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A -HIST,ORY
SAVINGS BANKS·
IN THE
UNITED STATES
FHO}f THEIH INCEPTION IN 1816 DOWN TO 1874.
WITH DISCUSSIONS OF THEIR THEORY.
PRACTICAL WORKINGS AND INCIDENTS, PRESKNT CONVlTIO:S AND
PROSPEOTIVE Dl!:VELOl'MEN1'.
llY
..
EMERSON W. KEYES,
LATS l>EPUTY 8UPERll\'TKNDKNT OF TIIE DMIIUNO D&rABTIIENT
or TH& STATS or Nsw YoRK.
IN TWO VOLUMES.
Vol. I.
NEW YORK:
PUBLISHED DY BRADFORD RHODES.
1876.
Sa--aaf
Entered according to act or Oongrese, lo tbe year eighteen hundred and seventy-six
BY EMERSON W. KEYES,
In the omce or the Librarian or Conaress, at Washtornoo.
wt:1m, PARSONS. COIU'.ANY.
PR1NTBR8 AND 8TERBOTYPBlld,
ALBANY, N. Y.
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PREFACE.
TuE relation sustained by the writer for a number of years
to the Savings Banks of the State of New York ie set forth
with sufficient detail in the progress of these volumes. That
relation and its incidents were considerations in hie favor in
undertaking the preparation of a History of Savings Banks.
It ie unfortunate, however, that his claims to special fitness for
such a work should not extend beyond the foregoing; that the
favorable conditions mentioned could not be supplemented in
him by literary culture, by the genius or the habit of author•
ehip, nor yet by that release from engrossing pursuits, which,
faithfully employed, might serve to at~ne for the deficiencies
herein acknowledged.
That a record of the origin, growth and achievements of an
interest w,hich in its present development rnnke among the
first in magnitude and importance in our country, is desirable,
it is believed will not be questioned; that it is desirable now,
before much pcrta_ining to its inception and early progress
shall pa.es beyond our reach, receding into the obscurity of the
buried past, is ecarcely more open to question. It is in this
conviction that the author has entered upon the preparation of
these volumes. He bespeaks for their faults no tenderness of
criticism, for upon these he baa none himself to bestow.
His ideal of such a record is as }iigh as tha~ of any one can
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PREFACE.
be, and no one can know better than he how far short of that
ideal is what is here offered for acceptance. Still, he cannot
l'tlsist the conviction that, despite its def~ts, the ,vork has a
certain value that justifies its submission to the public.
Dropping the stiffness of the impersonal form, - I can assert
with tmth, that into the preparation of these volumes I have
put my conscience most thoroughly. Upon many of the elaborate tables in the second volume, I have spent as much time,
and have been as careful and painstaking in the processes for
reaching approximate accuracy, where perfect accuracy was
unattainable, as though the result would affect the balance of
some poor depositor's account. · or course such care and pains
make no record of themselves, for even very considerable errors
would pass wholly unnoticed and would not appreciably affect
the grand aggregates into ,vhich they must enter. Haste, carelessness and indifference might have been indulged with impunity, for no one could challenge the substantial accuracy of
estimates and calculations for whose results the only claim
assorted is, that of a rational approximation from which the
elimination of all errors is simply impossible.
In further justice to myself upon another point, I may mention that, had I known when I set out, how voluminous would
be the material which I could command, or which would be
required ti.,r such an exposition of the subject as would satisfy
my own sense of completeness in its treatment, I should have
. rejected some and condensed more in the earlier portion of
the work. Besides, had the idea of two volumes presented
itself at the inception of the work, I should have aimed to
make a more natural division of the snbjcet matter between
the two volumes, than was possible under the circumstan~es as they occurred.
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PREFACE.
V
I desire herein to acknowledge my obligation to the New
York State Library, at Albany, for important, indeed indispensable, material, in the pr~paration of this work, and not
elsewhere attainable. Under au intelligent administration,
not always seconded by corresponding liberality in legislative
appropriations, this library bas become, probably, more
thoroughly furnished with the early laws, documents and
official transactions of the several States than any other in
the country, not excepting that of Congress, at Washington.
Not the least of the many pleasing features which distinguish
the management of this valuable library, are the courteous
attention and cheerful aid rendered by those in charge to
students or others seeking information.
I am likewise indebted for many courtesies to the Librarian,
of the Vermont State Library, and to the Secretary of State,
:md the Auditor of State, in Rhode Island.
BROOKLYN,
N. Y., May, 1876.
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CONTENTS OF VOLUME I.
FIRS'r SECTION.
INTRODUCTOBY.
Chapter 1 -Theory of Savings Banks, pp. 1-14 ; Chap. 2-- Inception of the
Idea in Europe, pp. 15-24; Chap. 3-Antecedent efforts of Philanthropy, pp. 2r;...34 ; Chap. 4-0rder and Plan of the work, pp. a5-a7.
SECOND SECTION.
SAVINGS BANKS IN THE STATE OF lfA88ACHUSETT8.
Chapter5-Inception and Orowth,1816-1883,pp. 38-45; Chap. 6-Ot-n•
eral Savings Bank Law, 18:H, pp. 46-54; Chap. 7-Course of Legislation, Supe~vision and Reports, 18:JS-1860, viz.: First Savings Bank Re
port, 1838; Investments, 1841; Reports, 1846; Taxation of Savings Banks;
Division of Profits; Growth of the Savings Bank System ; Deposits of
Minoni ; Savings llanksand Banks of Discount; Legislation in 1858; Sugirestions and Legislation 1859-60; "Multiplying Savings Banks-pp. 55-68;
Chap. 8-Bank Corumis.~ioners' Report, 1801, pp. 69-84; Chap. 9Course of Lt-gislation, 1862-1873, pp. 85-89; Chap. 10- Statistics of
Growth aad Progress, viz.: 1. Of Ct-rtain Institutions as Furnished by
Themselves; 2. In General as a System as shown by Tables- pp
90-117.
THIRD SECTION.
SAVINGS BANKS IN THE 8TATB 01" CONNECTICUT.
Chapter 11-General Course of Legislation, viz.: loception; Organization;
Notice of Incorporation; Investments; Purchase of Real Estate; Later
Legislation ; Surplus; Limitation of Individual Deposits; Dividends or
Interest ; Taxation of Deposits; Compensation of Oillcel'II; Borrowing
of Funds; Penalty for Violation of Law; Rate of Interest on Loans; Withdrawal of Deposits; Saving and Building Associations - pp. 118-140;
Chap. 12-Of Supervision and Reports, pp. 141-Ui4; Chap. 18-Statlstica of Growth and Progre88, viz. : 1. Of Certain Institutlon11 ; 2. In
General as a System as shown by Tables - pp. 155-163.
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CONTENT8•
.FOURTH SECTION.
SAVINGS BANKS IN THE STATE OJ:I' RHODE ISLAND.
Chapter 14-lnception and course of Legislation, viz.: Form of Or,zaniz&. ,
Uon; Investments; Reports and Supervision; Divid.. nd11; Limitation of
A.mount of Deposits; Withdrawal of Depoeits; Prohibitions; Deposits of
Married Women and J\finort1-pp. 166-181; Chap. 15-Statistics of
Growth and Progress, viz.: 1. Of Certain Savings Banks; 2. In Gem,ral
u a System -pp. 182-194.
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FIFTH SECTION.
SAVINGS BANKS IN TIU; STATK 011' NEW HAMPSHIRE..
Chapter 16- Inception and hit1tory of Portsmouth Sa,·ings Bank, pp. 195203; Chap. 15-(-0ur11e of Legislation, viz. : Supervision; Examination,
etc.; Organization; Investments; 'fa:rntion of Savings Banks; Compem,ation to OIHcers; Use of Funds by Tru11tees; Bonds of Officers- pp. 204:?IO; Chap. 18- Statistics of Condition and Progress, viz.: 1. Early
Reports of Certain In11titutions; 2. As a Syi;tem shown by TablP-B - pp.
211-224.
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SIXTH SECTION.
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SAVINGS BANKS IN TRE STATE OJ:I' MAINE.
Chapter 19-lncep.tion and Development, pp. 225-220; Chap. 20-Charac_
ter of Legislation, . viz.: Provisions of Early Charters; Savings Banks
Made Subject to Examination; General act of 1809; Supplementary and
amendatory Legislation - pp. 230-236; Chap. 21- Progress a1111hown by
Heports, presenting in full first Report, 18iil'i, and Abst.racte of Subsequent Reports, pp. 237-256; Chap. 22- Statistics of Growth and ProgreRs, viz.: 1. Of Certain Institutions; 2. In General as a Syetem as
shown by Tablee - pp. 257-267.
SEVENTH SECTION.
SAVINGS BANKS IN THE STATE 011' VERMONT.
Chapter 23 - Coudition11 of Development, pp. 268-272; Chap. 24- Coursa
and Character of Legi11lation Concerning Investments, pp. 273, 274 ;
Chap. 25 - Supen·ision and Reports; Subsequent Legislation, pp.
275-285; Chap. 26- Statistics of Growth and Progress : 1. Of each
Savings Bank from organization onward ; 2. Summary of the Progress
of the System from year to year - pp. 286-302.
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CONTENTS.
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EIGHTH SECTION.
8A VINO~ BANKS IN THE STATE OF NEW YORK. ·
PART I.
JNCEPI'ION OJ' THE IDBA A.ND INCORPORATION 01.1' THE BANX J'OB BAVINOB.
Chapter 27- Preliminary, Showing Order, Plan and Division of this Seetion, pp. 803-306; l,'hap. 28 - Dawn of Philanthropic Effort, viz. : Fil'llt
Voluntary Aaeociation, 1816; Savings Banks in the Legislature, 1817;
A Side IBBue- New York Interest Bank - pp. 807--314 ; Chap. 29 - Re•
organization and Renewed Effort, Statement thereon of Hon. P. W .
Eogs, pp. 816-822 ; Chap. 80- Message of Governor Clinton, 1818 ;
Another Side IBBue-New York Interest and Savings Bank, Petition
therefor- pp. 828--331 ; Chap. 81 - Introduction, Prog1'8811 and Passage
of the Act Incorporating the Baok for Savings, pp. 832-340; Chap.
82- Practical results, Success Popular ae well as Successful ; First
Report of Bank for Savings; First Fruits, Albany Savings Bank-pp.
341-853.
PART II.
OENl!IRAL COUBBB 01.1' LBOIBLATION AND OJ' Ol'FICIAL DIBCUBBION CONCERN•
ING BA VINOS BANKS.
(,'11apter 33- Policy of Legislation as Illustrated In the Form of Organization, viz. : Constituency of Boards of Trustees ; Quorum ; Grounds of
Exclusion from Membership- DiscuBSSed under relation of Savings
Banks to Banks of Deposit- Extract thereunder from Special Report
oo Savings Bank.a, 1868; Exceptional Forms of Organization Notedpp. 354--375; Chap. 34-Of Investmeota, 1819-1846, pp. 876-380;
Chap. 35-lnvestmeota Continued, 1846-A New Point of Departure;
"Available Fund" (first appearance); Report of Assembly Committee
oo New Features Introduced ioto Charter of Buffalo Savings Bank - pp.
