.87 of his account. This amount 
 comprised various interest credits evidently not entered at 
 the time, so that the depositor probably supposed he was 
 
272 CENTURY OF AMERICAN SAVINGS BANKS 
 
 closing the account. In 1903, an inquiry letter addressed 
 to the postmaster at his birthplace in Maine, brought the 
 information that one of his relatives resided in Milwaukee. 
 This relative found the direct heirs, some living in Kansas 
 and others in Illinois, and the amount — $126.97 — ^was paid 
 to its rightful owners. 
 
 Dormant account No. — . In 1853, this account was 
 
 opened by a medical student of Brooklyn, as Jones, 
 
 no Christian name having been taken. In 1855, the last 
 of the principal was withdrawn and the passbook taken 
 away by the depositor, no interest having been entered 
 thereon, although over $19 was then to his credit. In 1905, 
 the book was presented by the nephew of the widow, 
 who was old and somewhat indigent, in the hope that 
 there might be a little balance remaining. The amount 
 paid was $204.90, interest having been discontinued in 
 1903. 
 
 Passbook No. — . William R . Opened in 1860 
 
 by a grocer at No. — Ninth Avenue, New York, in trust 
 for his son Walter. A balance of $15.50 was left in 1863 
 and the passbook last presented for interest in 1880, the 
 interest being discontinued in 1905. Many inquiries were 
 made by the bank, and in 1910, the secretary, after tracing 
 the depositor through the directories to 1871, called upon 
 
 , a lawyer in Nassau Street, who informed him that, 
 
 although not of the same family, he thought a daughter 
 
 of Mr. , who was dead, had been married in Yonkers 
 
 many years before, but he was unable to recall the married 
 name. Upon making inquiries in Yonkers, this daughter 
 was found and the bank put in communication with the 
 truster, then residing in the Bahamas, the balance then 
 being $119.41. 
 
 Passbook No. — . Sarah G . This account was 
 
 opened in March, 1859, and in January, 1861, the book 
 was left in the bank by the depositor, who probably thought 
 she had then closed the account. The January interest, 
 $5.46, was afterward added and compounded until 1905, 
 when the interest was discontinued, the balance being then 
 
DORMANCY OF ACCOUNTS 273 
 
 $42. After much searching, the executor of her estate was 
 found in Brookl)^!. He was a very old man, a nephew of 
 the depositor, and as he had settled the estate many years 
 before it was only after much persuasion that he was in- 
 duced to withdraw the balance by donating the same to the 
 Bowery Mission. 
 
 Account No. — . /. F , Jr. A Scotch clerk who, 
 
 in January, 1862, left his passbook at the bank with a 
 balance of $77.82. All efforts to find him failed until in 
 the autumn of 1903 the institution was cited to produce in 
 court a transcript of another account. Noticing that one 
 of the attorneys was named F (the same as the de- 
 positor in question), the bank officers asked him for in- 
 formation. Later, this attorney appeared at the bank and 
 proved that he was the nephew of the depositor, who was 
 then living in Scotland, whence he had removed at the out- 
 break of the Civil War. In June, 1904, the depositor re- 
 ceived the balance, — $601.06 — which was about eight times 
 the amount left in the bank forty-two years before. 
 
 Passbook No. — . John H . A tailor living in 
 
 Williamsburgh and doing business at No. — Nassau Street, 
 New York. Bom in England about 1798. Account 
 opened in 1862, and last transaction a draft in 1865, leav- 
 ing a balance of $5.66, interest being stopped January 1, 
 1903. In 1910, an exhaustive search was made in the 
 
 city directories, with the result of finding that John H 
 
 died in 1867, that he had a widow, Joanna, whose name 
 appeared with different addresses until 1885; that there 
 was a Spencer C. in the family whose name, however, dis- 
 appeared in 1882, although the widow of the latter is desig- 
 nated in the 1885 directory. Many inquiries having been 
 made in New York City and vicinity without avail, twenty 
 
 circular letters were sent to H telephone subscribers in 
 
 Brooklyn, and one of these was handed to another son of 
 the depositor, with the result that the amount — $32 — ^was 
 paid to the three surviving children, May 2, 1910. 
 
 Passbook No. — . Joseph P. K . Opened by de- 
 positor in 1868; occupation given as a clerk — in reality, a 
 
274 CENTURY OF AMERICAN SAVINGS BANKS 
 
 crook. He kept a pretty large balance, amounting at one 
 time to over "$7,000. In 1872 he withdrew all but $5.64, 
 leaving his passbook at the bank, where it remained un- 
 claimed until May, 1903, all searches for the depositor's 
 whereabouts proving futile. In May, 1903, the newspapers 
 published an account of the recapture of some convicts who 
 had broken out of the Ludlow Street Jail, New York, dur- 
 ing Mayor Strong's administration, and among them was 
 the above named depositor. A letter of inquiry ensued and 
 upon receipt of the proper proof the amount — $19.09 — ^was 
 paid. 
 
 The Philolexian Society of Columbia College, on May 3, 
 1900, learned that it was richer by $110 than it had rea- 
 son to believe. The president received word from the Un- 
 ion Square Savings Bank that there was a deposit of that 
 amount in that bank which had not been increased or 
 diminished for the period of ten years, and which was draw- 
 ing interest steadily. Upon investigation, it was found that 
 the money had been deposited in 1890 by Henry A. Gilder- 
 sleeve, Jr., a son of Justice Gildersleeve of the Supreme 
 Court, and who was the treasurer of the society at that 
 time. Shortly after his graduation from Columbia Col- 
 lege, in June, 1890, Gildersleeve died, and the money in 
 the bank was forgotten. The proposition was made to use 
 the money for the erection of a tablet to the memory of Mr. 
 Gildersleeve. 
 
 The following is the actual history of an account opened 
 with the Union Square (New York) Savings Bank, on the 
 day it began business, July 1, 1848, and closed April 20, 
 1910: 
 
 Total Amount of deposits $531.09 
 
 Interest to July, 1854 30.01 
 
 561.10 
 Drafts to November 23, 1854 (inclusive) 420.00 
 
 Balance Nov. 23, 1854, which remained undisturbed until April 20, 
 
 1910 141.10 
 
 Interest on same to that date 1,935.26 
 
 Amount paid April 20, 1910 $2,077.36 
 
DORMANCY OF ACCOUNTS 275 
 
 Rate of dividends: 1848-1861, 5 per cent. ; 1862-1880, 
 5 per cent.; 1881-1884, 4 per cent.; 1885, 3J^ per cent.; 
 1886, 4 per cent.; 1887-1892, 3>^ per cent; 1893-1896, 
 4 per cent.; 1897-1906, 3^ per cent.; 1907-1909, 4 per 
 cent. Some of these were at mixed rates ; between 1867 and 
 1875, there were also six extra semi-annual dividends of 3 
 per cent. each. 
 
 A STRANGE CASE OF MISTAKEN IDENTITY 
 
 Many years ago, a prominent merchant in Albany, New 
 York, opened a large account in a Savings Bank in that 
 city for his sister-in-law, who at the time was an inmate 
 of an insane asylum, located in a different part of the State. 
 Inasmuch as the beneficiary was not at the bank at the time" 
 the account was opened, no signature was taken, and owing 
 to the prominence of the merchant referred to, no mem-' 
 orandum was made on the signature book of the bank. 
 The merchant himself retained the bankbook. 
 
 The account ran on with no transactions, becoming in 
 time dormant. The book had been presented and the in- 
 terest credited, but the books of the bank were not checked 
 to show this fact; this was known to the teller who, in due 
 course of time, left the employ of the bank. 
 
 Later in the same year, another woman of precisely the 
 same name as that of the asylum inmate opened a small 
 account in the bank and signed her name in the signature 
 book in the space belonging to the account of the insane 
 woman. The reason the mistake occurred, as subsequently 
 shown, was that the second woman did not happen to be in 
 the bank at the time the account was opened, but left her 
 signature on some later occasion, at which time the clerk, 
 turning to the index, found the earlier account of the insane 
 woman first; so that, when new bank officials, unfamiliar' 
 with these details, began to follow out the dormant accounts 
 in the bank, they naturally turned to the signature book 
 and notified the wrong woman. 
 
 When the latter appeared at the bank, she was unable' 
 
276 CENTURY OF AMERICAN SAVINGS BANKS 
 
 to produce the bank book, but seeing her name opposite this 
 account in the signature book and remembering that at one 
 time she had a small account with this bank, since closed, 
 she began to imagine that this large amount of money really 
 belonged to her, and gave many plausible reasons why she 
 so believed. The bank, relying upon its signature book, 
 regarded the identification as sufficiently complete and paid 
 over the money to her, at the same time taking the precau- 
 tion to obtain a surety company bond for the lost bank 
 book. 
 
 Some two years later, the merchant referred to, who had 
 fceen so dilatory all these years, presented the original bank 
 book to the bank with the statement that his insane sister- 
 in-law had died, and demanded the money. The bank's 
 officers, upon the advice of their attorneys, decided that the 
 claim must be honored, and paid over the amount called 
 for by the passbook, notwithstanding the fact that the ac- 
 count had been closed two years before and the money paid 
 to the woman whose name was signed in the signature book 
 opposite the account. 
 
 The attorneys for the bank proceeded to notify the latter. 
 It then appeared that she had invested the proceeds of the 
 account in real estate in Wichita, Kansas. Upon her re- 
 fusal to pay back the money, the bank began suit against 
 her. The surety bond protected the bank only against the 
 loss of the bank book, not against any payment by the bank 
 to the wrong party. 
 
 In due time the case was tried in a Federal Court, before 
 a jury, with the result that the bank obtained a complete 
 verdict in its favor, including all costs of action. 
 
 This case shows how much trouble can be caused by such 
 a slight mistake as a misplaced signature, combined with 
 the unusual circumstance of two women of precisely the 
 same name opening accounts in the same bank on the same 
 page of the signature book. 
 
 It may be added that at that time banks were not nearly 
 so careful as they are now in taking signatures and check- 
 ing their ledgers when interest is credited. Many banks 
 
DORMANCY OF ACCOUNTS 277 
 
 use cards in place of the book, taking also a great deal 
 of additional information to establish complete identifica- 
 tion of its customers, so that the bank can be protected in 
 cases of illness, insanity or death. 
 
 CASES FROM THE EMIGRANT INDUSTRIAL, NEW YORK 
 
 Nelson H. Tunnicliff, of the Emigrant Industrial Sav- 
 ings Bank, New York, makes report of these among other 
 interesting cases : 
 
 Account No. 91607. William Overton: Bank record 
 showed he was an engraver, bom 1808 at Birmingham, 
 England. I advertised in Birmingham papers ; also wrote 
 all Overtons appearing in directories there and also in the 
 various large cities through the United States. Received 
 replies from relatives at Birmingham who produced a rec- 
 ord of his baptism, which occurred at the Episcopal Ca- 
 thedral, at Birmingham. While in England I visited Bir- 
 mingham, interviewed the relatives and also went through 
 the records of the Cathedral, which showed that the fam- 
 ily had been members of the said church for many genera- 
 tions, and proved the genealogy of the family. 
 
 They knew nothing as to what had become of William 
 Overton, after he emigrated to New York. The last trans- 
 action at the bank was in 1874. Accordingly, death rec- 
 ords of New York and Brooklyn were examined subsequent 
 to that date, but without result. 
 
 While in Washington, a search was made at the Con- 
 gressional Library among the various directories filed there 
 for the years 1875 to 1880, believing that William Overton 
 possibly might have removed from New York City, and 
 if so, in this way, he could be tracied. All of this was with- 
 out result. 
 
 Advertised in the New York papers, including the Jewel- 
 er's Weekly, wrote all firms in the engraving business in 
 New York City, had a news item inserted in the Jeweler's 
 Weekly, personally interviewed a number of old engravers 
 in New York. All of these efforts were unsuccessful, and 
 
278 CENTURY OF AMERICAN SAVINGS BANKS 
 
 it was thought probable that the depositor might have died 
 as an "unknown." 
 
 The money was finally paid over to an administrator, the 
 Surrogate's Court having decreed the depositor dead. At 
 that time, if alive, he would have been over 107 years 
 old. 
 
 Account No. 24332. Grace McCutcheon: The record 
 at the bank showed the depositor was unmarried, and that 
 in 1860 when the account was opened she resided in Pater- 
 son, New Jersey. The last transaction at the bank was in 
 1885. In this case, after a long personal investigation at 
 Paterson, examination of census records, to show with whom 
 she resided at Paterson, New Jersey, in 1860, it jvas found 
 that she was boarding there with relatives. These rela- 
 tives were finally located in Pawtucket, Rhode Island. A 
 personal visit was made to them, and it was found that the 
 depositor was still alive and residing with them. She was 
 questioned and stated that she had an account in the bank 
 and had possession of the book. 
 
 Account No. 122063. John Darcy or Darcey: Bank 
 record shows account opened July 30, 1879, residence 
 Paige's Hotel, occupation teacher, arrived 1853, born Tip- 
 perary, wife Rosanna Nugent. 
 
 Examined directories of New York and Brooklyn for 
 a, John Darcy, teacher, but found none. Addressed letters 
 to the Boards of Education of New York and various other 
 States, also to various colleges and institutions throughout 
 the East and in Canada. Advertised in New York papers, 
 in various Catholic and Irish papers throughout the coun- 
 try. Found that Paige's Hotel was out of existence, traced 
 the owners and found that the registers of 1879 had been 
 destroyed. Wrote all the Darcys and Darceys in New 
 York and Brooklyn without result. 
 
 It was believed, as he was living at an hotel, that he 
 might have been here on a visit, and therefore a search was 
 made of the various directories throughout the country at 
 the Congressional Library, Washington, District of Co- 
 lumbia, but without result. Wrote all the Nugents (which 
 
DORMANCY OF ACCOUNTS 279 
 
 was his wife's maiden name) in New York and Brooklyn, 
 also to the various teachers' agencies. 
 
 Wrote the Superintendent of Banking, Albany, asking 
 if there was any other account in the name of this depositor 
 and found that there was one in the South Brooklyn Sav- 
 ings Bank in which he stated his father's name was 
 Michael. We then sent the matter to my investigator and 
 genealogist at Dublin, who has been in my employ con- 
 tinually for the past five years, and instructed him to search 
 the census records of County Tipperary for mention of 
 John Darcey, born 1820, father's name Michael. He lo- 
 cated such a record which showed John Darcy, teacher, son 
 of Michael, and investigated at the town in which he ap- 
 peared, and located nephews and nieces of the depositor, 
 and they stated nothing had been heard of him for a great 
 many years, and that they had never heard of his marriage 
 or death. 
 
 An examination had been made of the marriage records 
 of New York and Brooklyn, also in the Provinces of 
 Quebec and Ontario and in New England, but without 
 result. 
 
 A search was then made of the marriage records of Ire- 
 land and England and a record of his marriage was foimd 
 as having occurred at the Cathedral in Dublin, in 1866. 
 Finally, one of the witnesses to his marriage was found and 
 from him was obtained information which led to the loca- 
 tion of the widow of the depositor, it appearing that her 
 husband had died in 1881 under the name of John Brown 
 at Cork, Ireland, leaving a will and in this will he men- 
 tioned having an account in the South Brooklyn Savings 
 Bank, stating the number, and that he was known under 
 the name of John Bourke. This accovmt, it was after- 
 wards learned, had been closed out prior to the opening 
 of the active account. The widow was in destitute cir- 
 cumstances and she was appointed administratrix with the 
 will annexed at Dublin, Ireland, and both accounts were 
 finally paid over to her. 
 
 Account No. 73621. Isabella Kilday: The informa- 
 
280 CENTURY OF AMERICAN SAVINGS BANKS 
 
 tion received in this case was that the depositor was Isa- 
 bella Kilday, residence Jackson Street, Williamsburg, in 
 1869, bom 1814, County Monaghan, married. 
 
 An examination of the census record of 1870, in the ward 
 in which Jackson Street was located, was made, but no 
 Isabella Kilday was found, but an Isabella McLoughlin, 
 widow, was found. Some of the names appearing in the 
 same page of the census were taken off and directories of 
 1870 examined and I found that some of these persons liv- 
 ing in the same house with her appeared as living on Jack- 
 son Street. Several of these persons were interviewed and 
 remembered the depositor very well; stated she lived alone 
 but they did not know what had become of her. Adver- 
 tisements were inserted in various papers, both local and 
 weekly. Finally located a niece, whose passage to this 
 country the depositor had paid; and that upon her arrival 
 she went to her house on Jackson Street. She stated her 
 aimt owned this house. An examination was made of the 
 Registry of Deeds and it was found that in 1869 James 
 McLoughlin and his wife Isabella conveyed the said 
 house. 
 
 This niece further stated that she left her aunt and went 
 out to service; had visited her a number of times but on 
 one of her visits she found that she had removed, but was 
 never able to ascertain what had become of her. Search 
 was made at the Bureau of Vital Statistics, Brooklyn, but 
 no record of her death could be found. It appears, how- 
 ever, that Brookl)Ti, many years ago, was divided up into 
 small villages or towns and some of their death records are 
 missing. The niece gave the place of birth in Ireland of 
 her aunt and the matter was sent to my investigator at Dub- 
 lin, and he went to the birthplace, and through his investi- 
 gations found that Isabella Kilday had eight brothers and 
 sisters, and most of them left descendants, some of them 
 residing in New York and Brooklyn. The relatives were 
 scattered all over the world, including Australia, Seattle, 
 Ireland, England, Rhode Island and Massachusetts. 
 
DORMANCY OF ACCOUNTS 281 
 
 Letters of administration were granted to the niece and 
 a distribution was made to about fifty of the next of kin 
 of the depositor. 
 
 George Roman and Annette Simpson, joint account: 
 The bank record showed that they were colored, brother 
 and sister, born New York City, and gave no parents' 
 names. 
 
 An examination was made of the directories of New 
 York City, but no George Roman, or Annette Simpson was 
 found. A George Roman, colored, was found and was 
 traced up to 1880. An examination of the death records 
 was made, and a George Roman, colored, was found, who 
 died at the Colored Home, New York City; it appeared 
 that he left a bank account in another Savings Bank, and 
 his estate was administered upon by the Public Adminis- 
 trator, and there appeared a James Blake, colored, who 
 filed a claim as a creditor and absorbed the estate. At that 
 time there were supposedly no living relatives of George 
 Roman. 
 
 An examination was made of the census of 1860 in the 
 ward in which George Roman lived and it was found that 
 he appeared as living with the family of James and An- 
 nette Blake. It showed an Annette Blake, colored, born 
 New York City, and James Blake, colored, born at Hud- 
 son, New York. 
 
 A personal investigation was made at Hudson, and a 
 Mrs. Robinson was located. She was a colored woman, 
 and stated that she was well acquainted with George Ro- 
 man and that Annette Blake was his sister, and that she 
 had lived in New York City in the same house with them. 
 She further stated that Annette Blake had a daughter 
 Charline, who, a few years after the war, had married a 
 man named Jackson, and had one daughter named Grace, 
 but she did not know where Grace was. She said that 
 Charline had married against the wishes of the parents, 
 and was only 16 years of age at the time, and that they 
 had ceased to have anything to do with her. Mrs. Rob- 
 
282 CENTURY OF AMERICAN SAVINGS BANKS 
 
 inson removed from New York City, before the death of 
 George Roman, back to Hudson. She thought that Grace 
 was living somewhere in New Haven. A search was made 
 there through the intelligence offices, and one was finally 
 found which had a record of Grace; inquiry at the place 
 where they had sent her showed that she had been there 
 but had removed to Newark, New Jersey. Through the 
 same methods Grace was located. 
 
 Mrs. Robinson knew nothing, however, of anybody 
 named Simpson. She did say that Annette Blake, nee Ro- 
 man, had been married twice; her first marriage was to 
 George Munson and this was verified. 
 
 The bank was not satisfied with the proof that Annette 
 Blake was identical with Annette Simpson. An investi- 
 gation was made among the different Savings Banks in the 
 localities in which she had lived, and an account was found 
 in the Excelsior Savings Bank in the name of Annette 
 Blake, and the pedigree there given by the depositor and the 
 pedigree given at the Emigrant Industrial Savings Bank 
 agreed and proved the identity of Annette Blake and An- 
 nette Simpson, nee Roman. 
 
 This investigation covered a period of about ten years. 
 The expense involved amounted to several hundred dollars, 
 and entailed an immense amount of work. 
 
 THE CASE OF MARY AND HELEN MURRAY 
 
 One of the most interesting and difficult cases handled 
 in any of the metropolitan banks in many years is out- 
 lined herewith. In 1873, Mary and Helen Murray 
 (mother and daughter), 114 North Third Street, opened 
 accounts, one of which, Mary and Helen Murray, on Jan- 
 uary 1, 1909, contained a balance of $4,872, and the other, 
 Helen Murray, contained a balance of $2,214 on the same 
 date. On the above date the bank ledger showed no trans- 
 actions in either account for nineteen years and six months. 
 An investigation was started, and as the amount involved 
 was considerable, it was considered best to conduct the 
 search as quietly as possible. 
 
DORMANCY OF ACCOUNTS 283 
 
 The bank's representatives ascertained that Mary Mur- 
 ray had been dead about fourteen years. Concerning the 
 daughter Helen, little could be learned except that she was 
 very peculiar and had little or nothing to do with her 
 neighbors. One of the latter had heard a rumor some ten 
 years before that Helen had gone insane, but that was all 
 she knew about it. 
 
 An examination of the lunacy commitment records in the 
 Hall of Records showed that two Helen Murrays had been 
 committed from the county between 1885 and 1909. A 
 visit to the State Hospital for the Insane in New York 
 County showed that instead of two Helen Murrays, there 
 had been three committed during the period, two from New 
 York and one from an adjoining county. The records of 
 these inmates are kept on cards and the cards contain the 
 name, age, residence from which they were taken and the 
 names of children or friends. The clerk in charge in- 
 formed the bank's representative that two of the inmates 
 were at Kings Park and one confined at the Hospital. 
 Numbers 1 and 2 proved to be false clews. Card No. 3 
 contained the information that Helen Murray resided on 
 Leonard Street, near Frost Street, and gave the name of 
 Mrs. Bailey (apparently some friend). No. 3 was vis- 
 ited in person at the hospital. She was found to be quite 
 rational, engaging in a pleasant discussion, mentioning her 
 brothers, sisters and friends, and what was still more im- 
 portant, giving the bank man the number of the bank book 
 
 in the Savings Bank, which proved to be identical 
 
 with the report taken from the Hall of Records. 
 
 When the bank's representative had decided that she was 
 not the party he desired to locate, he informed the doctor 
 in charge that by his own records this lady was supposed 
 to be in Kings Park, and after some discussion proved to 
 him by the records in his possession that the wrong com- 
 mitment papers had been forwarded with the last patient 
 transferred. Having discovered this error, he concluded 
 there might be others, and obtained access to the original 
 entries when these Murrays were corranitted; From these 
 
284 CENTURY OF AMERICAN SAVINGS BANKS 
 
 he found the name Maud Bailey, No. 114 Leonard Street, 
 where he located the son of the latter. He was unaware 
 that there were any funds. His mother had told him she 
 paid the funeral expenses of Helen Murray's mother and 
 had paid five years' storage on the Murray family furni- 
 ture, hoping Helen would get well and be able to start 
 housekeeping again; but the doctors in charge decided she 
 never would recover her reason and had taken the furniture 
 and given it away. The son of Maud Bailey further 
 stated that for the past five years he had regularly visited 
 Helen Muray and had used much of his own small means 
 to buy her a few comforts in her old age. By direction of 
 the bank's counsel, he applied for letters on her estate as 
 an incompetent, and the balance of the account was paid 
 over to him. 
 
 A NICE EASTER EGG 
 
 Mary Parks opened an account with one of the largest 
 banks in New York City, furnishing the following infor- 
 mation on the bank's signature cards: 
 
 Born in Ireland. Residence No. — Union Avenue. 
 Wife of Owen, contractor. 
 
 As the bank's ledger showed that Mary Parks had failed 
 to transact any business for more than twenty years, a 
 search was started to learn her whereabouts. The city di- 
 rectory of 1883 brought to light three Owen Parks, all con- 
 tractors residing in different sections of the city, but failed 
 to record any Parks family as ever having lived at the 
 address furnished by the depositor. Circular letters were 
 without result. It was then determined to make inquiries 
 in the old neighborhood of No. — Union Avenue. The 
 bank's representative finally located a nephew of Owen 
 Parks, from whom he learned that the latter had met with 
 business reverses, had moved to Connecticut some twenty 
 years before and had died ten years later. He did not 
 remember the name of the town in Connecticut, but thought 
 it began with "Red." The atlas revealed Redfield, Red- 
 
DORMANCY OF ACCOUNTS 285 
 
 ding, Reddingsburgh, Redding Junction and Redan. To 
 the postmaster of each of these letters were sent, with the 
 result that Mary Parks was located at Williamstown, re- 
 siding with one Mrs. Henry Smith. It appeared that ten 
 years before, Mrs. Park attended the funeral of her only 
 son, who was killed in a railroad accident, and returning 
 from the cemetery, saw her little home totally destroyed by 
 fire. The shock of death and fire so affected her that she 
 became helplessly paralyzed, and Mrs. Smith opened her 
 home and took her in. 
 
 The bank mailed identification slips and draft to Mrs. 
 Smith, with instructions for Mrs. Parks to sign her name, 
 and on Good Friday the bank mailed her a check for 
 $112.50 — a nice Easter egg. 
 
 CASES FROM THE GERMAN SAVINGS BANK, NEW YORK 
 
 The German Savings Bank in the City of New York 
 had an account, which had become dormant and which, by 
 reason of interest credits, exceeded $1,000. 
 
 This account was opened by a man in trust for another 
 man. The bank had no information beyond his residence 
 in New York City. Inquiry from the owner of that house 
 resulted in the information that the depositor was living, 
 but that he had changed his name, which on the books was 
 one of German origin, to a similar name indicative of Eng- 
 lish or American nationality. 
 
 An attorney who had procured the aforesaid information 
 for the bank called upon the man and stated his errand. 
 He had become quite wealthy in his business pursuits. He 
 denied that his name had at any time been that of the de- 
 positor, or that he was the party to the account. 
 
 The attorney also ascertained that the depositor had en- 
 listed during the Civil War in the Northern Army and that 
 the records of the Adjutant General showed he was a de- 
 serter. This attorney also succeeded in getting a tracing of 
 the signature given by this man at the time of his enlistment. 
 
 Equipped with this information, an officer of the bank 
 
286 CENTURY OF AMERICAN SAVINGS BANKS 
 
 called upon the party in question at his place of business 
 and was received by him in a very brusque manner. He 
 again denied his identity with the bank's depositor, al- 
 though admitting that he had served in the Northern Army 
 during the Civil War and also admitting the similarity to 
 his own of the tracing of the signature shown. 
 
 The officer of the bank thereupon sought the good offices 
 of a gentleman who was a member of a commercial club, 
 of which the party referred to was a member. This gen- 
 tleman told the officer that a certain merchant knew this 
 man intimately, having boarded with his father. The offi- 
 cer of the bank called upon this merchant and made in- 
 quiries, which elicited the fact that the depositor and the 
 party supposed to be the depositor were identical, and that 
 the depositor had changed his name to his present name. 
 Thereupon the bank addressed a letter to the depositor set- 
 ting forth the information in its possession and stating 
 that, the facts being so clearly established, there would be 
 no use of his further denying his identity. 
 
 The man called at the bank the following morning, ad- 
 mitted that he was the party who had opened the account, 
 and stated that for family reasons he had changed his name. 
 He signed an order for payment of the account to the estate 
 of the man for whom the money had been deposited in 
 trust and whose widow the bank had succeeded in locating 
 in a city in the State of Connecticut. 
 
 During the Civil War a man opened an account in the 
 German Savings Bank in the City of New York, stating 
 that he had enlisted in the Army of the United States. The 
 account became dormant and by reason of interest credits 
 had a balance of several thousand dollars. 
 
 Inquiry to the officials of his native city in Germany 
 resulted in the information that the depositor had deserted 
 his wife and infant with the avowed purpose of going to 
 the United States, and that he had never been heard of 
 again; that the wife, with her infant, joined friends who 
 emigrated to the United States, their intention being to 
 locate in the city of Louisville, Kentucky. The bank 
 
DORMANCY OF ACCOUNTS 287 
 
 traced these parties and received information that the wife 
 of the depositor was residing in a city in the northern part 
 of the State of New York and that, upon the supposi- 
 tion that her husband was no longer living, she had re- 
 married. 
 
 The bank had ascertained through the good offices of the 
 War Department that the depositor had fallen in battle. 
 This information was imparted to the depositor's wife and 
 shortly thereafter the account was closed by payment to the 
 administrator. 
 
 A STRANGE CASE FROM ROCHESTER 
 
 February 17, 1886, J. M opened an account with a 
 
 deposit of $600, giving his address F Street (one of 
 
 the lowest places in the city), born in Ireland, no trade, 
 age 29, could not read or write. 
 
 Deposits were made from time to time for the next six 
 years on this account until the total amount deposited 
 reached $2,600, exclusive of interest. 
 
 December 1, 1893, the interest brought the account up 
 to $3,096.95, and a note was sent stating that the interest 
 would be paid on $3,000 only. This notice was returned 
 and thereafter the interest was figured on $3,000 until June 
 1, 1906, when the account became dormant. 
 
 The account then amounted to $4,676.95. 
 
 In June, 1907, a man called at the bank, stating his 
 
 name to be J. M , that he had a deposit in the bank, 
 
 and had lost his passbook. He was told that he could have 
 his money when the bank was satisfied that he was the per- 
 son entitled to it. 
 
 He made affidavit that he lived in Rochester in 1886 
 and worked as a laborer for the street railroad company. 
 Later he had worked in the southern part of the State on 
 the construction of a railroad and later as a laborer in 
 the coal mines in Pennsylvania; that he had never received 
 more than $1.50 per day, and had worked very little in 
 winter. 
 
 After considerable investigation the bank was convinced 
 
288 CENTURY OF AMERICAN SAVINGS BANKS 
 
 that he was the right person and paid him $4,781.95. He 
 redeposited $2,500 in this bank, $2,000 in another bank, 
 and left his bank books with an attorney in this city. The 
 
 attorney still has the books but has not seen J. M 
 
 since that time, although he has written him several times 
 and believes that he is still residing in the city. His total 
 deposits in the two banks exceed $6,000. 
 
CHAPTER XXI 
 
 THE SAVINGS BANK OF TO-MORROW 
 
 Marvelous Things Accomplished in the Century of Mutual Savings 
 Banks — Constant Vigilance Necessary on the Part of Officers — 
 Merely Honorary Positions Out of Date — Importance of the 
 Trustee — ^Progressive Banking — ^The Ethics of Advertising — 
 "Co-operative Competition" — What of the Future? — Benefits of 
 Financial Education. 
 
 The law of life is the law of constant mutation. Laws, 
 customs, manners, institutions, methods change. The 
 world of yesterday is not the world of to-day. 
 
 In business and finance the great law of evolution is 
 operating as steadily and as surely as it is in the material 
 world all about us. The same is true of all human insti- 
 tutions — they either advance or retrograde — ^they never 
 stand still. This truth applies with special force to bank- 
 ing institutions. They are in close and constant touch 
 with the business and financial world. Inevitably, they 
 fall into the class of old-fashioned and reactionary, or 
 progressive and wideawake. 
 
 That the Mutual Savings Bank, in the century of its 
 existence, has accomplished marvelous things has been 
 shown in preceding chapters. It has given a hundred 
 years of splendid service to mankind; but if its future is 
 to be as great as its past, it must be prepared to operate 
 under entirely new conditions. The present may be a most 
 opportune time to inquire what those conditions will be. 
 
 While for almost three quarters of a century the Mutual 
 Savings Bank stood practically alone in the field, it is a 
 matter of common knowledge that the last quarter has 
 brought a great change. To use the language of Pierre 
 Jay, chairman of the Federal Reserve Bank of New York, 
 one of the most far-seeing of modern bankers : 
 
 289 
 
290 CENTURY OF AMERICAN SAVINGS BANKS 
 
 There has been a practical cessation of tiie spread of the Mutual 
 Savings Bank idea. No new States — hardly any new places — are 
 establishing them. National and state banks and trust companies 
 all over the country are entering the savings field which formerly the 
 mutual banks held alone. Under competitive conditions the business 
 naturally goes to the bank which goes for it, and savings deposits 
 are increasing much faster in the aggressive capitalized banks than 
 in the passive mutual banks. 
 
 During the last quarter-century the idea of systematic saving has 
 been developed by the building and loan associations. In the last 
 ten years their resources have more than doubled, and are now about 
 one-third those of the mutual banks. In- another quarter of a cen- 
 tury, at the present relative rate of growth, they will overtake the 
 Mutual Savings Banks. The systematic savings idea is also find- 
 ing expression in the capitalized banks through the "Christmas Clubs" 
 they have recently organized with such remarkable results. 
 
 Here, then, is a text to be studied earnestly and thought- 
 fully by every friend and well-wisher of the Mutual Sav- 
 ings Bank system. Wherein do these institutions that have 
 performed such a beneficent mission in the past fail to 
 measure up to their full present-day responsibilities, and 
 what can properly be done to still further extend their field 
 of legitimate usefulness? 
 
 CONSTANT VIGILANCE NECESSARY 
 
 It would seem that no one who is familiar with the gen- 
 eral theory of the Savings Bank system can have much 
 sympathy with the "sit-back-and-wait-till-it-comes-to-you" 
 attitude which too many banks of the present day assume. 
 Time was when the executive officers of mutual banks 
 might pick out their securities, pay for them, put them in 
 the impregnable vaults of their institutions and there let 
 them rest until maturity, unseen, untouched, sacred. That 
 sort of policy might have answered for the nineteenth cen- 
 tury, but it will never do for the twentieth. As eternal 
 vigilance is the price of liberty, so is it the price of well- 
 invested funds. Indeed, it has come to such a pass one 
 might say that responsible Savings Bank officers are com- 
 pelled to measure up the situation as to investments almost 
 every day in order to keep pace with what is going on. 
 
THE SAVINGS BANK OF TO-MORROW 291 
 
 "Safety of principal," is properly the slogan of all up- 
 to-date bankers, and along with that they should be wide- 
 awake, ever ready and willing to take advantage of what 
 will surely prove to be profitable investments. That 
 should eliminate the spirit of lethargy, for these are not 
 times for drifting, as though upon the delightful and serene 
 summer sea of finance. The methods of investment are 
 ever large, and he who would keep pace with the times 
 must be prepared to take advantage of opportunities as they 
 present themselves from day to day. 
 
 This is by no means to say that there should be promis- 
 cuous trading on the part of Savings Bank officials, for no 
 one will question the fact that such exchanges of securities 
 may easily be carried to an vmdesirable point ; but it would 
 seem that the executive officers should be accorded more 
 latitude than they now possess in such matters. As a rule, 
 it will be found that the objection to such exchanges usually 
 comes from the board as a whole, not from the officers or 
 members of the board who are most closely in touch with 
 financial affairs. 
 
 MERELY HONORARY POSITIONS OUT OF DATE 
 
 The progressive, wideawake Savings Bank official of to- 
 day keeps his ear to the ground and senses prevailing con- 
 ditions, adjusts himself and the institution under his con- 
 trol to those conditions, and acts quickly and decisively; 
 in other words, he seeks to manage the institution just as 
 if it were his own business, — of course, all within the lim- 
 its of the wise laws governing it and him. The results of 
 following such a policy are to be seen in the greatly im- 
 proved condition of banks that, not so many years ago„ 
 were anjiihing but strong; in the rapidity with which they 
 have built up handsome surpluses, and the ease with which 
 they pay the prevailing rate of interest. Of these there 
 are many concrete examples. Those of the other class are 
 constantly assuming a pessimistic tone and clamoring for 
 a reduction of dividend rates. The reason can usually be 
 summed up in two short words — ^lethargy and dryrot. 
 
292 CENTURY OF AMERICAN SAVINGS BANKS 
 
 It is but expressing a well-known fact to say that more 
 complicated and trying conditions exist to-day than ever 
 before. The power to discriminate, to decide important 
 questions as they come up and decide them right, is abso- 
 lutely necessary. Not to mince words, all have noticed 
 the tendency on the part of men who have been active in 
 business, and who have come to occupy the most important 
 positions in the Savings Bank, to continue in those positions 
 despite the fact that through growing age, ill-health or 
 infirmity they are no longer able to be as active as such 
 positions demand. In other words, such a position too 
 often seems to be regarded as emeritus, bestowed as one 
 of distinction and honor, rather than an exceedingly im- 
 portant business duty. This may seem to some a harsh 
 statement and a cruel policy, but it is the rule and law of 
 life. To do otherwise is to fail in one's duty as a trustee, 
 for Savings Bank officials are first of all trustees and 
 guardians for unnumbered thousands who have put in their 
 custody all they have in the world to keep the wolf from 
 thfe door. 
 
 No man should be an officer or trustee merely because 
 his father was one before him, but because he possesses 
 the necessary qualifications. The idea of the son succeed- 
 ing the father on purely sentimental reasons is one wholly 
 lunworthy of consideration. 
 
 Thorough organization is of the first importance. The 
 !head of a Savings Bank of to-day should possess not only 
 experience, knowledge and executive ability of a high or- 
 -der, but he should be able to surround himself with a staff 
 of competent officers who will not only give their very 
 best in the service of the institution of which they are a 
 part, but be capable of organizing and carrying on "team 
 work," for it is that sort of work, above all other, which 
 brings results. The treasurer, in a sense, is just as im- 
 portant as the president, for it is he who as a rule is most 
 familiar with the bank's investments, as well as with the 
 prevailing market conditions. 
 
 No one man in these days of subdivision and specializa- 
 
THE SAVINGS BANK OF TO-MORROW 293 
 
 tion can cope successfully with all the innumerable details 
 of a modern Savings Bank. Work must be systematized 
 and subdivided. There must be speedy promotion for the 
 faithful and able. The executive officers should be lib- 
 erally paid for their services, while being held to strict ac- 
 covmtability; if the merely honorary positions were to be 
 abolished, perhaps salaries might be raised all round with- 
 out costing the banks any more than is now paid. 
 
 IMPORTANCE OF THE TRUSTEE 
 
 Many ordinarily well-informed persons have hazy or 
 erroneous notions of the duties of the Mutual Savings Bank 
 trustee. There is altogether too much of a disposition to 
 regard the position as merely an honorary sinecure, with 
 nothing in particular to do except attend monthly meetings, 
 at which merely routine business is transacted and the com- 
 pliments of the day passed. There are the "dummy" trus- 
 tees, and every bank should pray fervently to be delivered 
 from all such. They are not only a delusion and a snare, 
 but a positive and potential danger. In that way disaster 
 lies, as too many institutions have discovered when it was 
 too late to apply the remedy. 
 
 It is undoubtedly true that the importance of the Savings 
 Bank trustee in the banking world has been given too little 
 thought and attention. With vast deposits running close 
 to two billions of dollars in the aggregate, in New York 
 State alone, and representing the savings of over three mil- 
 lions of thrifty people, the responsibility of the officers and 
 trustees is apparent. The trustee's first and last thought 
 must be for the safety and security of his institution. He 
 must understand the law in all its provisions in order to 
 work intelligently under it. There are constant changes 
 going on in the real estate and bond markets, and the trus- 
 tee must be ever vigilant and the officers alert and resource- 
 ful. Hence the necessity of choosing in all cases the right 
 sort of nien for trustees. The aim of the trustee should be 
 to make himself useful rather than ornamental. He must 
 realize, as never before, that under both national and state 
 
294 CENTURY OF AMERICAN SAVINGS BANKS 
 
 laws, as well as in the minds of the public, the ultimate 
 responsibility for the methods of management and the final 
 results rests with the board of trustees or directors, by what- 
 ever name they may be called. A high sense of duty should 
 be ever present. Trustees should also be possessed of 
 plain, practical common sense and the courage to stand up 
 against the clamor of unreasonable and improper demands, 
 whether made by the ignorant, the unthinking or the dis- 
 honest. 
 
 THE SERVANT W^ORTHY OE HIS HIRE 
 
 More and more is the question of their responsibility 
 coming to the front. They should be able and willing to 
 take up real constructive work, instead of being merely 
 passive or ornamental parts of an organization. We have 
 outgrown the days of mere figurehead officials. Most 
 banks would be far better off with smaller boards and more 
 active ones. 
 
 It is also a serious question that is bound to come to the 
 front before long, whether trustees should not be paid some- 
 thing for their services, if nothing more than a modest 
 amount for attendance at regular meetings.^ It would 
 seem to be just as true of him as it is of the officers of these 
 institutions, that "the servant is worthy of his hire." Pay 
 a man for his services, and he will take a deeper interest 
 in the work before him.^ 
 
 It is also too obvious to need statement that modern meth- 
 ods of bookkeeping should be adopted by all banks. There 
 is no excuse for being behind the times in technical, time- 
 saving and safety-insuring details. 
 
 Ordinarily, boards of trustees of Savings Banks are made 
 
 "• The trend of modern thought is indicated by the fact that in a recent ad- 
 dress (October, 1916), before a religious body in Albany, Dr. A. R. Brubacher, 
 president of the State College for Teachers strongly advocated the regular pay- 
 ment of bible class and Sunday school teachers. 
 
 ^ In New York State no fees are allowed trustees ; in New Jersey they may 
 receive fees for attendance at meetings, to be determined by the board; in 
 Rhode Island they are allowed not over $3 per meeting; in New Hampshire 
 they are permitted to receive reasonable pay for their services; in Indiana, 
 when the surplus amounts to fifteen per cent, of the deposits, the trustees may 
 receive not over $3 for attendance at meetings. 
 
THE SAVINGS BANK OF TO-MORROW 295 
 
 up of very high grade men, many of whom have achieved 
 success in their own line in their local communities, but as 
 a general rule, they have little or no technical banking ex- 
 perience, and too often they are not disposed to give suffi- 
 cient latitude to the executive committee or officials to en- 
 able them to promptly take care of situations as they arise, 
 the outcome of which may mean a very considerable advan- 
 tage to the institution. It is also true that not a few exec- 
 utive officers are so sensitive to criticism that they will not 
 take the initiative in many transactions where, in the ordi- 
 nary commercial bank or trust company, the officials would 
 not hesitate to ask authority to act. 
 
 On the other hand, many trustees, without taking any 
 active part or interest in the details of their bank's manage- 
 ment, at meetings content themselves with occupying the 
 role of mere carping critics of their officials' acts, and often 
 without sense or reason. Such trustees, instead of perform- 
 ing a useful service to their institutions, are really doing all 
 they can to injure them by discouraging and disgusting 
 those who must act upon their own best Judgment. Such 
 "grouches" have no place in boards of trustees, and the 
 sooner they eliminate themselves, or are forced to do so, 
 the better it will be for the institutions they encumber. 
 
 PROGRESSIVE BANKING 
 
 On the subject of advertising, a great deal has been said 
 and written of late years, and views and opinions widely 
 differ. Argue as we may, there is no doubt that the new 
 spirit of enterprise is making converts in the banking field, 
 so that soliciting business in a proper way is no longer con- 
 sidered beneath the dignity of sound financial institutions. 
 
 The day has gone by when the banker can afford to 
 wrap himself in his mantle of dignity and wait for cus- 
 tomers to come to him, instead of going out and meeting 
 them, at least halfway. Advertising one's business does 
 pay, whether it is done through the newspapers or through 
 making the personal acquaintance of those men who have 
 custom to bestow, and whether it is on behalf of a Savings 
 
296 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Bank or a breakfast food concern. Advertising is as essen- 
 tial to the growth of a Savings Bank in these days as it is 
 to any other class of business, but the advertisements must 
 be along educational lines. 
 
 "co-operative competition" defined 
 
 It should also be governed by fairness and the Golden 
 Rule. M. W. Harrison, secretary of the American Bank- 
 ers Association, has well said: "Co-operative competition 
 means the recognition of certain principles of doing busi- 
 ness, in realizing that there is a reasonable living due each 
 person in order for him to remain in business. To infer 
 even in the most shadowy way instability in a competing 
 bank incites suspicion on the part of the public and a con- 
 sequent lack of confidence. It is therefore necessary in 
 order to obtain the best results through newspaper adver- 
 tising more particularly, for our banks to collectively ad- 
 vertise, to adopt a community plan of advertising, which 
 would measurably overcome suspicion and promote the con- 
 fidence of the public in our institutions, which is a part of 
 a great banking system." 
 
 The most progressive of the New York Savings Banks 
 and trust companies have found it profitable to keep them- 
 selves before the readers of financial papers, and their of- 
 ficers have not disdained going to the annual gatherings 
 of those in their line of business even at distant points. 
 
 Certainly, there is nothing degrading in letting the pub- 
 lic know of your existence and the advantages you can 
 place at the disposal of customers, and the narrow preju- 
 dice which exists against him who embraces every legiti- 
 mate opportunity that presents itself to advertise, is alien 
 to the age in which we live. 
 
 At the same time it is not to be denied that some abuses 
 have crept in. In his report for the year 1912, the Su- 
 perintendent of Banks called attention to the unfortunate 
 situation prevailing in connection with Savings Banks and 
 said "competition" in these institutions had attained such 
 proportions that they had almost outgrown the idea of their 
 
THE SAVINGS BANK OF TO-MORROW 297 
 
 originators. Advertising campaigns among Savings Banks 
 had created conditions which had brought certain of the in- 
 stitutions to a position where they had been obliged to pay 
 excessive dividends or lose so many deposits that they would 
 be compelled to dispose of some of their best bonds and 
 mortgages. Savings Bank officers sometimes forget that 
 they are officials of beneficent institutions and solicit de- 
 posits and cater to a class of accounts that do not right- 
 fully belong in Savings Banks, but should go to interest- 
 paying institutions. 
 
 WHAT OF THE FUTURE? 
 
 Seriously and not without good reason, the question has 
 been asked whether the Mutual Savings Bank system has 
 reached its practical limit. Certain it is that these insti- 
 tutions are not increasing in anything like the rate of in- 
 crease in population. 
 
 In the year 1890 there were 119 Savings Banks in this 
 State; in 1910 there were 142, an increase of twenty-three 
 in twenty years. In other words, while deposits were in- 
 creasing 300 per cent., the number of banks increased only 
 20 per cent., and of these twenty-three new banks, all but 
 seven were in Greater New York. 
 
 It is a significant fact that the number of Savings Banks 
 in New York State is less to-day than it was six years ago. 
 
 Looking at these facts, one may well inquire what is to 
 be the future of the present Savings Bank system of this 
 State? Is it incapable of extension to the smaller com- 
 munities generally? Is any system which fails to expand 
 with an expanding country a complete success? Has the 
 limit of extension been reached? 
 
 These questions are calculated to cause anxious thought 
 on the part of all who have given the matter any serious con- 
 sideration. They go to the root of the Mutual Savings 
 Bank system. 
 
 No one will question the wisdom of the present law which 
 requires that the expenses of a new bank be guaranteed by 
 its organizers until such time as it shall be in a position 
 
298 CENTURY OF AMERICAN SAVINGS BANKS 
 
 to allow interest on deposits and stand upon its own founda- 
 tion; at the same time, it is always a decidedly uphill fight, 
 and comparatively few men are to be found sufficiently 
 unselfish and philanthropic to undertake it. It is un- 
 doubtedly true that in each case of the successful establish- 
 ment of a Mutual Savings Bank in this State, under the 
 present law, such success has been due to individual initia- 
 tive and earnest personal work. 
 
 BRANCH BANKS 
 
 Probably it would be unwise and unsafe to let down the 
 bars, so that relief must be sought elsewhere. The propo- 
 sition made by Pierre Jay before the Savings Banks Asso- 
 ciation of the State of New York, in 1910, that the present 
 law be amended by providing for the establishment of 
 branch banks by existing ones, would seem to be worthy 
 of serious consideration. In European countries they are 
 very common and highly successful, though comparatively 
 rare in this country. Massachusetts, in the year 1908, 
 made such an amendment to its general law, and the results 
 were most gratifying in the extension of the system to out- 
 lying communities, especially small manufacturing locali- 
 ties. In the case of the city of Lowell, in addition to open- 
 ing branches in small villages nearby, a clerk was sent out 
 on pay days (Thursdays) to receive deposits. The people 
 responded with alacrity and made the experiment an in- 
 stant success. Other States have had similar experience. 
 
 Still another and perhaps better method, strongly advo- 
 cated by some of the most progressive New York bankers, 
 is to permit state and national banks and trust companies 
 to receive savings deposits, but require that they be kept 
 separate from commercial deposits and invested in such 
 loans and securities as are prescribed for Savings Banks. 
 The question has been asked whether, if these institutions 
 invest savings safely, there is any good reason why they 
 should not be permitted to receive them. The restriction in 
 the present law as to the use of the word "savings" does not 
 seem to have prevented the competition it was designed to 
 
THE SAVINGS BANK OF TO-MORROW 299 
 
 prevent; hence it is argued that "the way to make competi- 
 tion fair and safe is to abandon the idea that you can stop 
 it, and take up the idea of regulating it by putting your 
 competitors on the same footing as yourselves in regard to 
 the investment of savings deposits." By the terms of such 
 a law, it would be impossible for the commercial banks and 
 trust companies to make any more profit out of their sav- 
 ings deposits than the Savings Banks, and the competition 
 in interest rates being checked, Savings Bank surpluses 
 would again grow rapidly to the proportions in vogue be- 
 fore the rise of the trust companies. 
 
 But the question may be asked: "If capitalized banks 
 are permitted to do a Savings Bank business, will there 
 be any more Mutual Savings Banks organized?" If both 
 forms are equally safe, the question is of no practical im- 
 portance, for, to use the language of Mr. Jay: "The more 
 properly constituted agencies there are for the encourage- 
 ment of thrift, and the nearer they are brought to the doors 
 of the people, the greater will be the volume of their sav- 
 ings." 
 
 GOOD RESULTS OF FINANCIAL EDUCATION 
 
 In closing, a few words with reference to the true func- 
 tion of the Savings Bank will not be out of place. 
 
 Since the One Hundredth Anniversary celebration, it is 
 evident that a new spirit is abroad in the land. The value 
 of thrift in its many-sided applications to life and labor 
 is becoming more and more evident. Under the stimulus 
 of a nation-wide movement, banks are abandoning their 
 traditional attitude of mere passivity and are becoming 
 active, effective stimulators of thrift among all classes of 
 the people, thus fulfilling an educational function of the 
 utmost importance. The twentieth century idea goes, far 
 beyond the provision of a safe place for the investment of 
 money saved. To use again the appropriate language of 
 Pierre Jay: "The idea is to make saving attractive, to 
 make it as easy to spend money in saving as to spend money 
 in other ways; to bring it constantly to the people's atten- 
 
300 CENTURY OF AMERICAN SAVINGS BANKS 
 
 tion, and to make savers of the weak and irresolute as well 
 as of those who are impelled to save by character or con- 
 science. The people are responding to the treatment. The 
 twentieth century idea is sweeping to the front the institu- 
 tions which are imbued with and practice it." 
 
 Financial education is going through a period of devel- 
 opment which involves perhaps greater changes than have 
 ever occurred in any similar period in the past. This de- 
 velopment is due to several factors, some external, some 
 internal ; but the most important is the pressure from within 
 the banks themselves. Officers are more alert and enter- 
 prising. They realize more fully than ever before the obli- 
 gations laid upon them. Due largely to deaths within the 
 last few years, many young men with progressive tendencies 
 have become Savings Bank presidents and treasurers. 
 Young men are beginning to see more clearly than ever 
 before that the key to advancement is simply service, and 
 that it is farthest from the truth to say that there is no 
 scope for individual success. Despite all our vastness and 
 the intricacy of the apparatus we have devised for the 
 transaction of business, whether it be that of a Savings Bank 
 or of a merchant prince, the human factor — the individual 
 personality in contact with other individuals — still holds 
 the reins of power. 
 
 Wherever business is found on a large scale to-day, it is 
 because the men at the helm are devoting all their energies 
 to the effort to serve. 
 
CHAPTER XXII 
 
 OUR ECONOMIC POSITION IN 1916 
 
 How the Wealth of the United States Has Increased During the Past 
 Century — Nations Brought Closer Together — 1915 and 1916 
 Years of Wonderful Prosperity — ^How the United States Is to 
 Meet the Changes That Are Inevitable at the Close of the War — 
 The Staggering Debts of the Principal European Nations — Wis- 
 dom of the Nation-wide Thrift Campaign. 
 
 Figures compiled by the eminent British statistician, 
 Sir George Paish, and printed in the Statist, indicate that 
 if the economic position of the older countries of Europe 
 has improved in a remarkable manner during the past 
 century, the progress of the new countries, including our 
 own, has been still more noteworthy. These statistics show 
 that the wealth of the United States increased in the past 
 hundred years from about $1,750,000,000 to more than 
 $150,000,000,000, or nearly 8,500 per cent., which is about 
 double that of Great Britain and Germany. During the 
 same period the income has risen from less than $500,000,- 
 000 to about $35,000,000,000 a year (6,500 per cent.), 
 while the population has grown from 8,500,000 to 100,- 
 000,000, an expansion of over 1,125 per cent. 
 
 The days of national provincialism, if the term properly 
 may be used, have forever passed ; no individual nation can 
 any longer live for itself alone; all are bound together in 
 bonds of common brotherhood, so far as their economic life 
 is concerned. Time was when this may not have been the 
 fact, but it is impossible to go back to the old conditions. 
 The world moves irresistibly forward. Great integrating 
 forces, particularly the transatlantic cables, are too many, 
 too powerful, and too valuable ever to be broken, per- 
 manently. Hence the prosperity of one nation is to a great 
 extent bound up in the prosperity of all. 
 
 301 
 
302 CENTURY OF AMERICAN SAVINGS BANKS 
 
 THE FULL TIDE OF PROSPERITY 
 
 In practically every department of trade and industry 
 the years 1915-16 proved to be wonderfully prosperous 
 ones for the United States. Wealth poured in upon us in 
 a manner never before known in the world's history. As 
 the only great nation not involved in the war, this was freely 
 predicted. How much of this prosperity was due to the 
 war needs of the various belligerents, particularly Great 
 Britain and France, cannot be stated with exactness, but 
 it must have been a most powerful factor, as shown by the 
 statistics of exports. 
 
 While authentic statistics indicate that during the year 
 1915 the exports of the United States exceeded its imports 
 by about one and three quarter billion dollars, that fact 
 alone is not sufficient to show our economic condition. As 
 a matter of fact, we have been paying off our indebtedness 
 abroad, and this, of course brings us so much nearer being 
 a creditor nation. Half a billion dollars of interest indi- 
 cates a foreign investment here of about ten billions. Of 
 this, very little is balanced by American investments abroad. 
 Hence, if we paid off about a billion and a quarter in the 
 year 1915, this would be about one-eighth of the mortgage 
 which Europe holds on this country. It will thus be seen 
 that we are very far from becoming a creditor nation, al- 
 though measurably nearer to that desirable condition than 
 we were before the war. 
 
 These facts prove why it is that a favorable trade bal- 
 ance does not necessarily mean national prosperity, nor 
 an unfavorable trade balance, poverty; a vast amount of 
 energy has to be expended to pay the mortgage which other 
 nations hold on us. 
 
 At the time this was written (April, 1916), the financial 
 prosperity and strength of the United States was greater 
 than ever before in its history, and was still rising to new 
 levels. On March 7, 1916, the date of the bank call, re- 
 turns showed these conditions: 
 
OUR ECONOMIC POSITION IN 1916 303 
 
 Total resources of national banks. $13,838,000,000; an increase 
 of $2,271,000,000, or 20 per cent, within a year. 
 
 Total deposits, $10,790,000,000; an increase of $2,198,000,000, or 
 nearly 25 per cent, within a year; and an increase of $411,000,000 
 since December 31 last. 
 
 An increase of $990,000,000 in loans and discounts within a year. 
 
 Surplus and undivided profits of $1,031,278,000; an increase of 
 $18,000,000. 
 
 The increase in resources within the year alone was 
 shown to exceed the resources of the Reichsbank of Ger- 
 many. Aggregate resources of American national banks 
 "exceeded by $3,000,000,000 the aggregate resources of the 
 Bank of England, the Bank of France, the Bank of Russia, 
 the Reichsbank of Germany, the Bank of Netherlands, the 
 Swiss National Bank and the Bank of Japan." 
 
 The record of production of pig iron — generally regarded 
 as one of the best indexes to the country's prosperity — was 
 equally wonderful. While the first half of the year 1915 
 showed production of but twelve and a half million tons, 
 the last half increased to seventeen and three-quarter mil- 
 lions — a high record in the country's history. In the mat- 
 ter of gross railroad receipts, the last half of 1915 exceeded 
 those of the corresponding period of the year previous by 
 nearly two hundred millions of dollars. 
 
 LEADING FEATURES OE THE YEAR 1915 
 
 The salient features of the year 1915 in matters bearing 
 directly on the economic position of the United States were 
 thus summarized by the New York Times, January 1, 1916 : 
 
 I. — Enormous increase in exports which, combined with slightly 
 increased imports, gave us a total trade of $5,350,000,000, exceed- 
 ing the biggest previous year by 25 per cent., and yielding a credit 
 balance of close to $1,750,000,000, two and a half times as great as 
 any previous balance. 
 
 II. — Growth in banking facilities, under the operation of the Fed- 
 eral Reserve Bank system, and in consequence of a net inflow of 
 $415,000,000 in gold, so great that, despite the rapid increase in 
 loans, available credits are counted by billions. 
 
 III. — Growth of manufacturing, under the stimulus, first of for- 
 eign orders, and then of greatly increased home demand, to a level 
 
304 CENTURY OF AMERICAN SAVINGS BANKS 
 
 which, in some trades, exceeded all previous experience, as in the 
 steel trade, which is now more active than ever in the past. 
 
 IV. — Farm output exceeding $10,000,000,000, greater than ever 
 before, accompanied by much-needed diversification of crops in the 
 Southern cotton States. 
 
 V. — Repurchase from Europe of $1,200,000,000 of our securities, 
 perhaps more, with so great ease that their absorption did not prevent 
 a great and sustained rise in our stocks and bonds. 
 
 VI. — Assumption through the channels of trade and finance of an 
 international, in lieu of a provincial position, and of a part in world 
 trade more in keeping with the country's great resources, a change 
 attested by the large loans we made abroad and by the widespread 
 increase in our foreign commerce. 
 
 VII. — Recovery in railroad earnings which is benefiting railway 
 credit and restoring normal purchasing power to an industry naturally 
 the chief customer of other industries, but which had been forced for 
 years to limit greatly its expenditures. 
 
 VIII. — ^Revival in American shipbuilding, which has filled all the 
 country's shipyards with orders for a year or more ahead and is re- 
 flected in the bringing of himdreds of vessels under the United States 
 flag. 
 
 COMPARISON or 1914 AND 1915 
 
 The record of 1915 as compared with that of the year 
 preceding, was thus summarized by the Times: 
 
 Per Cent. 
 1915 1914 Change 
 
 Railroad earnings: 
 
 Gross $3,041,508,229 $2,899,324,769 -f 4.9 
 
 Net 972,548,567 809,365,868 -|- 20.3 
 
 Foreign trade: 
 Merchandise 
 
 Imports 1,804,094,786 
 
 Exports 3,551,485,164 
 
 Total 5,355,580,003 
 
 Excess of exports 1,747,390,381 
 
 Gold 
 
 Imports 438,291,014 
 
 Exports 23,736,680 
 
 Excess of imports 414,554,334 
 
 Bank clearings 187,810,267,274 
 
 N. Y. bank loans 3,246,356,000 
 
 Building permits 814,460,600 
 
 Farm output 10,250,000,000 
 
 1,789,276,001 -|- 
 
 0.8 
 
 2,113,624,050 -- 
 
 68.0 
 
 3,902,900,051 -- 
 
 37.2 
 
 324,348,049 -\- 
 
 438.8 
 
 57,387,741 -f 
 
 661.9 
 
 222,616,156 — 
 
 89.3 
 
 *175,218,415 
 
 
 155,242,201,536 -- 
 
 21.6 
 
 2,182,875,000 -- 
 
 48.7 
 
 771,660,173 -- 
 
 5.6 
 
 9,873,000,000 -|- 
 
 3.8 
 
OUR ECONOMIC POSITION IN 1916 305 
 
 Per Cent. 
 
 . , , ., ^91^ 1914 Change 
 
 Commercial failures: 
 
 Liabilities $301,680,874 $357,908,859 — 15.7 
 
 Number 22,102 18,280 + 20.9 
 
 Iron production 29,609,445 23,049,752 4-28 4 
 
 Steel orders (av'ge) 4,858,411 4,152,459 4- 17.0 
 
 Anthracite output 65,700,000 68,342,601 — 3.2 
 
 Stock Exchange sales: 
 
 Stocks (shares) 173,378,655 47,899,628 + 262.0 
 
 Bonds (par value) 956,777,000 461,898,100 4" 107.1 
 
 Sterling exchange 
 
 (average) 4.7234 4.9395 — 4.4 
 
 * Excess of exports. 
 
 A STRONG BANKING POSITION 
 
 On the subject of Banking, the Times of January 1, 
 1916, said: 
 
 Quite aside from any effect produced by the war, it was assured 
 that the change made in our banking system a little more than a 
 year ago would exert powerful influence upon the credit powers of 
 the country's banks. That, in itself, was almost certain to give a 
 new and very great stimulus to extension of trade at home and 
 abroad. Even in a fully developed country such a change in the 
 banking system would stimulate industry greatly. In our own land, 
 still so far from having reached its maximum capacity agriculturally 
 or industrially, the adoption of a vastly more efficient credit system 
 was certain to lead to new growth in many directions. 
 
 To this is due much of the change which has come about within 
 the last year. It is directly responsible for a large share of the ease 
 in money which has done so much to make possible the extension 
 of the activities of our national banks into other countries. It did 
 much, too. to create the confidence which business men all over the 
 country are showing. They now feel free of the old handicap of 
 restriction of credit due to inability of the banks to finance rapidly 
 extending trade. 
 
 BANK CLEARINGS IN THE UNITED STATES 
 
 1915 1914 
 
 December i $18,000,000,000 $12,654,577,511 
 
 November 19,382,510,816 11,080,625,483 
 
 October 2 20,144,355,592 11,735,570,732 
 
 September 15,759,725,270 10,028,059,866 
 
 ^ Estimated! ^ Largest monthly total on record. 
 
306 CENTURY OF AMERICAN SAVINGS BANKS 
 
 19XS 1914 
 
 August $14,268,853,136 $9,932,296,349 
 
 July 14,925,063,909 14,493,300,896 
 
 June 14,117,408,790 13,948,023,685 
 
 May 14,620,142,566 13,164,811,157 
 
 April 15,008,467,265 14,897,453,513 
 
 March 13,842,660,705 14,253,004,652 
 
 February 11,907,119,867 12,865,108,921 
 
 January 13,477,904,776 16,197,819,613 
 
 Total $185,460,767,936 $155,242,201,536 
 
 EXPORTS AND IMPORTS OF THE UNITED STATES 
 
 Exports and imports of the United States by months dur- 
 ing the year 1915 follow: 
 
 Exports Imports Exc. Exports 
 
 December i $300,000,000 $160,000,000 Exp. $140,000,000 
 
 November 331,144,527 164,319,169 Exp. 166,825,358 
 
 October 334,638,578 148,529,620 Exp. 186,108,958 
 
 September 300,676,822 151,236,026 Exp. 149,440,796 
 
 August 261,025,230 141,804,202 Exp. 119,221,023 
 
 July 268,974,610 143,244,737 Exp. 125,719,873 
 
 June 268,547,416 157,695,140 Exp. 110,852,276 
 
 May 274,218,142 142,284,851 Exp. 131,933,291 
 
 April 294,745,913 160,576,106 Exp. 134,169,807 
 
 March 296,611,852 157,982,016 Exp. 138,629,836 
 
 February 299,805,869 125,123,391 Exp. 174,682,478 
 
 January 267,879,313 122,148,317 Exp. 145,730,996 
 
 ^ Estimated. 
 
 FAILURE RECORD OF 1915 
 
 Statistics of commercial failures in the United States dur- 
 ing 1915, as reported by R. G. Dun & Co., show that de- 
 faults were more numerous, but involved fully $55,000,000 
 less than in the preceding year. The large numerical in- 
 crease reflects the economic disturbance caused by the war, 
 but, after the first quarter of 1915 the insolvency returns 
 showed pronounced improvement, and there were about 37 
 per cent, fewer failures in the third quarter than in 
 the opening three months of the year, with a reduction 
 of practically 50 per cent, in the amount of money in- 
 volved. 
 
OUR ECONOMIC POSITION IN 1916 307 
 
 FAILURES BY QUARTERS 
 
 1915 _ 1914 
 
 '. No. Liabilities No. Liabilities 
 
 1st quarter 7,216 $105,703,355 4,826 $83,221,826 
 
 2d quarter 5,524 82,884,200 3,717 101,877,904 
 
 3d quarter 4,548 52,876,525 4,298 86,818,291 
 
 4tli quarter 4,764 58,716,814 5,439 85,990,838 
 
 Year 22,052 $300,180,894 18,280 $357,908,859 
 
 IMMIGRATION DURING 1915 
 
 According to the monthly bulletin of the Bureau of Im- 
 migration, there were admitted into this country for a series 
 of months, compared with previous years: 
 
 1915 1914 1913 1912 
 
 October 25,450 30,416 135,140 108,300 
 
 September 24,513 29,143 136,347 105,611 
 
 August 21,949 37,706 126,180 82,377 
 
 July 21,504 60,377 138,244 78,101 
 
 June 22,598 71,728 176,261 92,425 
 
 May 26,069 107,796 137,262 113,635 
 
 April 24,532 119,885 136,271 99,839 
 
 March 19,263 92,621 96,859 91,185 
 
 February 13,873 46,873 59,156 45,380 
 
 January 15,481 44,708 46,441 38,453 
 
 WEALTH OF THE UNITED STATES 
 
 1912 
 
 Real property and improvements taxed ^^^'^^^'nnnnnn 
 
 Real property and improvements exempt ^^'^HnnnArS 
 
 Live stock ?'?ic'nnnnm 
 
 Farm implements and machinery i'nni nm nnn 
 
 Manufacturing machinery, tools and equipment 5'^, i'^n^'^nn 
 
 Gold and silver coin and bullion J'^Jo'nnn nm 
 
 Railroads and their equipment ^5'tn7 nnn nnn 
 
 ir^aoij^'^ ::::::::::::: ' SS 
 
 ?S^ ::::::::::::::::::::::::::::::: waooo 
 
 Pulhnan and privately owned railway cars . J^f -"""'"VJ^ 
 
 Shipping and canals ■ 'ffi 'oOO oS 
 
 Irrigation enterprises igOOOOOOO 
 
 Privately owned water works ? mp 000 000 
 
 Privately owned central electric plants c'?^n nm nm 
 
 Agricultural products 14fiQ4000000 
 
 Manufactured products '827'o00000 
 
 Imported merchandise glsWoOO 
 
 Mmmg products 90S nfin 000 
 
 Clothing and personal adornments s'lfi^ 'mO 000 
 
 Furniture, carriages and kindred property 8,463,0UU,UW 
 
 T, . , $187,739,000,000 
 
 ^ , t- . . 95,410,000 
 
 Population $1 967 
 
 Per capita wealth ^ ' 
 
308 CENTURY OF AMERICAN SAVINGS BANKS 
 PAYING THE PRICE OF WAR 
 
 The colossal human catastrophe which has devastated 
 Europe and thrown nearly the whole world out of joint, 
 must be paid for — and the price will stagger humanity. 
 Cost of living is mounting to unheard of figures in neutral 
 as well as in belligerent countries; and the worst appears 
 yet to come. Wages are higher than ever before known, 
 but so are the prices of necessities. 
 
 For more than two years the warring nations have been 
 piling up debts for posterity so vast that they can hardly be 
 comprehended even by the greatest minds in finance. Can 
 these governments meet the gigantic obligations they have 
 been incurring with such reckless prodigality? The ques- 
 tion never has been answered, and the solution must await 
 the reconstruction period following the close of hostilities. 
 Precise data are not at hand, but one can gain some ap- 
 proximation to the real facts and figures. To say they are 
 startling only mildly expresses the true condition. 
 
 At the beginning of the present war the debts of the three 
 leading belligerent nations were as follows: 
 
 In Millions 
 of Dollars 
 
 United Kingdom 3,486 
 
 Germany 1,177 
 
 France 6,284 
 
 The war loans of these various countries at the end of 
 1915 were as follows: 
 
 In Millions 
 of DoUars 
 
 United Kingdom 6,914 
 
 Germany 6,098 
 
 France . , 4,255 
 
 This makes the total national debts of the above coun- 
 tries to the end of 1915, as follows: 
 
 In Millions 
 of Dollars 
 
 United Kingdom 10,400 
 
 Germany 7,275 
 
 France 10,539 
 
OUR ECONOMIC POSITION IN 1916 309 
 
 According to President Charles R. Van Hise, of the Uni-- 
 versity of Wisconsin, who has made a special study of this 
 subject, the interest rates before the war were in part at a 
 comparatively low figure; but the new debts which have 
 been contracted, especially the later ones, are on conditions 
 which are better than 5 per cent, and in order not to result 
 in dissatisfaction and to secure new loans at home, refund- 
 ing operations have been carried on for the old debts, in- 
 creasing their rate of interest to an amount somewhat par- 
 allel to that of the new loans. Therefore it is safe to say 
 that at the present time 5 per cent, is a close approximation 
 to the figure which each of these nations is paying upon 
 its national debt. Using 5 per cent, and using only the 
 national debts, not the local debts, the interest charges for 
 the three countries under discussion involve annual expendi- 
 tures as follows: 
 
 In Millions 
 of Dollars 
 
 United Kingdom 520 
 
 Germany 364 
 
 France ". 525 
 
 Thus, at 5 per cent., the interest charge on these national debts 
 would be in excess of $1,400,000,000. 
 