387-400; Chap. SO- Investments Continued- Legislation under Fore.
going Precedents ; General Act of 1858; Subsequent Legislation to 1874;
Deposits in Banks; do. in Trost C-Ompanies-pp. 401-414 ; Chap. 37Of Dividends to Depositors, Extract thereon from Special Report, 1868,
pp. 415-429 ; Chap. 88-Of Surplus, Extract thereon from Special Re.
port, 1868; do. from Annual Report, 1870; pp. 429--438.
CoNCLUBION OJ' PART 11, IN VouTME n.
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FIRST SECTION;
INTRODUCTORY.
CHAPTER I.
THEORY OF SAVINGS BANKS.
It has been truly remarked that among a free people
laws grow rather than are made. The enactment of
statutes by legislatures and the enunciation of decisions by courts are but embodied forms of public sentiment, of the people's will, which is the law. But
public sentiment is a thing of growth and change, and
hence the laws, which are its emanation and expression
in form, must likewise change and grow.
Human institutions are a form of law, they are an
embodied public sentiment concerning some condition
or want of the social state. They may be purely vol•
untary in their organization, methods and appliances,
or they may have the support and countenance of stat•
utes, acts of incorporation and judgments of courts,
but in so far as they reflect the popular will or popular
acquiescence, in their plans, purposes and methods,
they are a form of law, and grow with the growth and
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HISTORY OF SAVINGS BANKS.
strengthen with the strength of the social condition or
necessity which called them into being. If the condition to which any institution is called to minister is
evanescent and passes away, so, too, the institution will
pass away with the necessity that made occasion for
it, or it will put on a new form of being and action,
adapted to some new necessity that superseded the
old. Or, if an institution is found not adapted to the
purpose to which it is applied, it is changed, modified,
re-created, until it will serve the purpose designed,
or is abandoned for other and more effective forms
of organization. The institution that lives, succeeds
and accomplishes results ; which grows, expands and
adapts itself to the varying phases of the social necessity which it was ordained to minister unto, is an
embodied law of the social fabric; it is an organic
function of society itself, and is to be watched, guarded
and cared for with the solicitude with which men watch
and protect their vital organs.
It is not presumed that the reader will be startled
by tlie novelty or profundity of these observations.
They are neither new nor profound. On the contrary,
they are in fact, if not in form and expression, both
familiar and common place. And so may have been
the text of last Sunday's sermon, and neither text nor
sermon in the least the worse for it. The sermon was
the expanded or amplified idea embodied in or suggested by the text; so the history of Savings Banks is
an amplified illustration of the truth embodied in the
foregoing observations. They are correlative. Savings
Banks, as an independent, isolated fact, are only so
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THEORY OF SAVINGS BANKS.
many columns of figures ; but Savings Banks, as an
organic element in the social state - as an essential,
vital force in human society- as part of the social
machinery adapted to accomplish a great purpose, and
doing it thoroughly and well, and, in doing it, ever
broadening and deepening the range of its power and
influence - in short, Savings Banks, as an expression
and embodiment of public sentiment, as a law of the
social state, not only declarative of, but enf01·cing, public order, temperance, virtue, sobriety, industry, thrift
and prosperity, as well as promotive of public credit,
public faith and financial stability, demand a broader
and more comprehensive treatment than their consideration as a mere incident or fortunate accident in
human experience would justify.
Had Savings Banks been superimposed upon, instead
of being an outgrowth from the social structure - had
their relation to, and mission in, the social state been
forced and unnatural - they would have no history to
record, at least none worth reading, though it should
engage the pen of a Macaulay or a Motley. But being in
fact an outgrowth from certain social conditions, called
into being by exigencies in the social state to which it
was believed such an institution could acceptably minister, and more than justifying the hopes of its founders in its adaptation to the purpose for which it was
designed, the institution has, during the first half century of its operations in our country, made for itself
and for humanity a record so wonderful in its aggregate of results, and so thrilling in its individual incidents, that no faults nor follies of the historian can
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HISTORY OF SA VINOS BANKS.
render wholly worthless the story of its achievements.
There is com£ort for both writer and reader in that !
And what is the great underlying fact in human
experience, this all-pervading, ever-present condition or
need in the social state, to minister unto which, Savings
Banks were conceived and ordained, and in behalf of
which they have successfully and triumphantly wrought
during the last sixty years 1
In one word, it is POVERTY ! Out of the condition
in society expressed or defined by that word and its
incidents, and as its exponent and representative, there
has been evolved in this country during the last half
century, an imposing financial system, :firmly and indissolubly inwrought in the very fabric and framework of
the social structure, an INSTITUTION which first and lMt
has wrought for not less than 7,000,000 of our people,
and has concerned itself with the care of more than
f4,200,000,000.
Paradoxical as this appears, such is the legend, to
be inscribed on PoVERTY's MONUMENT in this country
to-day.
I believe we may safely challenge any other financial institution to show a corresponding aggregate.
Could any other scheme have been devised that
should parallel this in the magnitude and grandeur of
its success ? How feeble, how absolutely insignificant,
in comparison, must have been the results of any merely
charitable organization. Not alone in the amount of
money contributed, but in the work wrought by it, in
the latent energies of body and mind stimulated and
utilized, in the self-respect created, in the character
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THEORY OF SAVINGS BANKS.
built up, in the courage inspired, in the hopes kept
alive, in the despair kept at bay.
The one is an emollient to soothe and assuage a
present distress; the other a tonic that invigorates the
system and imparts to it strength to repel the malady
by removing its predisposing cause.
In treating of the relations of poverty to the institution of Savings Banks, we must exercise care lest
misconception of our meaning be entertained, and the
subject come to be regarded from a wrong stand-point.
To prevent this let us elaborate this unpleasant theme
somewhat, in its relations to the present discussion.
And first, there are of course degrees of poverty.
We do not mean by it mendicity, destitution, pauperism, though it embraces these. These are the extremes
of poverty. But he who with steady, patient industry
can from day to day, earn barely the necessaries of life
for himself and family, is surely poor, though he may
thus keep absolute want from his door. Even if he
may do a little, and barely little, better than this; if
he may from his scant wages save a pittance for the
day when labor cannot, perchance, be found, or when
sickness of himself or some member of his household
adds to the expense or diminishes· the income, even
then he is poor. There is no defining with rule and
line the boundary where poverty ceases and wealth or
affluence begins. As well define the hour or day when
boyhood ends and the youth comes upon the stage.
But, in general, the poor are those who gain their living by their own labor of hand or brain, with no accumulated capital yielding an assured income.
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HISTORY OF SA VINOS BANKS.
But again, poverty is to be considered under its two
aspects, as an existing practical fact, and as a result of
certain conditions in the social economy. As a practical fact, in its extreme degrees, it demands relief ; it is
a present, urgent call that cannot, must not be denied
c,r deferred. To this condition of affairs Olwrity must
minister by gratuities from its bounty.
But while thus ministering, a wise, sagacious Charity
will busy itself with a study of the causes which have
wrought these sad results in human experience. Here
will be found food for reflection. Side by side with
the imbecile, whose poverty is the result of causes over
which he could have no control, will be found the strong
man, able and willing to work, but finding nowhere
a market for his labor. On questioning the latter
it may be found that so long as he could find employment he was above want. He will doubtless freely
confess that, could he but get employment now at half
wages, or, what is equivalent, could he but get employment at former wages for half the time, he could keep
himself and family beyond the need of charity. Of
course there would be privation; the food must needs
be common, the clothing poor and coarse, the shelter
rude, fuel must be very economically provided and
used ; but for all that, with even such moderate provision as half pay or half time employment would give,
affairs would be tided over until more prosperous days.
It could not fail to strike the thoughtful observer,
that the ranks of pauperism are largely recruited from
this class. That congenital pauperism, so to speak, is
comparatively rare, and if only those become Charity's
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THEORY 01'' SA VINGR BANKS.
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charge who became so through bodily infirmity, incapacitating them for labor, the burden of society in this
direction would be greatly lessened, and could be borne
with comparative ease.
The question presented relates then to the condition
of these objects of charity, who became such througt•
the mutations in the demand for and supply of labor.
The observer sees at once, that if he could assure constant employment, at fair wages, to all who are able
and willing to labor, one great cause of destitution and
suffering would be removed. It was some such thought
that suggested the enactment: hereinafter noted, to
establish public workshops. But it would quickly be
found, as it was found, that the relations . of capital
and labor are too subtle and recondite to be thus controlled by legislation, or by any voluntary scheme or
device, for assuring to labor at all times abundant
employment. But our thoughtful, suppositious observer will have had his attention aroused by the confes·
sion of our candid indigent, that if he could now, in
his extremity, have even lialf wages, he could in some
sort maintain his family above want. It will occur to
him, that the seasons or periods that assure to labor
constant employment, bestow upon it also rewards
more than commensurate with the absolute necessities
of living. This will be proved to him, not only by
the wor<ls of the unfortunate, but by his knowledge of
the ways of life. Wages are seldom doled out in exact
propo~ion to the needs of actual subsistence. When
there is a demand for labor, it can command wages
that afford a small but fair margin beyond the necessi-
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HISTORY OF SA VINOS BANKS.
ties of the laborer. Such is the law of supply and
demand. If it were otherwise, the wages that would
barely suffice the family of four would be insufficient
for the family of six, and want and suffering must
ensue. But we find that two laborers, earning the
same wages, support respectively their families of four
and six, while another, with the same or even less
wages, supports his family of eight or ten - one or
more of these, perchance, an in valid, requiring more
costly attention and provision than the others. The
feather that broke the camel's back has never been
found outside of allegory, and the precise amount that
would barely suffice to feed, clothe, shelter and warm
a given household, with not a dime over at the end of
the twelvemonth, has never yet been determined, or
made the basis of wages in the transactions between
capital and labor. Doubtless the necessities of the
laborer in the matter of a support for his family, are
an element entering into the question of wages in a
general way ; but I mean to say, that the precise measure of these necessities, the absolute limit, is never
fixed and determined, and made the rule and measure
of wages. The necessities and the wages may approxi•
mate very nearly, may leave a very narrow margin,
may insensibly blend together for a season in dull
times, and in duller times the margin may pass to the
other side; but when this is the case, it comes in the
form not so much of less wages as of less work, until
it passes to the final extreme of no work and no pay.
But all this does not affect our theory, that when labor
is in demand the rewards or wages of labor will, and
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THEORY OF SAVINGS BANKS.
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uniformly do, exceed the mere absolute necessities of
the laborer.
It is said of the duke of Wellington, that, when
applied to to favor a proposal for regimental Savings
Banks, for the benefit of British soldiers, he replied,
" Has a soldier more pay than he requires ~ If he has,
it should be lowered to those enlisted hereafter." But
the spirit that prompted that answer, fortunately does
not control the relations of capital and labor. These
are governed by immutable laws, which it is vain for
avarice, selfishness, or even heartlessness and indifference to human welfare, to contend against. These
laws are not inscribed upon our statute books, they are
not promulgated from the judicial bench, but they
have their origin in the nature of man, as man, demand·
ing recognition as such, which is something more than
· to be fed, warmed and clothed. ¥or man as an animal,
these would suffice; but for man as an intelligent,
responsible and immortal being, he has cravings above
and beyond these, cravings which will not be denied.