 Figures available regarding the total wealth of the na- 
 tions under discussion and their incomes are only approx- 
 imate. Recent estimates of The Economist are as follows: 
 
 Total Wealth Income in 
 
 in Millions Millions of 
 of Dollars Dollars 
 
 United Kingdom 87,597 11,923 
 
 Germany 77,864 10,219 
 
 France 63,763 7.299 
 
 These estimates probably are very high; and it should 
 be remembered that they include not only the privately 
 owned physical property in these countries, but all the pub- 
 lic property and all the property owned abroad. During 
 the continuance of the war, such property owned abroad, 
 more especially in the case of Germany, has been greatly 
 decreased. 
 
310 CENTURY OF AMERICAN SAVINGS BANKS 
 
 It therefore appears that the national debts of these three 
 countries and the interest charges upon the same are the 
 following percentages of the wealth and incomes of the na- 
 tions under discussion: 
 
 Percentage Percentage 
 
 of Wealth of Income 
 
 United Kingdom 11.87 4.36 
 
 Germany 9.34 3.56 
 
 France 16.48 7.19 
 
 SOME STAGGERING FIGURES 
 
 At the beginning of the war, August 1, 1914, the com- 
 bined debt of the five great belligerents, England, France, 
 Russia, Germany and Austria-Hungary, was $19,600,000,- 
 000. The combined debt of these powers on August 1, 
 1916, was approximately $62,500,000,000, showing that 
 the cost of the two years of war was $42,900,000,000. 
 These figures include the permanent war loans, which up 
 to May 1, 1916, had amounted to $25,525,000,000. The 
 charge upon the national resources of these countries for 
 the payment of interest on these obligations and the dis- 
 charge of the principal debt, will be burdensome beyond 
 all precedents in government finance. It would seem cer- 
 tain that the back of the taxpayer must be broken if to this 
 burden is added the cost of great and always greater arma- 
 ments. In the past, the cost of maintaining Europe as 
 practically an armed camp has been enormous, and the 
 fact has been pointed out that it would be immeasurably 
 greater in the future, for this war, by its unparalleled ex- 
 travagance in the use "of men and material, has established 
 new standards of fighting and efficiency which, in common 
 prudence would have to be lived up to by every nation de- 
 termined to do its part in the next conflict. England and 
 Russia could not afford again to be caught unprepared, and 
 France would be compelled to redouble her efforts. 
 
 The cost of the present European war has been calcu- 
 lated by high authority, at $100,000,000 per day. 
 
 In addition to the increase in the debt of the German 
 
OUR ECONOMIC POSITION IN 1916 311 
 
 Empire due to the war, there have been great increases in 
 the indebtedness of the German States, and if these debts 
 were added to the national war debt of Germany, the Ger- 
 man debts in percentage of wealth and percentage of in- 
 come would probably be between those of the United King- 
 dom and France. Thus far, only the national debts have 
 been taken into consideration; but in addition to these there 
 must be paid interest on all of the local debts, state, muni- 
 cipal, county, etc., besides taxes sufficient to pay the entire 
 expenses of government. 
 
 TAXATION IN THE UNITED STATES 
 
 On the subject of the recent outcry against high taxes 
 in the United States, President Van Hise says: 
 
 Why, we don't know what high taxes are! Suppose 10 per cent, 
 of your income from capital were taken first to pay the national 
 debt, several per cent, more to pay interest upon the local debts; and, 
 in addition, you were to pay taxes to care for all current expenses, 
 local, state, and national; and, finally, if the debts are ever to be 
 liquidated, to pay an additional tax toward a sinking fund. Then 
 you would be in a position similar to that of the people of Great 
 Britain, Germany, and France. 
 
 It is further shown that while the debts at the time of 
 the Napoleonic wars were very heavy, the United King- 
 dom and France were then largely undeveloped, and ft 
 therefore seems safe to say that there has never been a 
 time in the history of the world in which anything like the 
 present burdens of debt rested upon any nations, in pro- 
 portion to their resources, developed and potential. 
 
 How will the people handle their great economic prob- 
 lems at the close of the war? Under the stimulus of na- 
 tional feeling, in the midst of hostilities, men and women 
 always will and do make great sacrifices cheerfully, but 
 will they continue to do so in the period following peace? 
 Will they, through generations to come, consent to carry 
 these gigantic financial burdens, which are certain to mean 
 partial confiscation of property? 
 
 The maximum debt of the United States at the close of 
 
312 CENTURY OF AMERICAN SAVINGS BANKS 
 
 the Civil War (at that time the most colossal debt to which 
 any nation ever had been subject), was $2,758,000,000; 
 at the expiration of more than half a century, more than 
 one-third of this debt remains impaid, and that in a coun- 
 try the richest on the face of the globe. 
 
 Will the result of European taxation after the war be 
 the emigration of the rich and well-to-do, to escape the 
 fearful burdens? And if such emigration goes on, and 
 the capital available to pay the interest on the national debt 
 continues to be reduced, will the nations involved be obliged 
 to scale their debts or to confiscate the wealth of those who 
 migrate? Who can answer? 
 
 THE LATE JAMES J. HILL URGED PEACE PREPAREDNESS 
 
 As to what the people of the United States must do to 
 meet the economic and industrial changes that will follow 
 the war, opinions may differ, but it is certain that very 
 vexing problems will confront America, as well as Europe. 
 The late James J. Hill, always wise and far-seeing, in urg- 
 ing preparedness for peace as well as for war, pointed out 
 some of the factors in this problem. When he asserted that 
 our present prosperity is largely the result of abnormal 
 conditions there is ample reason for the belief that he spoke 
 well within the truth. Our exports in 1915, were more 
 than a billion greater than in 1913, an increase of 42.4 
 per cent. Every one knows that this cannot continue, for 
 after the war Europe will be compelled to curtail purchases 
 abroad, ordering only that which is absolutely indispen- 
 sable. To continue to sell their products abroad, they will 
 be compelled to reduce wages and profits to the minimum. 
 How this will affect us and how best to prepare ourselves 
 for the change is the question that should occupy the minds 
 of the people. In Europe, wages are sure to come down 
 and painful saving become the law of life, with millions 
 of men returning from the battlefields and other millions 
 to be supported in their helplessness. Mr. Hill said: 
 
 If the black shadow which the war has cast upon the future gen- 
 erations of Europe is not to darken our national life also, we must be 
 
OUR ECONOMIC POSITION IN 1916 313 
 
 prepared to meet these new conditions, not with political oratory, but 
 with the economic weapons by which alone they can be mastered. 
 The salvation of the workingman lies in his ability to secure contin- 
 uous work. It depends upon the steady and willing payroll. And 
 the payroll can exist only so long as the capital from which it must 
 be furnished sees safe and reasonably profitable opportunities of 
 investment in our domestic productive enterprises. Capital may be 
 a shy bird for some time to come. . . . Our manufacturing interest 
 has been built up to a point where our own needs cannot consume 
 the output. ... We must face competitive prices with Europe — the 
 new prices induced by their desperate need to earn, to save, and pay — 
 in all the outside markets of the world. We must face their dis- 
 criminating legislation in their struggle to live. 
 
 Mr. Hill declared that the world to be born from this 
 mighty conflict of arms will be a world different from any 
 that man has seen ; hence we must study the new problems, 
 adjust ourselves to the new conditions, and be as far as 
 possible economically prepared. 
 
 We may be sure that we shall have to pay our share of 
 the fearful burden it will entail upon the civilized world. 
 
 NEED OF THRIFT IN ANY EVENT 
 
 The wisdom of the present country-wide campaign of 
 thrift needs no argument; it is self-evident. Experts in 
 finance and commerce disagree in opinion as to what effect 
 the cessation of hostilities in Europe will have in this coun- 
 try. If prosperity should continue after the war for an 
 indefinite period, so much the better — we can keep on add- 
 ing to our savings and investment accounts; if, on the 
 other hand, a period of severe depression is to be encount- 
 ered, the necessity for rigid economy is apparent. In 
 either event, thrift is the key to survival and success. It 
 has been said by some experts, with truth, that after the 
 close of hostilities, Europe will have desperate need for 
 our gold and will do its best to get it. The safety of our 
 gold reserve depends largely upon whether Americans by 
 that time regard money as something to spend or something 
 to save and invest. By spending recklessly and extrava- 
 
314 CENTURY OF AMERICAN SAVINGS BANKS 
 
 gantly, we shall play into the hands of those nations that 
 are seeking our gold; by prudence and thrift we shall be 
 able to retain permanently the great advantages we have 
 already gained. 
 
CHAPTER XXIII 
 
 THE SPENDTHRIFT NATION 
 
 Are We Really a Saving People? — ^Love of Luxury and Pleasure the 
 Leading Characteristics of To-day — Self-denial the Basis of 
 Character — ^Words of Wisdom from Great Men of All Ages — 
 Why Thrift Is Blessing — Examples Showing How Money Grows 
 — Some True Little Stories from Real Life. 
 
 Few of those who have given the matter any serious 
 thought will have the temerity to deny that America is a 
 spendthrift nation. It seems to be the national failing. 
 Due in part, perhaps, to the general feeling that our na- 
 tional resources are inexhaustible, the people as a whole 
 seem to have little or no idea of conservation, either per- 
 sonally or collectively. While the big corporations have 
 learned the lesson of economic efficiency, the people have 
 not, and the result is financial chaos in the average Amer- 
 ican family. The rule is to pay expenses, some necessary, 
 more of them needless or artificial, and save what is left — 
 if there is anything left. Too often, the head of the family 
 is swamped in his desperate efforts to put by something 
 for emergencies. 
 
 In these latter days of luxury and the passion for pleas- 
 ure, the saving habit has fallen into disrepute in many quar- 
 ters. The simple, inexpensive pleasures of other years 
 are scoffed at as antiquated. Not only is acciunulation 
 discouraged, but those who show a praiseworthy inclination 
 in that direction are looked at askance or with openly ex- 
 pressed contempt. They are referred to in the vernacular 
 of the street as "tightwads." The argument, in a nutshell, 
 seems to be: "While we live, let us live. There's very 
 little pleasure, anyhow; we'll never pass this way again. 
 What's the use of saving for some one else to enjoy? Let 
 those who come after us earn their money, as we did. 
 
 31S 
 
316 CENTURY OF AMERICAN SAVINGS BANKS 
 
 We've only one life to live, so let's enjoy ourselves to the 
 limit. Dum vivimus vivamus." 
 
 It cannot be denied that this specious argument, although 
 it takes no note of the misfortunes that are always liable to 
 overtake us with the necessity of accumulated capital to tide 
 over the rough places, finds many followers. The line of 
 least resistance always is popular — it is the ordinary way 
 even for a current of electricity. How much easier it is to 
 drift with the current than to stem the stream ! 
 
 The evidences of this are to be seen everywhere in reck- 
 lessly extravagant methods of living. Instead of follow- 
 ing the example of the wonderful French people, thousands 
 upon thousands in this land of opportunity are living far 
 beyond their means, enjoying luxuries both in the way of 
 food, raiment and pleasures, which they cannot afford.^ 
 Young men and women, sons and daughters of parents 
 in very moderate circumstances, ape the wealthy, so that it 
 is difficult to distinguish on the street the girl who works 
 for a very small wage in store or factory from the daugh- 
 ter of a millionaire. Many of these girls and women spend 
 practically all they receive in personal adornment. 
 
 The young men of the present day also are notoriously 
 extravagant in their personal habits, not hesitating to spend, 
 for instance, $25 or $50 for a New Years Eve celebration. 
 Not how much can be set aside for future needs and emer- 
 gencies but how much can be spent for present pleasures 
 seems to be the thought uppermost in their minds. If they 
 earn good salaries, a way is always found of getting rid 
 of it all by the end of the year, and if an increase is ob- 
 tained, it goes the same way in further comforts and lux- 
 uries and more "style." Thousands of people ride daily 
 
 1 Practically every city in France has its Municipal Savings Banks, and they 
 are extremely popular. One out of every six of the men, women and children 
 of France has such an account of more tiian five hundred francs. These banks 
 are managed by local commissions whose members serve without pay. The 
 system has grown rapidly, and not only does it encourage thrift among the 
 poor but furnishes the funds for absorbing the bonded obligations of the 
 commxmity. 
 
THE SPENDTHRIFT NATION 317 
 
 in street cars or in automobiles who would be far better 
 off, physically — and financially — if they walked. 
 
 It has been said with truth that we are living in an age 
 of financial delirium, and that lavish expenditure has 
 grown to be a national trait. 
 
 None can deny that this state of mind is all wrong. 
 There is urgent need of education along the line of system- 
 atic saving. 
 
 ARE WE REALLY A SAVING PEOPLE? 
 
 As proof that the people of the United States are a sav- 
 ing people it has been customary to point to the aggregate 
 deposits in the Savings Banks of the country. The fact 
 that New York has more than one-third of all these has 
 been regarded by many as evidence that its people properly 
 must be classed as thrifty. 
 
 Highly creditable as is this exhibit of New York's sav- 
 ing in the aggregate, ought not the showing to be far greater 
 and more impressive, in view of the fact that there are lo- 
 cated within the State a large number of flourishing cities, 
 including the metropolis of the western world, a city sec- 
 ond in size only to London and seemingly destined soon to 
 surpass it in population and commercial importance? 
 Probably few who have given the question any serious 
 thought will answer otherwise than in the affirmative. 
 
 Another companion fallacy is the proposition that if 
 everybody became careful and saving it would be "bad 
 for business." Such argument is so specious as hardly to 
 need answer. Waste is always waste, no matter under what 
 cloak it may seek to disguise itself. One might as well 
 argue that destructive fires are good things for the world 
 at large, because they create new employment. Of course 
 if that were true, the more and the greater the conflagra- 
 tions, the better off we should all be ! 
 
 In any event, the discussion of this phase of the matter 
 must be purely academic, for we always shall have a goodly 
 proportion of thoughtless, extravagant people. To make 
 
318 CENTURY OF AMERICAN SAVINGS BANKS 
 
 everybody thrifty is as manifestly impossible as to make 
 everybody good. 
 
 SELF-DENIAL THE BASIS OF CHARACTER 
 
 It is very little credit to a young man or woman to set 
 aside a portion of a large income after all desires have been 
 satisfied. Saving out of a small income by personal econ- 
 omy and self-denial is what builds up character; for after 
 all, it is not so much the money saved that is important 
 as the effect of saving upon the saver. To make more use- 
 ful men and women, — the sturdy kind of which past gen- 
 erations in this country showed many excellent examples, 
 — is the really important thing. 
 
 Saving is quite as much a woman's problem as it is a 
 man's. All know how much the former have to do with 
 household economies, but both sexes should get into their 
 minds the fundamental truth that saving money is less a 
 matter of income than of remorseless, inflexible habit. 
 Surrounded as we are by innumerable temptations to spend, 
 we can only save by positive determination of the will. 
 This determination is the touchstone that solves the prob- 
 lem. Saving must come first; expenses afterward. 
 
 James B. Forgan, president of the First National Bank, 
 Chicago, has told the young men of the country how to get 
 ahead in the world. It may be explained that Mr. Forgan 
 arrived in Montreal from Scotland in the year 1872, at the 
 age of twenty, with only character and determination as his 
 capital. Mr. Forgan says: 
 
 Extravagance is America's national sin. Most young people make 
 no effort to save; few even of older years save systematically. My 
 method was to start the new year by fixing the sum I would save dur- 
 ing the year. If I decided to buy a $1,000 bond I would pay per- 
 haps $100 in cash, borrow the balance from the bank and repay $75 
 every month. That $75 was the first thing I paid on receiving my 
 salary. The remainder had to last the whole month. December 
 found me sole owner of the bond. I never speculated. 
 
 It was good old Benjamin Franklin — a typical American 
 whose memory and example should be cherished forever by 
 his countrymen, — who said: "Save, young man, and be- 
 
THE SPENDTHRIFT NATION 319 
 
 come respectable and respected. It is the surest way." 
 Franklin practiced what he preached. He was in the 
 highest and best sense thrifty, conserving everything and 
 wasting nothing. His precepts and proverbs, attributed to 
 "Poor Richard," and published in the famous almanac of 
 that name, were once widely read, constantly quoted and 
 generally followed. They were witty, wise, and shrewd, 
 and exercised a wonderful influence for good all over the 
 country. 
 
 On the same subject, Franklin wrote: 
 
 The way to Wealth is as plain as the way to Market. It depends 
 chiefly on two words, Industry and Frugality; that is, waste neither 
 time nor money, but make the best use of both. Without Industry 
 and Frugality nothing will do, and with them everything. He that 
 gets all he can honestly, and saves all he gets, necessary expenses 
 excepted, will certainly become Rich, if the Being who governs the 
 world, to whom all should look for a blessing on their honest en- 
 deavors, doth not, in His wise providence, will otherwise. 
 
 And again he has said : "Take care of the Pence, and the Pounds 
 will take care of themselves." 
 
 James J. Hill, the great railroad builder and financial 
 genius, who died recently a multi-millionaire although born 
 in poverty in the Canadian backwoods, with few friends 
 and fewer opportunities, said not long before his lamented 
 decease: 
 
 If you want to know whether you are destined to be a success or a 
 failure in life, you can easily find out. The test is simple but in- 
 fallible. Are you able to save money? If not, drop out. You will 
 lose. You may not think it, but you will lose as sure as you live. 
 The seed of success is not in you. 
 
 These are true words, the force and value of which are 
 especially to be commended to the youthful of both sexes. 
 Conceding their wisdom, as we must, it will be undisputed 
 that there can be no better places in which to instill the sav- 
 ing habit than in the home and the school. 
 
 THE LATE THOMAS M. MULRY ON THRIFT 
 
 To use the language of the late Mr. Thomas M. Mulry, 
 when president of the Emigrant Industrial Savings Bank, 
 
320 CENTURY OF AMERICAN SAVINGS BANKS 
 
 New York, one of the largest and strongest institutions of 
 the kind in the world, with more than 165,000 deposi- 
 tors and deposits reaching the enormous total of $150,- 
 000,000: 
 
 It doesn't seem to me that the young men and women of to-day get 
 the saving habit as strong as they did when I was a young man. 
 They seem to be more taken up with the idea of spending money than 
 saving it. I remember well when if you took your best girl out and 
 bought two dishes of ice cream it was a big treat and the total ex- 
 penditure was twenty cents. Nowadays a young fellow pays four or 
 five dollars for a pair of theater tickets and afterwards goes to a 
 restaurant for a big spread. By the time he bids the young lady 
 good night he has spent enough money to keep a family for a week. 
 The craze for automobiles has prevented a good many people from 
 saving money who should be doing so. 
 
 A young man is afraid to ask a girl to marry him nowadays un- 
 less he has a flat furnished up in the height of style, with a piano, 
 talking machine or a player piano in the parlor. Perhaps that's why 
 there are so many bachelors running around. 
 
 The cost of living, I realize, is higher in some respects than it was 
 a few years ago, but it seems to me if people would be willing to 
 start life on a more simple basis and cultivate a little more of the 
 old-time thrift they would get farther in the end. 
 
 HENRY A. SCHENCK TELLS HOW TO SAVE 
 
 Henry A. Schenck, president of the Bowery Savings 
 Bank, New York, and president of the Savings Banks As- 
 sociation of the State of New York, put the matter with 
 admirable force and directness when he said, in a recent 
 address : 
 
 Every one should save, because every one who is not in debt and 
 has a dollar put up is a capitalist. If you are a woman, save for 
 safety. The safest place for your money at all times is the Savings 
 Bank. If you are a man save for opportunity. The time will come 
 to put those savings into business or property of your own. Don't 
 try to save too much. In general a tenth of what you earn is a good 
 percentage of saving. At least it is a good scale upon which to be- 
 gin. Ten years is a good age at which to begin saving. Then and 
 always the amount saved is secondary to the formation of the habit 
 of saving. Once that habit is formed the amount takes care of 
 itself. Watch the little leaks. ... In the order of their importance 
 I name the objects for which a man should save: First, that he may 
 
THE SPENDTHRIFT NATION 321 
 
 many; second, for a home; third, for a life insurance for the benefit 
 of his family; fourth, for the employment of the savings in a busi- 
 ness of his own or in acquiring other property; fifth, to provide for 
 the girls of his family after his death. The boys do not need money 
 as a start in their life of manhood. Usually it is a serious detri- 
 ment. They will develop into better men without it. But for the 
 women of his family a man should provide as well as he can. All 
 this accomplished, a man should save for bequests to worthy phi- 
 lanthropies. To do all this will keep a man busy saving all his 
 life, as he should do. 
 
 But some one may say that there is the liability of over- 
 doing it; that one of the most despicable of all creatures 
 is the miser. This may be freely conceded; but the danger 
 of one's becoming a miser is so small as to be negligible. 
 
 WORDS OF WISDOM FROM GREAT MEN 
 
 Quaint Josh Billings somewhere refers to certain kinds 
 of economy that don't pay. "One of them is that thair iz 
 a grate menny peepul in the world who try to ekonomize 
 by straightenin' pins." This is illustrated by Orisen 
 Swett Harden in his reference to a certain rich man who 
 had become such a slave to the habit of economizing that he 
 would frequently lose a dollar's worth of valuable time 
 trying to save a dime. He would tear off the unused half- 
 sheets of letters, cut out the backs of envelopes for scrib- 
 bling paper, and compel his employees to save strings from 
 bundles even if it took twice as much time as the string 
 was worth. This sort of economy is the foolish kind ; true 
 economy involves the highest kind of judgment, level- 
 headedness and breadth of vision. There is no doubt that 
 the habit of saving may be carried to such an extent as to 
 become a boomerang, proving a stumbling-block instead of 
 a stepping-stone. However, it may be said that the danger 
 of this is remote. 
 
 There is a broad distinction between thrift and avarice. 
 Lord Rosebery has said: "Avarice is not generous, and 
 after all it is the thrifty people who are generous. All true 
 generosity can only proceed from thrift, because it is not 
 generosity to give money which does not belong to you, as 
 
322 CENTURY OF AMERICAN SAVINGS BANKS 
 
 is the case with the unthrifty." He added that while the 
 rising generations of all lands should be taught to abhor 
 waste in all its innumerable forms, it was not the mere 
 waste of money which he referred to; that cures itself, be- 
 cause very soon there is no more money to waste. He 
 meant waste of anything and ever)i:hing that is valuable, 
 including, perhaps first in importance, — ^time. 
 
 Ben Jonson shrewdly observes: "When you are in- 
 debted any great sum, your creditor observes you with no 
 less regard than if he were bound to you for some huge 
 benefit, and will quake to give you the least cause of of- 
 fense, lest he lose his money." 
 
 SOME WISE SAYINGS WORTH PONDERING 
 
 "Seest thou good dayes? Prepare for evil times; no 
 summer but has its winter. He never reaped comfort in 
 adversity that saved it not in prosperity." — Quarles. 
 
 "Sometimes our neighbors want the things which we 
 have, or have the things which we want; and we both fight, 
 till they take ours, or give us theirs." — Swift. 
 
 "In expenses I would be neither pinching nor prodigal; 
 yet, if my means allow it not, I would rather be thought 
 too sparing than a little profuse." — Feltham. 
 
 "Both are equally absurd, he that will burn his taper 
 while the sun shines, and he that will go to bed in the dark 
 to save the expense of light." — Feltham. 
 
 "I trusted so much that I sold the skinne before the 
 beaste was taken, reckoning without mine host, and setting 
 that downe in my bookes as ready money, which afterward 
 I found to be a desperate debt." — Euphues. 
 
 "He that lendeth to all that will borrowe, sheweth great 
 good will, but l)^tle witte. Lend not a penny without a 
 pawne, for that will be a good gage to borrowe." — Euphues. 
 
 "Be very wary for whom thou becomest security, and for 
 no more than thou art able to discharge, if thou lovest thy 
 liberty. The borrower is a slave to the lender: the security 
 is a slave to both." — Quarles. 
 
 "While the money is hoped for, and for a short time after 
 
THE SPENDTHRIFT NATION 323 
 
 it has been received, he who lends it is a friend and bene- 
 factor; by the time the money is spent, and the evil hour of 
 reckoning is come, the benefactor is found to have changed 
 his nature and to have put on the tyrant and oppressor. 
 It is an oppression for a man to reclaim his own money; 
 it is none to keep it from him." — Defense of Usury. 
 
 WHAT THRIFT REALLY IS 
 
 Thrift does not consist merely in starting a bank account. 
 To it must be added self-denial — moral courage — ^backed 
 by an incentive to attain a reasonable competence. It lies 
 within the reach of the great majority of able-bodied men, 
 temperate and capable, to make adequate provision for the 
 time when it will not be possible to earn daily wages. It 
 is not all of thrift to merely put money out at interest, but 
 it is of sufficient moment to be the first concern of those who 
 believe in "preparedness" — for thrift is in its essence pre- 
 paredness. An analysis of the lives of one thousand prom- 
 inent and successful persons in this country shows that only 
 111 were sons of financially successful men, the other 889 
 being sons of farmers, preachers and teachers who had 
 learned the value of a dollar. 
 
 A comparison of the operation of our saving habit with 
 that of other nations reveals how far we are from being 
 a thrifty nation. Out of every 1,000 people in 
 
 Switzerland 595 have a savings account: 
 
 Norway 468 
 
 Denmark 436 
 
 Japan 400 
 
 France 368 
 
 Germany 356 
 
 England 302 
 
 Australia 300 
 
 Belgium 300 
 
 United States 109 
 
 The average amount to the credit of those who have sav- 
 ings accounts is: 
 
 In the United States $47.92 J 
 
 Switzerland 88.47 J 
 
 " Denmark 67.85 I 
 
 " Norway 62.42; ' 
 
324 CENTURY OF AMERICAN SAVINGS BANKS 
 
 The comparison of our wealth with that of other leading 
 nations is as follows: 
 
 Wealth Income 
 
 United States ISO billions 35 billions 
 
 Great Britain 85 billions 12 billions 
 
 France 50 billions 6 billions 
 
 While we are saving about two billions of dollars an- 
 nually, Great Britain, with one-third of our income, is sav- 
 ing as much as we are; and France, with one-sixth, is sav- 
 ing half as much as we are; Germany, with 65 per cent, of 
 our population, saves annually 80 per cent, more than we 
 do. 
 
 WHY THRIFT IS BLESSING 
 
 if the practice of the old-fashioned virtues, — among 
 which that of saving is a leading one, — is out of date, then 
 so much the worse for the Republic, and the outlook is dark 
 indeed. 
 
 Let the boys and girls of the State and nation be taught 
 to disregard the sneers and slurs of the extravagant and 
 improvident and go on in the true path, paying no heed 
 to those who are living only in the present. By living in 
 that manner, we really place ourselves on a footing with the 
 lower animals. 
 
 It has been said, with partial truth, that man is the only 
 animal that lives in the past or the future. The example 
 of the squirrel laying up his store of nuts for the long win- 
 ter, and of the dog, burying a too large bone for the mor- 
 row would seem to disprove the statement, even though it is 
 instinct that impels them. Let us teach our boys and girls 
 then, until thrift becomes an instinct. Let us instill into 
 their young, formative minds the virtue of carefulness and 
 the wickedness of waste. Let us point them to the in- 
 numerable examples of present-day millionaires who be- 
 gan with practically nothing and reached their high estate 
 by habits of economy, by getting the right start and making 
 the "devil of interest" work for them — as he will — day and 
 night, instead of against them. 
 
 Thrift is blessing, not merely on account of the accumu- 
 
THE SPENDTHRIFT NATION 325 
 
 lation of substance, but because of the foundation and 
 strengthening of character; and contrary to the generally 
 prevalent idea, it is within the power of the poorest to be 
 thrifty. This cardinal virtue lies at the foundation of the 
 surest and strongest empires the world has known or will 
 know. 
 
 "Thrift," says Lord Rosebery, "is at the root of inde- 
 pendence and self-respect, two vital principles of any as- 
 piring nation." 
 
 THOUSANDS LEARNING THE LESSON 
 
 Thanks to the far-seeing men in the great banking cor- 
 porations of the State, working in entire harmony along 
 the lines of a systematic plan covering the entire country, 
 countless thousands are learning the lesson of thrift, with 
 beneficial results far above all calculation. A "Centennial 
 Advisory Thrift Commission" was formed late in the year 
 1915, composed of prominent Americans to aid in the plan. 
 Among the members of this commission were such well- 
 known and prominent citizens as William H. Taft, Car- 
 dinal Gibbons, Myron T. Herrick, A. B. Hepburn, Wil- 
 liam E. Carson, J. K. Orr, Charles S. Whitman, Hugh 
 Chalmers, James A. Green, Herbert F. Gunnison, Charles 
 B. Warren, Eugene Lamb Richards, William E. Knox, 
 James B. Forgan, and others equally prominent. 
 
 In sixty-two cities of the United States, each with a 
 population of over 25,000, the campaign was conducted 
 through the local chapters of the American Institute of 
 Banking: in the smaller cities and towns, through banks 
 which are members of the American Bankers Association; 
 in the States through the secretaries of the State Bankers' 
 associations. The industrial workers were reached through 
 the National Civic Federation and the immigrants through 
 the National Americanization Committee. 
 
 Immigrants, as a rule, being accustomed to government 
 Savings Banks in their own countries, deposit their money 
 in the United States post-office banks and do not under- 
 stand the safety of savings and commercial banks. The 
 
326 CENTURY OF AMERICAN SAVINGS BANKS 
 
 government officials in the postal savings system assisted 
 in fostering in foreign immigrants a feeling of confidence 
 in Savings Banks. The Bureau of Commercial Economics 
 at Washington supplied lectures and motion picture films 
 to be used at thrift meetings. 
 
 Regarding this campaign, the American Bankers Asso- 
 ciation Journal, in its issue of December, 1915, said: 
 
 To-day, with our national wealth approximating $187,000,000,000 
 and almost one hundred millions of people in the country, we have 
 about $4,700,000,000 in the Savings Banks, belonging to ten and 
 a half million depositors. This may seem an amazing sum of cap- 
 ital and number of depositors, but when a comparison is made with 
 other countries and a balance is struck, it is found the United States 
 is near the end of the list in the percentage of savers to population. 
 
 With every appearance of unprecedented future prosperity in the 
 United States, the fact is apt to be disregarded that the other great 
 commercial nations of the world are involved in a war of frightful 
 destruction and economic waste; that after the war these nations will 
 need funds for reconstruction, and the United States will be called 
 on to supply them; that for some time to come this country will not 
 be able to secure capital, as in the past, from Great Britain and 
 France, for the purpose of carrying on new enterprises. The United 
 States must finance itself. 
 
 No fear need be had for the immediate future, but it is inevitable 
 that the time is coming when this country will meet the test of 
 financing practically the whole world. Preparations are being made 
 for defense in the event of war; preparations should also be made for 
 peace. Adequate credit machinery can be developed and perfected, 
 but it will assuredly require a sufficient amount of capital to main- 
 tain properly and keep in good running condition this credit ma- 
 chinery. 
 
 How is this capital going to be secured? Through education; by 
 calling the attention of the people to the lack of thrift in the country 
 and the beneficial results of practicing thrift; through a systematic 
 nation-wide campaign to promote thrift and saving. 
 
 This splendid movement, let us hope, will not close with 
 the centenary year, but go on and on, with increasing mo- 
 mentum, until we shall be entitled to be called what we 
 now are not, a truly thrifty nation. 
 
THE SPENDTHRIFT NATION 
 
 327 
 
 HOW MONEY INCREASES 
 
 As a striking illustration of the cumulative increase of 
 money placed on deposit at compound interest, every pres- 
 ent and prospective saver should examine the following: 
 
 Weekly 
 
 
 
 
 
 
 Sav'gs 
 
 Rate of Int. 
 
 For 5 yrs 
 
 . For 10 yrs 
 
 For 20 yrs. 
 
 For 40 yrs. 
 
 $1.00 
 
 Compounded 
 
 $275. 
 
 $602. 
 
 $1,455. 
 
 $4,370. 
 
 2.00 
 
 semi- 
 annually 
 
 550. 
 
 1,205. 
 
 2,911. 
 
 8,740. 
 
 S.OO 
 
 Jan. & July 
 
 1,376. 
 
 3,041. 
 
 7,279. 
 
 21,850. 
 
 
 AN 
 
 ACTUAL 
 
 CASE IN 
 
 POINT 
 
 
 The following is a transcription of an actual account 
 taken by permission from one of the passbooks of the Al- 
 bany Savings Bank: 
 
 Dr. ALBANY SAVINGS BANK TO Cr. 
 
 2 1864 
 
 By Cash 
 
 1862 
 Mar. 12 
 1863 
 May 14 
 
 Aug. 27 
 1876 
 Jan. 1 
 1878 
 Jan. 1 
 1880 
 July 1 
 1884 
 July 1 
 1886 
 July 1 
 1897 
 Jan. 1 
 1900 
 Jan. 1 
 1900 
 July 1 
 1907 
 Jan. 1 
 1914 
 Jan. 1 
 1915 
 Jan. 1 
 1916 
 July 1 
 
 To Cash 
 
 
 .. 200 
 
 it I( 
 
 .. 30 
 
 U «( 
 
 .. 150 
 
 Int. to date .. 
 
 . . 146.99 
 
 11 ti ( 
 
 1 
 
 .. 31.35 
 
 (1 (( 1 
 
 ( 
 
 . . 40.70 
 
 (1 K * 
 
 1 
 
 . . 56.25 
 
 II (1 
 
 1 
 
 . . . 30.20 
 
 U II 1 
 
 1 
 
 . . 198.85 
 
 It li » 
 
 • .... 
 
 . . 75.56 
 
 If U * 
 
 1 
 
 . . . 11.80 
 
 II it 1 
 
 
 . . . 173.67 
 
 i« (1 ( 
 
 1 
 
 . . . 258.00 
 
 11 11 1 
 
 ( 
 
 . . . 45.14 
 
 (1 (1 
 
 • .... 
 
 ... 71.18 
 
 1864 
 Nov. 4, 
 1872 
 Apr. 15, 
 1878 
 Feb. 28, 
 1886 
 Dec. 15, 
 
 200 
 25 
 10 
 50.49 
 
 Balance 1,234.20 
 
 Total 
 
 $1,519.69 
 
 $1,519.69 
 
328 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Twenty-five cents saved weekly and compounded twice 
 a year at 4 per cent, per annum, will amount to $396.42 in 
 twenty years; fifty cents will amount to $792.84, and five 
 dollars to $7,928.40. 
 
 RECORD OF ACTUAL ACCOUNTS 
 
 Here is an actual account of a deposit opened eighty- 
 four years ago: 
 
 S B of Norwich, Connecticut, opened an account with, a 
 
 Savings Society by deposit 
 
 June 4, 1832 $ 7 
 
 Sept. 3, 1832 he deposited 8 
 July 21, 1833 5 
 
 Oct. 8, 1834 13 
 
 Total amount deposited ^33 
 
 There were no other transactions on this accoimt until 
 December 3, 1915, when the Society paid to his estate, rep- 
 resented by his widow as executrix of his will, 
 
 the amount deposited $ 33.00 
 
 and accumulation of dividends or interest 1,779.09 
 
 Total $1,812.09 
 
 This is not an estimate, but the record of an actual ex- 
 perience of a depositor in a Mutual Savings Bank. 
 
 TRANSCRIPT OF ACCOUNT NO. 36,391 
 
 "Isaac Deposited for His Daughter Lydia" 
 
 $10.00 
 
 7.00 
 
 5.00 
 
 5.00 
 
 5.00 
 
 5.00 
 
 5.00 
 
 S.OO 
 
 6.00 
 
 5.00 
 
 5.00 
 
 5.00 
 
 1852 
 
 6/3 Dep 
 
 (< 
 
 12/30 
 
 1853 
 
 12/30 
 
 1854 
 
 12/30 
 
 1855 
 
 12/29 
 
 1856 
 
 12/30 " 
 
 1857 
 
 12/29 
 
 1858 
 
 12/29 
 
 1859 
 
 6/3 
 
 It 
 
 12/27 
 
 1860 
 
 12/26 
 
 1861 
 
 12/27 
 
THE SPENDTHRIFT NATION 329 
 
 1862 12/29 Deposit $5.00 
 
 S.OO 
 
 5.00 
 
 S.OO 
 
 5.00 
 
 5.00 
 
 5.00 
 
 5.00 
 
 5.00 
 
 1863 1/21 
 12/31 
 
 1864 12/29 
 
 1865 12/22 
 
 1866 12/31 
 
 1867 12/28 
 
 1868 12/24 
 
 1869 12/24 
 
 Total Deposits $113.00 
 
 1870 Interest to January, $96.71 
 
 1880 Interest to January, 190.69 
 
 1890 Interest to January, 203.11 
 
 1900 Interest to January, 293.08 
 
 1910 Interest to January, 435.40 
 
 Account closed May 10, 1910, by 
 
 payment of $1,331.99 
 
 SYSTEMATIC SAVING PAYS WELL 
 
 Two dollars, deposited every day in a Savings Bank, 
 will in forty years yield an income of eight dollars a week 
 for the balance of one's life, while leaving an estate of ten 
 thousand dollars for the family at death. That result 
 comes from regular deposits which are compounded every 
 three months at 4 per cent, interest. 
 
 By saving three dollars a week, according to the same 
 plan, these results are obtained. In 
 
 10 years you will have $1,904.44 
 
 20 years you will have 4,795.30 
 
 30 years you will have 8,976.48 
 
 40 years you will have 15,123.52 
 
 If, therefore, you begin at the age of twenty to save three 
 dollars a week and entrust it to a bank that pays 4 per cent, 
 and compounds the interest on your deposits quarterly, by 
 the time you are sixty, you will have a capital of over 
 $15,000 and a yearly income (supposing you still receive 
 4 per cent, on your money) of over $600, or $12 a week. 
 
 It pays to save regularly, systematically and persistently. 
 
330 CENTURY OF AMERICAN SAVINGS BANKS 
 
 A PRACTICAL SUGGESTION 
 
 "The most practical suggestion I can make on the sub- 
 ject of Teaching Thrift, paradoxical as it may seem, is to 
 have the prospective saver incur a debt," says a well-known 
 financier. 
 
 "Among our own employees, the obligation to pay a 
 stated amount on the first of each month is promptly met. 
 It is most important to have compulsory regulation in sav- 
 ing. To illustrate my suggestion concretely and briefly: 
 
 "Let the employer make it possible for the employee to 
 purchase, say, a share of stock in their company, employee 
 giving his note in payment for same, with the obligation 
 to pay a stated amount on same each month. 
 
 "If the employee is of the right caliber, not only is his 
 loyalty and co-operation developed, but by the time his 
 debt is paid, he sees the benefits of systematic saving, and 
 the habit is deeply and firmly rooted in fertile soil. 
 
 "This plan may be used in all branches of commercial 
 and industrial establishments, with certain modifications, 
 and I believe will accomplish more than all the nebulous 
 theories ever set forth." 
 
 THE CASH-CARRYING HABIT 
 
 "The cash-carrying habit is wasteful and leads to many 
 useless expenditures which prove a constant drain on your 
 finances," says Where Money Goes. "You don't mean to 
 be extravagant, but your money just vanishes in a way that 
 you are unable to account for. If you pay bills by check, 
 the stub or canceled check will show just where your money 
 has gone. It will enable you to stop many little wasteful 
 leaks and to proceed along lines of better economy. The 
 man who has an account in the bank and pays bills by 
 check naturally grows into habits of thrift. He cultivates 
 temperance in his indulgences. He learns to look with 
 pride upon the increase of his 'balance.' Everybody re- 
 gards him as a citizen of more worth and importance in 
 the community." 
 
THE SPENDTHRIFT NATION 331 
 
 BIRTHDAY FUNDS 
 
 An excellent way to provide a son or daughter with an 
 inheritance, when they arrive at majority, is to place to 
 their credit, on each birthday, one dollar for each of the 
 years they have lived. This, without interest, will amount 
 in twenty-one years, to $231. Let the amounts be placed 
 at interest, and compounded semi-annually, and we have 
 over $300, not an insignificant amount with which to start 
 in many kinds of business. What child, knowing that this 
 bank account is growing for him, will not make systematic 
 efforts to add to it from his own savings, thus swelling the 
 aggregate to a sum which would enable any young man or 
 woman to start out in a business career well equipped for 
 success ? 
 
 In addition to this, the early training in habits of thrift 
 and self-denial thus obtained will be worth many times 
 the amoimt of the original account. Accumulation will 
 have become a fixed habit, and the young person's future 
 assured. 
 
 SOME TRUE STORIES FROM REAL LIFE 
 
 For six months there hung in the depositors' room of the 
 Universal Savings Bank, New York, the picture of a girl 
 baby, three weeks old, with its name and bank record: 
 
 Youngest Savings Bank Depositor; Bom March 15, 3 A. m. Ac- 
 count opened same day, 1 1 a. m. Age at time of deposit, eight hours. 
 
 The baby's father deposited $1 weekly, and if he keeps 
 this up for seventeen and a half years, the account, with 
 interest, will amount to over $1,300, sufficient for a uni- 
 versity education or a handsome dowry. 
 
 Moral : It is never too early to become a saver. 
 
 The same bank mentions the fact that a certain newsboy 
 who had been seen in front of the Singer Building (where 
 the bank is located), for several years, is not there any 
 longer. He has been going to night school and selling pa- 
 
332 CENTURY OF AMERICAN SAVINGS BANKS 
 
 pers in the daytime. He has saved several hundred dol- 
 lars. Later, he is to attend law school and go to work in 
 a law office. Says the bank official: "He comes into the 
 bank regularly for his expense money, and we still call 
 him Jake — some day it may be Judge." 
 
 This newsboy started an account with one dollar. 
 
 A building superintendent in New York City has de- 
 posited five dollars a week in the Universal Savings Bank 
 since the institution first opened its doors, nine years ago, 
 with comparatively few lapses. He now has between 
 $1,500 and $2,000 in bank and has bought a house in 
 Brooklyn, the bank taking a mortgage of $5,000 upon it. 
 He is bringing up a family of four, three of whom are girls, 
 two now attending High School. These two girls will be- 
 come self-supporting in another year, and in a few years 
 more the father will have a clear title to a fine home. 
 Thrift is blessing. 
 
 The same bank mentions the case of a youth who started 
 an account with his birthday present of $10 and then his 
 Christmas present of $25 from his firm. He became very 
 enthusiastic and used to put nearly all his salary in the 
 bank every Saturday night, with the result that every two 
 or three days he was compelled to withdraw some. In 
 three months the account was closed. 
 
 Another, an elevator boy, opened an account with one 
 dollar and kept putting in a dollar every week with regu- 
 larity that never failed. At last accounts, he had kept 
 this up for 138 weeks and had drawn nothing out. 
 
 Which was the more sensible boy? 
 
 It is getting the habit and keeping up the system that 
 wins. 
 
 In October, 1915, a depositor who had drawn down a 
 good account to a credit balance of three dollars, handed 
 in a four-dollar deposit with the remark: 
 
 Now, I've got to begin all over again. I lost what I had in this 
 bank speculating in war stocks, besides $3,000 I had in another bank. 
 
THE SPENDTHRIFT NATION 333 
 
 I lost it all in a rising market by overbuying, and was unable to 
 cover reactions. Never again! The Savings Banks for me here- 
 after. 
 
 There is always one sure thing in gambling — ^you lose. 
 
 An electrician deposited six dollars in the bank with the 
 remark: "That makes an even three hundred. If I 
 hadn't seen your signs in the window and had not come 
 in and obtained this little booklet, I wouldn't have a cent 
 to-day. I save six dollars a week and I don't even feel the 
 deprivation. I could have been saving for years. I've 
 got to thank this bank for what it has done for me." 
 
 And the bank's services cost nothing. 
 
CHAPTER XXIV 
 
 ORGANIZATION OF THE SAVINGS BANKS ASSOCIATION 
 OF THE STATE OF NEW YORK 
 
 Great and Lasting Benefits Derived — ^Nearly Every Bank in the State 
 Included — The Early Meetings and Those Who Attended Them 
 — Concerted Action in the Matter of Proposed Legislation One 
 of the Objects Aimed At — The First Officers Chosen — Group 
 System Adopted with Good Results — Banking Law Revision — 
 Central Banking Council Formed in 1916. 
 
 Few associations in the State have been productive of 
 greater good than that of its Savings Banks. "In union 
 there is strength," is axiomatic, but in rare cases does this 
 apply with greater force than where banking and financial 
 institutions are concerned. That indefinable thing we call 
 public confidence is so easily impaired or shattered that 
 long ago it was recognized as absolutely necessary for banks 
 to stand together in times of stress or else, when one suc- 
 cumbs, the rest are likely to go toppling over like a house 
 of cards. It seems somewhat strange that in these days of 
 organization, the officers of the Savings Banks of the State 
 did not sooner perceive the necessity of banding together 
 to promote their mutual interests, and hence those of their 
 depositors. The need had been felt for a nimiber of years 
 by some of the wisest Savings Bank men of the State, but 
 it was not until 1892 that steps were taken to bring about 
 actual results. 
 
 In the month of May, in that year, a convention of Sav- 
 ings Banks officers of New York, believed to be the first 
 on any scale representative of all parts of the State, was 
 held in the Chamber of Commerce building. New York 
 City, primarily for the purpose of securing concerted action 
 in the matter of increasing the scope of investments for 
 Savings Banks. 
 
 334 
 
ORGANIZATION OF SAVINGS BANKS 335 
 
 This meeting was called to order by Mr. Alexander E. 
 Orr, and Mr. James McMahon, president of the Emigrant 
 Industrial Savings Bank, New York City, was chosen to 
 preside. Mr. Andrew Mills, president of the Dry Dock 
 Savings Bank, New York, acted as secretary. 
 
 COGENT REASONS FOR ASSOCIATING 
 
 President McMahon, in his opening address, voiced the 
 sentiments of those present when he said nothing could be 
 lost and very much was likely to be gained through com- 
 ing into personal contact with, and knowing each other. 
 ■He added: 
 
 Our interests are identical, and having no other ends to serve than 
 to do our duty faithfully to the public at large, we are in a position 
 to discuss the various questions coming before us calmly, soberly, and 
 in a spirit of absolute fair-dealing as between ourselves as officers, 
 the depositors v?e represent, the Banking Department at Albany, and 
 the Legislature of the State, which properly controls and governs the 
 management of the institutions we serve. 
 
 The subject of investments had long troubled some 
 of the wisest and most experienced Savings Bank men 
 throughout the country, but in order to accomplish any 
 results with the Legislature, in whose hands rested the deci- 
 sion of this vital matter, it was generally recognized that 
 there must be concerted action. When a committee of Sav- 
 ings Bank men appeared before a legislative committee 
 making any requests, the exceedingly practical law-makers 
 were likely to inquire whom they represented and by what 
 authority they came, and it was seen that if they spoke for 
 an organization representing the great majority of the Sav- 
 ings Banks of the State, their requests would be much more 
 likely to receive careful consideration than if they ema- 
 nated from some particular locality, even though that lo- 
 cality were the great City of New York. A few individual 
 though powerful bankers from the metropolis could hardly 
 be said to represent the sentiment of the entire State. 
 
 Another consideration in favor of organizing the Savings 
 Banks of the State was the advantage of at least annual 
 
336 CENTURY OF AMERICAN SAVINGS BANKS 
 
 meetings at which valuable as well as pleasant friendships 
 could be formed and ideas exchanged as to various features 
 of their important duties to the public and to themselves. 
 Indeed, there seemed every reason for organization and none 
 against. 
 
 At the meeting referred to, on May 26, 1892, fifty-one 
 banks were represented by one or more officers of the re- 
 spective institutions, and letters were received from twenty- 
 three others, approving of the meeting and endorsing its 
 objects. Thus the conference was fairly representative. 
 Its success was so marked that the additional steps toward 
 permanent organization for general purposes were not only 
 logical, but easily taken. 
 
 The year immediately preceding that of the organization 
 of the Savings Banks Association of the State of New 
 York was one of never-to-be-forgotten stress in financial 
 circles — ^the panic year of 1893. The disturbed condition 
 of the finances of the country, the many bank and business 
 failures, the "endless chain" of redemption in gold of cur- 
 rency notes, of which there were five hundred million out- 
 standing (with no provision for cancellation when once 
 redeemed), the compulsory purchase by the Government 
 of four and a half million ounces of silver per month, the 
 dangerous depletion of the gold reserve, the widespread in- 
 dustrial depression, and the hoarding of money, especially 
 of gold — all these factors combined to make this period 
 one of the most disastrous in the country's history. 
 
 ENLARGED SCOPE OF INVESTMENTS NECESSARY 
 
 Much was done by means of the preliminary organiza- 
 tion of the Savings Banks of the State to avert a crisis far 
 more disastrous than that which actually occurred. The 
 knotty problem of investments was taken up with zeal, and 
 a committee appointed to prepare an amendment to the 
 existing law permitting Savings Banks to invest in the 
 bonds of seven specified cities of this State. It was only 
 after six years of unremitting effort that a partial measure 
 of relief for the Savings Banks of the State was obtained 
 
ORGANIZATION OF SAVINGS BANKS 337 
 
 in the passage of the so-called Bloodgood bill. Savings 
 Bank depositors in the State already numbered 1,600,000, 
 with deposits of over six hundred millions of dollars. The 
 rapid increase in the volume of deposits, being more than 
 $40,000,000 in the year 1893, rendered the enlargement 
 of the scope of investments absolutely necessary if the then 
 existing rates of interest to depositors were to be continued. 
 The amount of municipal securities held by the Savings 
 Banks of the State on the first of January, 1893, exceeded 
 $152,000,000. 
 
 In addition to the work of the committee in the direction 
 referred to, they gave careful attention to such other bills 
 affecting Savings Banks as were introduced in the Legisla- 
 ture from time to time. Among these was one providing 
 for the taxation of all deposits in excess of $500; another 
 levying a tax of one-half of one per cent, upon all loans 
 upon real estate secured by mortgage, and still another re- 
 quiring the banks to furnish the State Banking Department 
 with all the details in their possession relating to so-called 
 "dormant accounts," and the immediate payment of all 
 such accounts into the treasury of the State. These are 
 fair samples of the baneful class of bills that were con- 
 stantly coming up in the Legislature. Some, no doubt, 
 were honestly introduced and promoted; many others were 
 highly questionable of motive. The committee pointed out 
 the fact that constant vigilance would be required to pre- 
 vent the passage of such laws, which would only result 
 in imposing still greater burdens upon the debtor class and 
 lead to serious injury of the interests of Savings Bank 
 depositors. 
 
 At a meeting of officers of Savings Banks of the State 
 held on June 15, 1894, Mr. James McMahon again pre- 
 siding, a report was received from the executive committee 
 favoring the formation of an association, and if considered 
 advisable, the incorporation of the same. (The associa- 
 tion never was incorporated.) This committee consisted of 
 John Harsen Rhoades, chairman; William C. Sturges, 
 James McMahon, A. C. Miller, J. Howard King, and 
 
338 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Andrew Mills; William G. Conklin, secretary to the com- 
 mittee. 
 
 Full discussion of the proposition resulted in a unani- 
 mous agreement that an organization representing every 
 Savings Bank in the State would be powerful for good, and 
 a plan was therefore recommended somewhat similar to 
 that of the American Bankers Association, a highly suc- 
 cessful organization of nation-wide influence. A proposed 
 constitution was submitted at this meeting, of which copies 
 had previously been sent out to every Savings Bank in the 
 State, and after full discussion the same was adopted, with- 
 out objection. 
 
 THE FIRST OFFICERS CHOSEN 
 
 At this first convention, the nominating committee, con- 
 sisting of Messrs. J. Howard King, president Albany 
 Savings Bank; Samuel R. Rainey, secretary-treasurer Hud- 
 son City Savings Institution; and Constant A. Andrews, 
 president United States Savings Bank, New York City, 
 reported in favor of the following officers, who were unani- 
 mously chosen: 
 
 John Harsen Rhoades, president; President, Greenwich Savings 
 Bank, New York. 
 
 James McMahon, vice-president; President, Emigrant Industrial 
 Savings Bank (also recommended for Chairman of the Executive 
 Committee) . 
 
 William G. Conklin, secretary; Secretary, Franklin Savings Bank, 
 New York. 
 
 Andrew Mills, treasurer; Trustee, Dry Dock Savings Bank, New 
 York. 
 
 Executive Committee: William C. Sturges (Chairman), Presi- 
 dent, Seamen's Savings Bank, New York; A. C. Miller, Treasurer, 
 Utica Savings Bank; Samuel R. Rainey, Secretary and Treasurer, 
 Hudson City Savings Institution; J. Howard King, President, 
 Albany Savings Bank; Ed. S. Dawson, President, Onondaga Savings 
 Bank, Syracuse. 
 
 Members ex officio: John Harsen Rhoades, James McMahon, 
 Andrew Mills, William G. Conklin. 
 
 Thirty-nine Savings Banks were represented at this 
 initial meeting; at the second annual convention the num- 
 
ORGANIZATION OF SAVINGS BANKS 339 
 
 ber had increased to fifty-two. There were eighty-eight 
 banks co-operating in the temporary organization, all but 
 three of which subsequently joined the permanent organ- 
 ization, which, with thirteen additional ones, made the total 
 membership ninety-eight. On the first of July, 1916, there 
 were 141 Savings Banks doing business in the State, all of 
 the Mutual or Trustee type, of which 134 are members of 
 the Savings Banks Association of the State of New York. 
 
 One of the most important functions of the association 
 ever since its organization has been the vigilant watching 
 of proposed legislation affecting Savings Banks and their 
 depositors, through the legislative committee, whose efforts 
 have been constant and unremitting. 
 
 GROUP SYSTEM INAUGURATED 
 
 At the eighteenth annual convention, a committee was 
 appointed, consisting of Mr. Andrew Mills, Mr. Charles A. 
 Miller and Mr. Frederic B. Stevens, to revise the by-laws 
 of the association, more particularly so as to embody the 
 so-called group system. This was in recognition of the 
 feeling in some quarters that the association was perhaps 
 too much of a close corporation, especially as to the com- 
 position of the executive committee, and that an opportunity 
 was not afforded the up-State members, especially, to par- 
 ticipate in the discussions and to assist in arriving at con- 
 clusions regarding Savings Bank management. 
 
 The proposed amendment called for five groups, as fol- 
 lows: 
 
 Group 1. 16 counties, 12 banks, and deposits $161,000,000 
 
 Group 2. 15 " 20 " " " 109,000,000 
 
 Group 3. 23 " 34 " " " 178,000,000 
 
 Group 4. 2 " 42 " " " 878,000,000 
 
 Group 5. 5 " 32 " " " 291,000,000 
 
 At the nineteenth convention the report of this commit- 
 tee was received, and after a spirited debate it was adopted 
 by a decisive majority. It seems to be the well-nigh uni- 
 versal opinion of the members that the plan has worked 
 well, and that by reason of its adoption the organization 
 has taken on a new lease of life and usefulness. 
 
340 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Each year, the respective groups elect their officers, to 
 serve for the period of one year. For the year 1915-16 
 they were as follows: 
 
 Group No. 1 
 
 Elected October 20, 1916. to serve one year. 
 
 Chairman — Cassius C. Davy, Attorney East Side Savings Bank, 
 Rochester. 
 
 Secretary — Franklin W. H. Becker, Secretary and Treasurer West- 
 em Savings Bank, Buffalo. 
 
 Treasurer — ^H. S. Hanford. Treasurer Rochester Savings Bank, 
 Rochester. 
 
 Executive Committee 
 
 John P. Dolan, Treasurer Niagara County Savings Bank, Niagara 
 Falls. 
 
 George D. Whedon, Secretary and Treasurer Geneva Savings 
 Bank, Geneva. 
 
 Wilmot Castle, Secretary and Treasurer Mechanics Savings Bank, 
 Hochester. 
 
 John M. Satterfield, Member Ex-officio. 
 
 Group No. 2 
 
 Elected June, 1916, to serve one year. 
 
 Chairman — Isaac L. Hunt, President Watertown Savings Bank, 
 W^tertown. 
 
 Secretary — ^W. B. Couch, Treasurer Oswego County Savings Bank, 
 Oswego. 
 
 Treasurer — ^William H. Meaker, Treasurer Cayuga County Savings 
 Bank, Auburn. 
 
 Executive Committee 
 
 Samuel H. Beach, President Rome Savings Bank, Rome, also 
 Ex-officio. 
 
 William S. Downer, Treasurer Auburn Savings Bank, Auburn. 
 
 Asbury C. Deyo, Treasurer Binghamton Savings Bank, Bingham- 
 ton. 
 
 Group No. 3 
 
 Elected July 13, 1916, to serve one year. 
 
 Chairman — S. Mitchell Rainey, Treasurer Hudson City Savings 
 Institution, Hudson. 
 
 Secretary — John B. Alliger, Treasurer Ulster County Savings In- 
 stitution, Kingston. 
 
 Treasurer — Charles E. French, Treasurer Amsterdam Savings 
 Bank. Amsterdam. 
 
ORGANIZATION OF SAVINGS BANKS 341 
 
 Executive Committee 
 
 Allen W. Johnston, Treasurer Schenectady Savings Bank, Schenec- 
 tady. 
 
 Marcus T. Hun, President Albany Savings Bank, Albany. 
 Charles E. Hanaman, President Troy Savings Bank, Troy (de- 
 ceased). 
 
 Martin T. Nachtmann, Member Ex-officio. 
 
 Group No. 4 
 
 Elected July 13, 1916, to serve one year. 
 
 Chairman— George E. Edwards, President Dollar Savings Bank, 
 New York City. 
 
 Secretary— William H. Rockwood, President Union Square Sav- 
 ings Bank, New York City. 
 
 Treasurer— Edward E. Young, Treasurer Peekskill Savings Bank. 
 Peekskill. 
 
 ExEcuxEVE Committee 
 
 John J. Pulleyn, President Emigrant Industrial Savings Bank, 
 New York City. 
 
 James Quinlan, President Greenwich Savings Bank, New York 
 City. 
 
 William J. Roome, President Excelsior Savings Bank, New York 
 City. 
 
 Henry A. Schenck, Member Ex-officio. 
 
 Group No. 5 
 
 Elected October, 1916, to serve one year. 
 
 Chairman — Eugene F. Barnes, President East Brooklyn Savings 
 Bank, Brooklyn. 
 
 Secretary — Henry Stumpf, Cashier German Savings Bank, 
 Brookl3Ti. 
 
 Treasurer — George W. Felter, Secretary Green Point Savings 
 Bank, Brooklyn. 
 
 Executive Committee 
 
 Charles M. Blydenburgh, President Riverhead Savings Bank,, 
 Riverhead. 
 
 Jarvis S. Hicks, Secretary Long Island City Savings Bank, Long; 
 Island City. 
 
 Victor A. Lersner, Comptroller Williamsburgh Savings Bank^ 
 Brooklyn. 
 
 Hollis H. Searles, Member Ex-officio. 
 
 Walter S. Rose, Member Ex-officio. 
 
 In the twenty-two years of its existence, the Savings 
 Banks Association of the State of New York has been 
 
342 CENTURY OF AMERICAN SAVINGS BANKS 
 
 privileged to hear from some of the most eminent men of 
 the country in the fields of banking, economics and finance, 
 such as Prof. William G. Sumner, of Yale; former Comp- 
 troller of the Currency, William L. Trenholm; Hon. Hor- 
 ace White, of Syracuse; Hon. Wheeler H. Peckham and 
 Hon. Stewart L. Woodford, of New York; Hon. Carroll 
 D. Wright and Col. William Carey Sanger, of Washing- 
 ton; Col. Thomas Wentworth Higginson and Hon. Edward 
 Atkinson, of Boston; former Secretary of the Treasury 
 Charles S. Fairchild; Judge M. L. Crawford, of Dallas, 
 Texas; Hon. E. J. Hill, of Connecticut; Prof. Woolsey 
 M. Stryker, of Hamilton College; Frank A. Vanderlip, 
 Pierre jay, William Frederick Dix, and many others. 
 
 In its printed proceedings will be found many valuable 
 contributions to the Savings Bank literature of the coun- 
 try and to the great economic problems that have con- 
 fronted and still confront the statesmen, financiers and econ- 
 omists of the land. 
 
 Without the slightest disparagement of the efforts and 
 services of others identified with the Savings Banks Asso- 
 ciation of the State of New York, it can be said with truth 
 that its father was John Harsen Rhoades, Sr. 
 
 When, after several years of occasional meetings of Sav- 
 ings Banks officers, for the purpose of discussing such mat- 
 1:ers of interest as might be brought before them, it became 
 ■evident that a much closer, more comprehensive and more 
 formal organization was needed, as with one accord these 
 pioneers turned to Mr. Rhoades and chose him as their 
 president, in the year 1894. For five successive years he 
 was re-elected, serving with great acceptability, and it was 
 much to the regret of every member of the association that 
 he refused, on account of failing health, to longer act in that 
 capacity. Much was accomplished during Mr. Rhoades's 
 incumbency; he was unfailing in his loyalty to the associa- 
 tion and untiring in his efforts in its behalf and in behalf 
 of the great army of depositors whom it served. 
 
 To use the appropriate language of the committee, con- 
 sisting of Messrs, Mills and Felsinger, appointed to prepare 
 
ORGANIZATION OF SAVINGS BANKS 343 
 
 a minute in reference to the death of Mr. Rhoades: "As 
 the Savings Banks increased in resources, it became evi- 
 dent that the scope of investment as provided in the law of 
 1875 must be changed to meet the new conditions. For 
 years efforts had been made to bring this about, but without 
 success, until the bank officers were ready to abandon the 
 idea in despair. Mr. Rhoades never faltered, and each 
 failure only served to spur Mm to renewed effort, until 
 finally the bill admitting the bonds of certain cities in other 
 States than New York was passed, and a measure of relief 
 to the banks afforded. Many other amendments to the 
 Savings Bank Law were secured by the association during 
 Mr. Rhoades's active connection with it, due in no small 
 measure to his personal effort. Mr. Rhoades was a broad- 
 minded man, of excellent judgment, strong in the defense 
 of what he deemed right, and fearless in his denunciation 
 of wrong. The Savings Banks Association is indebted to 
 Mr. Rhoades for much, and places upon its records this 
 minute in grateful recognition of his service and in loving 
 remembrance of the man." 
 
 OFFICERS SINCE ORGANIZATION 
 
 Presidents: James McMahon, 1893; John Harsen Rhoades, 
 1894-1899; Andrew Mills, 1900-1901; Charles A. Schieren, 1902- 
 1903; Wm. B. Van Rennsselaer. 1904-1907; Charles A. Miller, 
 1908; Thomas M. Mulry, 1909; Charles E. Hanaman, 1910-1911; 
 Harold P. Brewster, 1912; Edwin P. Maynard, 1913 (resigned); 
 William Felsinger, 1913; James H. Manning, 1914-S; Henry A. 
 Schenck, 1916. 
 
 First Vice-Presidents: James McMahon, 1893-1905; Edward S. 
 Dawson, 1906; Walter Trimble, 1907-1912; William Felsinger, 
 1913; Henry A. Schenck, 1914-5; John M. Satterfield, 1916. 
 
 Second Vice-Presidents: Edward S. Dawson, 1900-1905; Charles 
 E. Hanaman, 1906-1909; William Felsinger, 1910-1912; Robert 
 S. Donaldson, 1913; John M. Satterdeld, 1914-15; Samuel H. 
 Beach, 1916. 
 
 Third Vice-Presidents: Charles E. Hanaman, 1900-1905; 
 Thomas M. Mulry, 1906-1908; William Felsinger, 1909; Robert S. 
 Donaldson, 1910-1912; Clinton T. Rose, 1913; Samuel H. Beach, 
 1914-15; Martin T. Nachtman, 1916. 
 
 Secretaries: William G. Conklin, 1893-1907; William F. Pat- 
 
344 CENTURY OF AMERICAN SAVINGS BANKS 
 
 terson, 1908; Jonathan B. Currey, 1909; Frederic B. Stevens, 1910- 
 1913; HoUis H. Searles, 1914-16. 
 
 Treasurers: Andrew Mills, 1894-1899; Jonathan B. Currey, 
 1900-1901; Samuel D. Styles, 1902-1909; Samuel D. Styles, and 
 Frank M. Hurlbut, 1910; Frank M. Hurlbut, 1911; William H. 
 Rockwood, 1912-1913; Walter S. Rose, 1914-16. 
 
 Counsel: Charles Addison Miller, 1908-1916. 
 
 BANKING LAW REVISION 
 
 The review of the labor and achievements of a century 
 would be incomplete without reference to the revision of 
 the Banking Laws of the State of New York, which was 
 accomplished in the year 1914. The Commission, which 
 was appointed by Supt. George C. Van Tuyl, Jr., pursuant 
 to the provisions of Chapter 705 of the Laws of 1913, as 
 amended by Chapter 3, Laws of 1914, made its report to 
 the Legislature on February 26, 1914. The Commission 
 was constituted as follows: 
 
 A. Barton Hepburn, president Chase National Bank, 
 New York, chairman ; Frank M. Patterson, attorney. New 
 York, vice-chairman; Charles L. Bernheim, merchant. New 
 York City; Louis Goldstein, assistant district attorney, 
 Kings County, Brooklyn; John H. Gregory, vice-president 
 Central Bank, Rochester; Frank E. Howe, president Man- 
 ufacturers' National Bank, Troy; Joseph French Johnson, 
 a member of the faculty of New York University; Herbert 
 H. Lehman, private banker. New York City; Randall J. 
 LeBoeuf, former Judge of the Supreme Court, Albany; 
 Elliott C. McDougall, president Bank of Buffalo; Edwin 
 P. Maynard, president Brooklyn Trust Company; Jeremiah 
 T. Mahoney, judge. New York City; Charles A. Miller, 
 president Savings Bank of Utica; John J. PuUeyn, comp- 
 troller Emigrant Industrial Savings Bank, New York City; 
 John Harsen Rhoades, trustee Greenwich Savings Bank, 
 New York City; Leopold Stern, merchant. New York City. 
 
 The secretary of the Commission was Edwin F. Rore- 
 beck, and the counsel were John DeWitt Warner and George 
 W. Morgan, both of New York City, and George I. Skin- 
 ner, the latter, since March 1, 1897, First Deputy Superin- 
 
ORGANIZATION OF SAVINGS BANKS 345 
 
 tendent of Banks, being able to serve the Commission 
 through a leave of absence granted him for that purpose 
 by the Superintendent of Banks. 
 
 The Commission granted hearings to the various inter- 
 ests affected, and in order to give the widest possible pub- 
 licity to the proposed changes in the law, and to invite help- 
 ful criticism, redrafts of the different articles of the pro- 
 posed new Banking Law were submitted from time to time 
 to the representatives of these interests. The law, which 
 is known as the Consolidated Banking Law, is expressed 
 in clear, concise language and is drawn with the greatest 
 care, terms being defined whenever definition was deemed 
 necessary to a complete understanding of its provisions. 
 
 The Legislature at once passed, and the Governor signed 
 the new revision, which became Chapter 2, of the Consoli- 
 dated Laws. Each article is intended to be complete in 
 itself. In many respects this new law is regarded as a 
 model of its kind. 
 
 SYNOPSIS or NEW york's banking law 
 
 A synopsis of the law so far as it relates to Savings 
 Banks (Article VI), is appended: 
 
 No Savings Bank may be organized in this State without the writ- 
 ten consent of the Superintendent of the Banking Department, and 
 he must be satisfied of its necessity and that there is a reasonable 
 prospect of its adequate support; also that the contributions to the 
 initial guarantee and expense funds have been paid in cash. The 
 Superintendent is required to endorse the preliminary certificate, 
 within sixty days of its filing, either with his approval or disapproval. 
 When authorized, not less than nine nor more than thirty persons 
 may form a corporation to be known as a Savings Bank; complete 
 statistics and facts must be furnished to the Department. Such 
 persons must be citizens of the United States, at least four-fifths of 
 them must be residents of this State, and at least two-thirds of them 
 must be residents of the county wherein the business of the bank 
 is to be conducted. Notice of intention to organize must be filed 
 in the office of the Superintendent within sixty days after its execu- 
 tion, and must be published as designated by the Superintendent 
 and a copy served upon each Savings Bank organized and doing 
 business in the village, borough or city wherein it is proposed to be 
 located. The proposed incorporators are also required to form an 
 
346 CENTURY OF AMERICAN SAVINGS BANKS 
 
 initial guarantee fund, and an expense fund, both of $5,000 in 
 amount, and are required in addition to agree to make such further 
 and additional payments to these funds as may be deemed necessary 
 by the Superintendent. These funds may be returned after the 
 organization of the bank when certain conditions have been com- 
 plied with. 
 