These latent possibilities of his nature, unfolding day
by day, suggest and inspire new and varied needs to
which yesterday he was a stranger. To supply these,
as they come in the form of domestic affection, the
love of home, the desire of possession, a thirst for
knowledge, a refinement of taste, or any of the myriad
ways in which hwman life is enriched and beautified,
the wages that will serve barely to keep soul and body
together are wholly inadequate. But society is only
an aggregation of human beings, whose aggregated
needs, desires and aspirations determine or become the
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HISTORY OF SAVINOS BAN KS.
law of the social state which they form. The great
demand of man's nature is for opportunity to attain
something higher than a merely animal existence. To
insure this, he must needs receive, in return for the
faithful employment of his energies of body or mind,
more than will serve the necessities of his animal
nature ; and thus out of the nature of man, is evolved
the law of labor and its rewards, whereby the latter are
measured and adapted to the needs of the laborer as
a man and not as a brute.
It will, of course, be understood that I am discuss•
ing conditions of the social structure in a state of
freedom, for we know there may be brought to bear
upon society a repressive force that shall prevent the
development of man's manhood, and hold him in thrall
to a power stronger for the time than his own will.
Where such a condition prevails, the law of the social
state is not evolved from the nature of man, but is
arbitrarily imposed a~ the will of an external force
called despotism.
We are conscious, too, that even in free society there
will be exceptional conditions which seem to be, and
in fact are, at variance with the laws of labor and
wages as we have propounded them. We recognize as
such the condition of poor sewing women and girls,
whose scanty pittance as wages scarcely serves as a
provision for their merely animal wants. But these
exceptional conditions do not invalidate the general
law. Any single department of labor may be over
supplied for a time, which biings into operation other
laws of the social state, the effect of which is to reduce
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THEORY OF SA VINOS BANKS.
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wages in that department. But our larger law, still
operative in its sphere, soon corrects the evil by withdrawing laborers from the overburdened department,
and employing them elsewhere, and thus the equilibrium and the waues are again restored.
We think, then, that it must be conceded, that in
any natural state of society the wages of the laboring
classes in seasons of prosperity will ever be such as to
enable them, if they will, to reserve a portion for future
need. The neglect to do this, or the want of oppor•
tunity to do this, must ever be a fruitful source of
poverty, indigence, pauperism, m·ime.
Here, then, is the inviting field for the efforts of
Philanthropy. Here is the idea which it is to elaborate
into a scheme of practical and beneficent activity. Discarding as chimerical the suggestion of measures to
insure employment for labor under any and all circumAtances, it directs its attention to the means whereby
the possible surplus earned during the period of active
employment, may be saved and applied toward independent support during the periods of stagnation in
the labor market.
In this direction is the blow to be struck, at the very
root of the evils of indigent poverty. It aims at a
removal of the cause of a large part of the destitution
and suffering of humanity. It preserves from falUng
into destitution that large class of the poor who are
ever hovering upon the brink of pauperism, ready,
upon the first adverse condition in the labor market,
to recruit its ranks. Dry up the sp1ings, and the river
will never be full.
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HlSTORY OF SA.VINOS BANKS.
Such is the philosophy of Savings Banks. They offer
to this large class from which the indigent are liable to
be and are recruited, the opportunity of putting safely
aside the surplus earnings of prosperous years, to be
called for when the day of adversity comes. They
appeal to the manliness of man, to his love of independence, to his scorn of dependence, to his domestic
affections, to his pride, to his instinct of accumulation,
in short, to his better nature. They tender him no gratuitous charity, beyond the exercise of supervision over
the fund accumulated by his industry. They say to
him, "you were created self-helpful, endowed with
powers to gain for yourself and family a decent and
comfortable subsistence. With life and health preserved, the constitution of the social state is such as
will average to demand your service long enough and
at sufficient wages to give you a decent maintenance
according to your station. But it will be an average
only. For the law is not the less immutable, that
there will come periods of depression, when you will
seek employment in vain. But by careful and provident saving of the assured surplus of prosperous
seasons, you may hold in reserve .the means that shall
carry you safely through the season of adversity."
Such is the nature of the appeal. I have said it is
an appeal to man's higher and better nature, to his
pride, to his dignity, to his love of independence, to
his self-respect.
It says, be industrious, be frugal, be temperate; or,
suggestively, be not idle when work is to be done, be
not wasteful or extravagant, be not intemperate. It
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THEORY OF SAVINGS BANKS.
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says, live witliin your income, lay aside the surplus
saved, for future need, and draw not upon it until the
need shall come.
,ve know too well, that all men will not be influenced
by appeals to their higher nature. We know that
with some, the love of idleness and ease is greater than
the love of conscious independence which steady ind us•
try assures. With some, the instinct and passion is to
spend rather than to save, is to sell-indulgence rather
than se1f-denial. With some, the instinct is to vice
and crime and all vicious indulgence, rather than to
virtue, honesty, and a reputable career.
It is not to be presumed therefore, that this appeal
will revolutionize human nature. It will not make the
slothful vigilant; the wasteful frugal; the vicious virtuous. It cannot, in the nature of things, banish poverty from the earth, not even the poverty that comes
as the result of one's own follies.
Savings Banks were founded upon no such misconception of human nature. Their theory was simple,
modest and well founded. It was only that some,
many, perhaps a majority of mankind, would prefer
honest independence, the result of industry, to beggarly dependence, the consequence of idleness ; that
they would be frugal rather than wasteful, if the sav•
ings of frugality could be carefully garnered for the
time of need; that they would guard against vicious
indulgence rather than steep themselves in drink, if
there was the incentive of accumulation held out as
the sure reward of se1f-denial
Such is the simple theory of Savings Banks. The
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IDSTOU,Y OF SAVINGS BANKS.
purpose of this work is·to show how far this theory
has been proved true, during the first half century of
its experiment in our country. It will also be in our
way to note how this instrumentality has been found
serviceable to larger uses than those to which it was
originally applied, and, expanding the area of its opera-·
tions, has enriched the country through its benign ministration.
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CHAPTER II.
INCEPTION OF THE IDEA IN EUROPE.
Before entering upon this field of investigation, it
seems pertinent to give a brief resume of the early
inception of Savings Banks in Europe, before the system was transferred to these shores.
In this resume we shall be brief, as we employ it
only as a natural and proper introduction•to the work
in hand. We do not purpose advancing any thing new,
any thing not entirely familiar to those who have investigated the subject, but merely to note a few facts of
the origin and progress of the principle, of which the
exemplification in our country is b~t a branch.
Concerning the origin of Savings Banks, I quote
largely from memoranda furnished me by Andrew
Warner, Esq., secretary of the Institution for Savings
of Merchants' Clerks in the city of New York, who,
with an intelligence and zeal rarely equaled and not
exceeded, has made the subject of Savings Banks a
matter of thorough and careful study.
Mr. Warner says : "T:Qe first Savings Bank is claimed
to have been founded at Hamburg so early as 1778,
though it had generally been believed that the first
institution of the kind was formed at Berne, in Switzerland, in 1787."
Concerning this claim, Mr. Lewins, in his " History
of Banks for Savings in Great Britain and Ireland,"
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HISTORY OF SA VIN GS BANKS.
remarks, "That, from the best investigation he has
been able to make, the institutions in question were
something very different from Savings Banks as English people understand them, dealing, as they did, in
business more like the sale of deferred annuities. The
institution at Hamburg simply took the spare cash of
domestic servants and handicraftsmen, and granted
annuities on the members arriving at a certain age.
No withdrawal of money was allowed."
I again quote from the memoranda of Mr. Warner.
" The credit of introducing Savings Banks into Great
Britain is claimed in behalf of several different persons,
but doubtless there may be earlier unrecorded instances
of arrangement➔ having been made to receive small
savings from the poor, and to return them on demand
with interest.
In 1798,* a "Friendly Society for the ben&fit of
women and children " was established at Tottenham
High Cross, under the superintendence of Mrs. Priscilla Wakefield, and before 1801 there had been combined with its main design ( which appears to have
been the granting of annuities to members after a certain age, or an allowance weekly in case of sickness,
and a sum for burial at decease), two other objects,
viz., a fund for loans and a 'ban/c for savings.' In 1804
this Bank for Savings was regularly organized and trustees were appointed.
A prior claim is raised, however, in behalf of the
Rev. Joseph Smith, of Wendover, who, in 1799,t cir-
* Lewins says, 1799.
t 1798, according to Lewil18.
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INCEPI'ION OF THE IDEA IN EUROPE.
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culated in his parish, proposals to receive any sums in
deposit during -the summer, and to return the amount
at Christmas with the addition of one-third to the
whole, as a bounty upon the depositor's economy."
Which of these claims is entitled to priority, " will,"
as Mr. Lewins very justly remarks, "be determined,
according to the judgment of the reader, as to which
of these two original schemes best deserves the name
Savings Bank, or whether either of them is entitled to
that honor." "In the mind of each of these estimable persons," he continues, "we think the question of
becoming bankers for the poor around them was at
first only a subordinate measure, and quite auxiliary
t-0 other matters deemed of greater importance."
I deem it quite sufficient to set forth what was undertaken and accomplished by those persons respectively,
and leave the name by which their effort shall be characterized out of the discussion. That each, in his own
way, instituted a scheme to encourage industry, frugality and virtue, whereby the poor should lielp them,.
.<;elves and receive the reward of their industry and self.
denial, which was or became the germ of what are now
known as Savings Banks, is quite sufficient for our purpose, and entitles each to recognition as one of the
founders of this beneficent agency, without regard to
the priority by a day or a year in the introduction of the
Savings Bank principle, pure and simple.
Citing again the memoranda of Mr. Warner, he proceeds to say : "The first publication in England of the
idea of a Savings Bank is also attributed to the celebrated Jeremy Bentham, in whose well-known schemes
3
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HISTORY OF SAVIN GS BANKS.
for the management of paupers (1797), was included
a system of frugality banks, as he called them. His
suggestions, however, were never acted upon."
Malthus in hi"I "Essay on Population," 1803: favors
the establishment of county banks to facilitate the saving of small sums, and to encourage young laborers
to economize their earnings, where the smallest sums
might be received, and a fair interest granted for them.
"The next society formed," continues Mr. Warner,
"of which we have any account, was opened in 1808,
at Bath ( chiefly through the instrumentality of ladies),
for receiving deposits from female servants."
But it appears from Mr. Warner's notes that, prior
to this, in 1806, the Provident Institution of London
was established, to which a Savings Bank was at first
attached, but this was shortly after discontinued.
"In 181 0," continues Mr. Warner, " the first Savings
Bank in Scotland was formed by the Rev. Henry Duncan, minister at Ruthwell, Dmnfrieshire. Various
papers were published hy him on the subject of forming banks for savings in the different parishes of the
country, and the regular and simple organization of
his 'Parish Bank' served as a model for other institutions. He communicated the rules of this bank to tlie
Edinburgh Society for the suppression of mendicity,
and the result was the establishment, in 1814, of the
Edinburgh Savings Bank. Under the same inspiration similar institutions were commenced about the
same time in Kelso and Hawick."
The name of Rev. Henry Duncan, in association with
the establishment of Savings Banks, deserves more
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than merely incidental mention. Lewins devotes several pages of his history to a consideration of the
labors of Dr. Duncan in behalf of these institutions.
That he first conceived the idea is not claimed, but he
probably did more than any other man, perhaps more
than all others, to reduce the idea to practical form,
and to impart to it success.