 The investment of deposits and guarantee fund is strictly guarded. 
 It can only be in the stocks or bonds or interest-bearing obligations 
 of the United States or those for which the faith of the United States 
 is pledged to provide for the pa)Tnent of the interest and principal, 
 including the bonds of the District of Columbia; in the stocks or 
 bonds or interest-bearing obligations of the State of New York, 
 issued pursuant to any law of the State; in the stocks, bonds or inter- 
 est-bearing obligations of any State of the United States under cer- 
 tain restrictions as to past defaults; in the stocks or bonds of cities, 
 towns, counties, villages, school districts or poor districts of this 
 State, that were issued pursuant to law and that the faith and credit 
 of the municipality or district that issued them are pledged for their 
 support; in the stocks or bonds of incorporated cities in the United 
 States, under certain restrictions; in bonds and mortgages on unin- 
 cumbered real property situated in this State, to the extent of 60 
 per cent, of the appraised value thereof, but not more than 65 per 
 cent, of the whole amount of deposits and guarantee fund shall be 
 so loaned or invested; in the bonds of railroad corporations under 
 certain restrictions. (These are fully explained in the chapter on the 
 history and development of the law relating to investments in rail- 
 road bonds.) Not more than 25 per cent, of the assets of any 
 Savings Bank are permitted to be loaned or invested in railroad bonds. 
 Street railroad corporations are not considered railroad corporations 
 within the meaning of this section. 
 
 Investments may also be made in promissory notes payable to the 
 order of the Savings Bank on demand, secured by the pledge and 
 assignment, if necessary, of the stocks or bonds or any of them 
 enumerated in the railroad subdivision, but no such loan shall exceed 
 90 per cent, of the cash market value of such securities so pledged. 
 Investment is also permitted in real estate under certain restrictions, 
 one of which is that the cost of plot and building or buildings for 
 -the transaction of the business of the bank shall in no case exceed 
 25 per cent, of the guarantee fund of such bank, except with the 
 approval of the Superintendent of Banks. Every parcel of real estate 
 ovmed and not occupied by the Savings Bank as an office shall be 
 sold within five years from the date on which it was acquired. 
 
 No Savings Bank is permitted to borrow money or pledge or 
 hypothecate any of its securities except with the written approval of 
 the Superintendent of Banks and in pursuance of a resolution adopted 
 by vote of a majority of its board of trustees, duly entered upon the 
 
ORGANIZATION OF SAVINGS BANKS 347 
 
 minutes by ayes and nays. No stocks or bonds shall be entered 
 upon the bank's books at more than the actual cost thereof or shall 
 be carried for more than a year at a valuation exceeding their present 
 cost as determined by amortization. All real estate must be carried 
 on the bank's books at figures representing actual cost. Each Savings 
 Bank is required to conform its methods of keeping books and records 
 to the orders of the Superintendent. 
 
 Individual deposits are limited to $3,000 (exclusive of dividends), 
 and those of societies or corporations to $5,000. Any Savings Bank 
 is also permitted to further limit the aggregate amount which an 
 individual, society or corporation may deposit, to such sum as it 
 may deem expedient to receive, and may, in its discretion, refuse to 
 receive a deposit or at any time return all or any part of any deposit. 
 
 It is required that all sums deposited shall be repaid on demand, 
 with the proviso that the bank may, at any time, by resolution of its 
 board of trustees require a notice of sixty days before repaying 
 deposits. Such deposits, if not withdrawn within fifteen days after 
 the expiration of the sixty days' notice, shall not then be due or 
 payable under such notice or by reason thereof. 
 
 Banks are permitted to keep on hand or on deposit in other banks 
 an available fund not exceeding 20 per cent, of the aggregate amount 
 credited to its depositors, and are also required to have a guarantee 
 fund, for the security of depositors and to meet any contingency or 
 loss in business from depreciation of securities or otherwise. 
 
 Elaborate provision is made for the calculation of earnings for 
 dividend periods and for deductions from net earnings for the guar- 
 antee fund. The rate of interest cannot exceed 5 per cent, per 
 annum. For all dividends declared and credited in excess of profits 
 earned, the trustees voting for such dividend shall be jointly and 
 severally liable. 
 
 The trustees of any Savings Bank whose undivided profits and 
 guaranty fund amount to more than 25 per cent, of the amount due 
 depositors, are required, at least once in three years to divide equitably 
 the accumulation beyond such 25 per cent, as an extra dividend to 
 depositors. 
 
 No bank is permitted to change its place of business without the 
 written consent of the Superintendent of the Banking Department. 
 
 Each board of trustees shall consist of not less than nine nor 
 more than thirty members. A person shall not be a trustee of a 
 Savings Bank if he (a) is not a resident of the State of 'New York 
 (provided, however, that one-fifth of the trustees of any Savings Bank 
 in the city of New York may be residents of a State which adjoins 
 said city; (b) has been adjudged a bankrupt or has taken the benefit 
 of any insolvency law, or has made a general assignment for the 
 benefit of his creditors; (c) has suffered a judgment recovered against 
 him for a sum of money to remain unsatisfied of record or unsecured 
 
348 CENTURY OF AMERICAN SAVINGS BANKS 
 
 on appeal for a period of more than three months; (d) is a trustee, 
 officer, clerk or other employee of any other Savings Bank. 
 
 Provision is made for regular meetings of the board of trustees 
 at least once a month, and for written reports to each trustee at each 
 regular meeting, or to an executive committee of not less than five 
 members of the board, of the purchases and sales of all securities and 
 of every loan made since the last meeting of the board, with descrip- 
 tion of collateral. 
 
 Except as to those trustees acting as officers of a bank, or perform- 
 ing special duties under certain subdivisions of the Banking Law, 
 no trustee is permitted to receive, directly or indirectly, any pay or 
 emolument for his attendance at meetings of the board, or for any 
 other service as trustee, except as in the act provided. (An attorney 
 for a Savings Bank, although he may be a trustee, is permitted to 
 receive a reasonable compensation for his professional services.) 
 
 The restrictions upon officers and trustees are severe and rigid. 
 They are prohibited from borrowing any fimds or deposits of the 
 bank, either directly or indirectly, or from becoming the owner of 
 real property upon which the Savings Bank holds a mortgage; they 
 shall not become a member of the board of directors of a bank, trust 
 company or national banking association of which board enough 
 other trustees of the Savings Bank are members to constitute with him 
 a majority of the board of trustees. 
 
 Provision is made for the removal or forfeiture of office of trus- 
 tees whenever in the judgment of three-fourths of the trustees the 
 conduct and habits of such trustees are of such a character as to be 
 injurious to such Savings Bank; such action to be approved by the 
 Superintendent of Banks. 
 
 Provision is made for the pensioning of officers and employees 
 under certain restrictions, for example, after a service of thirty years, 
 or after a service of twenty years or more with physical or mental 
 incapacity, or one who shall have served twenty years or more and 
 shall have reached the age of sixty years. The maximum annual 
 amount paid to pensioners shall in no case exceed 60 per cent, of the 
 average annual salary of such pensioner. 
 
 Banks are required to make semi-annual reports to the Superin- 
 tendent, the contents of such reports being minutely specified in the 
 law. Severe penalty is imposed for failure to make such reports 
 promptly. 
 
 Annual reports, on or before the first day of September, are re- 
 quired on dormant accounts, and also their publication in the news- 
 paper in the place where the bank is located, as well as in a news- 
 paper in Albany in which notices by State officers are required by 
 law to be published. 
 
 Advertisements of unauthorized Savings Banks and the use of the 
 
ORGANIZATION OF SAVINGS BANKS 349 
 
 word "savings" except by regularly incorporated Savings Banks, are 
 prohibited under very severe penalties, the only exception being as to 
 school savings. 
 
 CENTRAL BANKING COUNCIL ORGANIZED 
 
 After several conferences attended by a number of prom- 
 inent representatives of the New York State Banking sys- 
 tem, an organization of a Central Council of nine members, 
 endorsed by the Superintendent of Banks, was perfected in 
 March, 1916. This is primarily in the interest of the pub- 
 lic and will mean much in the future concerning the intro- 
 duction of amendments to the banking law, or imposing 
 any legislation which may seem unwise. There are two 
 hundred banks of discount, one hundred forty-one sav- 
 ings banks, and eighty trust companies, a total of four 
 hundred twenty-one institutions, with aggregate resources 
 of nearly $5,000,000,000. The new organization, though 
 small, undoubtedly will be able to work effectively for the 
 best interests of all state banks. Its personnel is as fol- 
 lows: Discount Banks: Elliot C. MacDougal, president 
 Bank of Buffalo; Paul E. Bonner, president North Side 
 Bank, Brooklyn; John H. Gregory, president of the Central 
 Bank of Rochester. Savings Banks: James H. Man- 
 ning, president National Savings Bank, Albany; Charles 
 A. Miller, president Savings Bank of Utica; John J. Pul- 
 leyn, president Emigrant Savings Bank of New York. 
 Trust Companies: Arthur W. Loasby, president Trust 
 and Deposit Company of Onondaga, Syracuse; F. I. Kent, 
 vice-president Bankers Trust Company of New York; Mor- 
 timer Buckly, president New York Trust Company. 
 
 The officers of the Central Council are: Elliot C. Mac- 
 Dougal, chairman; James H. Manning, vice-chairman; 
 Arthur W. Loasby, secretary. 
 
CHAPTER XXV 
 
 THE SAVINGS BANK CENTENARY 
 
 Appropriately Celebrated in the City of New York, May 17, 1916— 
 More than Five hundred Present at Celebration, Convention 
 and Dinner — Guests from Other States, but None from Europe — 
 High School Prize Essay Contest — ^Many Messages of En- 
 couragement and Congratulation Received from Abroad — ^The 
 Addresses in Epitome. 
 
 The celebration by the Savings Banks Association of the 
 State of New York of the Centenary of Savings Banks in 
 America, was held at the Hotel Biltmore, New York City, 
 on Wednesday, May 17, 1916. There was a large and 
 distinguished attendance, including representatives of Mu- 
 tual Savings Banks from various States, more especially 
 New England and the East. 
 
 The event had been looked forward to by those connected 
 with the Savings Banks of the country, and particularly 
 of the State, with the keenest interest. 
 
 The matter had been broached as far back as the year 
 1911, by the introduction of a resolution in the Savings 
 Banks Association of the State of New York by Victor A. 
 Lersner, of the Williamsburgh Savings Bank, Brooklyn, 
 but no affirmative action was taken until the year 1915, 
 when the executive officers of the association decided to 
 celebrate the event in a manner befitting its national and 
 international importance. 
 
 As planned by the committee of arrangements, the cele- 
 bration proper was followed by a dinner in the evening 
 at the Biltmore, one of the most famous of the great hos- 
 telries of the metropolis. The splendid banquet hall, one 
 of the largest in the world, proved none too spacious to 
 accommodate the diners, who, with their guests, numbered 
 more than five hundred. 
 
 List of those present at the Centenary Celebration and 
 
 350 
 
THE SAVINGS BANK CENTENARY 351 
 
 banquet on May 17, and the convention on May 18, of the 
 Savings Banks Association of the State of New York: 
 
 Albany City Savings Institution, Albany— Wm. S. Hackett, Treas- 
 urer; Frank H. Williams, Asst. Treasurer. 
 
 Albany County Savings Bank, Albany— Henry H. Kohn, Secretary. 
 
 Albany Exchange Savings Bank, Albany— Martin T. Nachtmann, 
 President. 
 
 Albany Savings Bank, Albany— Marcus T. Hun, President; Thos. 
 I. Van Antwerp, Vice-President; Henry D. Rodgers, Treasurer; 
 Edward N. McKinney, Trustee. 
 
 American Savings Bank, Buffalo— John M. Satterfield, President; 
 Charles J. Fix, 1st Vice-President. 
 
 American Savings Bank, New York City— Wm. M. Campbell, Presi- 
 dent; Wm. M. Hazelton, Treasurer; John V. Irwin, Counsel. 
 
 Amsterdam Savings Bank, Amsterdam — Charles E. French, Treas- 
 urer; Cornelius Van Buren, Robert J. Lindsay, Trustees. 
 
 Auburn Savings Bank, Auburn — ^D. M. Dunning, President; Wm. S. 
 Downer, Treasurer; Hobart L. Romig, Trustee. 
 
 Bank for Savings, New York City — ^Lewis B. Gawtry, Secretary; 
 August Belmont, Trustee; Edward W. Ryan, guest. 
 
 Bank for Savings, Ossining — S. G. EUegood, Secretary; G. S. Hil- 
 liker. Trustee. 
 
 Bay Ridge Savings Bank, Brooklyn — Thomas J. Dowling, Cashier; 
 Peter N. Meinke, Trustee. 
 
 Binghamton Savings Bank, Binghamton — Charles W. Gennet, Presi- 
 dent; A. C. Deyo, Treasurer; E. W. Stone, Teller. 
 
 Bowery Savings Bank, New York City — Henry A. Schenck, Presi- 
 dent; Wm. E. Knox, Comptroller; Wm. A. Nash, Vice-Presi- 
 dent; Jos. G. Liddle, Secretary; Stephen Baker, G. H. Robin- 
 son, I. Wyman Drummond, W. Hull Wickham; Chas. H. 
 Tenney, Richard M. Hoe, H. Blanchard Dominick, Trustees; 
 Edw. W. Coggeshall, Samuel S. Dennis, Alex. S. Ward, Joseph 
 Byrne, Louis V. Bright, Wynant D. Vanderpoel, Walter H. 
 Bennett, T. Wilbur Spear, guests. 
 
 Bronx Savings Bank, New York City — ^Wm. B. Aitken, President; 
 T. Tasso Fischer, Comptroller; Wm. E. Stevens, Treasurer. 
 
 Brooklyn Savings Bank, Brooklyn — Crowell Hadden, President; 
 Laurus E. Sutton, Comptroller; Francis L. Noble, Trustee. 
 
 Buffalo Savings Bank, Buffalo— E. C. Townsend, President; F. X. 
 Wanenmacher, Treasurer. 
 
 Bushwick Savings Bank, Brooklyn — Jere E. Brown, President; 
 George W. Schaedle, Vice-President; George J. Merked, Cashier; 
 Theophile Thonet, C. H. Tiebaut, Jr., Trustees; Harold E. 
 Brown, guest. 
 
352 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Catskill Savings Bank, Catskill — ^W. I. Jennings, President; Addison 
 P. Jones, Trustee. 
 
 Cayuga County Savings Bank, Auburn — ^W. H. Meaker, Treasurer. 
 
 Citizens Savings Bank, New York City — Chas. H. Clark, Vice- 
 President; Henry Sayler, Secretary; C. E. Rogers, B. G. Coles, 
 Jr., Trustees. 
 
 City Savings Bank, Brooklyn — Remsen Rushmore, President; H. V. 
 Raymond, Secretary. 
 
 Cohoes Savings Institution, Cohoes — Jas. W. Ablett, Vice-President; 
 Geo. R. Wilsdon, Vice-President; Chas. R. Ford, Treasurer. 
 
 College Point Savings Bank, College Point — Edwin P. Roe, Vice- 
 President; Geo. W. Gillette, Secretary. 
 
 Commonwealth Savings Bank, New York City — John H. Boschen, 
 President; Chas. S. Gaubert, Secretary. 
 
 Cortland Savings Bank, Cortland — Benj. L. Webb, Treasurer; L. P. 
 Bennett, Trustee. 
 
 Dime Savings Bank, Brooklyn — Russell S. Walker, Treasurer; 
 George T. Moon, Vice-President; F. W. Jackson, Secretary; 
 N. T. Thayer, Frank H. Parsons, James L. Brumley, Frank L. 
 Crawford, Eugene W. Sutton, Trustees. 
 
 Dime Savings Bank of Williamsburgh, Brooklyn — ^Wm. P. Sturgis, 
 President; C. L. Lowes, Treasurer; John Hoerle, Corbett Mc- 
 Carthy, Trustees. 
 
 Dollar Savings Bank, New York City — Geo. E. Edwards, President; 
 Brian G. Hughes, Vice-President; William M. Kern, Treasurer; 
 Harry F. Regal, Secretary; Jas. M. LaCoste, John S. Hanson, 
 Geo. M. Mackellar, Chas. P. Faber, Chas. W. Bogart, Wm. S. 
 Beckley, Fred A. Wurzbach, Samuel Trimmer, Joseph B. Hare, 
 Trustees. 
 
 Dry Dock Savings Institution, New York City — Andrew Mills, 
 President; Samuel Webster, Secretary; Frederick Zittel, W. M. 
 Bennett, Walter E. Frew, Richard T. Davies, Wm. S. Gray, 
 Trustees. 
 
 East Brooklyn Savings Bank, Brooklyn — Eugene F. Barnes, Presi- 
 dent; David Morehouse, Treasurer; Edgar J. Phillips, Trustee. 
 
 Eastern District Savings Bank, Brooklyn — Lewis E. Meeker, Presi- 
 dent; Homer L. Bartlett, Vice-President; A. Manning Shevill, 
 Cashier; Chas. Jacobs, H. L. Gaus, Trustees. 
 
 East New York Savings Bank, Brooklyn — C. W. Colyer, Vice- 
 President; John M. Linz, Treasurer; Rudolph Reimer, Trustee. 
 
 East Side Savings Bank, Rochester — Cassius C. Davy, Trustee. 
 
 Emigrant Industrial Savings Bank, New York City — John J. 
 PuUeyn, President; Myles Tiemey, Vice-President; Louis V. 
 O'Donohue, Secretary; John S. Daly, Deputy Comptroller; 
 Wm. Harkness, Joseph P. Grace, John D. Ryan, Jas. Clarke, 
 
THE SAVINGS BANK CENTENARY 353 
 
 John J. Deery, C. V. Fomes, Trustees; John T. Brennan, 
 Edward O'Gorman, Richard O'Gorman, Edw. J. McGuire, 
 Thos. J. O'Reilly, Jos. E. Owens, Hugh G. Connell, James 
 Donohue, Very Rev. J. J. Hughs, Robt. L. Hoguet, guests. 
 
 Empire City Savings Bank, New York City— John Beaver, Presi- 
 dent; Arthur S. Van Winkle, Secretary. 
 
 Erie County Savings Bank, Buffalo— Robert S. Donaldson, Presi- 
 dent; G. Barrett Rich, Vice-President; Whitney G. Case, George 
 C. Ginther, George L. Williams, Trustees. 
 
 Excelsior Savings Bank, New York City— W. J. Roome, President; 
 W. H. Barron, Vice-President; John Burke, Vice-President; 
 John C. Griswold, Secretary; Arthur Plage, Asst. Secretary; 
 J. C. Gulick, H. D. Brewster, Henry Dazian, S. S. DeLano, 
 Michael Coleman, Chas. H. Class, B. A. Hegeman, Jr., Wm. 
 Crawford, E. M. Youmans, Trustees. 
 
 Flatbush Savings Bank, Brooklyn — ^H. B. Hawkins, President; 
 Daniel A. Bentien, Secretary; H. B. Davenport, Trustee. 
 
 Franklin Savings Bank, New York City — ^Wm. G. Conklin, Presi- 
 dent; Wm. H. Van Kleeck, Wm. H. Porter, Theo. Hetzler, 
 T. Frank Manville, Wilson M. Powell, Trustees. 
 
 Fulton Savings Bank, Fulton — ^Harry L. Stout, Treasurer; Albert I. 
 Morton, Trustee. 
 
 German Savings Bank, Brooklyn — Charles Froeb, President; Henry 
 Stumpf, Secretary. 
 
 German Savings Bank, New York City — ^Hubert Cillis, President; 
 Adolph Koppel, Treasurer; Carl Goepel, Oscar F. ZoUikoffer, 
 Adolf Kuttroff, Fritz Achelis, F. T. Fleitmann, George S. Runk, 
 Louis Watjen, Trustees. 
 
 Germania Savings Bank, Brooklyn — A Goepel, President; Oscar A. 
 Thomas, Treasurer; T. E. Hodgskin, Trustee. 
 
 Goshen Savings Bank, Goshen — A. V. D. Wallace, Vice-President; 
 Henry B. Knight, Treasurer. 
 
 Greater New York Savings Bank, Brooklyn — C. J. Obermayer, 
 President; Alex. G. Calder, 1st Vice-President; Wm. K. Clever- 
 ley, 2nd Vice-President; Wm. Obermayer, Secretary; John E. 
 Ruston, Attorney; Hamilton B. McNair, John Lamont, Guy 
 Loomis, Raymond H. Fiero, Harry M. DeMott, Frederick W. 
 Starr, Trustees. 
 
 Greenburgh Savings Bank, Dobbs Ferry — ^W. Ward Tompkins, 
 President; W. H. Losee, Secretary. 
 
 Green Point Savings Bank, Brooklyn — George W. Felter, Secretary; 
 Frank S. Harlow, Asst. Secretary; Wm. B. Cater, Trustee. 
 
 Greenwich Savings Bank, New York City — James Quinlan, Presi- 
 dent; Chas. L. Seibert, Asst. Treasurer; F. Eugene Cobb, Asst. 
 Treasurer; Hubert E. Brower, Asst. Treasurer; L. DeG. 
 
354 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Quackenbush, Asst. Comptroller; Walter H. Lyman, Geo. F. 
 Ladue, Edward N. Tailer, Chas. F. Noyes, John Harsen 
 Rhoades, Trustees. 
 
 Hamburg Savings Bank, Brooklyn — David Engel, President; Robert 
 E. Moffett, Vice-President; Geo. C. Unbescheiden, Secretary. 
 
 Harlem Savings Bank, New York City — ^William E. Trotter, Presi- 
 dent; Granville F. Dailey, Vice-President; John J. Bell, Vice- 
 President; Thomas R. Ebert, Secretary; Wm. Somerville, Frank 
 E. Wise, John F. Steeves, Walter P. Silleck, Olin J. Stephens, 
 Warren A. Leonard, Ransom E. Wilcox, Trustees. 
 
 Home Savings Bank, Albany — ^Thomas Austin, President; W. F. 
 Hourigan, Treasurer. 
 
 Home Savings Bank, Brooklyn — Marshall W. Gleason, President; 
 Vernon M. Powell, Cashier; J. Roscoe Hazelwood, Trustee. 
 
 Home Savings Bank, White Plains — David Cromwell, President; 
 H. S. Hamilton, J. T. Lockwood, Vice-Presidents; John F. 
 Krepps, Secretary; A. T. Shaw, Asst. Secretary; H. R. Barrett, 
 C. J. F. Decker, H. P. Griffin, J. F. Horan, C. D. Horton, 
 Harvey Husted, Wm. H. Lyon, Aaron Radick, Edw. Schirmer, 
 Thos. Simpson, Stephen C. Smith, Trustees. 
 
 Hudson City Savings Institution, Hudson — C. A. Van Deusen, 
 President; S. Mitchell Rainey, Treasurer; Noah H. Browning, 
 Trustee. 
 
 Irving Savings Institution, New York City — H. E. Tener, President; 
 S. S. Conover, J. W. Nix, J. O. Williams, W. H. Frame, G. N. 
 Robinson, Trustees. 
 
 Italian Savings Bank, New York City — Jos. N. Francolini, Presi- 
 dent; John E. Wayland, Vice-President; Domenico Saladino, 
 Vice-President; Pasquale I. Simonelli, Secretary; Nicholas J. 
 Barrett, Antonio Pisani, Bernard J. McCann, Trustees. 
 
 Ithaca Savings Bank, Ithaca— Roger B. Williams, President; Roger 
 B. Williams, Jr., Trustee. 
 
 Jamaica Savings Bank, Jamaica — ^William W. Gillen, 1st Vice- 
 President; Leander B. Faber, William L. Wood, Robert W. 
 Higbie, Edgar D. Shimer, A. James Van Siclen, Trustees. 
 
 Jefferson County Savings Bank, Watertown — Henry Purcell, Presi- 
 dent; A. T. E. Lansing, Secretary and Treasurer. 
 
 Kings County Savings Bank, Brooklyn — Hubert G. Taylor, Presi- 
 dent; J. Carlisle Loudon, Alfred Hodges, Vice-Presidents; 
 Augustus P. Day, Edw. McGarvey, Wm. C. Carrick, Cornelius 
 E. Donnellon, Jas. R. Brennan, Wm. W. Taylor, S. A. Coyken- 
 dall, Robt. Liptrott, Jacob C. Klinck, Walter Mathison, Trustees. 
 
 Kingston Savings Bank, Kingston — Charles Tappen, Treasurer. 
 
 Long Island City Savings Bank, Long Island City — ^W. J. Burnett, 
 President; Benj. Moore, Vice-President; J. S. Hicks, Secretary; 
 
THE SAVINGS BANK CENTENARY 355 
 
 A. T. Payne, J. H. Smedley, D. G. Morrison, George Frew, 
 Trustees. 
 
 Maiden Lane Savings Bank, New York City — Joel S. DeSelding, 
 Vice-President; J. Heynen, Secretary. 
 
 Manhattan Savings Institution, New York City — Constant M. Bird, 
 Vice-President; Arthur S. Stiles, Asst. Secretary. 
 
 Mechanics Savings Bank, Beacon — John T. Smith, President; B. L. 
 Smith, treasurer; Benj. Hammond, Trustee. 
 
 Mechanics Savings Bank, Cohoes — Rodney Willcox, President; G. W. 
 Humphrey, Secretary. 
 
 Mechanics Savings Bank, Rochester — ^Wilmot Castle, Secretary. 
 
 Metropolitan Savings Bank, New York City — J. B. Currey, Presi- 
 dent; Robert D. Andrews, Vice-President. 
 
 Middletown Savings Bank, Middletown — George A. Swayze, Presi- 
 dent; H. B. Woodward, Secretary and Treasurer; John W. 
 Slauson, Trustee. 
 
 Monroe County Savings Bank, Rochester — ^W. B. Lee, Counsel. 
 
 National Savings Bank, Albany — James H. Manning, President; 
 Frederic B. Stevens, Treasurer; Charles I. Oliver, John A. 
 Jamison, Jr., Trustees. 
 
 Newburgh Savings Bank, Newburgh — ^Thos. F. Balfe, President; 
 F. W. Senff, Vice-President; Thos. F. Chadwick, Samuel V. 
 Schoonmaker, Hiram Merritt, W. F. Cassedy, Trustees. 
 
 New Paltz Savings Bank, New Paltz — C. L. Van Orden, President; 
 Jesse Eltinge, Trustee. 
 
 New York Savings Bank, New York City— William Felsinger, 
 President; James L. Wandling, Treasurer; Benjamin A. Wil- 
 liams, John Arthur Greene, Vice-Presidents; Walter R. Brincker- 
 hoff, Secretary; Elbe D. Cordts, Frank B. Smidt, Thomas P. 
 Spencer, William J. Hoe, Alexander M. Welch, William W. 
 Hall, Trustees; Herbert D. Brown, John A. Button, guests. 
 
 North River Savings Bank, New York City— John H. Selmes, Presi- 
 dent; Geo. C. Connett, Secretary. 
 
 North Side Savings Bank, New York City— John G. Borgstede, 
 President; Arthur A. Ekirch, Secretary. 
 
 Oneida County Savings Bank, Rome— Chas. W. Lee, President. 
 
 Oneida Savings Bank, Oneida— H. L. Baldwin, Treasurer. 
 
 Onondaga County Savings Bank, Syracuse— Douglas E. Petit, Treas- 
 urer; Salem Hyde, A. E. Nettleton, Trustees. 
 
 Oswego City Savings Bank, Oswego— E. B. Mott, President; Thomas 
 F. Gleason, Vice-President. 
 
 Oswego County Savings Bank, Oswego— W. B. Couch, President; 
 H. J. Peebles, Trustee. 
 
 PeekskiU Savings Bank, Peekskill— E. E. Young, President; F. M. 
 Dain, Treasurer. 
 
356 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Peoples Bank for Savings, New Rochelle — A. L. Hammett, Secretary. 
 
 Peoples Savings Bank, Yonkers — Robert H. Neville, 1st Vice-Presi- 
 dent; Frank E. Wheeler, Treasurer. 
 
 Port Chester Savings Bank, Port Chester — EUwood Burdsall, Vice- 
 President; John W. Diehl, Cashier. 
 
 Poughkeepsie Savings Bank, Poughkeepsie — Floy M. Johnston, 
 President; J. Frederick Lovejoy, Treasurer; James H. Young, 
 Trustee. 
 
 Prudential Savings Bank, Brooklyn — Dietrich W. Kaatze, President; 
 John H. Scannell, Vice-President; HoUis H. Searles, Cashier; 
 Charles Wissman, Trustee; Charles E. Weigold, guest. 
 
 Queens County Savings Bank, Flushing — Harrison S. Moore, Trustee. 
 
 Riverhead Savings Bank, Riverhead — Chas. M. Blydenburgh, Presi- 
 dent; O. G. Pike, Asst. Secretary. 
 
 Rochester Savings Bank, Rochester — Harold P. Brewster, President; 
 Henry S. Hanford, Treasurer. 
 
 Rome Savings Bank, Rome — Samuel H. Beach, President. 
 
 Rondout Savings Bank, Kingston — J. E. Derrenbacher, President. 
 
 Roslyn Savings Bank, Roslyn — Frederick C. Davis, Willet Charlick. 
 
 Sag Harbor Savings Bank, Sag Harbor — Everett L. Tindall, Secre- 
 tary and Treasurer; Jonathan Baker, Trustee. 
 
 Saint Lawrence County Savings Bank, Ogdensburgh — James E. 
 Kelly, Treasurer; Charles D. Randies, Secretary. 
 
 Schenectady Savings Bank, Schenectady — Everett Smith, President. 
 
 Skaneateles Savings Bank, Skaneateles — J. Horatio Earll, President. 
 
 Southold Savings Bank, Southold — H. H. Huntting, Vice-President; 
 Frederick K. Terry, Asst. Treasurer; F. F. Overton, Trustee. 
 
 Staten Island Savings Bank, Stapleton — Edw. C. Bridgman, Presi- 
 dent; Edw. C. Meurer, Vice-President; Geo. C. Hall, Asst. 
 Cashier; Anning S. Prall, Albert C. Fach, Charles A. Bruns, 
 John B. Pearson, Geo. S. Humphrey, Trustees. 
 
 Sumner Savings Bank, Brooklyn — Arthur S. Somers, President; 
 Nathan S. Jonas, Vice-President. 
 
 Syracuse Savings Bank, Syracuse — ^Nicholas Peters, Vice-President. 
 
 The Savings Bank of Utica, Utica — Charles A. Miller, President; 
 Rufus P. Birdseye, Vice-President and Treasurer; Nicholas E. 
 Devereux, Trustee. 
 
 Troy Savings Bank, Troy — Charles E. Hanaman, President. 
 
 Ulster County Savings Bank, Kingston — E. H. Loughran, President; 
 J. B. Alliger, Treasurer. 
 
 Union Dime Savings Bank, New York City — A. P. W. Kinnan, 
 President; Francis M. Leake, Treasurer; Frederick H. Ecker, 
 Willard E. Edmeister, George Hadden, Fred'k. C. Meacham, 
 Edgar A. Treadwell, Abram C. DeGraw, Trustees. 
 
 Union Savings Bank, Patchogue — Joseph Bailey, President; W. L. 
 Hulse, Vice-President; Walter S. Rose, Secretary; Robert S. 
 
THE SAVINGS BANK CENTENARY 357 
 
 Pelletreau, Walter H. Jaycox, Julius Hauser, Trustees. 
 
 Union Savings Bank of Westchester County, Mamaroneck — R. G. 
 Brewer, President; C. F. Griffen, Wm. A. Boyd, Vice-Presi- 
 dents; E. H. Gedney, Asst. Treasurer; B. C. Meighan, E. T. 
 Cornell, Henry Fatten, P. H. Collins, Bradford Rhodes, Chas. 
 M. Baxter, Wm. R. Bull, S. R. Bell, C. C. Holden, Daniel 
 Warren, Trustees. 
 
 Union Square Savings Bank, New York City — ^Wm. H. Rockwood, 
 President; Henry R. Brinckerhoff, Secretary; Hugh B. Gardner, 
 Asst. Cashier. 
 
 United States Savings Bank, New York City — Charles N. Taintor, 
 President; Adolphe F. LeGost, Cashier; Richard A. Anthony, 
 Noah C. Rogers, Wm. C. Adams, Isaac N. Seligman, Edward I. 
 Devlin, Trustees. 
 
 Walden Savings Bank, Walden — Hiram B. Wooster, President; T. L. 
 Millspaugh, Vice-President; Edward Whitehead, Trustee. 
 
 Wappinger Savings Bank, Wappinger Falls — I. T. N. Harcourt, 1st 
 Vice-President; William A. Brewster, Treasurer. 
 
 Warwick Savings Bank, Warwick — John W. Sanford, Henry Pelton, 
 Trustees. 
 
 Watertown Savings Bank, Watertown — Isaac L. Hunt, President; 
 Harvey W. Steele, Treasurer. 
 
 Western Savings Bank, Buffalo — F. W. H. Becker, Treasurer. 
 
 West Side Savings Bank, New York City — Clarence O. Bigelow, 
 President; N. S. Westcott, Vice-President; R. L. Harrison, 
 V. Chapin Daggett, Edward R. Finch, Jos. H. Emery, Ruel W. 
 Poor, Jos. Rowan, Trustees. 
 
 Williamsburgh Savings Bank, Brooklyn— Andrew D. Baird, Presi- 
 dent; John V. Jewell, Vice-President; Edw. T. Horwill, Secre- 
 tary; Chas. J. Pasfield, Cashier; Victor A. Lersner, Comptroller; 
 Henry R. Kinsey, Asst. Comptroller, Jas. F. Bendemagel, 
 Herbert F. Gunnison, Paul E. Bonner, Ralph H. Tiebout, 
 Edward E. Pearce, Trustees. 
 
 Yonkers Savings Bank, Yonkers— James H. Weller, President; Chas. 
 F. Hulbert, Treasurer; Wm. L. Saunders, Harry L. Twme, 
 Trustees. 
 
 GUESTS 
 
 Eugene Lamb Richards, Superintendent of Banks, State of New York 
 George I. Skinner, First Deputy Superintendent of Banks, State of 
 
 New York. . 
 
 Dr. Charles Alexander Richmond, President of Union University. 
 Hon. William Jennings Bryan, Lincoln, Neb. 
 Joseph A. Lawson, Albany, N. Y. ^ , r- ■ ^ 
 
 G. C. Purves, President Philadelphia Savings Fund society, 
 
 Philadelphia, Pa. 
 
358 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Henry Parkman, Treasurer, Provident Institution for Savings, Bos- 
 ton, Mass. 
 
 George E. Brock, President, Home Savings Bank, Boston, Mass. 
 
 Arthur L. Allin, Treasurer, Middletown Savings Bank, Middletown, 
 Conn. 
 
 John, Headden, President Hudson City Savings Bank, Jersey City, 
 N. J. 
 
 Walter E. Houghton, Secretary and Treasurer, Citizens Savings Bank, 
 Stamford, Conn. 
 
 H. T. Montgomery, Secretary and Treasurer, Savings Fund Society 
 of Germantown, Philadelphia, Pa. 
 
 Samuel W. Hawley, Treasurer, Bridgeport Savings Bank, Bridge- 
 j)ort. Conn. 
 
 Samuel C. Parcher, President, Saco and Biddeford Savings Institu- 
 tion, Saco, Maine. 
 
 G. Mortimer Rundle, President; Harrie T. Hoyt, Asst. Secretary and 
 Treasurer, Savings Bank of Danbury, Conn. 
 
 Carlton H. Leach, Treasurer, Farmers and Mechanics Savings Bank, 
 Middletown, Conn. 
 
 Milton W. Harrison, Secretary, Savings Bank Section, American 
 Bankers Association. 
 
 Ward W. Jacobs, Treasurer, Mechanics Savings Bank, Hartford, 
 Conn. 
 
 F. W. Tilton, President, Cambridgeport Savings Bank, Cambridge, 
 Mass. 
 
 Myles L. Peck, Treasurer, Bristol Savings Bank, Bristol, Conn. 
 
 Edward A. Brown, President, Island Savings Bank, Newport, R. I. 
 
 Robert W. Dwyer, Treasurer, Dime Savings Bank, Hartford, Conn. 
 
 S. Fred Strong, Treasurer, Connecticut Savings Bank, New Haven, 
 Conn. 
 
 Chas. A. Collins, President, Lynn Institution for Savings, Lynn, 
 Mass. 
 
 Dr. Thomas E. Finegan, Deputy State Commissioner of Education. 
 
 John McHugh, Frank O.. Roe, Samuel S. Campbell, Philip L. 
 Watkins, Douglas MacPherson, George Young, Frank S. Ken- 
 yon, A. T. Campbell, Edward R. Anker, Guernsey R. Jewett, 
 William E. McHarg, Kenneth G. White, B. F. Buck. 
 
 PROCEEDINGS OPENED BY PRESIDENT MANNING 
 
 The session was called to order at 2 :30 p. m. by the 
 president of the association, James H. Manning, who con- 
 gratulated the delegates upon the fine attendance and the 
 keen interest exhibited on every hand in the celebration and 
 its meaning. The event, he declared, was of far greater 
 
THE SAVINGS BANK CENTENARY 359 
 
 importance than many might imagine. It was purely his- 
 torical, and it was the intention to follow a program some- 
 what similar to that so successfully carried out in the city 
 of Edinburgh, in 1910, though in a somewhat less preten- 
 tious manner. "We, as Americans," he said, "believing in 
 Americanism, want to prove to our friends across the water 
 who are directly in touch with us at this time, that our 
 sympathies are in the work along the same lines of saving, 
 of thrift." 
 
 President Manning stated that at the present time every 
 one of the 141 Savings Banks in the State of New York 
 is in this association save seven; why these were not in- 
 cluded, he was not at liberty to say, but he was able to 
 assure the delegates that these institutions were in full sym- 
 pathy with the work being done. It was his hope that 
 before the close of another twelvemonth, all these banks 
 would see their way clear to join the association, because 
 of the things that had been accomplished and from which 
 they had derived lasting benefit. 
 
 The president's formal address was mainly historical. 
 He paid a sincere tribute to those noble pioneers who 
 founded the first Savings Banks in America, thereby mak- 
 ing aU succeeding generations their everlasting debtors; 
 they builded better than they knew, not only changing 
 former dependents into the most valuable class of citizens, 
 but, by means of their self-denial and frugality, benefit- 
 ing every community incalculably. It is, he said, one of 
 the chief merits of these beneficent institutions that they 
 educate the people in those qualities that make for the best 
 citizenry, building up character as well as amassing for- 
 tunes. 
 
 The speaker also paid a fervid tribute to the many noble, 
 disinterested men who give so freely of their time to the 
 management of these institutions of the people; he char- 
 acterized them as probably the very best representatives of 
 
 the race. 
 
 The campaign of thrift and education bemg earned on 
 in this country is now bearing most valuable fruit, and he 
 
360 CENTURY OF AMERICAN SAVINGS BANKS 
 
 expressed the hope that the good work would go on and 
 on indefinitely. 
 
 President Manning sketched the rise of the first Savings 
 Banks in this country, a century ago, Philadelphia being 
 the first to open the doors of such an institution, Boston the 
 first to incorporate one, and New York the first to take 
 steps toward such an organization, although, on account of 
 adverse legislation and widespread prejudice against such 
 institutions at that time, not the first to actually begin 
 business. He also gave a picture of the condition of the 
 country a century ago, having just emerged from the second 
 war with Great Britain, and referred to the fact that it was 
 a period of active philanthropy, when the leading men and 
 women in Europe and America were seeking, in every way 
 possible, to relieve the sufferings of the masses and furnish 
 them means of subsistence. When, on December 2, 1816, 
 the Philadelphia Saving Fund Society opened its doors and 
 received a five-dollar deposit from a negro named Roberts, 
 the great system which has done so much for this country, 
 both with respect to its material and its moral welfare, had 
 its birth. The Provident Institution for Savings in the 
 Town of Boston followed in the month of April, 1817, and 
 then the Savings Bank of Baltimore, the Salem (Massa- 
 chusetts) Savings Bank, and the Bank for Savings, New 
 York City. 
 
 There were, he said, in the State of New York, at the 
 close of the year 1915, 3,181,023 depositors in 140 Sav- 
 ings Banks, owning $1,771,560,808, an average to each 
 depositor of $556.91. While this was a flattering exhibit, 
 he declared it did not prove that the people of the United 
 States are thrifty, for, judged by the test of ratio of ac- 
 counts to total population, the system proves far from satis- 
 factory. 
 
 It was his hope that the present thrift movement would 
 bring forth most valuable results, assuring his hearers that 
 no matter what the future might have in store, thrift, econ- 
 omy and self-denial were the cardinal virtues, so far as con- 
 cerned the material progress of the State and nation. 
 
THE SAVINGS BANK CENTENARY 361 
 
 HIGH SCHOOL PRIZE ESSAY CONTEST 
 
 At the conclusion of his address President Manning 
 called upon Henry A. Schenck, president of the Bowery 
 Savings Bank, New York City, to report on the results of 
 the essay contest on the subject of "Thrift" among pupils 
 of the high schools of the State, for valuable money prizes. 
 
 While at first very loath to take the chairmanship of the 
 Essay Committee, Mr. Schenck said he was persuaded to 
 accept and, much to his surprise, found the labor con- 
 nected with it exceedingly interesting and profitable. The 
 other members of the committee were Samuel H. Beach, 
 president of the Rome Savings Bank, and J. M. Satterfield, 
 president of the American Savings Bank, Buffalo. 
 
 The competition was confined to high schools in the State 
 in those cities where Savings Banks are located. Returns 
 were received from ninety-six schools: Group 1, from 
 eight schools, eighteen essays; Group 2, ten schools, twenty- 
 one essays; Group 3, nine schools, twenty essays; Group 4, 
 nineteen essays; Group 5, eight schools, eighteen essays. 
 Under the plan adopted, these essays were forwarded to the 
 respective chairmen of groups and these chairmen were re- 
 quested to select what they considered to be the best three ; 
 in that way there were returned to the committee fifteen 
 essays. These were forwarded to the president of the asso- 
 ciation, with the request that he select what he considered 
 the best five. This, of course, was without knowledge on 
 his part as to the identity of the authors. 
 
 The awards were as follows: First prize, $100, to 
 Thomas W. Wojciechowski, of the Hutchinson Central 
 High School, Buffalo; second prize, $50, to Miss Jessie 
 Barton, Kingston High School; third prize, $25, to Morti- 
 mer Burr Williams, Auburn Academic High School; fourth 
 prize, $15, to Hyman Wanderman, Yonkers High School; 
 fifth prize, $10, to Miss Laura Marie Noque, Long Island 
 City High School. 
 
 Following out a very happy thought, all the prize winners 
 were invited to be present in person, and all responded. 
 
362 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Their traveling expenses were paid by the respective Groups 
 from which they came, and they were the guests of the asso- 
 ciation. The committee vouched for the fact that all the 
 essays were well written and very interesting, especially 
 when the tender age of the contestants was taken into con- 
 sideration. 
 
 Besides the money prizes, each one of the ninety-six con- 
 testants was awarded a bronze medal, on the reverse side 
 of which were the words, "Prize Essay Contest, 1916," and 
 on the obverse, "Presented by the Savings Banks Associa- 
 tion of the State of New York." 
 
 The competition was generally regarded as one of the 
 most successful of the kind ever held in the State. 
 
 The prize winning essay is given herewith : 
 
 THRIFT 
 
 Throughout the bulk of the literature of modem political economy, 
 down to recent years, there runs the teaching that the practice of 
 thrift by all is the surest way to prosperity, not only for the savers 
 individually but for the community to which they belong. Thrift, 
 as defined by economists, is the practice of economy in personal or 
 domestic expenditure of money and the careful management of money 
 matters. 
 
 It is only a century since political economy elevated the lowly 
 quality of thrift to the rank of a preeminent virtue. At present the 
 view, as expressed by Professor Bonamy Price in his " Chapters on 
 Practical Political Economy," is widely held that "the man who 
 saves, be he prince or peasant, is the benefactor of his country"; 
 and that one of the best tests of the virtues of a man is his power 
 to sacrifice present enjoyments for the sake of his own future and 
 that of those dependent upon him. The man who saves creates 
 capital and thereby contributes to the welfare of even those who 
 consume their entire incomes day by day. 
 
 The very foundation of all material success is thrift. It is the 
 companion of savings and first aid to prudence and economy. The 
 nations and individuals that have progressed, owe their progress to 
 thrift, because the total sum of small savings forms the unshakable 
 foundation of national and individual credit. There is a big differ- 
 ence between saving and hoarding, but when money is saved and 
 employed for a definite purpose, it becomes the most constructive 
 agency of human progress. Many people have the idea that thrifti- 
 ness necessarily means self-denial. No error could be more costly. 
 
THE SAVINGS BANK CENTENARY 363 
 
 If people realized the true meaning of money, they would be apt to 
 save more and be less extravagant. 
 
 The happy-go-lucky spirit so common among our American people 
 is the reason why so much money is spent in pursuit of senseless 
 pleasures. A certain amount of pleasure is necessary by all classes; 
 there can be no effective work where there is no play; but there is no 
 doubt that billions of dollars are spent annually by our people on 
 indulgences which not only cannot be described as sane pleasures but 
 which do physical and moral harm. Thrift helps to do away with 
 the senseless and useless expenditures in order that people may have 
 more money for the things that are sensible and useful, thereby 
 making for a better people and better government. You cannot have 
 national thrift until you have community thrift, and in order to have 
 community thrift, the individual himself must be thrifty, for thrift 
 is a virtue and a principle, not a mere forced rule; it is wisdom, and 
 more an attitude of mind than a matter of money. 
 
 We are now confronted with the proposition of choosing a sound 
 institution where the savings of the people could be placed with safety 
 and at the same time bring a small return for the investment. Many 
 such institutions would be chosen, but the real bulwark of the people's 
 money and the citadel that thrift rears in a well regulated community 
 is the Savings Bank. It deserves to rank with the public school as a 
 factor for uplift and human progress. Despite the inroads of the 
 half hundred different kinds of saving institutions, the Savings Bank 
 has maintained its integrity throughout the century that has passed 
 since it was founded. 
 
 For a brief account of the essential solvency and good management 
 of savings banks, one has only to look at the history of such institu- 
 tions during the past thirty-five years. Panics have not affected them 
 seriously, for they are under the careful supervision of the State, and 
 their investments are always conservative. They take small savings 
 of innumerable men and women, which otherwise would be quite 
 unusable as capital, and put them at the service of a community and 
 the nation. The money so deposited is always subject to the will of 
 the depositor to withdraw it and invest in some other way as soon as 
 his savings accumulate to the necessary amount. 
 
 The moral effect of a Savings Bank account is greater than many 
 people might think. In some instances merchants and business 
 houses will not employ men who have not started a savings account. 
 The very knowledge of having such an asset, small as it may be, 
 is an impetus to effort and ambition. And yet the savings account 
 does more than this. It emphasizes the big facts that no amount is 
 too small to save, and that money can work and make more money 
 from the very moment that your dollar is written down on the bank 
 ledger, it is like seed planted in fertile soil. It starts to grow. 
 
 The great increase in deposits in the Savings Banks is notable. 
 
364 CENTURY OF AMERICAN SAVINGS BANKS 
 
 People have come to view the savings bank as the finest, soundest and 
 safest banking institution in the United States, and have kept this 
 bulwark of our national well being safe from all assaults from with- 
 out or disintegration from within, as it represents the most conserva- 
 tive, the most logical and the most helpful scheme for bettering the 
 condition of all classes of people. 
 
 I have not argued thrift upon you for its own sake, nor merely 
 that you may be kept safe from poverty, nor even for the ease it 
 brings, but because it is one of the greatest virtues possessed by man. 
 It is the conserving and practicing virtue, and is antagonistic to all 
 the vices. It favors a full manhood and works against the very faults 
 which it seems to unite. When people come to look upon thrift from 
 this point of view and perceive the beneficial results of this virtue, I 
 am certain that the erroneous ideas they have concerning thrift will 
 disappear, and that the quality of thrift will be regarded by all as one 
 of the chief tests of a man's character. 
 
 SOME NOTABLE ADDRESSES 
 
 The address by Deputy Superintendent of the Banking 
 Department, George I. Skinner, was listened to with the 
 closest attention and liberally applauded. 
 
 Mr. Skinner declared that in his admiration for the Sav- 
 ings Banks system of the State of New York he yielded 
 to no one; he knew of no system of finance that in so lim- 
 ited a space of time had accomplished so much. "When 
 we think of the past," he said, "we cannot help but wonder 
 at the imagination, the courage and the confidence of the 
 founders of this great system, which is the backbone of 
 the financial system of the State; for even now, when your 
 state institutions have resources of four billion and a half 
 dollars, the Savings Banks head the list, notwithstanding 
 the great growth and the constant increase in the number 
 of trust companies, state banks and other institutions. Too 
 few opportunities present themselves for communication 
 between the Department and the Savings Bank men of the 
 State. None ought to be missed. The system is yours. 
 We can only help you upbuild it, and in upbuilding it we 
 need your active, every-day, every-year support, not only 
 in solving what problems remain for you to solve — and in 
 my judgment they are not many — ^but in solving the prob- 
 lems of the State, for you are a part of the great system 
 
THE SAVINGS BANK CENTENARY 365 
 
 which we are upbuilding and we need your intelligent help 
 along other lines than your own." 
 
 Mr. Skinner referred to the fact that during the year 
 steps had been taken to weld together, in a way, and secure 
 co-operation between the different branches of the State's 
 financial system, and he was hopeful that very valuable 
 results would follow. 
 
 ' What, he asked, were they going to do with their own 
 system ? In his view, it was not incapable of development. 
 No movement ever stands still ; if the apex is ever reached, 
 it must go down. Hence there should be a constant effort 
 on their part to increase their own opportunities, to make 
 the most of what the founders handed down to them, and 
 to go ahead, with equal intelligence and equal faith in the 
 development of the movement to serve the purpose for which 
 the institutions were founded. What are they? Unselfish 
 agencies for the investment of the funds of savers in such 
 small amoimts that the owners cannot readily invest them 
 because of lack of experience. The speaker had only 
 words of praise for the work being done in behalf of small 
 investors by the savings and loan associations. He made 
 caustic reference to the fake investment corporations, and 
 some private bankers whose business it is to fleece the in- 
 experienced and imwary, and asked if those within his 
 hearing had ever thought of the vast sums that are lost to 
 investors through these undesirable agencies. It was the 
 wish of the Department, he said, to make the Investment 
 Company Article and the Private Banking Article of the 
 Banking Law as nearly perfect as the Savings Bank Article 
 now is, and he hoped to have the co-operation of all Savings 
 Bank men of the State to that end. 
 
 Referring to proposed legislation along the lines of the 
 much-discussed Rural Credit system, Mr. Skinner said: 
 
 I do not know what the future of the Land Bank of the State of 
 New York is to be, but it has great possibilities. It will do much to 
 liquify land values. If the Savings Bank men of the State appre- 
 ciate the safety of these investments— if there can be co-operation 
 between the two savings systems of the State— I see no reason why 
 
366 CENTURY OF AMERICAN SAVINGS BANKS 
 
 the problems of this State along these lines would not be wholly- 
 solved. I see no need for either State or Federal intervention; you 
 will be fulfilling, to a very high degree, any duty you owe to the poor 
 borrower whom you cannot now properly serve because of the form 
 of your organization. 
 
 Herbert F. Gunnison, trustee of the Williamsburgh Sav- 
 ings Bank, Brooklyn, was the next speaker. 
 
 Mr. Gunnison highly praised the work done in connec- 
 tion with the Prize Essay contest, expressing the opinion 
 that nothing more valuable or far-reaching had been ac- 
 complished; he also had words of commendation for the 
 splendid service done in arousing public interest in the 
 school savings system, citing the fact that more than 105 
 Savings Banks of this kind already had been started in the 
 metropolis ; one school in Brooklyn, which only a short 
 time before had inaugurated the movement, showed aggre- 
 gate deposits of more than $800. He did not believe the 
 Savings Banks of the State were doing their full duty when 
 they merely received money, took care of it and paid in- 
 terest. "It seems to me," he added, "that these organiza- 
 tions throughout the country should be the leaders in every 
 movement looking toward savings and thrift and the pre- 
 vention of extravagance." 
 
 Mr. Gunnison had the pleasure of attending the Interna- 
 tional Thrift Congress held in the City of Edinburgh, Scot- 
 land, in the year 1910, in connection with the European 
 Savings Banks Centennial. He described the conference 
 and told of some of its most important features and of the 
 distinguished personages who attended it; these included 
 delegates from all of Great Britain's colonies, as well as 
 from France, Switzerland and various other countries. 
 The speaker said that more facts concerning thrift and 
 Savings Banks were presented at these conferences than 
 had ever before or since been gathered. 
 
 Mr. Gunnison said that when the trustees of the Wil- 
 liamsburgh Savings Bank reached Edinburgh, the first thing 
 they did was to take a wreath of flowers and place it on the 
 statue of Abraham Lincoln, which adorns one of the ceme- 
 teries of the Scotch city. 
 
THE SAVINGS BANK CENTENARY 367 
 
 Mention was also made of the fact that a great many of 
 the thrift movements are started by clergymen. The 
 speaker was proud to say that his father, who was a clergy- 
 man, was the foimder of a Savings Bank in the State of 
 Maine. 
 
 Mr. Gunnison spoke on the need of preparedness, re- 
 minding his hearers that no matter how peaceful the world 
 might seem, and how impossible the contingency of war, 
 history showed that never for five successive years since he 
 was bom, sixty years ago, had Europe been without a war 
 of some sort. 
 
 J. C. Purves, whom the presiding officer introduced as 
 the president of the oldest Savings Bank in the United 
 States, — ^the Philadelphia Saving Fund Society, — ^was the 
 next speaker. Mr. Purves gave a brief, interesting history 
 of the splendid institution of which he is president. Draw- 
 ing a lesson from the experience of the banks during the 
 past two trying years, he said : 
 
 The great prosperity and vast growth in the past hundred years 
 have made both capitalist and wage earner reckless in expenditure 
 and wasteful in so doing. This is characteristic of the Nation, the 
 individual States, our cities and towns, where efficiency in planning 
 and spending are sadly lacking. . . . What the American family 
 needs to have instilled into it, is not only prudence, economy and self- 
 denial in the use of their income, but also an ambition to excel in 
 better work, as being the prime factor in furthering their welfare and 
 advancement in the various occupations, as well also of having a 
 pride in producing the best, for its own sake. ... It is a source of 
 gratification to observe, notwithstanding our wastefulness as a nation, 
 that as the country has grown and prospered in so many ways, the 
 Savings Bank, the symbol of thrift, has measurably kept pace with 
 the vast increase in our industries, although there is every reason to 
 believe that a large portion of our population are still outside our 
 doors. To bring in these should be our earnest endeavor, especially 
 the ignorant and the young, remembering the lack of proper informa- 
 tion in the former, and the advantage of the formation of good habits 
 in the latter. 
 
 Henry Parkman, treasurer of the Provident Institution 
 for Savings, Boston, Massachusetts, the second oldest Sav- 
 ings Bank in the United States and the first to be legally 
 
368 CENTURY OF AMERICAN SAVINGS BANKS 
 
 incorporated, gave interesting facts pertaining to the insti- 
 tution he represented and its long and honorable history. 
 
 It had always been, he said, a source of wonder and sur- 
 prise to him that the Mutual Savings Bank idea has not 
 gotten farther than it has. He confessed that he never be- 
 lieved the mutual bank should have any affiliations with the 
 Western banks, which are purely money-making institu- 
 tions, although, belonging in the same category, they could 
 doubtless work together harmoniously in some ways. 
 
 Walter Trimble, president of the oldest Savings Bank 
 in the State of New York, The Bank for Savings, of the 
 City of New York, being unable to be present, was repre- 
 sented by Louis B. Gawtry, secretary of the board of trus- 
 tees. Mr. Gawtry gave a concise history of the institution, 
 referring to the meeting held in the assembly rooms of the 
 City Hotel, on Friday evening, November 29, 1816, for the 
 purpose of establishing a Savings Bank, undoubtedly one 
 of the first meetings held on this continent. The speaker 
 related how these gentlemen organized a Savings Bank, but 
 failed to obtain a charter from the Legislature until March, 
 1819. Mr. Gawtry gave the following interesting facts 
 and figures : 
 
 "From July, 1819, to January, 1916, the bank has received 6,276,- 
 334 deposits, amounting to over $556,000,000 and during that period 
 has paid out over $570,220,000 on 6,008,378 drafts. It has received 
 during this period from interest on investments and on deposits in 
 banks and Trust companies over $126,000,000 and has paid in divi- 
 dends to depositors over $105,800,000. Dividends have been paid 
 out without cessation for the last 97 years at rates not less than 3J^ 
 per cent., with a maximum of 7j4 per cent, which was paid during 
 the period from 1870 to 1874. 
 
 "The bank has long been identified with the mercantile life of 
 New York, and we find among its officers and trustees such well 
 known merchants and financiers as William Bayard, Philip Hone, 
 Matthew Clarkson, Robert C. Cornell, John C. Green, Edmund 
 Penfold, Benjamin Strong, Peter G. Stujrvesant, James Suydam, 
 Robert L. Kennedy, Merritt Trimble, James Brown, Hamilton Fish, 
 John T. Johnson, James Harper, Daniel Lord, James A. Roosevelt, 
 James De Peyster and many others far too numerous to mention." 
 
THE SAVINGS BANK CENTENARY 369 
 
 Marcus T. Hun, president of the Albany Savings Bank, 
 incorporated in the year 1820, spoke briefly for that insti- 
 tution. He knew of nothing in its history, he said, that was 
 unusual or anomalous, and added, that the fact that a Sav- 
 ings Bank had no history was, in his judgment, the, very 
 best evidence that it had been wisely conducted. 
 
 J. H. Smedley, representing the Long Island Savings 
 Bank, the pioneer in the establishment of School Savings 
 Banks, presented a very interesting paper on that subject, 
 which was listened to with the closest attention. 
 
 THE CENTENARY DINNER 
 
 The Centenary Dinner, which was held on the evening of 
 May 17, proved a brilliant success in every way. More 
 than five hundred Savings Bank men and their guests 
 sat down to the beautifully decorated tables in the Hotel 
 Biltmore. In the galleries were seated the orchestra, and 
 many ladies, relatives of the diners who had accompanied 
 them to the metropolis. 
 
 The president of the Savings Banks Association of the 
 State of New York, James H. Manning, Albany, New York, 
 presided. 
 
 CABLE MESSAGES FROM OVER THE SEA 
 
 Some of the congratulatory cablegrams received from Eu- 
 rope were as follows: 
 
 The British Trustee Savings Banks Association sends heartiest 
 
 congratulations. 
 
 Vincent F. Carlyle, Chairman. 
 
 The Trustee Savings Banks of London send heartiest congratula- 
 tions. 
 
 Henry Henderson, 
 
 Actuary, The London Savings Bank. 
 
 Congratulations and sympathy with your National and interna- 
 tional work. 
 
 Cameron, 
 
 Trustee Savings Banks, London. 
 
370 CENTURY OF AMERICAN SAVINGS BANKS 
 
 Edinburgh Savings Banks directors and officials send cordial con- 
 gratulations on this auspicious occasion and desire increasing success 
 for the future of American Savings Banks. 
 
 Alexander Carctll, 
 Manager, Edinburgh Savings Bank. 
 Member of the Exchequer's Parliamentary Committee on War Loans. 
 
 NOTABLE LETTERS FROM ABROAD 
 
 The following, among other letters, were received by the 
 president from abroad: 
 
 Lord Rosebery 
 38 Berkeley Square. 
 W. 
 
 May 3rd, 1916. 
 Dear Sir: 
 
 Yes, I am sorry to say that it will not be possible for me to attend 
 the dinner to which you kindly invite me on May 17th. 
 
 Thrift needs no recommendation from me. It stands for inde- 
 pendence, and that is its supreme claim on every self-respecting 
 citizen. 
 
 Yours truly, 
 Rosebery. 
 James H. Manning, 
 President. 
 
 Actuary or the Hxtll (Eng.) Savings Bank, 
 
 Hull. 3rd May, 1916. 
 Mr. James H. Manning, 
 President, 
 Savings Bank Association of New York. 
 
 Dear Sir: 
 
 Your letter dated the 13th April has been received this morning, 
 and I hasten to thank you for its cordial tone and the kind invitation 
 you have given to me to attend the Centennial Celebrations of your 
 Association. 
 
 There is nothing that would have given me greater pleasure than 
 to have been able to accept the call. Under normal circumstances, I 
 should have made a great effort to avail myself of the opportunity 
 of visiting your country and seeing something of the great work of 
 thrift which your Association is doing so much to promote. After 
 fifty-four years closely spent in Savings Bank work, I, naturally am 
 keenly interested in all agencies of the kind, and also very sensitive 
 
THE SAVINGS BANK CENTENARY 371 
 
 of the honour you have done me, personally, in sending me an invi- 
 tation. 
 
 Unfortunately, the times are not normal. From our bank we have 
 sent 75 per cent, of the staff to serve in the army for the war. This 
 entails upon the remainder — with the help of a few lady clerks — a 
 great pressure of work, and it is impossible to leave, even for so 
 tempting an occasion as that you offer. 
 
 The war has brought home to our people the justification of all 
 our thrift teaching. What had become an obsolete, old fashioned 
 doctrine, all very well in theory, is now the one practical thing. The 
 salvation of the State, the safety of the individual, is assured in direct 
 proportion to the exercise of thrift. Surely no cause has ever before 
 received so striking a justification! Our statesmen are urging its 
 practice. Means are being devised for its exercise in all conditions of 
 life, and to-day the Savings Banks, and what they stand for, are 
 recognized as foundation rocks of national and private safety. 
 
 I am glad to say that evidences are abundant that SAVING is very 
 much on the increase. Our depositors, numbering over 80,000 in this 
 City, are saving better than ever before, and I believe most Savings 
 Banks in the country are having the same experience. 
 
 May you have a successful time! Although I am prevented from 
 joining you, I trust you will not be hindered from paying us, in 
 Hull, a visit in 1918, when we celebrate our 100th anniversary. 
 
 Yours very faithfully, 
 F. FuLLERTON, Actuary. 
 
 TRUSTEE SAVINGS BANK'S INSPECTION COMiyilTTEE. 
 
 9 Serle Street Lincoln's Inn, 
 
 London, W.C, 29th May, 1916. 
 
 My dear Sir: 
 
 The delivery of your esteemed letter and invitation to the Cen- 
 tenary Celebration of American Savings Banks on the 17th instant 
 were delayed in the course of post owing to the War Censorship, and 
 their receipt was further delayed by absence from home. Conse- 
 quently, it was not possible to arrange for thankful acceptance, but 
 there was nevertheless time to admit of a message being cabled to you 
 which was sent in the following terms:— "Congratulations and sym- 
 pathy with your National and International work." 
 
 A. great tribute of praise is due to the Savings Banks in America 
 and their managers and staffs for the vast benefits conferred upon 
 the public in the course of their hundred years' propaganda of 
 
 Thrift. 
 
 The educational benefits of this work are, moreover, of transcen- 
 dental value to the State, while its economic advantage m encodrag- 
 
372 CENTURY OF AMERICAN SAVINGS BANKS 
 
 ing and assisting the provident poor to help themselves is not to be 
 measured by mere accumulations of capital, however great may be 
 those contributions to the garnered wealth of nations. 
 
 We are, 
 Yours most sincerely, 
 Albert Kaye Rollit, Chairman. 
 Trustee Savings Banks' Inspection Committee. 
 
 W. S. Cameron, Secretary. 
 James H. Manning, 
 President. 
 
 MANCHESTER & SALFORD SAVINGS BANK 
 Booth St. & Kennedy St. 
 
 Manchester, 6th May, 1916. 
 Dear Sir: 
 
 At the request of Mr. Francis Godlee, who has succeeded Mr. 
 l«onard Tatham in the Chairmanship of this Bank, and on my own 
 behalf, I desire most cordially to thank you for the very kind in- 
 vitations you have sent us to be present at the Centennial celebration 
 of the Savings Banks Association of the State of New York. 
 
 As it would be quite impossible for us to be in New York on the 
 17th instant we very much regret having to decline so cordial an 
 invitation, and availing ourselves of the opportunity of visiting your 
 city upon such an interesting occasion. 
 
 I enclose a report of the proceedings of the last Annual Meeting 
 of this Savings Bank. From this you will observe that our Presi- 
 dent, the Lord Bishop of Manchester, presided, and in moving the 
 adoption of the report gave some interesting particulars bearing upon 
 thrift, and these you will see were further emphasised by the Chair- 
 man in his review of the business done by the bank during the year. 
 Trusting what I send you may be helpful, and with our heartiest 
 congratulations, 
 
 I have the honour to be, 
 
 Very sincerely yours, 
 
 L. D. Stewart, 
 
 Actuary. 
 James H. Manning, 
 President. 
 
 EDINBURGH SAVINGS BANK 
 (16 North Bank Street) 
 
 3rd May, 1916. 
 My Dear Sir: 
 
 I have just received your valued favour of the 14th April and 
 hasten to reply so that you may have this acknowledgment in time 
 for your Centennial Celebrations on the 17th inst. 
 
THE SAVINGS BANK CENTENARY 373 
 
 Let me say how much I regret that it is a sheer impossibility for 
 me to attend the Celebrations. Time and space are, in present cir- 
 cumstances absolutely against me, and I am very sorry for myself 
 that 1 should miss so much. 
 
 T^J?i^'"o'^'r^'"^*' *^ ^^^^^ pleasure of meeting your worthy self and 
 Ihrift Confreres, and of foregathering with certain old friends who 
 honoured our own Centenary in Edinburgh a few years ago: and 
 then, there is the inspiration to be derived from such an important 
 occasion and the taking part in it along with a distinguished as- 
 semblage of the Apostles of Thrift: all these unique advantages I 
 reluctantly, but necessarily, have to forego. 
 
 Nevertheless, I shall be with you in spirit, for our affinity is a 
 sure and a close one. Besides, the changing circumstances, and the 
 clamant needs of our day and generation compel us all, in the great 
 work of popularising Thrift, to attune our souls to a new key of 
 endeavour, so that your people in America and ours in Great Britain, 
 — they and their children and children's children— may understand 
 and appreciate, as the world never appreciated before, the truth of 
 the glorious apothegm of Shakespeare — "Thrift is blessing." 
 
 Yours faithfully, 
 
 Alexander Cargill, 
 
 Actuary. 
 James H. Manning, 
 
 President. 
 
 BANK OF SCOTLAND ' 
 
 Edinburgh, Third May, 1916. 
 My dear Sir: 
 
 I am in receipt of your letter of 14th ulto., and I beg to thank you 
 and your Association for the honour you have done me in inviting 
 me to your Convention and Dinner on the 17th of May. It would 
 have afforded me much pleasure to be present; but the exigencies of 
 business and the difficulties of travel at the present time make it im- 
 possible for me to accept, and this I very much regret. To have 
 met you and your colleagues face to face, and to have had the op- 
 portunity of conversing with you on various interesting subjects,, 
 would have been a privilege I should have greatly valued, and I am; 
 very sorry that for the present at least it must be foregone. 
 
 It is a matter of great interest to me to hear of your Association', 
 having attained its Centenary, and I have no doubt it is a powerful' 
 and influential institution, worthy of your great city and your great 
 country. I gather that it acts as a stimulus and an encouragement 
 to Thrift, and this is a matter of supreme importance at the present 
 time. It is of special interest to us Scotsmen. We have, not with- 
 out reason, earned the reputation of being a thrifty people, and in 
 
374 CENTURY OF AMERICAN SAVINGS BANKS 
 
 the difficult and trying times through which we are passing, the 
 principle is of greater importance than ever before. 
 
 The inequalities caused by the awful War are very great. Many 
 of our people are earning more money than they ever did, and others 
 are suffering from decreased resources and increased outlays. You 
 in the United States, if what we hear is true, are extremely pros- 
 perous, and are making money in colloquial phrase "hand over fist." 
 Now is the time therefore for us and for you to inculcate and prac- 
 tice Economy. The bad times will come, and the simple rule of 
 laying by something for a rainy day cannot be too strongly em- 
 phasised. No doubt your Association is doing excellent work, and 
 I heartily wish you continued and increasing success. 
 
 With much respect, and best wishes to you and your colleagues, 
 and renewed thanks for your kind invitation 
 
 I remain. 
 Very faithfully yours, 
 
 George Anderson. 
 James H. Manning, 
 
 President. 
 
 GLASGOW SAVINGS BANK 
 30 George Square 
 
 Glasgow, 9th May, 1916. 
 James H. Manning, Esq., 
 
 President. 
 My dear Sir: 
 
 Yours of 14th April just reached me last week, and as I was out 
 of town, I have not been able to reply to it before to-day. 
 
 I am indeed very much indebted to you for asking me to attend 
 ■the centenary celebrations of the Savings Bank Association of New 
 York, and it would have given me very great pleasure to have done 
 so, but unfortunately time does not permit of this. To be with you 
 on the 17th inst., would, I am afraid, have meant starting before 
 your letter reached me, and I am afraid that this letter, under present 
 circumstances, will not be in time for the meeting. 
 