And yet in a sense, he is claimed as their f 011,nder,
in that he " originated and organized the first selfsustaining bank, and succeeded in so arranging his
scheme as to make it applicable not to one locality
only, but to the country generally." The amount of
travel, correspondence and public speaking performed
by Dr. Duncan in connection with, and for the establishment of these institutions was, for that period,
immense. It is but just to say that but for such efforts
as he put forth, and upon some basis or plan as well
considered and practicable as his, Savings Banks would
not have been organized to any considerable extent at
so early a period, or, if organized, would not, for want
of practical plans of operation, have been successful.
The notes of Mr. Warner, however, bring to view
an earlier claimant for the honor of the first pubUo
announcement of a practicable scheme for the organization of Savings Banks. This is no other than Patrick Colquhoun, a local magistrate in London, of whom
we shall have more to say in connection with the
origin of Savings Banks in the State of Ne~ York.
Mr. Warner says : " It will be perceived by the following extract from a letter of Patrick Colquhoun, of
Loudon, to Thomas Eddy, of New York, dated Lon-
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HISTORY 01'' SA VINOS BANKS.
don, 20th February, 1818, that Mr. C. claims that the
idea of Provident Banks originated with him. ' You
will observe,' he says, ' that so far back as in the year
1806, I recommended Provident Banks (in my treatise
on indigence), upon a national plan. The idea of such
institutions originated with me; but the public mind
was not then prepared for them, and I much fear they
will not be rendered permanent under the present system. .Had my plan been adopted in 1806, I am certain
that not less than seven millions sterling of the property of the laboring classes would now have been
yielding interest. The institutions, however, as now
constituted, have become popular, and they are spreading fast all over the country.'" "Again, in June,
1818, he writes to the same, 'You will see, by referring to my treatise on indigence, which I sent you, that
I was the first to suggest the establishment of Savings
Banks so far back as 1806. Happy would it have
been for this country if this and my various other suggestions for the amelioration of society, had been
attended to at the time they were brought forward.
But the public mind in this country, and particularly
the Parliament, do not see good objects quickly. The
proposition was made when a leading member brought
in a bill for amending the Poor Laws, in 1806, which
did not pass the lower house. Three years ago, the
establishment of local banks for savings originated in
Scotland, and their utility being (as I had predicted),
rendered manifest, they got a footing in this country.
They have recently been recognized by government,
and there are now about two hundred establishments
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in di.ffere:nt parts of Great Britain and Ireland ; but as
the superintendence is gratuitous, and the organization
of a natl.lrf' not to secure permanency ( which was the
main feature of my plan), I doubt their success on the
present footing. ' "
The claim of Mr. Colquhoun to having originated
the idea of Savings Banks relates, I presume, to their
organization on a general and systematic plan, under
the protection, control and encouragement of the government ; for the idea, as a voluntary and local effort
of charity, had, as we have seen, already been put in
operation as early as 1798-9. And we have seen
also that Malthus, as early as 1803, had suggested the
idea of county banks for the benefit of the laboring
classes. Whether he proposed these as purely volun•
tary organizations, or that they be under the protec•
tion of the government, does not appear.
Mr. C. is evidently in error as to the date of the first
organization of Savings Banks in Scotland, which he
makes out to be 1815, whereas, the first was organized,
as we have seen, in 1810, and at least one other as early
0
as 1814.
If the bill for amending the Poor Laws, to which
ha refers as being introduced in 1806, was the bill of
Mr. Whitbread, as I have good reason to believe, he is
in en-or as to the date of its introduction by one year.
The bill introduced by Mr. Whitbread in 1807, and
which failed to pass the lower house, is remarkable for
having proposed measures for the establishment of
government Savings Banks, which, though rejected
then as being in advance of the public sentiment of
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HISTOltY OF SAVINGS HANKS.
the period, were recognized and incorporated into legislation nearly half a century later. li these measures
were, as it would seem, the suggestion of Mr. Colquhotm, he is entitled to greater credit for far sighted
wisdom upon this subject than he has received from
any writer whose work I have seen. Lewins in his
history on Savings Banks, gives an interesting account
of the effort made by Mr. Whitbread to secure governmental recognition in the establishment of Savings
Banks, and of the opposition encountered by him, and
also gives an abstract of the provisions of his bill.
But he makes no mention of Mr. Colquhoun in connection with the measure, probably for the sufficient reason
that he was not publicly known in connection with it.
But this letter plainly points to such connection, and,
as it would seem, a very intimate connection, indeed
no less than the progenitor of the plan of which Mr.
Whitbread was in fact only sponsor. It is not the
less creditable to the latter gentleman that he should
entertain, and strive in his official ai1d responsible relation to promote a project so far in advance of the time,
and should enforce the proposition by arguments so
clear, logical and cogent, which the practical experience
of half a century later has amply verified and confirmed.
I have dwelt at some length upon this phase in the
history of Savings Banks in Great Britain, because it
seemed an act of justice toward one whose claims to
recognition in this relation have been overlooked, for
the renson that they were unknown, and because we
shall see hereafter, that however little or much Patrick
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Colquhoun may have in fact suggested or achieved
in behalf of English Savings Banks, he certainly, by
his letters, suggestions and advice, did much to give
embodiment and direction to the sentiment in their
favor in the State of New York.
~
It was not until 1817 that Savings Banks in Great
Britain were recognized at all by the government.
Prior to this they were merely voluntary associations,
of gentlemen or ladies in various localities who sought
in this way to assist the poor in thei"r immediate neighborhoods. They were necessarily limited in their opera•
tion, and depended for their success upon the confi•
dence reposed in the character of their projectors, and
the degree to which that confidence was justified. It
is a pleasure to record that the trust thus voluntarily
ass.urned was rarely if ever abused.
But as they extended the range of their operations
and influence, the necessity for their recognition and
protection by law became apparent. This was secured
by an act of Parliament, passed August, 1817 ; but,
owing to radical defects in the plan or details of organi•
zation approved by Parliament, they became subject to
frauds and abuses such as had never characterized them
umler the voluntary system. The most astounding
frauds were perpetrated by officers of Savings Banks,
amongst whom were clergymen, and all of whom
previous to these disclosures, had been men of the
highest respectability, enjoying the confidence of the
trustees and of the community in an unlimited degree.
Indeed it was this overweening confidence, this perfect
trust in the integrity of reputable men that gave oppor-
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HISTORY
o~• SAVINOS BANKS.
tunity for and incited the terrible disasters that followed. In this blind confidence no thorough examination and comparison of the books was made, and the
returns of the institution to the government office, as
prepared by the officer in charge, were accepted and
sworn to by the trustees without question or suspicion.
After various fruitless efforts to satisfactorily amend
the system on its original basis, it was in 1861 superseded by the post-office Savings Banks, a brief account
of which will be found elsewhere.
But it is not my purpose to trace further the history
of Savings Banks in Great Britain. It is foreign to
the plan of the present work, which is only to indicate
in outline the leading features of the movement of
public sentiment in this direction, until it culminated
in legislative recognition and protection as among the
authorized institutions of society.
Their history in detail prior to this period, as well
as subsequently, has been admirably written, and to
the work already cited the reader interested in the
subject is referred.
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CHAPTER III.
ANTECEDENT EFFORTS OF PHILANTHROPY.
The conditions of society in our country antecedent
to and cotemporaneous with the institution of Savings
Banks as a means to the amelioration of the evils of
and sufferings from indigence; and the rise ;nd progress of the spirit of philanthropy, which after many
years of experiment in other directions, at length found
expression and embodiment in this agency, may now
properly engage our attention.
The war which resulted in securing the independence
of the United States, left them in a feeble and impoverished condition. Trade, industry and finance had all
become demoralized by the seven years' struggle. The
accumulations of scarcely more than a century of rugged
experiences, by no means peaceful, had been nearly
exhausted. The country was yet new. It was rich in
undeveloped resources only. It was full of possibilities for the future, but was crowded with urgent necessities as well, demanding instant relief. Until something could be organized out of this social chaos, to
bring relief through the operation of the natural laws
of industry and trade, extraneous and adventitious
methods must be and were resorted to. That these in
the haste with which they were conceived and applied
to a pressing and instant emergency, were not always
the wisest, may well be believed.
4
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HISTORY OF SAVIN GS BANKS.
Among the earliest of these efforts was an act passed
by the legislature of New York, in March, 1778, and
during the progress of the war, entitled "An Act to
regulate the wages of Mechanics."
But it was found after very brief experience, that it
is inexpedient, if not impossible, to change the operation
of natural laws concerning labor and wages, by legislation. The operation of the law was accordingly
suspended at the June session following, and at the
October session in the same year was repealed.
But the act is significant, as showing the prevalent
and urgent need of relief for the industry of the people,
and of the effort to meet the want and apply the
remedy. It was the first groping step in the darkness
toward the light subsequently revealed. That it was
a step in the wrong direction and had to be retraced
depiives it of none of its value as an historical illustra•
tion of the needs of the people, and of t~e efforts to
afford relief. Such is the nature of all early efforts
toward progress and reform. The mistakes of yester•
day are corrected to-day. The failure of to-day opens
our eyes to the means of success to-morrow.
Our attention is next directed to a general act for
the relief and settlement of the poor, considered by
the legislature in 1779, but not passed. At this peiiod
it must be remembered, all the energies of that State
in common with other States, were being taxed to the
utmost in maintaining the war for independence. It
was doubtless, the superior urgency of measures to
this end that prevented the consummation of the act
in question. But its introduction and reference to the
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committee of the whole, is evidence of the ever present
and overpowering necessity for relief from the evils of
poverty, which forced itself upon the attention of the
representatives of the people. In 1780 an act was
introduced and passed for a general limitation of
prices, which only further illustrates the urgent needs
of a people, when such abortive efforts to secure relief
could engage the attention of any legislature. It was
not to take effect, however, until certain other States
should pass similar laws, which they never did, so that
the act never became operative.
At various times, subsequently, the legislature, as
will be seen by consulting its journals, was concern~d
with measures for the reli.ef of the poor. These efforts
culminated in 182-1 in an elaborate and exhaustive
report upon the whole subject of the care and settlement of the poor, founded upon statistics from the
various counties of the State, and suggestions and
recommenda_tions from officers charged with the management of poor-houses and. other pauper or charitable
institutio:is. This report reviewed the whole subject,
and showed the defects in our system, derived from
that in England, which tended rather to promote than
allay the evil which it was instituted to relieve. But
it is not our purpose to trace minutely the efforts of legislation, instituted upon its own motion, induced by the
prevalence of poverty and want observable upon every
hand, to apply means of relief. It is sufficient to say,
that the State papers of the period, in other States as
well as in New York, messages of governors, addresses
of the houses of the legislature, reports of State officeni
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IIISTORY OF SAVINOS BANKS.
and of standing and select committees, are full of the
subject, and of suggestions to mitigate the evils of
poverty. It was out of this condition that lotteries for
charitable and public purposes became, for a time, a
recognized and legally authorized institution in many
of the States.
Though want and suffering are by no means unknown
in our day, nor will they ever be strangers to us, it is
significant how much less prominent is the discussion
of these as an overshadom,ng evil, than in the later
years of the last, and the earlier years of the present
century.
In this_ is the evidence that it is certainly less preva•
lent, less a universal condition than formerly, and that
some means or agency has been devised, whereby this
evil has been diminished, at least relatively to the
general growth and prosperity of the country.
But, as a further illustration of the prevalence of destitution, and of the efforts toward its amelioration during
the period anterior to the institution of Savings Banks,
let us glance at the efforts of philanthropy outside of
the legislature, looking in the direction of relief.
As the conditions were similar in all the States at
that time, it will sufficiently serve our purpose to cite
some of the more notable of these efforts in the State
of New York.
The course of these efforts was commonly through
voluntary association for special or general charitable
purposes, seeking from the legislature only such corporate powers as would give greater permanence and
efficiency to their organization.
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Singularly enough, among the earliest, if not the
earliest, of these distinctively charitable institutions,
incorporated by the legislature of New York, is one
which still exists, and which holds an honored and
prominent place among the institutions of New York
city. This is The Society of Mechanics and Tradesmen of the city of New York, incorporated in 1792.
As illustrating the direction and scope of charitable
effort at that period, it is not inapt to insert here the
preamble to the enactment, as follows :
"Whereas, Robert Boyd and others, Mechanics and
Tradesmen of the city of New York, associated as a
society under the style of' The General Society of the
Mechanics and Tradesmen of the city of New York,'
for the laudable purposes of protecting and supporting such of their brethren as by sickness or accident
may stand in need of assistance, and for the relief of
the widows and orphans of those who may die leav•
ing little or no property for their support, have prayed
to be incorporated to enable them more beneficially
to carry into effect their charitable intention ; there·
fore, be it enacted, etc."
This institution has neither outgrown its usefulness,
nor altogether grown away from its original charitable
purpose, though the latter is hardly now its central
idea. It has become more a social, educational and
literary, than a charitable, organization, maintaining a
large and well selected library and reading room, a
school for the instruction of young mechanics, and
other appliances designed for the benefit of the class
to whose improvement, rathe.r than to whose necessities, it acceptably ministers.
In 1801 a_similar society, under the name of the
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Society of Mechanics in Albany, was incorporated,
having similar objects and purposes in view, and which
maintained a library and a school for many years, the
latter being one of its distinguishing features, until
superseded by the public school system. It did not
become wholly disorganized until a few years since.
Also in this year, 1801, a general act for the settlement and relief of the poor was passed, which was
variously amended in subsequent years.
In 1803 the legislature considered at some length
the petition of Edward Livingston, Samuel Osgood
and others, of New York, praying for incorporation
with power to erect workshops and purchase materials
for the employment of the poor, etc.
I extract from the report of the committee in the
assembly to whom it was referred the following: "That
the object of the petitioners is the prevention of vice
and the removal of poverty by the establishment of a
house of industry in which indigent persons may at
all times find employment," etc. The subject was,
however, dismissed, because of the advanced period in
the session at which it was introduced.
But our purpose is only to briefly indicate the course
and direction of philanthropic effort during this early
period, and not to trace the history of the several
organizations that illustrate it., nearly all of which
have passed away, superseded by new methods and
institutions. We only cite tl1em as il1ustrntions of the
growth and· development of the spirit of philanthropy,
at this period, working toward a practical solution of
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ANTECEDENT EFFORTS OF PilILANTHROPY.
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the great problem of human want, and its appro•
priate relief.
The names of a few of these benevolent institutions,
and the date of their incorporation will suffice for
our purpose.
Marine Society, New York.... . . . . . . . . . . . . . . l'l86
The New York Dispensary ......... : . . . . . • . . 1795
The New York Lying-in Hospital.... . . . . . . . 1796
Society of Mechanics, Albany................ 1801
Society for the Relief of Poor Widows, New York, 1802
Lottery for public improvements and charitable
purposes. . . • . . . . . . . . . . . . . . . . . . . . . . . . . . 1803
Act for relief of indigent women and children .. 1804
German Society for Charitable Purposes ....... 1804
Colµmbian Friendly Union, Albany.. . . . . . . . . . 1804
Provident Society, Mutual Relief Society, Benevolent Society, and Albion Benefit Society, all
of New York, and Social Society, of Schenectady . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • 1805
New York Free School Society....... ·..••.... 180!'>
I quote the following extract from the preamble:
"W IIEREAs, De Witt Clinton and others have associated themselves for the laudable purpose of establishing a free school in the city of New York, for the
education of the children of persons in indigent circumstances, etc."
Society of Tammany, or Columbian Order in the
City of New York. . .. . . . . . . . . . . . . . . . • . . . 1805
As it may be new to many that this organization,
which is now only known as foe most powerfully
organized political institution in the country, was origi-
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DISTORY OF SAVINOS BANKS.
nally incorporated as a charitable institution, I here
quote the preamble to the charter:
" W HEREAs, William Mooney and others, inhabitants
of the city of New York, have presented a petition to
the legislature, setting forth that they, since the year
one thousand seven hundred and eighty-nine, have associated themselves under the name and description of
'The Society of Tammany, or Columbian Order,' for
the purpose of a.ffording reUef to the indigent and Jas.
tressed 1nemiers of tlie said association, their widows
and orphans, and others who may be found proper
objects of their charity, they therefore solicit that the
legislature will be pleased to incorporate the said
society for tl,,e pwrposes ajoresaid, etc. ; therefore be it
enacted, etc."
It is said that the association was originally formed
as a burlesque upon the various friendly societies then
springing up in the country upon the model of similar
institutions 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 established our independence.
But we proceed with our list as follows :
Orphan Asylum, New York ................. 1807
St. Andrew's Society, Schenectady. . . . . . . . . . . . 1808
Mutual Benefit Society of Cordwainers, N. Y... 1808
Thistle Society, New York .................. 1808
Mutual Relief Society, New York ............ 1808
General Society of Mechanics, Poughkeepsie. . . . 1808
Albany Humane Society.......... . . . . . . . . . 1808
Mechanics' Humane Society, Troy ............ 1808
Harlem Friendly Society... . ............ . .. 1809
Manhattan Provident Society. . . . . . . . . . . . . . . . 1809
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ANTECEDENT EFFORTS OF PHILANTHROPY.
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Assistance Society, New York .•••....•.•... . 1810
New York African Society ...•..•.•••.•. . .• 1810
Geneva Friendly Society .................... 1810
Society for Relief of Poor Widows and Small
Children. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181 O
Society of Teachers, New York (for charitable
and literary purposes) . .. • .. . . . . . . . . . . . .. 1811
Wilberforce Philanthropic Association, N. Y ..• 1812
Female Association for Charitable purposes, N. Y. 1812
Poughkeepsie Humane Society.. . . • . . . . . . . . • • 1812
Humane Society, New York .......... . ...••. 1814
An act for the exemption of certain property
loaned to indigent widows and females from
sale on execution . . . . . • . . . . . . . . . . . . . . . . . • 1814
This act was passed at the solicitation of certain
charitable societies in the city of New York, among
whose measures of relief was one of loaning to indigent females spinning wheels and other domestic
machinery, to aid in making more effective their labor.
The same principle is recognized in our statutes to-day
in the general exemption from sale on execution of
similar articles and of sewing machines.
Butchers' Benevolent Society, New York.. . . • . • 1815
Widows' Fund Society, under the auspices of the
Reformed Dutch Church ... . ...... . .. . .... 1815
Society for the relief of Indigent and Aged
Females, New York .......•... . ........ 1815
Ancient Britons' Benefit Society, New York.. . . 1816
Pilots' Charitable Society, New York.. . . . . . . . . 1817
Female Assistance Society, New York ....•... 1817
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IDSTORY OF SA VINOS BANKS.
Roman Catholic Benevolent Society........... 1817
New York Typographical Society.. . . . . . . . . . . . 1817
New York Benevolent Society.. . . . . . . . . . . . . . 1817
Though some of the foregoing, doubtless, were
organized for the purpose, in part, of social enjoyment
an~ improvement, the act of incorporation always recognized the charitable purpose of the organization as predominant.
We have thus sufficiently indicated the course and
direction of public philanthropy, and its methods,
through legislation and otherwise, to meet and overcome the overshadowing evils of poverty during the
early years of the history of the country. These are
introductory and preparatory to the organization of
Savings Banks, which had their origin in the same
causes, and their purpose the amelioration of the same
conditions, that gave rise to the institutions which we
have been considering. These, though doubtless use·
ful in a limited degree, were too narrow and circumscribed in their operation, were directed too much to
effects and too little toward causes, to sensibly affect
the great masses of society.
The condition of the country was ripe for the more
intelligent and more practical measures whose introduction and progress we are now prepared to sketch.
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PLAN OF THE PRESENT WORK
35
CHAPTER IV.
ORDER AND PLAN OF THE WORK.
There are certain disadvantages under which one
labors in giving or in attempting to give order and
coherency to his treatment of the subject-matter of
this history. These arise from the necessity of tracing
the origin, growth and progress of Savings Banks in
this country, not as one connected system, incited,
directed and controlled by a central source of authority
and power, but as a series or multiple of systems, each
regulated by its own special source of authority, a
State Legislature. A History of Savings Banks in the
United States is, therefore, a collection of histories of
the origin and progress of Savings Banks in each of
the several States. It is impossible to avoid in such a
work, the recurrence of the same topics for record and
for discussion, as these have arisen in the legislation
and public administration of these institutions in the
different States.
Thus it will be seen that the subject of Savings
Bank investments, as well as others that will be noticed
in the progress of the work, is one, pervading the
course of legislation in all of the States, where Savings
Banks have attained such prominence and dh,tinctness
in the body politic, as to constitute a system.
It will be found, however, that there is sufficient
unity of purpose in their organization, and of method
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IDSTORY OF SA VINOS BANKS,
in the plans for the accomplishment of that purpose ;
and sufficient consonance or identity in the character
of the work performed and of the results accomplished,
to justify, indeed to demand, a comprehensive grouping of these elements and incidents into a summary
and general exposition of this great interest, as it
has found its practical development in the country at
large.
These conditions and considerations have impressed
upon the writer a task of no inconsiderable magnitude
in determining the form or plan of the work, which
should thus preserve the individual characteristics of
development in the several States, and at the same time
give opportunity to 1;1ote and record the more general
and comprehensive aspects of the development, of
which these individual cases are but sections or parts.
These considerations have controlled in the mechanical plan or form of this work. The subdivision into
sections was a form imposed by the necessity of giving
to the record of each State an individuality of its own.
It could not be done under the title of chapters, without, in most instances, protracting these to great length
and embracing under one general head, topics incongruous or irrelevant. The term "section " has been
employed in preference to the more common designation of "part," for the reason that " part" as commonly
used, hardly defines the nature of the subdivision here
employed. In making reference from one portion of
the work to another, it seems to be more fitting and
appropriate to refer to sections than to parts ; thus,
reference to the New York s::,ction or Massachusetts
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ORDER AND PLAN OF THE WORK.
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section, seems more distinctive and suitable, than
would be similar reference to New York part, etc.
The order in which the States should be introduced
in the work, was also a subject of considerable re:flec•
tion. A strict chronological order, founded upon the
date of the incorporation ~r organization of Savings
Banks, would be attended by many inconveniences.
We sho11ld thus have to begin with Pennsylvania, fol•
low with Massachusetts, continuing with Maryland,
after which would come New York, to be followed by
other New England States, between which would be
sandwiched New Jersey, winding up with Vermont.
It was deemed preferable to start with the first rec•
ognized legislation upon Savings Banks, and thereafter
let the chronological order be subordinate to geographical position; or rather to follow the chronological order
within geographical limitations. Hence after Massachusetts we follow with the other New England States, then
New York, New Jersey, Pennsylvania, Maryland, etc.