 As you say, I am most thoroughly interested in all that pertains 
 to Savings Banks, and it is a very great pleasure to me to note the 
 interest that nearly all those who are associated with the work take 
 in it. Savings Banks, although it is only little over a hundred years 
 ago since they first started, are now one of the most settled and 
 prosperous institutions of the country, and I often wonder what the 
 founder, Dr. Duncan of Ruthwell, would say could he see what the 
 institution which he founded on a very tender basis, has grown into. 
 This fact I believe is largely due to the influence of the officials, and 
 the confidence with which they inspire the depositors. As you know 
 
THE SAVINGS BANK CENTENARY 375 
 
 the Manager or Actuary as we call them, of a Savings Bank must be 
 muA naore than a Banker, and above all he must be endowS in 
 no small degree with common sense, and able to give council to the 
 depositors on many matters not attaching directly to Bank work 
 proper. In doing so they help the depositors and further the in- 
 fluence of the Bank to an enormous extent. 
 
 There is one class of officials who must not be overlooked I refer 
 to the many thousands of ladies and gentlemen who conduct the 
 Penny Banks without fee or remuneration, and devote a considerable 
 amount of time to this. More especially I think I would refer to 
 the School teachers, now that thrift is really recognised as part of 
 the teaching of the young, and it is wonderful the amount of money 
 they can save. 
 
 I have again to thank you for the honour you have done me in 
 asking me to be with you, and very much regret indeed that I cannot 
 accept. 
 
 Yours sincerely, 
 
 T. W. M. Watson. 
 
 ABERDEEN SAVINGS BANK 
 
 Aberdeen, 4th May, 1916. 
 James H. Manning, Esq., 
 
 President, 
 
 The Savings Banks Association of the State of New York. 
 My dear Sir: 
 
 I feel greatly honoured by the most kind invitation of the 14th 
 April which you were good enough to forward to me on behalf of 
 the Savings Banks Association of the State of New York, that I 
 should, as Actuary of this bank, attend the Centennial proceedings of 
 that body which fall to be held in New York City on 17th May next. 
 
 It would afford me a pleasure of no ordinary kind if I could 
 find it possible to comply with your considerate and courteous re- 
 quest to visit the great Republic of America, with which this northern 
 outpost of civilization has many intimate and tender ties, for the 
 purpose of joining with you and your numerous colleagues on the 
 date mentioned in celebrating an event which has a common interest 
 for Savings Banks throughout the world; but unfortunately it is 
 neither convenient nor practicable for me to leave my duties here for 
 the extended period that such a journey would necessarily impose 
 upon me. 
 
 In these circumstances I beg of you to accept my grateful thanks 
 for this invitation which, I feel sure, is laden with good feeling and 
 which certainly impresses me with the idea that your Association 
 cherishes a large and enlightened conception of the international 
 character of the functions which such Associations are fitted to dis- 
 
376 CENTURY OF AMERICAN SAVINGS BANKS 
 
 charge; and also to convey to those representative and responsible 
 officials, in whose name you speak, my earnest hope that your Cen- 
 tennial Celebration, so interesting in itself, may not only be com- 
 pletely successful but, may further help the worthy cause of thrift 
 towards the promotion of which all our energies are directed. 
 
 The Scottish people are usually credited with being a thrifty race, 
 and I dare say the allegation, whether made in a complimentary 
 sense or otherwise, receives a measure of confirmation from the pros- 
 perity of their thrift institutions, the most powerful and popular of 
 which are the Trustee Savings Banks as distinguished from the Gov- 
 ernment Post Office system of Banks. And Aberdeen, in respect of 
 thrift, may be taken as being a fairly typical Scottish city. The 
 Savings Bank, the funds of which are well over 2J4 million pounds 
 sterling, is for size the fourth largest in Scotland, and its popularity 
 is attested by the fact that every third person of its 160,000 inhab- 
 itants is a depositor in it. 
 
 What, however, needs saying from an official of a Scottish Savings 
 Bank on an occasion like the present is that if the Scottish people 
 are thrifty to a fault it is not because they value money in and for 
 itself alone, but solely for the higher things of life, such as education 
 and intellectual betterment, which they prize above all material 
 things, and which are only procurable by strict econorny in the use 
 of those less important things. Any other species of thrift is simply 
 despicable in the eye of the Scot. 
 
 The duty of thrift in the sense indicated has always been an 
 obligation which civilized States have not only recommended to the 
 individual units composing those states, but have themselves, as cor- 
 porate communities, also practised; and it seems to me that at the 
 moment when nations, great in all the civilized arts, are exhausting 
 their accumulated substance and mortgaging the potential powers of 
 unborn generations in internecine war, the duty of thrift assumes a 
 peculiar significance for the nations of the earth and comes home to 
 the individual with especial force as an obligation of the first mag- 
 nitude. It is true that the free nations of the earth will surrender 
 their last farthing for liberty: and in this they do well; but such 
 exceptional sacrifice of material resources in the greatest of all causes 
 will have been rendered partly nugatory if it does not, for the future, 
 teach mankind generally the wisdom of exercising frugality in a 
 spirit and on a scale never before dreamt of in the past. 
 
 It will be obliging if you can find it convenient to send me any 
 print of your proceedings that may be officially issued. 
 With many good wishes for a most successful Centenary, 
 I have the honour to be. 
 
 Sincerely yours, 
 
 Thomas Jeffrey, 
 Actuary. 
 
THE SAVINGS BANK CENTENARY 377 
 
 ADELAIDE, AUSTRALIA 
 
 lilding, 
 •eet, 
 
 Adelaide. May 29th. 1916. 
 
 Brookman's Building, 
 Grenfell Street, 
 
 James H. Manning, Esq., 
 
 President of the Savings Banks Association. 
 My dear Sir: 
 
 I have to thank you for your courteous letter of 14th April with 
 formal invitation to attend the gathering in connection with the 
 celebration of the Centenary of American Savings Banks, on May 
 17th. 
 
 Your letter reached me on May 26th, too late, of course, for me 
 to accept your invitation. 
 
 It was my pleasure to take part in the Centenary in Edinburgh in 
 1910, as representative of the States of Victoria, South Australia and 
 Western Australia, and had it been possible for me to do so I should 
 have felt special interest in joining in so important a gathering as 
 that which you have held. I shall be interested later on to hear of 
 the result of your deliberations. 
 
 You are probably aware that for several years a large part of 
 Australia has been suffering from an unusually severe condition of 
 drought, an extraordinary feature, however, being that last year 
 rains fell during the wheat growing period giving us the largest 
 harvest ever known on Australia. Unfortunately, through the Gov- 
 ernment commandeering the whole of the wheat and only allowing 
 the farmers an advance of 2/6d. per bushel, less charges, the finan- 
 cial position of the farming community has been by no means re- 
 lieved, and as only a comparatively small proportion of the grain 
 has been shipped and the next season is upon us the financial strain 
 has told its tale on the Savings Banks, and had it not been for the 
 huge loans for war purposes causing enormous activities in all the 
 industrial centers they would have suffered severely. 
 
 In our own Savings Bank — of which I am Chairman — it was a 
 matter of interest, week by week, to follow the movements of the 
 Savings Bank in the different portions of the State, and to see how 
 the thrift of the previous years was enabling people to live during 
 this time of stress. I am sorry to say that having had no rains of 
 any producing value since September last, and our mid-winter com- 
 ing on the 21st of next month, the prospects for the coming season 
 are somewhat distressing; however, we must hope for the best. In 
 spite of all it was a remarkable fact that while funds were diminish- 
 ing during the drought period the number of depositors increased 
 almost everywhere. They number in our State Savings Bank, which 
 is a Trustee Bank, 56 per cent, of the whole population, and this, 
 
378 CENTURY OF AMERICAN SAVINGS BANKS 
 
 numbering about 420,000 people, has funds in our bank to the 
 amount of nine and one-third millions of money. 
 
 The Bank has again declared for this year interest on deposits at 
 the rate of 3^ per cent. 
 
 Thanking you for the courtesy of your invitation which I take 
 as extended to our Bank and which I shall lay before the Board at 
 the next meeting, 
 
 I have the honour to be, 
 Yours sincerely, 
 (Signed) W. Herbert Phillips. 
 
 SYDNEY, NEW SOUTH WALES 
 
 "Montrose," Richmond Avenue, Neutral Bay, 
 
 Sydney, N. S. Wales, 26 May, 1916. 
 James H. Manning, Esq., 
 
 President, 
 The Savings Banks Association. 
 Dear Sir: 
 
 I have to acknowledge receipt of your letter of 14th ultimo, (this 
 day) carrying an invitation to be present at the "Centennial Cele- 
 bration" of your Association on 17th instant. 
 
 I should have liked very much to have been at the function, but 
 as you will perceive it has already taken place, and I trust you have 
 had a pleasant time, and that the gathering was productive of results 
 both practical and social which will bear good fruit in the future. 
 
 I regret to say that my old Institution, "The Savings Bank of New 
 South Wales," established in 1832 was by legislation in 1914 in- 
 corporated into "The Government Savings Bank" and my position 
 as Managing Trustee abolished, so that my connection with Savings 
 Banks closed after 57 years service. 
 
 I may also remark that it was my good fortune to attend the 
 Centenary of Savings Banks held at Edinburgh, Scotland, in 1910, 
 and I had the pleasure of meeting Mr. C. Stuart Patterson, President 
 of the Western Savings Bank of Philadelphia, and other representa- 
 tives of American Savings Institutions there, and I have only happy 
 recollections of the gathering. 
 
 With my best thanks for your kindness, and regrets that circum- 
 stances prevented me from having a personal meeting with yourself 
 and others, 
 
 I am, dear sir. 
 
 Yours very truly, 
 
 D. Mitchell. 
 
THE SAVINGS BANK CENTENARY 379 
 
 SAVINGS AND PROVIDENT BANK OF PARIS 
 Mr. President: ^*- ^°™'°'<1'^^' ^^^s, May 11, 1916. 
 
 Because of existing conditions your honored letter of April 14 
 1916 reached me only within the last few days ' 
 
 I have every reason to believe that it was intended for my dear 
 father whom you must have met in England some years Z and 
 whom It was my misfortune to lose early in 1911. Having succeeded 
 
 orP^ris^^t^'tt """f"" °' ^^ ^'^'^^^ -d Provided Bank 
 of Pans It would have been a pleasure to answer your kind in- 
 vitation but, on the one hand, your letter arrived too late and be- 
 sides, having been mobilized as an officer, all my time is devoted to 
 the accomplishment of my military duties. 
 Believe me, Mr. President, 
 
 Very truly yours, 
 (Signed) Comte de La Panouse. 
 
 MESSAGES FROM AMERICA 
 
 Among the messages of congratulation and encourage- 
 ment received by the president from prominent Americans 
 who were unable to attend were the following: 
 
 CHARLES E. HUGHES 
 
 I greatly regret that it is impossible for me to attend the dinner 
 this evening of the Savings Banks Association. Permit me to ex- 
 tend my heartiest congratulations on the event you celebrate, and 
 particularly on the efficient management of the Savings Banks of 
 New York. I send my best wishes for their continued prosperity, 
 with its unfailing proof of the thrift of the people and of the skill 
 and fidelity of their fiduciary. 
 
 CARDINAL GIBBONS 
 
 I am heartily in sympathy with the movement which the Asso- 
 ciation has in view — the encouragement of thrift among the p>eople. 
 This virtue must be constantly urged upon them, to counteract the 
 tendency for extravagant wastefulness. It is my conviction that the 
 integrity of the personnel of our banking institutions, their fidelity 
 to the trust that has been reposed in them, has been largely instru- 
 mental in promoting the habit of thrift and has brought immeasurable 
 benefits to our people. A comfortable, thrifty, contented citizenry 
 promises well for the future of the country in its industrial, economic 
 and social life. 
 
 Wishing the Association continued success, I beg to remain, very 
 faithfully yours. 
 
380 CENTURY OF AMERICAN SAVINGS BANKS 
 
 WILLIAM H. TAFT 
 
 I regret it will not be possible for me to accept your kind in- 
 vitation to attend the dinner. I sincerely hope that your celebration 
 may be a success. The virtue of self-restraint involved in thrift is 
 the basis of all sound prosperity, and with the Association organized 
 with a view to promote this virtue, it has a most useful field. 
 
 ANDREW CARNEGIE 
 
 Man must exercise thrift and save before he can produce anything 
 material of great value. There was nothing built, no great progress 
 made, so long as man remained a thriftless savage. Civilized man 
 has no clearer duty than from early life to keep steadily in view the 
 necessity for providing for the future of himself and those dependent 
 upon him. The accumulation of millions is usually the result of 
 enterprise and judgment and some exceptional ability for organiza- 
 tion. It does not come from savings in the ordinary sense of the 
 word. . . . To try to make the world in some way better than you 
 found it is to have a noble motive in life. Your surplus wealth 
 should contribute to the development of your own character and 
 place you in the ranks of Nature's noblemen. 
 
 JOHN H. FINLEY 
 
 There is spent in this State yearly for education in public and 
 private schools, colleges and universities, approximately $90,000,000 
 — about what is spent in one day for carr3ring on the great war in 
 Europe. This total yearly expenditure means for the whole popula- 
 tion of the State an average of about 2% cents per person per day, 
 that is, the amount of a street car fare, or of the price of a glass of 
 soda or beer, every two days. It would seem that such average 
 saving were possible not only without harm but with benefit. 
 Thousands of people ride daily in street car or in automobile who 
 would be better off if they walked. And I suspect that immensely 
 more is spent and without benefit if not with harm, for things repre- 
 sented by the other two items. 
 
 Thrift, even moderate thrift, will on the one hand make the ex- 
 pense of educating our children no burden, but on the other hand, 
 the practice of thrift will in itself have an educational value and 
 will make people generally sturdier, happier and healthier. Waste 
 is sinful because it is harmful not only to ourselves but to those to 
 whom we have to leave this world when we go. I most heartily ap- 
 plaud what you are doing to prevent it through your effort to promote 
 thrift, and especially among children. 
 
 Respect for others and self control are two habits we have special 
 need to cultivate in this country. One has its expression in courtesy 
 to all, and in obedience to those in authority; the other thrift. 
 
THE SAVINGS BANK CENTENARY 381 
 
 CHARLES W. ELIOT 
 
 I regret that I cannot attend the banquet and say there that well- 
 conducted Savings Banks, such as those of the State of New York, 
 unquestionably exert a strong influence on the health, wealth and 
 moral energy of the entire community. The men and women who 
 marry early, bring up a family well and go through life always bet- 
 tering their condition, are the thrifty young people who, in prepara- 
 tion for family life, save a good part of their earnings before they 
 are twenty-four years of age and live within their incomes all their 
 lives, accumulating on their way more and better chattels and put- 
 ting money in the Savings Bank, with which to educate and further 
 their children and grandchildren. These are the people who con- 
 stitute a stable, free State and produce a vigorous population, capable 
 of self-control in liberty. 
 
 The sound Savings Bank is the best instrument of their thrifti- 
 ness. 
 
 JAMES J. HILL 
 
 Whatever encourages thrift in people builds a sure foundation 
 for their prosperity, security and honor. Economically, the saving 
 of some portion of earning or income raises barbarism to civilization. 
 Morally, it leads to self-mastery and the wholesome pride that ac- 
 companies the sense of independence. Politically, it strengthens civic 
 interest and virtue by giving men a stake in the State. 
 
 The wonderful qualities shown by the French in the present war 
 could be displayed only by a people that had raised thrift to the 
 rank of a distinctive national virtue. 
 
 More, perhaps, than any other, the need and the value of it should 
 be impressed upon the people of the United States. 
 
 MYRON T. HERRICK 
 
 I am very glad that the Savings Banks Association of New York 
 is taking up the subject of thrift. Thrift promotes good habits, 
 good character and good health. It places the individual as it places 
 the nation, upon a sure and certain foundation. It makes him a 
 better man, a better citizen and a valuable asset to the community. 
 
 Thrift is the most profitable and satisfactory investment in the 
 whole, wide world. Just a little effort and self-denial will start it, 
 but once started it gathers impetus, like an avalanche down a moun- 
 tain side and sweeps away every obstacle in its path. 
 
 M. WOOLSEY STRYKER 
 
 Thrift, indeed, is preparedness. The indirect, or, rather, the in- 
 cidental values of the forecasting and providing purpose, the rational 
 
382 CENTURY OF AMERICAN SAVINGS BANKS 
 
 habit of mind it engenders and enlarges — ^these values are deep and 
 durable. To sit down and count the cash of life's exigencies is 
 simple sanity. 
 
 That was an exceedingly wise remark of Aristotle's, "Count it 
 among the probabilities that many improbable things will happen." 
 The items of chance thus fall into the aggregate of certainty. Im- 
 providence is a kind of impudence. 
 
 THEODORE N. VAIL 
 
 Industry and thrift are the bases of individual character and pros- 
 perity and the bulwark of the family and the nation. 
 
 The aggregation of the results has made possible the development 
 of the utilitarian industries and enterprises of this country on the 
 existing scale. 
 
 May the future of your institution be as great as the past. 
 
 NEW JERSEY SAVINGS BANK ASSOCIATION 
 
 The New Jersey Savings Bank Association, now in session in 
 Bloomfield, New Jersey, extends cordial greetings and sends con- 
 gratulations to the Savings Banks Association of the State of New 
 York, now celebrating the Centenary of American Savings Banks. 
 
 Howard Biddulph, 
 Secy. 
 
 THE OLDEST BANK IN AMERICA 
 
 Philadelphia, May 4, 1916. 
 Mr. James H. Manning, President. 
 Pear Sir: 
 
 I thank you for your kind invitation to the Centenary Celebration 
 of American Savings Banks to be held on Wednesday, May 17, 1916, 
 and regret very much that I am unable to accept it. 
 
 We are however sending you the best representative of the oldest 
 Savings Bank in the Country in our president who, I am sure, will 
 enjoy your hospitality and in his address be able to tell you some- 
 thing of interest. 
 
 It is almost impossible to say anything new or original on 
 "Thrift," but I cannot refuse your courteous request for a word on 
 the subject. 
 
 At this time when so much is being said and written about "Pre- 
 paredness" has any one suggested how well the Savings Banks, which 
 are at the same time the promoters and result of thrift, are doing 
 their part as the most useful and effective mobilizers of resources 
 that the world has seen? 
 
 They collect, and distribute through the channels of investment, 
 billions of dollars that otherwise would go unmarshalled; release an 
 
THE SAVINGS BANK CENTENARY 383 
 
 equal amount of other capital which again releases still other capital 
 for graded service through the steps from investment to initial de- 
 velopment; build up an immense army of self-supporting, self-re- 
 specting people as a first line of defense against improvidence and 
 pauperism, and a last reserve against recklessness and speculation, 
 and by giving the individual an interest in property, engender the 
 habits and thoughts that are essential to sound citizenship, with a 
 corresponding sense of the rights and duties incident thereto. 
 
 The welfare of Savings Banks is S3Tionymous with the welfare 
 of the laboring people of the country: their successful continuance 
 means opportunity to their depositors and the perpetuation of that 
 prosperity to which they have so largely contributed and which in 
 turn contributes so largely to their own. 
 
 With greetings to you and our fellow workers in the field of 
 Thrift, 
 
 Believe me to be 
 
 Very truly yours, 
 
 (Signed) J. M. Willcox, 
 Vice-President. 
 
 THE PIONEER SALEM (MASS.) BANK 
 
 Incorporated 1818 
 
 SALEM SAVINGS BANK 
 
 Salem, Mass. 
 
 May 8, 1916. 
 
 Mr. James H. Manning, President, 
 
 The Savings Bank Association 
 of the State of New York. 
 Dear Sir: i- i. • 
 
 I regret I cannot accept your kind invitation for the 17th mst. 
 
 The Savings Banks have done much to encourage thrift and the 
 large and increasing deposits show the success of the Savings Bank 
 
 system. ^ , 
 
 Before the Revolutionary War broke out, a Tory parson prayed 
 that the government might all hang together. A sturdy patriot m the 
 congregation shouted "Amen." The parson recognizing the voice 
 amended his prayer, saying, "May they hang together in accord and 
 concord": to which the response was, "No matter what cord it is, 
 so it be a strong one." 
 
 So I offer the sentiment: The American Savings Banks, may they 
 
 all hang together. 
 
 I have the honor to be 
 
 Very respectfully yours, 
 
 Charles S. Rea, 
 President. 
 
 CSR.S. 
 
384 CENTURY OF AMERICAN SAVINGS BANKS 
 
 ADDRESS OF BANK SUPERINTENDENT RICHARDS 
 
 The president announced the inability of Governor 
 Whitman to be present, by reason of the rush of work due 
 to the thirty-day bills left on his hands by the Legislature. 
 They were also unfortunate, he said, in not having present 
 any representatives of banking institutions in Europe, due 
 to the exigencies of the prevailing war, but he was able to 
 assure the diners that London and other cities were aware 
 of this celebration and that they were at least present in 
 spirit and purpose. The president felt sure that there were 
 no cities in the world where greater interest is taken in Sav- 
 ings Banks and their work than London and Edinburgh. 
 
 The Hon. Eugene Lamb Richards, Superintendent of 
 Banks, of the State of New York, was the first speaker of 
 the evening. 
 
 Mr. Richards was given a most cordial reception. After 
 putting his hearers in excellent humor by relating a few 
 pointed anecdotes in his own inimitable way, Mr. Richards 
 drifted into a more serious vein. Among other things, he 
 said: 
 
 While this celebration is properly a jubilee of material prosperity, 
 I prefer to see in it something of deeper significance, a tribute to the 
 stem and homely virtues of thrift and industry, to the people who, 
 in the past, with the cooperation of the Savings Banks system, have 
 made their mites into millions, and have made this country what it 
 is to-day. 
 
 We lose sight, I think, in these days of getting rich quick, of 
 the modest virtues of economy and hard work. Industry and thrift! 
 What a demonstration of their force has been given by two of the 
 nations on opposite sides of this great European struggle. In Ger- 
 many and in France, back of their high military preparedness and 
 efficiency, has stood the compelling, resisting, solid force of the 
 French peasants and the German artisans, who, by their thrift have 
 clothed and fed and armed their patriotic soldiers. I think there is 
 not a man in this presence who does not realize that the strength 
 of these nations — ^the strength of this nation — ^must lie in the plain 
 people who are thrifty and economical, those who, with their little 
 earnings, gathered together, have contributed the amounts that have 
 made the country a power and given it financial stability. 
 
THE SAVINGS BANK CENTENARY 385 
 
 • ^ *^^v' *°Pj ^.^^^ latter days of new nostrums and of paternal- 
 ism of the old prmaples of government co-operation and encourage- 
 ment of business, and I know of no more powerful channel than the 
 bavings Banks m their respective communities, in keeping before the 
 eyes of the people the homely virtues of our fathers and their theories 
 and principles of government in its relation to the material pros- 
 perity of the country and to the merchants and business men of the 
 land, for the Savings Banks come into closer touch with more people 
 than any other financial institution in this country. 
 
 The churches are and ought to be the centers of moral improve- 
 ment; but I believe the Savings Banks are and ought to continue to 
 be the cornerstone of civic improvement and the inculcation of the 
 principles upon which this government was founded. In your daily 
 contact with the depositors you have an opportunity equal to that 
 of the occupant of any pulpit of telling the people the plain truth 
 as to what is best for them and best for the country. 
 
 Mr. Richards made an eloquent plea for co-operation in 
 banking, co-operation between the State and every officer 
 or director under its supervision, co-operation for fair deal- 
 ing and opportunity, co-operation between all officers, mer- 
 chants and bankers working along the middle line between 
 the policy of government ownership and the policy of live 
 and let live. While perfection was not to be expected, each 
 should have his own ideals, and he for one, looked forward 
 to the day when the Savings Banks would not have their 
 privileges and prerogatives encroached upon by banks of 
 deposit and trust companies. (Applause.) Should that 
 prove, as in the past, impossible, he believed he could look 
 forward, with some reasonable expectation of realization, 
 to the day of co-operation between the state system and the 
 national bank system, or of a completely independent state 
 system in addition to the State Banking Department,' with 
 a state Clearing House Association for the State, made up 
 of the members of the state system banks and trust com- 
 panies. With that he believed there would come some pro- 
 vision for a guarantee fund voluntarily contributed by the 
 members of the State Clearing House Association for the 
 protection of the depositors in every bank in that associa- 
 tion. Then, they might look forward to the day of a State 
 Reserve Bank which, added to the State Banking Depart- 
 
386 CENTURY OF AMERICAN SAVINGS BANKS 
 
 ment, would make a complete system of ideal co-operative 
 supervision. Mr. Richards added: 
 
 Any steps toward this final result, in my belief, represents sin- 
 cerity in government, represents going to those safe and sane and 
 real ideas, turning back from the graven images of semi-socialism 
 to the theory that the least possible interference with business by the 
 government represents the highest form and the highest prospects of 
 material and general and real welfare. (Applause.) It represents 
 progress with prudence; it represents real preparedness for the bank- 
 ing interests of the country to take the place which is coming to them 
 day by day — nay, which is here this moment — of being the bankers 
 for all the nations of the earth. 
 
 REMINISCENCES BY THE DEAN 
 
 Andrew Mills, president of the Dry Dock Savings Bank, 
 New York, one of the original members of the Savings 
 Banks Association, gave a few interesting reminiscences,, 
 referring to the noble service in the past of such men as 
 John Harsen Rhoades, Samuel H. Rainey, Thomas M. 
 Mulry, Merritt Trimble, William C. Sturgis, and others. 
 Among these men he counted some of his most intimate 
 friends, and as he recalled them he was unable to prevent 
 a feeling of sadness, for they have all crossed the Great 
 Divide. Though gone, their works follow them. They 
 were men of unblemished character, strong men, men of 
 ability, whose motto was what seems to have become the 
 slogan of the day, "Safety first." Any institution under 
 their charge was known to be trustworthy. When, almost 
 a century ago, the Bank for Savings, the first Savings Bank 
 of this State, opened its doors for business, it issued a cir- 
 cular announcing as its purpose the provision of a safe 
 depository for the savings of the wage earners. The em- 
 phasis was on the "safe" as it is to-day. In conclusion, 
 Mr. Mills said: 
 
 I remember as a school boy, the design on the certificates which 
 were given us each month as a reward of merit. It pictured the 
 graduate passing from the portals of the school and passing back 
 the torch of knowledge to those coming after. Let us see to it that 
 we keep the torch of safety and conservatism bright, so that when 
 we pass on, we may pass it to our successors undiramed. 
 
THE SAVINGS BANK CENTENARY 387 
 
 PRESIDENT OF UNION UNIVERSITY 
 
 The Rev. Charles Alexander Richmond, president of 
 Union University, at the outset of his remarks, paid his 
 respects to Superintendent Richards, expressing surprise 
 that the latter should have advocated any such plan as the 
 Government having nothing to do with the supervision of 
 business. The speaker suggested that perhaps Mr. Rich- 
 ards meant to include all other government activities except- 
 ing his own. 
 
 Dr. Richmond said he disliked to hear any one talk 
 about thrift and not include the Scotch. He had observed 
 that the assemblage loudly applauded the message from 
 Scotland. He had also noticed that very few objected to 
 a little Scotch. (Laughter.) The speaker went on to say 
 that it is not money, but the love of money, that is the root 
 of all evil. Money stands as a bulwark against the fear 
 and slavery of want, and besides, it stands for leisure and 
 for education, for the care of the sick, for the fine arts, for 
 music, and for all the refinements of life, none of which 
 could be in existence at all if it were not for the fact that 
 somebody had made large savings through a very consid- 
 erable period of time. Dr. Richmond added: 
 
 I desire to say a few words about the savings that are represented 
 as the real value lying behind all those pieces of paper you have in 
 your vaults and which you call securities— the savings of a nation, 
 without which these securities of ours would not be secure for a 
 single moment. I mean liberty and the protection of hfe, a free 
 government, a sense of nationality and the spirit of union, those 
 things that represent the real value and stability of our nation. And 
 I think you will all realize that all of these things have been the 
 result of great sacrifices and great struggles. They have all been 
 fought for? they have all been saved, and they have all been gained 
 for us at W great cost. We accept them as part of our heritage, 
 as something that has come to us and that we own, frequently for- 
 getSg that we hold them simply in trust to hand down unimpaired 
 to our children, as our fathers handed them down to us. 
 
 sTwhen we are told of the vast deposits m the Savings Banks of 
 the State and the nation, it is not the enormous amount of the de- 
 positors or the sums of money that impresses me-it is the self- 
 
388 CENTURY OF AMERICAN SAVINGS BANKS 
 
 sacrifice, the self-restraint, the things these people have gone without, 
 in the natural and honest pride they have taken in laying up this 
 provision for their children; for these depositors — I believe I am 
 right when I say it — ^most of these depositors are not thinking of 
 themselves, but of their children, those who come after them. 
 
 Dr. Richmond quoted Abraham Lincoln's saying that 
 "this country will live forever, unless it commits suicide," 
 explaining that the eminent American meant our greatest 
 dangers are not from without, but from within. 
 
 We have been careless almost to the point of idiocy in the matter 
 of our outward defenses. We have behaved, and I think are be- 
 having to-day, very much as a board of directors of one of your 
 banks would behave if they should order down the bars from the 
 windows, take out the currency and the gold, lay it out on the 
 counters, and invite an astonished but delighted populace to come in 
 and make themselves at home. That is very much the way we have 
 acted. 
 
 No doubt, the world is full of very friendly, peaceable people, but 
 I am afraid there are a few rogues still left. There are, as David 
 Harum used to say, a few fleas left on the dog; and I have no doubt, 
 if we used a fine tooth comb, we might still find a few robber barons- 
 who would like to take a bite or two out of our fine, fat carcass, if ' 
 they had the chance. 
 
 But with all, these possible dangers, the one I think the most 
 pressing is the menace from within. I mean no criticism of the 
 immigrants. I suppose we are all immigrants, excepting, possibly, 
 the Lady of the White House, who is said to be descended from an 
 Indian princess. All the rest of us are immigrants, but there are no 
 doubt hundreds of thousands, and I believe there are millions of 
 people in this country who are with us but not of us, people who 
 have no stake whatever in this country, people who would not will- 
 ingly give up a single dollar or a drop of blood in defense of this 
 country. 
 
 I say we do not object to the immigrant, but what we have a right 
 to demand is that he shall not remain an immigrant. (Applause.) 
 I wonder if you realize that in the group of Middle Atlantic States 
 to which New York belongs, of the adult men of voting age who 
 have come to this country from abroad, only 38 per cent, are natur- 
 alized — about one in three; in other words, two out of three of these 
 men own another flag than ours: their allegiance is not to the re- 
 public, but to a king. Now, whether they mean to be of us or not, 
 we cannot tell, but I think the time is fully ripe when we have a 
 right to press this question of old Joshua, who said, "Choose you 
 this day whom you will serve." 
 
THE SAVINGS BANK CENTENARY 389 
 
 I am told that the Bible Society, which was founded one hundred 
 years ago last week, prints the Bible in ninety-one different languages 
 and dialects for distribution in the United States. I do not know 
 in how many languages you issue your pass books; I have no doubt 
 they are good in any language, but in the great national institutions 
 that represent our national wealth which I have been describing, 
 there should be only one language, and no man's signature should be 
 good imless it is the signature of a man whose heart is honestly and 
 truly American. (Applause.) No man has the right to the protec- 
 tion of the Stars and Stripes who is not willing to give his best blood 
 for its defense. 
 
 When I was trying to get something ready for this address, I felt 
 as Robert Burns felt, in his letter to his young friend, when he said: 
 
 "But how the subject theme may gang 
 Let chance and time determine ; 
 Perhaps it may turn out a sang, 
 Perhaps turn out a sermon." 
 
 Well, it has turned out a sermon. But, gentlemen, I know you 
 feel as I do, that these are times when a man must think seriously. 
 The whole world excepting ourselves, is at war and suffering deso- 
 lation unspeakable and untold. We have escaped thus far. We 
 have a certain superficial prosperity, but I cannot help feeling that 
 it is not very well founded. There is a reckless feeling all over the 
 country, there is a kind of gaiety, the city is full of pleasure seekers, 
 and much money is spent. But thoughtful men are not deceived. I 
 doubt very much whether we are going to escape without our trial, 
 but how it may come and what it may be, no one knows. And yet, 
 I believe the heart of America is sound. I believe that when the 
 trial comes — and that is what savings are for — we shall find that 
 which we have preserved through these hundred and more years, not 
 only in money and property but also in patriotism, in love of country, 
 and in love of liberty, will be found sufficient savings and resources 
 to carry us through whatever trials may be upon us now, or whatever 
 trials the future may bring. 
 
 JOSEPH A. LAWSON 
 
 Joseph A. Lawson, of Albany, New York, "set the table 
 on a roar" for some time with a collection of his latest 
 anecdotes. In his more serious moments, the speaker ex- 
 pressed some thoughts well worthy of consideration. Con- 
 tradistinguishing between the Savings Banks and the banks 
 of discount, he said he could not conceive of the latter send- 
 ing out circulars and advertisements soliciting deposits of 
 
390 CENTURY OF AMERICAN" SAVINGS BANKS 
 
 one dollar and upward. It was the little man, financially, 
 that the Savings Banks are helping to start the nucleus of 
 a fortune. When the bank books came in, greasy and 
 fingered, they represented what had been wrested out of 
 the soil by the plain people from out of the hills, who spend 
 their days in toil from sun to sun; the savings of the poor 
 women on the East Side who are sewing their lives away. 
 This was the touch of nature between them and the plain 
 working people. 
 
 It is not your surplus, it is not the showing you can make to the 
 public in your annual statement, it is not what you can show to my 
 distinguished friend of the Banking Department, that you ought to 
 be proud of. You ought to be proud of the fact that there exists 
 between you and the mass of the people that touch of nature that 
 makes you realize you are the conservators of their savings, that you 
 are the people who are enabling them to put aside that which will 
 guard, protect and shelter them in the rainy day that is to come. 
 And that is what makes up the bulk of these great United States — 
 not the multimillionaire, who drops out of life here and there with a 
 hundred millions to his credit, and leaves a hole in the life of the 
 community that can be found as readily as the hole that you find in 
 your glass of water when you put your finger in it and draw it out. 
 It is the millions and millions of plain people of these great United 
 States, of which you are the conservators, and as you protect their 
 deposits by time-locks and bolts and bars, so ought the government 
 of this country protect their savings and their lives by an adequate 
 and proper system of preparedness. 
 
 I WILLIAM JENNINGS BRYAN 
 
 The Hon. William Jennings Bryan was the last speaker 
 of the evening. He said that in looking over his speeches 
 — and he had a very large collection — ^he had not been 
 able to find any that exactly fitted this occasion. It was 
 not his intention to make a speech on preparedness, but he 
 would simply say he was not ashamed to believe in Christ's 
 philosophy, that love is more potent than the terrorism of 
 preparedness. "If experience is any guide," he added, "I 
 know of nothing more certain to involve us in all the horrors 
 of war than the following of the false philosophy that has 
 brought Europe into this conflict, and making a national 
 
THE SAVINGS BANK CENTENARY 391 
 
 policy of the discarded doctrine that preparedness preserves 
 peace; for, unless there is some moral philosophy that ap- 
 plies to a nation and does not apply to an individual, then 
 just as sure as pistol-toting among men promotes disorder 
 instead of peace, so pistol-toting among nations will hasten 
 and not retard war." 
 