Outside of these States which have been mentioned,
Savings Banks, as voluntary associations of persons
acting in the interest of depositors, with no personal
or pecuniary interests of their own to serve, are almost,
if not quite, wholly unknown. But the institutions ·
known and recognized as Savings Banks in the newer
States, in so far as information could be gained of
them, are given a place in this history, as forms into
which this interest has developed itself under different
auspices from those which attended its inception in the
earlier years of the century ; and their arrangement has
been controlled largely by considerations of convenience.
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HISTOUY O~' SAVINGS BANKS.
SECOND SECTION.
SAVINGS BANKS IN THE STATE OF MASSACHUSETTS.
CHAPTER V.
INCEPTION AN.D GROWTH, 1816-1833.
To Massachusetts belongs the honor of being the
first State to give legis~ative sanction to the Institution
of Savings Banks. The plans and address of the London Institution for savings, fell accidentally into the
hands of the Hon. James Savage, of Boston, in the year
1816. Impressed with the importance and efficacy of
this means of contributing to the welfare of the working classes, he early concerted measures for the establishment of such an institution in Boston. The first
public announcement of the purpose, so far as I can
learn, was in The Oh1·istwn Disciple, for December,
1816, a small religious monthly, published in Boston.
It is in the following words :
"&wing Banks."
"Under this novel title, it is proposed to form an institution in Boston, 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)
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lL\88ACIIUSETTS : 1816-1833.
39
for an act of incorporation, and to digest suitable rules
and by-laws, to be proposed to an adjourned meeting.
Similar institutions exist in England 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
Pa1mplueteer, No. 14, contain essays on the subject,
explaining their objects and principles, and narrating
their beneficent effects. In Philadelphia it is proposed
to establish o~e of these societies. We agree in the
following sentiment, and wish every success to the
laudable schemes contemplated : ' It is not by the
alms of the wealthy, that the good of the lower class
can be generally promoted. By such donations, encour•
agement 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 frugaJ,ity.'"
·
It is very probable that notices of the movement
appeared in other public journals of the day. At the
time of the publication of this notice, the plans of the
projectors of the enterprise must have been very far
matured, for the act to incorporate the Provident Insti\) tution for Savings, in the town of Boston, was approved
on the 13th of December, 1816. With characteristic
modesty becoming a genuine philanthropist, the name
of James Savage appears as the last in a list of fortyeight trustees or directors of the Society thus formed.
So far as I can ascertain, this was the first public act
of legislation in the world, which recognized the beneficent character of Savings banks, and invested them
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HISTORY 01" SA VIN GS BANKS.
with the sanction and protection of the law. Even in
England, where they had their inception as detailed in
a previous chapter, they were at this time purely volun•
tary associations, the first act of Parliament to give
protection to such institutions having passed in 1817.
The act incorporating the Provident Institution fo1
Savings in Boston, will be found in full in the appen
dix, where we have inserted the original or first Savings Bank charters of the several States.
It is evident that the measure encountered in the
General Court of Massachusetts none of the hostility
which subsequently defeated a similar effort in the
legislature of the Stnte of New York, as is hereinafter
narrated. How far this may be owing to the exclusion
of the word" Bank" from the act ·of incorporation,
and the substitution of the more innocent title of
"provident institution," we have not evidence sufficient
to form an opinion. It only appears that the project
was favorably considered, and a conclusion satisfactory
to the promoters of the enterprise was speedily reached.
The population of Boston at this time, probably, was
between 35,000 and 36,000.
The institution was organized and commenced business in the following spring, promising, to divide to
depositors one per cent quarterly, and more if practica•
ble. The first dividend was declared in July follow•
ing according to the terms of the promise made. Thereafter, one and one-fourth per cent quarterly, equal to
five per cent annually, was declared until January,
1822. At this time the total deposits in the institution amounted to over $600,000, and the surplus was
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llASSACIIUSETfS : l~W--1833.
$6,200, or about one per cent. It was then proposed
to reduce the regular dividend to the original amount
of one per cent quarterly, and that once in five years
there be made an extra dividend to all depositors existing at such time, and con·esponding to the term of
their deposits in the institution. This policy was
adopted, and the first dividend of reserved surplus,
made in July following, amounted to $8,000. It was
divided on the principle that a deposit of five years
should receive five times as much as a deposit of one
year. In 1827, the termination of the second period,
the reserved profits for an extra dividend were $34,000,
on a total deposit of $793,000. In 1832, the reserved
profits were $60,500; total deposits, $1,442,000. In
1834, the deposits were $2,058,000, and the reserved
surplus for an extra dividend $99,300. During the next
five years the institution suffered losses on its investments in bank stocks and loans to banks, and on bank
stock collaterals, amounting to over $275,000. These
losses, spread over the period of five years, absorbed
the earnings in excess of four per cent, so that in 1839
no extra dividend was declared.
The Institution for Savings in the town of Salem
was next incorporated, January 29, 1818, and the
others in order, to 1834, will be found below. These
charters were in their form, and in the character of
their provisions, substantially like that of the Boston
institution. Such also appears to have been the usual
form in the incorporation of all savings institutions in
the State of Massachusetts d<_>wn to 18:34, with a single
exception to be hereafter noted.
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HISTORY OF SAVINGS BANKS.
The features in which these cha\·ters are worthy of
Rpecial notice, as corresponding with or differing from
the legislation in other States, are the following :
The charters were perpetual, and .the number of
trustees or managers was, it would seem, fixed by the
promoters of the institution, according to their judg·
ment of the expedient number to be inserted in the
bill. As will be seen from the charter of the Boston
institution, authority was given to the managers to
increase their number at discretion. There is no prohibition against the trustees or managers receiving
compensation for their services and charging the same
to account of expenses, neither is there any prohibition against the trustees being themselves borrowers
from the institution. It will also be observed that the
discretion of the trustees in the matter of investments
was almost absolutely unlimited. It .is presumed that
the well-known character of the corporators for. integrity and worth, and their reputation for business
sagacity and discernment, were regarded by the legislature as a sufficient guaranty that the trust reposed
would be wisely and unselfishly administered.
In 1833 power was granted to the Boston Provident
Institution to purchase real estate to an amount not
exceeding $30,000. At the same session of the General
Court the Savings Bank for Seamen in the city of Boston
was incorporated, with this provision concerning investments: "All deposits may be invested in any public
stocks, created under and by virtue of any law of the
United States, or of this commonwealth, or loaned on
promissory notes secured by pledge of such stocks, at
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MASSACHUS.l!.'1'TS; 1816-1833.
43
no more than ninety per centum of their par value ;
and no patrt of the deposits sluill be inve:sted in any otlter
manner, or loaned upon (1/ll,y other secwrities than tlwse
herein '111,61Uwned,."
This was the last act of incorporation prior to the
passage of a general law to be presently noted, and we
will here enumerate the institutions incorporated prior
to that act, in the order in which the charters were
granted.
Provident Institution for Savings in the town of Boston, December 13, 1816.
Institution for Savings in the town of Salem and
vicinity, January 29, 1818.
Institution for Savings in the town of Portland and
vicinity, June 11, 1819; not organized.
Institution for Savings in Newburyport and vicinity,
January 31, 1820.
Provident Institution for Savings in the town of
Hallowell and vicinity, February 21, 1820 ; not
organized.
··
Institution for Savings in the town of Roxbury
( since became a part of Boston) and vicinity, Feb
ruary 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
Taunton and vicinity, February 26, 1827.
Springfield Institution for Savings, June 16, 1827;
original charter limited the term of the corporation to
thirty years.
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HISTORY OF SAVINGS BANKS.
Institution for Savings in the town of Haverhill and
vicinity, February 8, 1828.
Worcester County Institution for Savings, February
8, 1828.
Provident Institution for Savings in the towns of
Salisbury· and Amesbury, February 20, 1828
Fall River Institution for Savings, March 11, 1828.
Plymouth Institution for Savings, June 11, 1828.
Lowell Institution for Savings, February 20, 1829;
originally limited to thirty years.
Warren Institution for Savings in the town of
Charlestown, February 21, 1829.
Institution for Savings in the town of Barnstable,
January 29, 1831.
Provident Institution for Savings in the town of
Gloucester and vicinity, February 3, 1831.
Dedham Jnstitution for Savings, March 19, 1831.
Institution for Savings in the town of Newton, .June
17, 1831.
Institution for Savings in the town of Fairhaven,
February 10, 1832.
Weymouth and Braintree Institution for Savings,
February 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, twenty-four Savings Institutions were incorporated, all but two of which organized
and commenced business.
Two of these, Taunton, chartered 1827, and Gloucester, chartered 1831, subsequently failed.
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MASSACHUSETI'S : 1816-1833.
The remainder appear to be still in operation, with
an aggregate of deposits amounting to nearly $7 4,000,000. See table, post, p. 111.
It is significant that the word " Bank" is employed
in but one, and that in the last of the above tit1t>s.
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HISTORY OF SAVINOS BANKS.
CHAPTER VI.
GENERAL SAVINGS BANK LAW, 1834.
Until l834, no supervision appears to have been
exercised over these institutions, not even to the extent
of requiring from them any public statement of their
transactions or condition. The reason is to be found,
probably, in the fact of their generally safe and satisfactory management, giving rise to no complaint, and
the comparatively moderate amount of accumulation;
the deposits in 1834 being less than three and a-half
millions ($3,407,773), distributed among twenty-two
institutions and 24,256 depositors.
It is probable that the increasing frequency of applications for charters for Savings Banks impressed the
~ubject somewhat forcibly upon the attention of the
legislature, and suggested the idea of the growing
importance of this interest, and the propriety, by
proper safe-guards, of placing about it some measure
of restraint. Accordingly, in this year (1834), an act
was passed, quite comprehensive in its scope, and of
such important bearing upon the interest concerned,
and of so marked a character in defining the general
policy of the State regarding these institutions, that
its insertion in full seems to be demanded as a necessary incident in this history.
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H.A.BSAOHUSETl'S ; GENERAL LAW, 1834.
AN ACT
47
TO REGULATE INSTITUTIONS FOR SAVINGS.
PASSED
April 2, 1834.
Be it enacted by the &nate and House of
Representatives in general court a.ssembled, and hf t7w
authority of the sa;me: That all Savings Banks or mstitutions for savings which now do or may hereafter
exist, by virtue of any statute of this Commonwealth,
shall be corporations possessed of the powers and functions conferred by law upon corporations generally, and
shall be governed by the rules, and subject to the
duties, restrictions, liabilities and other provisions contained in this act.
SEO. 2. Be it f wrther enacted, That the officers of
every such corporation shall consist of a president and
treasurer, and such number of trustees or managers as
the corporation shall agree upon, together with such
other officers as may be found needful for the orderly
management of the affairs of such corporation.
SEO. a. Be it further enacted, That the officers aforesaid shall be chosen at regular annual meetings of such
corporations, to be holden at such times as the by-laws
thereof may direct, except the treasurer, who shall be
appointed by the managers or trustees, and hold his
office during their pleasure; and except, also, that in
case of any office becoming vacant during the year, the
managers or trustees may appoint a person or persons
to .611 the same until the same be regularly filled at the
next annual meeting. And a11 the officers shall be
duly sworn or affirmed to the faithful discharge of their
respective duties, and shall hold their several offices
until others are chosen or qualified in their stead ; and
the treasurer shall also give a bond to the satisfaction
of the managers or trustees for the faithful discharge of
his duti~ as treasurer.
SEO. 4. Be it further enacted, That in addition to the
rP.gular annual· meetings of such corporations, special
meetings thereof may be holden at any time, on due
notice by order of the trustees or managers thereof;
SECTION
J.
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HISTORY OF SAVINGS BANKS.
and it shall be thtl duty of the treasurer to notify a
special meeting, at the requisition in writing of any ten
members of the corporation ; notice of all such meetings
to be given by public advertisement in some newspaper
of the town or county where the corporation is established, or if there be . no newspaper in such town or
county, then in some newspaper of the city of Boston.
SEO. 5. Be it fwrther enact,ed, That every such corporation shall have power, at meetings legally holden,
to elect by ballot any citizen of this Commonwealth
to be a member thereof; and any member may withdraw from and cease to be a member of such corporation by filing a written notice of such intent with the
treasurer of the corporation three months at least before
the regular annual meeting ; and every mem her shall
cease to be such on removing out of the Commonwealth.
SEO. 6. Be it fwrther enacted, That every such corporation may receive on deposit all sums of money
offered for that purpose ; provided, that it shall not
hold at the same time more than one thousand dollars
from any one depositor, other than a religious or charitable corporation ; said sums to be invested, used and
improved for the benefit of said depositors.
SEO. 7. Be it fwrther enacud, That all deposits may
be invested in t1ie stock of any bank incor.Porated by
a law of this Common wealth or of the U mted States ;
provided, that the whole amount of investment or
security in any one bank shall not exceed one-half the
capital stock of said bank ; or said deposits may be
deposited in any such bank on time and interest; or
said deposits may be invested in bonds or notes with
collateral security of any such bank stock at not more
than ninety .Per centum of its par value; or they may
be invested m mortgages of real estate, not exceeding
in the aggregate three-quarters of the whole amount of
moneys held on deposit by said corporation ; or in the
public funds of this Commonwealth, or of the United
States, whether by direct investment or by conveyance
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MASSACllUSETI'S
i
UENERAL LAW, 1834.
49
of the property in such funds as collateral security for
a loan at their par value ; or in loans to any county,
city or town in this Commonwealth.
SEO. 8. Be it f'UIT'ther ena()t,d, That if the moneys
held on deposit by any- such corporation cannot be
conveniently invested m any or all of the modes of
investmP-nt hereinbefore prescribed, then it shall be
lawful to loan, not exceeding one-fourth part of the
amount thereof, on bonds or other personal security,
with at least one principal and two surety promisors,
provided, that all such parties shall be citizens of this
Commonwealth.
SEO. 9. Be it furtlier 8na()ted, That no officers or com•
mittee of such corporation, specially charged with the
duty of investing the deposits, shall borrow any portion thereof, or use the Bl;\me, except in payment of the
expenses of the corporation.
SEO. 10. Be it further 8na()ted, That the income
or profit of all deposits shall be divided among the
depositors, their executors, administrators, assigns or
other legal representatives, in just proportion, with
deduction of all reasonable expenses incurred in the
man8$ement thereof; and the principal deposits may
be withdrawn at such time, or in such form, as the
corporation shall in its by-laws direct and appoint. ·
SEO. 11. Be it further· enacted, That the treasurer of
every such corporation shall, in every year, make a
return of the state thereof, as it was at two o'clock in
the afternoon of the last Saturday of some _preceding
month, to be prescribed by the Governor, which return
Rhall be made to the Secretary of the Commonwealth
within fifteen days after an order to that effect; and
said retarn shall specify the following particulars,
namely:
.
Number of de_positors; total amount of deposits ;
amount in vested m bank stock ; amount deposited in
banks on interest; amount secw·ed by bank stock;
amount invested in public funds ; loans on mortgages
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msTORY OF SAVINGS BANKS.
of real estate ; loans to county, city or town ; loans on
personal securities; amount of cash on hand ; total
dividends for the year; annual expenses of the institu•
tion.
All which shall be certified and sworn to or affirmed
by the treasurer ; and five or more of the trustees or
managers of such corporation shall also certify and make
oath or affirmation that the same is correct, according
to their best knowledge and belie£ And blank
forms of such return shall be furnished said corporation by the Secretary of the Commonwealth, who shall
prepare suitable yearly abstracts thereof, to be laid by
the Governor before the general court.
SEO. 12. Be it further enacted, That the general court
may at any time make other or further regulations for
the government of such corporations, or determine and
take away their corporate powers ; and all such corporations and their officers shall be subject to examinution by a committee of the general court, in like
manner, and under all the liabilities and penalties, provided in the seventeenth section of the " Act to regulate banks and banking."
The purpose of the act was to reduce to uniformity
th.e powers and duties of these corporations, thus simplifying the law concerning their administration, imposing restraints in those directions in which experience
had shown a tendency to laxity or abuse, and making
all alike amenable to a single and simple code of procedure. The effect of this law in creating limitations
not prescribed in the charters of institutions previously
incorporated, was questioned by some of them, but in
the main the provisions of the act may be regarded as
the policy of the State thereafter, except as modified
by subsequent general legislation.
The object of reducing to a uniform system the
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llASSACHUSETI'S ; GENERAL LAW, 1834.
51
operations of those institutions, whereby they should
find in this general law their powers and duties fully
defined, was steadfastly adhered to in subsequent
legislation by the adoption of a charter for all institutions thereafter incorporated in the following form :
Be it enacted, eta., That
, their associates
and successors, are hereby incorporated by the name
of
, and shall be entitled to all the powers
and privileges, and be subject to all the duties, liabilities and requirements, contained in the statute of one
thousand eight hundred and thirty-four, entitled "An
act to regulate institutions for savings."
It must be conceded that this is a great improvement over the system, or want of system, so long prevalent in New York and other States, where each
charter embraces provisions unknown to any other, and
commonly more or less in conflict with the general
legislation concerning these institutions.
Though the general law inserted above is sufficiently
clear in itself, it may not be out of place to call attention, somewhat in detail, to its lea.ding provisions or
features.
'
The power to increase the number of trustees or
managers indefinitely, was conferred upon the corporation ; but no quorum was named in the act, as had
been done in previous charters.
Deposits were limited to $1,000 from any individual,
but might be received in any a.mount from religious or
charitable corporations.
Officers, and members of any committee charged
with the duty of making investments, were prohibited
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HISTORY OF SA VINOS BANKS.
frolJ). borrowing or using the funds of the corporation;
but the prohibition was not extended to trustees
generally.
The authorized investments were : 1. Stock of any
bank incorporated by the Commonwealth or the United
States; but not to exceed one-half the capital stock of
any one bank. 2. Deposits on time and on interest in
such bank were allowed. 3. Bonds or notes of
private individuals, secured by such stock at not
exceeding ninety per cent of its par value. 4.. Bonds
and mortgages to an amount not exceeding threefourths of the total deposits. No limit as to the
location of the real estate thus accepted as security,
nor concerning the relative value of the property to
the loan, was named, these matters being left to the
discretion of the managers. . 6. Public funds (bonds)
of the Commonwealth of Massachusetts, or of the
United States. 6. Loans to any county, city or town
in the Commonwealth. It would seem as though this
range of investment was sufficiently broad and diversified; but lest it should prove otherwise, it was further
provided: 7. That not exceeding one-fourth part of
the deposits might be loaned to citizens of the Commonwealth only, upon personal security, with one
principal and two surety promisors.
The usual provisions for a division of the entire income among the depositors, after deducting reasonable
expenses for management, are embraced in the act. No
accumulation of surplus to meet losses or depreciation
in the value of securities was provided for.
any
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MASSACHUSl.TIS j GENERAL LAW, 1834.
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The requirement to make a return to the Secretary
of the Commonwealth, of the financial condition of each
institution, upon a day to be designated by the Governor, was, I believe, the earliest effort of general legislation in this country to make public record of the
condition of this interest, unless we regard the requirement in most of the earlier charters of Savings Banks
in New York, to report annually to the legislature, as
an exception.
Though made subject to visitation and examination
at the discretion of the General Court, this power
seems not to have been exercised until, by a subsequent act in 1838, the appointment of bank commissioners was provided for, upon whom this duty was
imposed.
The subject-matter of the returns to be made by
Savings Banks is set forth in the act, and fails to embrace many items of desirable information which have
since been included in these reports, and which are
essential to a really complete history of the growth and
progress of these institutions. The object appears to
have been simply to call for such facts as would indicate existing financial conditions, from which the status
of solnncy or insolvency could be derived. The current transactions of the year, from which a knowledge
of the practical work wrought by Savings Banks could
be gained, were not included in the items to be furnished, until seven years later. Hence the grand total
accomplished by this agency is nowhere made a matter
of record, and my efforts to supplement the reports of
the last few years, with •information derived from the
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HISTORY Oil SA VINOS BANKS.
institut.ions themselves, as will be seen hereafter, have
not been attended with very gratifying success.
Nothing further of interest or importance affecting
Savings Banks, marked the course of legislation until
1838. The features of this, as well as of subsequent
legislation, we will reserve for the next chapter.
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MASSACHUSETfS j SUPERVISION, ETC., 1838-1860.
55
CHAPTER VII.
COURSE OF LEGISLATION; SUPERVISION AND REPORTS, 1838-1860.
In 1838 an act was passed providing for the appointment of three bank commissioners, upon whom was
devolved the duty to visit at least once in twelve
months every bank and Provident Institution for Savings in the Commonwealth. They were to have free
access to the vaults, books and papers, and to thoroughly
examine all the affairs of said corporations, and make
any and all such inquiries as might be necessary to
ascertain their condition, their ability to fulfill all the
engagements made by them, and whether they had
complied with the provisions of law applicable to their
transactions. It was further provided, that whenever
upon the examination of any institution a majority of
the commissioners were of opinion that the same was
ins_olvent, or its further operations hazardous to the
public or to depositors, or had exceeded its powers, or
failed to comply with the law, the commissioners were
empowered to apply to the Supreme Court for an injunction restraining the institution from further operations, etc. The commissioners were to report to the
Governor, who would transmit the same to the Legislature.
The first report of Commissioners · Waldo Flint,
Julius Rockwell and Jonathan Shore, made December
31, 1838, embraces forty..five pages, of which forty-three
are devoted to banks, and two to Savings Institutions.
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HISTORY OF SA VINOS BANKS.
As illustrating the character of the system at that time,
we extract the substance of that report, as follows :
FIRST SAVINGS BANK REPORT, 1838.
"The attention of the commissioners, in their examination of Savings Institutions, has been directed especially to the investments, and the system of accountability as provided for in the by-laws, and as carried
out in practice. An examination of the individual
accounts would be a work of great labor and of little
· advantage. The investments, with very few exceptions,
have all been made in some of the modes provided for
by law, but there has been found a great difference of
opinion as to the best mode of investment within the
rules prescribed by the statute. Some have loaned
almost wholly on collateral securities, and as far as convenient, on mortgages of real estate ; while others have
loaned on mortgages only as a last resort, and have
gone to the extreme limits of the law in their loans on
personal security. Some have preferred bank stocks,
while others have regarded all other modes of investment as preferable to that in bank stock. In several
instances the opinion has been given to the commissioners that the law ought to be so far altered as to allow
a larger amount to be invested on personal security.