 So far as thrift was concerned, he was able to heartily 
 congratulate the bankers present upon the fact that they 
 encouraged thrift; he also shared with them the feeling of 
 contempt for the false pride that leads so many people to 
 squander money to keep up appearances when they had 
 better be honest with themselves and their creditors, live 
 within their means and lay up money for the future. He 
 declared for that essential honesty in the individual that 
 teaches him no man can rightly collect from society except 
 as he contributes to the welfare of society, and that no man 
 is really honest at heart who desires to secure from society 
 a single dollar without giving to society a dollar's worth 
 of service in return. 
 
 I am glad to believe that we have made progress in the last twen- 
 ty-five years, and as I look forward to the next twenty-five years I 
 believe we are going to make more progress. I want you to under- 
 stand that the virtue of this country is not confined to any one sec- 
 tion, and I believe it would be well if we could bring together the 
 people of the different sections, have them know each other, and have 
 them realize that however much we may differ upon the surface issues 
 that arise from time to time, that when we come to the great funda- 
 mentals upon which the strength of our nation is built, there is no 
 essential difference among American citizens, no matter to what party 
 they belong and no matter what section of the country they live in. 
 
 AMERICAN BANKERS ASSOCIATION CELEBRATES 
 
 A celebration of the one hundredth anniversary of the 
 establishment of American Savings Banks was held in con- 
 nection with the forty-seventh annual convention of the 
 American Bankers Association, at Kansas City, Missouri, 
 September 26, 1916. 
 
 E. L. Robinson, vice-president of the Eutaw Savings 
 Bank, Baltimore, Maryland, delivered the "keynote" ad- 
 
392 CENTURY OF AMERICAN SAVINGS BANKS 
 
 dress, which was entitled "One hundred years of Savings 
 Banking." Professor Graham Taylor, head resident, Chi- 
 cago Commons, and president of the School of Civics and 
 Philanthropy, spoke on the subject of "The Social Aspect 
 of Thrift," bringing to the attention of the convention the 
 need of cultivating the thrift habit in a broader way. 
 
 George E. Allen's address on "Thrift and Human Na- 
 ture" was a masterpiece of thrift literature. 
 
 Victor A. Lersner, chairman of the Savings Bank Cen- 
 tennial Committee and treasurer of the Williamsburgh Sav- 
 ings Bank, explained the purpose of the Centennial Thrift 
 Campaign. 
 
 At the entertainment in celebration of the Centennial, 
 held on the evening of Wednesday, September 27, in Con- 
 vention Hall, there were in attendance approximately twelve 
 thousand people. It is estimated that about eight thousand 
 of these were depositors in Kansas City Savings Banks. 
 
 The official motion picture of the nation-wide thrift cam- 
 paign — "The Dollar and the Law" — was shown. The en- 
 tire affair is described as a brilliant success. 
 
INDEX 
 
 Aberdeen Savings Bank, letter from, 
 
 37S 
 Adelaide, Australia, letter from, 377 
 Adversity, the school that makes men, 
 
 31 
 Advertisements, samples of, issued by 
 some' discount banks and trust 
 companies, 240 
 Albany Savings Bank, incorporation 
 of, 55, 143 
 petition for, 143 
 
 corporators and first managers, 144 
 opening of, 55, 145 
 first loan on bond and mortgage, 146 
 officers since organization, 149 
 by laws (original), 151 
 financial statement, 154 
 American Bankers Association, work 
 
 of, in promoting Thrift, 8 
 American Institute of Banking, work 
 
 of, in promoting Thrift, 8 
 Amsterdam, Bank of, origin, 15 
 Anderson, George (Bank of Scot- 
 land), letter from, 373 
 Availability of coimty bonds, 225 
 Average amotmt of savings accounts 
 in the United States, 323 
 in Switzerland, 323 
 in Denmark, 323 
 in Norway, 323 
 
 B 
 
 Babylon, banking in ancient, 15 
 Babylonia, King of. Code of, 17 
 Baltimore, The Savings Bank of, in- 
 corporation of, 55, 98 
 
 first directors of, 98 
 
 first opened, 100 
 
 growth of, 101 
 
 report of first auditors, 101 
 
 interest payments, 101 
 
 ,list of presidents, 102 
 
 act of incorporation, 102 
 
 statement Jan. 1, 1916, 104 
 
 Officers and directors (1916), 104 
 
 393 
 
 Bank clearings, in the United States, 
 
 comparison of, 305 
 Bank for Savings, New York, organ- 
 ization of, 112 
 attempts to obtain charter, 114 
 incorporation of, 116 
 corporators of, 55, 117 
 opening of, 55 
 extracts from first report (1820), 
 
 118 
 real estate investments authorized, 
 
 122 
 first financial statement, 123 
 address to the public (1819), 124 
 presidents since organization, 126 
 officers and trustees (1916), 126 
 financial statement to date, 127 
 Bank of England, fovmding by Wil- 
 liam Patterson, 15 
 Banking, ancient origin of, 15 
 Banking law. New York, 345 
 Banking law, revision, 344 
 Banking, what constitutes progressive, 
 
 295 
 Bank of Scotland, letter from, 373 
 Bank of Venice, origin of, 15 
 Banks, terse description of, 17 
 Banks, of deposit and discount 
 (branches), number of, State of 
 New York, 62 
 Barcelona, Bank of, origin, 15 
 Barnstable (Mass.) Institution for 
 
 Savings, incorporation of, 97 
 Basle, early bank in, 32 
 Bath, residents of, proposed early 
 
 bank, 34 
 Bay State banks, old, date of incor- 
 poration of, 96 
 Bentham, Jeremy, wrote in favor of 
 
 "Frugality Banks," 32 
 Berlin, Bank of, origin, 15 
 Berne, early bank in, 32 
 Biddulph, Howard, letter from, 382 
 Borrowing fimds of Savings Banks, 
 
 trustees prohibited from, 24 
 Boston, first to incorporate in the 
 world, 89 
 
394 
 
 INDEX 
 
 Branch Savings Banks, establishment 
 of, 298 
 
 British Trustee Savings Bank Asso- 
 ciation, cable message from, 369 
 
 Bremen, Savings Bank at, 45 
 
 Brubacher, Dr. A. R., on duties of 
 schools toward military train- 
 ing, 180 
 payment of Sunday School teachers, 
 294 
 
 Brunsvirick, early bank in, 32 
 
 Building lot associations, number of, 
 State of New York, 62 
 
 Cable messages from Europe, 369 
 Cameron, W. S., letter from, 372 
 Capitalist class, deposits belonging to, 
 first to be withdrawn in time of 
 trouble, 27 
 Capital, new, the one imperative need 
 
 of the United States, 11 
 Cargill, Alexander (Edinburgh Sav- 
 ings Bank), letter from, 372 
 on effect of war upon European 
 Banks, SO 
 Carlyle, Vincent F. (British Trustee 
 Savings Banks Association), 
 cable message from, 369 
 Cash-carrying habit, the, 330 
 Centenary, celebration of, 350 
 list of those present at, 351 
 High School prize essay contest, 361 
 
 text of, 362 
 Skiimer, George I., address of, 364 
 Gunnison, Herbert F., address of, 
 
 366 
 Purves, J. C, address of, 367 
 Parkman, Henry, address of, 367 
 Gawtry, Louis B., address of, 368 
 Messages from prominent Ameri- 
 cans, 379-382 
 Pioneer banks, 382 
 Richards, Eugene Lamb, address of, 
 
 384 
 Mills, Andrew, address of, 386 
 Richmond, Rev. Charles A., address 
 
 of, 387 
 Lawson, Joseph A., address of, 389 
 Bryan, Wm. Jeimings, address of, 
 390 
 Central Banking Council, organization 
 of, 349 
 officers of, 349 
 Charity, no part of the Savings Bank 
 idea, 18 
 
 China, only great nation that has not 
 made its silver and paper money 
 redeemable in gold, 16 
 
 Christian Disciple, The, publication of 
 first notice referring to the or- 
 ganization of a Savings Bank, 
 90 
 
 "Christmas Clubs,'' as conducted by 
 discount banks, 242 
 
 Classification of Savings Banks, 25 
 
 Cleveland, Grover, on. the combination 
 of poverty and well-regulated 
 ambition, 31 
 
 Clinton, DeWitt, recommended estab- 
 lishment of Savings Banks in 
 1818, 4 
 
 Closed Savings Banks, list of, 62 
 
 Colonial times, industrial methods dur- 
 ing, 58 
 
 Commercial readjustments, world- 
 wide, after the war, 12 
 
 Commercial failures in the United 
 States, comparison of, 305 
 
 Commercial jealousies, frequent cause 
 of wars, 12 
 
 Commimal Savings Banks in Ger- 
 many, 43 
 
 Communism, rioting and disorder, de- 
 positors in Savings Banks op- 
 posed to, 27 
 
 Comptroller of the Currency, report of, 
 as to Savings Banks in the 
 United States, 67 
 
 Condition of the country in 1816, 56 
 
 Convertible assets, consensus of bank- 
 ing men as to, 224 
 
 "Cooperative competition," definition 
 of, 296 
 
 Cost of conducting Savings Banks in 
 the United States, 6 
 
 County bonds, availability of, 225 
 
 Current expenses, payment of, when 
 starting a new Savings Bank, 
 24 
 
 Curtis, Louis, president. Provident In- 
 stitution for Savings, Boston, 
 biography of, 95 
 
 Credit Foncier bonds, 46 
 
 Credit unions, number of. State of 
 New York, 62 
 
 D 
 
 Dedham (Mass.) Institution for Sav- 
 ings, incorporation of, 97 
 
INDEX 
 
 395 
 
 Defoe, Daniel, author of proposed 
 
 'Pension Oface" plan, 32 
 Delestre, Hughs, first to propose insti- 
 tutions for the benefit of work- 
 ingmen, 32 
 Delphi, temple at, place for keeping 
 money securely and as gathering 
 place of money-changers, 16 
 DeMalerce, on Savings Banks, 31 
 Deposits in European Savings Banks, 
 
 SO 
 Deposits, limitations upon, 26 
 Development of Savings Bank legisla- 
 tion, 182 
 Dividend rates, comparison of, State 
 
 of New York, 62 
 Dormancy of Accounts, 246 
 aggregate amount of, 246 
 results of systematic work in mini- 
 mizing, 249 
 system devised by Bryan H. Smith, 
 
 249 
 never outlawed, 252 
 claims of the State to, 253 
 publication required, 254 
 cases from various banks, 256 
 Duchy of Brunswick, first Savings 
 
 Bank in, 42 
 Duncan, Reverend Henry, pioneer 
 work of, 34 
 
 E 
 
 Economic position of the United States 
 
 in 1916, 301 
 Eddy, Thomas, New York pioneer in 
 
 Savings Bank field, 54 
 founder of Bank for Savings, New 
 
 York, 112 
 Edinburgh Savings Bank, organized in 
 
 1814, 39 
 letter from, 372 
 Edinburgh Society for the Suppression 
 
 of Mendacity, 39 
 Eliot, Charles W., message from, 381 
 England, Bank of, founding by Wm. 
 
 Patterson, 15 
 Emergency resources, narrow limits of, 
 
 237 
 European Savings Banks, deposits in, 
 
 50 
 effect of the war upon, SO 
 origin of, 30 
 Examinations, good results of, 192 
 
 Factory system, rise of, in the United 
 States, 59 
 
 Failed Savings Banks, total liabilities 
 of, in proportion to aggregate 
 deposits, 6 
 
 Failure record. United States, 1915, 306 
 
 Fairhaven (Mass.) Institution for Sav- 
 ings, incorporation of, 97 
 
 Fall River (Mass.) Institution for Sav- 
 ings, incorporation of, 96 
 
 Federal Reserve Bank Act, operation 
 under, 62 
 
 Financial education, good results of, 
 299 
 
 Finley, John H., message from, 380 
 
 First Savings Bank Act passed in 
 Great Britain, 54 
 
 First Savings Bank in the New World, 
 73 
 
 First Savings Deposit in America, 76 
 
 Fiske, Amos K., definition of Banking, 
 17 
 
 Foreclosure, payments for real estate 
 acquired by, 207 
 
 Foreign corporation agencies, State of 
 New York, 62 
 
 French people, thrift of, 5, 316 
 
 French Savings Banks, 46 
 
 Friendly Society, plan of, 34 
 
 Fullerton, F. (Hull Savings Bank), let- 
 ter from, 370 
 
 Future of Trustee Savings Banks in the 
 United States, 297 
 
 G 
 
 Gawtry, Louis B., address at Centen- 
 ary celebration, 368 
 
 General investment act, first, 185 
 
 General law pertaining to Savings 
 Banks passed by English Parlia- 
 ment, 39 
 
 General Savings Bank law, enactment 
 of, 186 
 
 Geneva, early bank in, 32 
 
 Genoa, Bank of, origin, 15 
 
 German Empire, nimiber of Savings 
 Banks in, 44 
 
 Germany's Savings Banks, 41 
 
 German Savings Bank Union, formed 
 in 1881, 43 
 
 Gibbons, Cardinal, message from, 379 
 
 Glasgow Savings Bank, letter from, 374 
 
396 
 
 INDEX 
 
 Gloucester (Mass.) Provident Institu- 
 tion for Savings, incorporation 
 of, 97 
 
 Gold imports and exports, comparison 
 of, 304 
 
 Greed and graft, no place in Mutual 
 Savings Banks, 6 
 
 Grecian Temples, first banks, 16 
 
 Gross earnings of railroad corpora- 
 tions, 218 
 ^ Group system, first organized, 339 
 
 Guarantee fund, must be formed upon 
 starting a new Savings Bank, 
 24 
 
 Gtmnison, Herbert F., address at Cen- 
 tenary celebration, 366 
 
 Guests at Savings Bank Centenary cel- 
 ebration, 351 
 
 H 
 
 Hamburg, Bank of, origin, IS 
 
 early bank in, 32, 42 
 Hammurabi, King of Babylonia, Code 
 
 of, 17 
 Hamilton, James Henry, definition of 
 
 Savings Banks, 17 
 Hartford (Conn.) Society for Savings, 
 
 opening of, SS 
 incorporation of, SS 
 Haverill (Mass.) Institution for Sav- 
 ings, incorporation of, 96 
 Henderson, Henry (London Savings 
 
 Bank), cable message from, 369 
 Herrick, Myron T., message from, 381 
 High School prize essay contest, text 
 
 of, 361 
 Hill, James J., message from, 381 
 
 on saving, 319 
 Honorary positions in Savings Banks, 
 
 out of date, 291 
 How money increases in Savings 
 
 Banks, 327 
 Hull Savings Bank, letter from, 370 
 Hughes, Charles E., message from, 379 
 Him, Marcus T., president, Albany 
 
 Savings Bank, 150 
 Hun vs. Carey, decision in case of, 24 
 Hunt, Isaac L., on relations of Savings 
 
 Banks with trust companies and 
 
 national banks, 243 
 
 Immigration, year 1915, 307 
 
 Imports and exports, comparison of, 
 1914 and 1915, 304-306 
 
 Improvidence and mismanagement, 
 trustees liable for, 24 
 
 Investment companies, number of. 
 State of New York, 62 
 number of branches, 62 
 
 Interest departments in National 
 Banks, etc., 5, 241 
 
 Investments, enlarged scope of, neces- 
 sary, 336 
 
 Investments, legal in New York, 222 
 
 Investments, liquidity of, 222 
 
 Investment in railroad bonds, history 
 of, 209 
 
 Japan, Savings Banks in, 48 
 Jeffrey, Thomas (Aberdeen Savings 
 Bank), letter from, 375 
 
 Land banks, number of, State of New 
 
 York, 62 
 La Panouse, Comte de, letter from, 379 
 Lawson, Joseph A., address at Cen- 
 tenary celebration, 389 
 Legion Savings Banks, established in 
 
 ancient Rome, 17 
 Legislation, development of Savings 
 Bank, 182 
 first statutory reference to Savings 
 
 Banks, 183 
 beginnings of system of state regu- 
 lation, 184 
 first general investment act, 185 
 first general organization act, 187 
 enactment of General Savings Bank 
 
 Law, 186 
 railway bonds, first made legal, 190 
 good results of examinations, 192 
 schedule of statutes affecting Savings 
 Banks, 194 
 Limitations upon deposits, 26 
 Liquidity of investments, 222 
 Loire, early bank in, 32 
 Lowell (Mass.) Institution for Sav- 
 ings, incorporation of, 97 
 Lowndes, William, father of tariff of 
 
 1816, 56 
 Lynn (Mass.) Institution for Savings, 
 incorporation of, 96 
 
INDEX 
 
 397 
 
 M 
 
 Manchester & Salford Savings Bank, 
 
 letter from, 372 
 Manumission, deposits in Savings 
 Banks made test and means of, 
 in England, 41 
 Massachusetts, Savings Bank deposits 
 
 in, 65 
 Measure of Thrift, the true, 4 
 Middle Ages, banking well understood 
 
 in, 15 
 Mills, Andrew, address at Centenary 
 
 celebration, 386 
 Mills, John M., on duty of schools to- 
 ward children, 181 
 Mistaken identity, strange case of, 275 
 Mitchell, D. (New South Wales), let- 
 ter from, 378 
 Mixed Savings and Commercial Banks, 
 
 plan of, 25 
 Modem Savings Bank, origin of, 16 
 Money, not created by government, but 
 
 regulated by it, 15 
 Money-changers, first mention of, in 
 
 the Bible, 16 
 Morris Plan, inception and growth of, 
 
 69 
 Mortgage as a Savings Bank invest- 
 ment, 196 
 difficulties of proper appraisal, 197 
 qualifications in an appraiser, 197 
 how borrowers "milk" property, 200 
 brokers and how they operate, 201 
 importance of title examination, 203 
 losses borne by title companies, 203 
 forged mortgages not vmcommon, 204 
 taxes and assessments, payment of, 
 
 205 
 guaranteed mortgages, demand for, 
 
 206 
 guarantee companies, work of, 207 
 Mortgage foreclosure, payments for 
 
 real estate acquired by, 207 
 Muby, Thomas M., on thrift, 319 
 Municipal bonds, as investments, 226 
 Municipal Savings Bank, description 
 
 of, 43 
 Mtmicipal Savings Banks, in Germany, 
 
 43 
 Mutual Savings Banks, plan of, 25 
 
 N 
 National Banks, interest departments 
 in, 5 
 
 National debts, statement of, 308 
 Navy League (United States), wise 
 
 words of, 13 
 New Bedford (Mass.) Institution for 
 
 Savings, incorporation of, 96 
 Newburyport (Mass.) Institution for 
 
 Savings, incorporation of, 96 
 Newport (R. I.) Savings Bank of, in- 
 corporation of, 55, 134 
 opening of, 55 
 Newton (Mass.) Institution for Sav- 
 ings, incorporation of, 97 
 New York Banking Law, 345 
 
 Supt. must endorse preliminary cer- 
 tificate, 345 
 qualifications of corporators, 345 
 notice of intention to organize, 345 
 
 publication of, 345 
 guarantee and expense funds re- 
 quired, 346 
 investment of deposits and guarantee 
 
 fund, 346 
 promissory notes, investment in, 346 
 real estate, investments in, 346 
 keeping books, imiformity of method, 
 
 347 
 individual deposits, limit of, 347 
 deposits to be paid on demand, 347 
 
 exceptions, 347 
 available fund to be kept on hand, 
 347 
 amount of, 347 
 calculation of earnings, 347 
 interest, rate of, not to exceed 5 per 
 
 cent., 347 
 dividends, extra, when may be de- 
 clared, 347 
 change of place of business, author- 
 ization by Supt., 347 
 trustees, number of, 347 
 qualifications of, 347 
 meetings of, 348 
 reports to, 348 
 payments to, prohibited, 348 
 payments, restrictions on, 348 
 removal of, 348 
 pensions to officers and employees, 
 
 348 
 semi-annual reports required, 348 
 dormant accounts, annual reports on, 
 348 
 publication of, 348 
 advertisements of unauthorized Sav- 
 ings Banks prohibited, 348 
 word "savings" not to be used, 348 
 
398 
 
 INDEX 
 
 O 
 
 Old Bay State banks, date of incor- 
 poration of, 96 
 
 Oldenburg, early bank in, 32 
 
 Olympia, temple at, place for keeping 
 money securely and as gathering 
 place of the money-changers, 16 
 
 Origin of the Savings Bank Idea, 15 
 
 Organization Act, first, 187 
 
 Organization of Central Banking 
 Council, 349 
 
 Origin of Savings Banks in Europe, 30 
 
 Organization of the Savings Banks As- 
 sociation of the State of New 
 York, 334 
 
 Outside Indebtedness of the United 
 States, how it is being paid off 
 as a result of the war, 9 
 
 Panics and their lessons, 229 
 
 Paris, the Savings Bank of, 47 
 
 Parkman, Henry, address at Centenary 
 celebration, 367 
 
 Parliament, passage of acts by, per- 
 taining to Savings Banks, 39, 54 
 
 Passbook, first adoption of, 39 
 
 Patterson, William, foxmder of Bank of 
 England, 15 
 
 Pauperism versus self-respect, 2 
 
 Pawtucket (R. I.) Savings Bank, in- 
 corporation of, 132 
 
 Payments for real estate acquired by 
 foreclosure, 207 
 
 "Peace preparedness," James J. Hill, 
 on, 312 
 
 Pennsylvania, Savings Banks, deposits 
 in, 65 
 
 "Pension Office,'' proposed by Defoe, 
 intended to abolish pauperism, 
 32 
 
 Personal loan brokers, number of. State 
 of New York, 62 
 
 Personal loan companies, number of, 
 State of New York, 62 
 
 Philadelphia Saving Fund Society, or- 
 ganization of, 75 
 opening of, 55, 76 
 incorporation of, 55 
 charter, features of, 80, 87 
 officers since organization, 75, 82 
 
 Phila. Savings Fimd Soc. — Contd. 
 financial statement of, 83 
 officers and managers (1916), 86 
 growth of, 86 
 Phillips, W. Herbert (Adelaide, Aus- 
 tralia), letter from, 377 
 Pioneer Savings Bank in the New 
 
 World, 73 
 Plymouth (Mass.) Institution for Sav- 
 ings, incorporation of, 96 
 Population of the United States in 
 
 1816, 60 
 Postal Savings Banks, as competitors 
 
 of Trustee Savings Banks, 243 
 Postal Savings Banks, origin of, 155 
 effect of, upon Trustee Banks in Eu- 
 rope, 156 
 rapid growth in Great Britain, 157 
 features of the system, 158 
 rise in America, 159 
 not as yet a formidable rival, 162 
 statistics of, in the United States, 163 
 Prize essay (High School), text of, 361 
 Private Bankers, Number of. State of 
 
 New York, 62 
 Private business corporations conduct- 
 ing savings departments, 242 
 Profits on investments, do not belong to 
 corporation in Mutual Banks, 
 26 
 Prosperity in the United States, proofs 
 
 of, 302 
 Provident Institution for Savings, 
 
 Bath, 39 
 Providence (R. I.) Institution for Sav- 
 ings, incorporation of, 55, 140 
 opening of, 55 
 
 presidents since organization, 140 
 financial statement, 141 
 present officers and trustees, 141 
 Provident Institution for Savings, Bos- 
 ton, opening of, 55 
 incorporation of, 54, 89-91 
 first dividend, 91 
 charter of, 92 
 
 officers since organization, 94 
 deposits by 10-year periods, 94 
 rates of dividends paid, 94 
 Provident Institution of Southampton 
 
 (Mass.), 39 
 Purves, G. Colesberry, tribute to Condy 
 Raguet, 74 
 biography of, 87 
 
 address at Centenary Celebration, 
 367 
 
INDEX 
 
 399 
 
 R 
 
 Raguet, Condy, biography of, 73 
 a pioneer in Savings Bank field, 
 
 54 
 Railroad, miles of, operated, 219 
 Railroad bonds, investment in, 209 
 Railroad Corporations, requirements 
 
 of, as to investments in bonds, 
 
 211 
 gross earnings of, 218 
 Railroad earnings, comparison of 
 
 1914 and 1915, 304 
 Railroad mortgages, refunding of. 
 
 Railway bonds, first made legal invest- 
 ments, 190 
 Real life, true stories from, 331 
 Redfield, Secretary of Commerce, com- 
 ment on present sound financial 
 system of the United States, 12 
 Relations of Savings Banks, Discount 
 Banks and Trust companies, 
 234 
 Revolution of 1848 in Germany, effect 
 
 of, on Savings Banks, 47 
 Rea, Charles S., president, Salem 
 (Mass.) Savings Bank, 111 
 letter from, 383 
 Rhode Island's Earliest banks, 132 
 Rhoades, John Harsen, work of, in or- 
 ganizing the Savings Banks As- 
 sociation of the State of New 
 York, 342 
 tribute to, by State Association, 343 
 Richards, Eugene Lamb, address at 
 
 Centenary celebration, 384 
 Richmond, Rev. Charles A., address at 
 
 Centenary celebration, 387 
 Rise of Savings Banks in America, 54 
 Risk concentration and risk distribu- 
 tion, 228 
 Rollit, Albert Kaye, letter from, 372 
 Rome, ancient, permitted slaves to de- 
 posit extra earnings to create 
 fund for final purchase of their 
 freedom, 17 
 Rosebery, Lord, on thrift and avarice, 
 321 
 letter from, 370 
 Roxbury (Mass.) Institution for Sav- 
 ings, incorporation of, 96 
 Rules for Savings Bank trustees, 21 
 Ruthwell Bank, operation of, 39 
 
 Safe Deposit companies, number of 
 State of New York, 62 ' 
 
 number of branches, 62 
 Safeguards of property, Savings Bank 
 
 one of the best, 27 
 Salient features of the year 1915, 303 
 Salem (Mass.) Savings Bank,' incor- 
 poration of, 55, 106 
 opening of, 55, 109 
 act of incorporation, 107 
 original incorporators, 1 10 
 statement of growth, 109 
 first officers, 110 
 
 presidents since organization. 111 
 Salisbury and Amesbury, Provident In- 
 stitution for Savings, incorpora- 
 tion of, 96 
 Savage, James, Massachusetts pioneer 
 
 in Savings Bank field, 54, 89 
 Savings accounts, number of, in Ger- 
 many, 44 
 Savings and loan associations in the 
 U. S., number of, 7 
 number of in the State of New York, 
 
 62 
 take the place of Savings Banks in 
 some of the States, 7 
 Savings and Provident Bank of Paris, 
 
 letter from, 379 
 Savings Bank Associations, remarkable 
 development of, in Europe since 
 the opening of the present war, 
 51 
 Savings deposits, growth of, shown by 
 the report of Comptroller of the 
 Currency, 67 
 Savings Bank deposits in Europe, 52 
 Savings Bank depositor, a hero of 
 
 civilization, 18 
 Savings Bank for Seamen, Boston, 
 
 Mass., incorporation of, 97 
 Savings Bank idea, origin of, 15 
 Savings Bank Legislation, development 
 
 of, 182 
 Savings Bank of Newport, R. I., incor- 
 poration of, 134 
 first directors, 135 
 officers since organization, 135 
 financial statement, 136 
 present officers and trustees, 137 
 statement of growth, 138 
 provisions of original charter, 138 
 Savings Bank of to-morrow, the, 280 
 
400 
 
 INDEX 
 
 Savings Bank principles, popular ig- 
 norance of, 238 
 
 Savings Bank statistics, State of New 
 York, 60 
 
 Savings Banks Association of the State 
 of New York, organization of, 
 334 
 officers of, 338-343 
 
 Savings Banks, earliest on record, 17 
 
 Savings Banks, in Japan, 49 
 
 Savings Banks in New York State, cost 
 of conducting, 6 
 
 Savings Banks, not a mere business 
 venture, 20 
 
 Savings Banks, number of, State of 
 New Yorki 62 
 
 Savings Banks, origin of, in Europe, 30 
 
 Savings Banks, primary purpose in the 
 establishment of, 6 
 
 Savings Banks, principal reasons for 
 the creation of, 26 
 
 Savings Banks, rise of, in America, 54 
 
 Savings Banks, statistics of, in Amer- 
 ica, 64-69 
 
 Savings Banks, theory of, 26 
 
 Savings Banks, utility of, to organized 
 society, 20 
 
 School Savings Banks, origin of, 165 
 Long Island plan described, 168 
 Brooklyn plan described, 173 
 workings of, in the West, 173 
 indirect results valuable, 175 
 New York's splendid campaign, 176 
 statistics, 178 
 duties of the schools, 179 
 
 Schedule of statutes affecting Savings 
 Banks, 194 
 
 Schenck, Henry A., on saving, 320 
 
 Scotland, Bank of, founding, 15 
 
 Scotland, first Savings Bank Act passed 
 for, 39, 54 
 
 Self-denial, basis of character, the, 318 
 
 Skiimer, George I., address at Centen- 
 ary celebration, 364 
 
 Slot machines, use of, as Savings Bank 
 aids in Europe, 48 
 
 Smedley, John H., work of, in connec- 
 tion with School Savings Banks, 
 168 
 
 Smith, Rev. Joseph, plan advocated by, 
 34 
 
 Society for Savings, Hartford, Conn., 
 incorporation of, 128 
 opening of, 128 
 corporators, 128 
 
 Society for Savings, Hartford, Conn. 
 — Continued. 
 statement of growth, 129 
 changes of location, 130 
 presidents since organization, 131 
 present officers and trustees, 131 
 
 "Sparkasse" (Savings Bank), first es- 
 tablished in Germany, 41 
 
 Spendthrift nation, the, 315 
 
 Springfield (Mass.) Institution for 
 Savings, incorporation of, 96 
 
 Stability, prime requisite of any money 
 system, 16 
 
 Starting a Savings Bank, method of, 24 
 
 State regulation of Savings Banks, be- 
 ginning of, 184 
 
 Statutes, schedule of, affecting Savings 
 Banks, 194 
 
 Stewart, L. B. (Manchester & Salford 
 Savings Bank), letter from, 372 
 
 Statistics of Savings Banks in America, 
 64-69 
 
 Stock Savings Banks, plan of, 25 
 
 Stone, Charles L., on the utility of Sav- 
 ings Banks, 20 
 
 Stories from real life, some true, 331 
 
 Stryker, M. Woolsey, message from, 381 
 
 Suffolk (Mass.) Savings Bank, incor- 
 poration of, 97 
 
 Sumner, Wm. G., on the Savings Bank 
 depositor, 18 
 
 Surplus, requirement in law as to, 26 
 
 Sydney, New South Wales, letter from, 
 378 
 
 Sykes, Sir Charles, originator of Postal 
 Savings Banks, 155 
 
 Systematic saving, how it pays, 329 
 
 Taft, William H., message from, 380 
 
 Tammany, Society of, incorporation of 
 (1805), 57 
 
 Tariff Law, 1816, effect of, 56 
 
 Taunton, (Mass.) Provident Institu- 
 tion for Savings, incorporation 
 of, 96 
 
 Taxation in the United States, statistics 
 of, 311 
 
 Temps (Paris), contrasts the financial 
 position of the United States be- 
 fore the war and now, 10 
 
 Thiry, John H., pioneer work of, in or- 
 ganizing School Savings Banks, 
 165 
 
INDEX 
 
 401 
 
 Thrift Campaign in the United States, 
 325 
 
 Thrift, effect on business, 317 
 
 Thrift, need of, at all times, 313 
 
 Thrift plant, of slow growth, 34 
 
 Thrift, true measure of, 5 
 
 Thrift, what it really is, 323 
 
 Thrift, why it is blessing, 324 
 
 Thrift movement, real meaning of, 9 
 
 Trimble, Walter, president, Bank for 
 Savings, New York, 127 
 
 Trustee, importance of, 293 
 
 Trustees, fees allowed to, in certain 
 States, 294 
 
 Trustee Savings Banks, future of, in 
 the United States, 297 
 
 Trustee Savings Banks, growth of, in 
 England from 1819 to 1861, 40 
 
 Trustee Savings Bank Inspection Com- 
 mittee (England), letter from, 
 371 
 
 Trustee Savings Bank, principles of, 22 
 
 Trustee Savings Banks of London, 
 cable message from, 369 
 
 Trustee Savings Banks of the United 
 Kingdom, ordinary Department 
 Funds on Nov. 20, 1908, 40 
 
 Trustees transcending powers granted 
 in charter liable for damage 
 caused thereby, 24 
 
 Trustee System, tribute to, by Alex- 
 ander Cargill, 29 
 
 Trust companies, powers and functions 
 of, 235 
 
 Trust Companies, number of. State of 
 New York, 62 
 number of branches, 62 
 
 Trust funds, exceptions as to, in mak- 
 ing deposits, 26 
 
 U 
 
 Unearned dividends, trustees voting 
 
 for, liable for, 24 
 "Unclaimed deposits," litigation over, 
 ■ by Phila. Saving Fund Society, 
 82 
 Unclaimed Deposits (see Dormancy of 
 
 Accounts) 
 United States Bank, origin of, IS 
 expiration of charter of, 56 
 
 Utility of Savings Banks to organized 
 society, 20 
 
 V 
 
 Venice, Bank of, origin, IS 
 
 Vail, Theodore N., message from, 382 
 
 W 
 
 Wakefield, Mrs. Priscilla, plan advo- 
 cated by, 34 
 
 War debts, of principal nations at war, 
 3l0 
 
 War loans, of various European coun- 
 tries, 308 
 
 War of 1812, cost of to the United 
 States, 57 
 
 War, paying the price of, 308 
 
 Warren Institution for Savings, 
 Charlestown (Mass.), incorpo- 
 ration of, 97 
 
 Waste in America, stop it !, 13 
 
 Waste, folly of, 8 
 
 Watson, T. W. M. (Glasgow Savings 
 Bank), letter from, 374 
 
 Wealth of the United States, increase 
 of, 301-307 
 
 Wealth of the United States, compari- 
 son of, with that of Great Brit- 
 ain and France, 324 
 
 Wealth of France, 324 
 
 Wealth of Great Britain, 324 
 
 Weymouth and Braintree (Mass.) In- 
 stitution for Savings, incorpora- 
 tion of, 97 
 
 Whitbread, Samuel, proposed to Par- 
 liament Bank for laboring 
 classes alone, 34 
 
 Why men become Savings Bank 
 trustees, 28 
 
 Willcox, J. M., on growth and size of 
 Phila. Sav. Fund Society, 85 
 letter from, 383 
 
 Wise sayings worth pondering, 322 
 
 Worcester County (Mass,) Institution 
 for Savings, incorporation of, 96 
 
 Words of wisdom from great men of all 
 times, 321 
 
 World wide commercial readjustments 
 after the war, 12 
 
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