But the fact that some of the best institutions prefer
all other investments to that in personal securities, furnishes a prettJ strong presumption that the law is, after
all, right as 1t stands. Some of them have recently
sustained losses upon their bank stocks, but not to an
extent at all calculated to impair their usefulness, or
seriously to affect the interestij of depositors."
No schedules of the results of these examinations are
given, probably for the reason that the annual statements were relied upon to furnish all the information
deemed necessary.
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.MASSACHUSl!."Tl'S; LEGISLATION, ETC., 1838-1860.
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As part of the history of that period, pertinent to the
foregoing, we subjoin here a statement of the various
classes of securities, constituting the assets of these institutions on the last Saturday of October, 1838.
Bank stock. .......................... $1,426,188
568,787
Deposits in bank.......... . ...........
Loans on bank stock.. . . . . . . . . . . . . . . . . .
536,931
Public funds. . . . . • . . . . . . . . . . . . . . . . . . . .
70,000
Loaned on public funds................
10,000
Mortgages of real estate.... . ........... 1,121,300
County and town loans....... . . . . . . . . .
465,247
Loans on personal security.... . . . . . . . . . .
672,117
144,16~
Cash on hand.. . . . . . . . . . . . . . . . . . . . . . . .
$5,014,732
INVESTMENTS, 1841.
In 1841, the power of investment by the managers
of Savings Banks was enlarged by the adoption of the
following provision:
"All Saving Banks and Institutions for Savings
may make loans upon bonds or notes, with the pledge
of the stock of any railroad company incorporated
under the authority of this Commonwealth, the whole
amount of whose capital is actually paid in, such loan
not to exceed eighty-five per centnm of the par value
of such stock ; provided, that no such loan shall be
made upon the stock of any company whose road or
franchise is subject to any mortgage or pledge ; and
provided further, that no loan shall be made on any
railroad stockR, which stocks shall not, at the time
said loan is made, oommand at least their par value
in the market; and no such bank or institution shall
so loan more than fifty per cent of the amvunt of their
deposits."
8
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msTORY O~' SA Vl.NGS BANKS.
It must be conceded, that if raih-oad stocks _are to
be regarded as a proper security for Savings Bank
loans, their admission could hardly be more carefully
snarded than in the foregoing.
REPORTS, 1848.
In 1843 the office of Bank Commissioners was abolished, and of course the examination of Savings Banks
was discontinued, though statements of their condition
were still ·made annually to the Secretary of State. An
effort was made to revive this office in 1846, but without
success. In this year, however, the number of items in
the annual statements of these institutions was increased,
embracing the rate as well as the amount of dividends
declared for the previous year, and also the average
annual dividend during the five preceding years, and
the name and location of the institution. They were
also required to specify the amount of each of the different stocks or bonds held for investment or as
collateral.
From 1834 till 1847, the abstracts of returns made
by Savings Banks were transmitted by the Secretary
of the Commonwealth to one or the other of the two
houses of the legislature (General Court), and were
published among the documents of the house by
which they were received. In the latter year, however, instead of being published as formerly, these
abstracts were referred to the Committee on Banks
and Banking, with instructions to report whether these
corporations had or had not complied with the laws
of the Commonwealth during the previous year. The
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.MAS8ACHUSE'ITS; LEGISLATION, ETC., 1838-1800.
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report of the committee is chiefly occupied with the
discussion of technical, and apparently immaterial
violations of the law concerning investments; as
concerning the stocks of other States and of cities
in other States, also concerning stocks and bonds
of railroad and manufacturing companies as collateral for loans. Here is brought to view the controversy concerning the application of the act of 1834,
to those institutions previously incorporated, with less
restricted powers in their charters than those of the
general law. The question was litigated by the _
Provident Institution for Savings, but was decided
adversely to the claims of that institution. In
the opinion of the court, although the bank was
chartered in 1816, it was, nevertheless, subject to the
general laws of the Commonwealth passed since that
time, relating to investments of deposits by Savings
Banks and Institutions for Savings.
Thi~ decision is important, as it establishes a precedent concerning the power of the legislature over
these institutions, which would doubtless be regarded
as authoritative by the courts of other States, if the
que!!tion were ever to be brought to a test. Of course
it concerns only the power of the legislature to regulate the affairs of these institutions in respect to- the
mode of conducting their bu.~iness and their relation
to depositors generally; but cannot, by implication or
otherwise, be stretched to the extent of justifying the
legislature itself, upon any pretext, in confiscating these
deposits to the use of the State. That involves other
and different and graver considerations, which we shall
have occasion hereafter to consider.
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HISTORY OF SAVINOS BANKS.
In 1849, the Senate Committee on Banks and Banking-reported a bill to revive the office of Bank Commissioners, with power to visit and examine Savings
Banks, substantially as under the act of 1838. In
their report upon this bill, the committee refer to the
valuable work accomplished by former commissioners.
The bill did not pass, however. In this year, also,
treasurers of Savings Banks were required to make
returns to the assessors of the names of borrowers from
Savings Banks, and of the securities deposited by them
as·collateral, the object being, of course, to reach these
for purposes of taxation.
TAXATION OF BA VINOS BANKS.
In 1850, the question of taxing the depoms of Savings Banks themselves was agitated, and a petition
was presented to the House of Representatives, asking
for a law requiring treasurers 'Jf Savings Banks to
report the names of depositors to the assessors for the
purpose of taxation. The Committee on Banks and
Banking, 'to whom the petition and subject were referred, reported adversely thereon. The policy of taxing
Savings Bank deposits involves questions of grave
importance to these institutions, and we shall probably have occasion to consider the subject more or
less in subsequent chapters of this history. With a
view to an intelligent apprehension of the light in
which the matter was regarded by those especially
charged with its examination, and to a better understanding of the subject generally, I subjoin extracts
from the committee's report. The committee say :
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MASSACHt;SETTS: LEGISLATION~ ETC., 1838-1800.
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"That it has been the settled policy of enlightened
government~ to foster and encourage such institutions,
by avoiding all legislation . which would be likely to
interfere with or retard their prosperity and usefulness. They are of opinion that these depositors should
be dealt with, protected, encouraged and vigilantly
watched, as a means by which a great public good is
conferred upon the community, by increasing the common stock of industry, frugality and thrift, by husbanding the earnings of the laborer and returnmg to
him in safety, with use, in the day of his need, the
fruits of his toil, and by increasing the feeling of the
importance of public peace and of the perpetual stability of good order and good government, and by impressing it upon the ~eat mass of the community with
that strong conviction which individual interest never
fails to inspire."
The committee then refer to the fostering care
exercised over these institutions by the Government
of Great Britain, which not only refrains from taxing
these deposits, but pays a larger interest upon the
public fund in which these deposits are invested, than
upon any other part of its consolidated debt.
In conclusion, the committee are of opinion that the
act petitioned for
"Would deter people from depositing in Savings
Banks, and would weaken the stimulants and inducements to industry and frugality among the people of
the Commonwealth, and increase the number of the
noor, the poor-rates and the taxes upon property
already subject to taxation, thus injuring many and
b,mefiting none."*
In 1851, the Bank Commissioners were again invested with substantially the same powers of visitation
• For further argument upon the subject of taxing Savings Bank deposits, • .,.,
·
Vol. II.
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HIBTORY OF SAVINOS BANKS.
and examination of Savings Banks as those conferred
by the act of 1838.
DIVISION OF PROFITS.
In 1852, an attempt was made to secure legislation
to promote a more just and equitable distribution of
the profits of Savings Institutions, but the Committee
on Banks in the Senate reported adversely upon the
measure, as uncalled for, and cited the policy of the
Provident Savings Institution of Boston, referred to
a;nte, p. 41, as evidence that no legislation of the kind
sought was required.
In this year, the apprehension lest depositors in
Savings Banks _were not contributing their full quota
to the support of the government, through taxation,
culminated in the passage of an act requiring the
treas~ of Savings Banks, upon application, to report
~ overseers of the poor the names of depositors
asked for, and to the assessors, all those whose deposits
exceeded $100. Of course, the former was for the pur•
pose of ascertaining how many paupers had bank accounts! and the latter, to subject to taxation all deposits
over $100. This seems to have been an amendment of
an act of the previous year of similar import, but which
only required the return of depositors whose deposits
were $500 or more.
In 1864, the Provident Institution of Boston was
authorized to hold real estate to the value of $100,000,
but only for the purpose of a building for banking
purposes.
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GROWTH OF THE SA VINOS BANK SYSTEM.
In the five years, from 1849 to 1855, the number of
Savings Banks had nearly doubled, and twenty institutions had been organized within the two years previous. This rapid increase gave rise to discussion
concerning the expediency of incorporating so many
institutions: anrl forms a .topic for consideration in the
report of the Committee on Banks, in the Senate. The
committee say:
"That they have endeavored to discriminate properly, and to grant no charters where strong cases were
not made out. The committee believe institutions of
this kind, placed in proper hands, and located where a
reasonable amount of deposits may- be expecte.d, are
beneficial to the poorer classes, and also may furnish
loans to the worthy mechamc, who would otherwise
be unable to procure them; and thereby the small
savings of the poor, not only benefit themselves, but
furnisb a capital for enterprising- mechanics to help to
build up and enrich our cities and villages."
DEPOSITS OF MINORS.
In this year (1855) an act was passed limiting the
amount that might be invested in the stock of any corporation by any Savings Bank to ten per cent of its
deposits, or $100,000. Also an act securing the depos•
its of minors to their exclusive use. This principle
of protection was recognized in the State of New York
as early as 1820, as will be found recorded in that part
of the work which treats of the growth of the system
in that State. The principle was also recognized in
the first legislation concerning Savings Banks in
England, in 1817.
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JJISTORY OF SA VINOS BANKS.
SAVINOS BANKS AND BANKS OF DISCOUNT.
'The report of the Bank Commissioners for 1858 shows
that the same questions concerning the general policy
in the management and direction of these institutions
arose in Massachusetts, as in New York and other
States. This arises natura11y enough from the fact that
the conditions to be served, and the conditions under
which the service was to be rendered, were so nearly
alike in the different States. Among the subjects of
discussion in this report, are the control of the affairs
of Savings Banks by banks of discount through their
officers, and the exercise by Savings Banks of the business and functions of ordinary banks, as in discounting
business paper. Both practices are earnestly condemned
by the commissioners.
The former practice bad its origin, naturally enough,
in the fact, that in small neighborhoods, where it was
thought a Savings Bank might be of service to the
manufacturing classes, it would be found that the patronage secured would hardly be sufficient to warrant
the expense of an independent establishment. Economy would therefore be promoted, by transacting the
business of the Savings Bank in the office, and through
the officers of an ordinary bank. A small addition to
the salary of such officers would compensate them for
the service rendered, and the bank would be at no additional expense, and the slight inconvenience suffered
by the accommodation thus afforded would be compensated by the balance of Savings Bank funds left with it
for deposit and use. But the tendency of such connection
was to make the affairs of the Savings Bank subordin
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MASSAOHUSETl'S; LEGISLATION, ETC., 1838-1860.
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ate to those of the bank of discount. Whenever the
affairs of the Savings Bank became prosperous, and its
business profitable, these would be made to inure to
the benefit of the stock corporation. A larger proportion of salaries would be apportioned from Savings
Bank profits, rent for the accommodation furnished
would be charged and allowed, and the heaviest possible line of deposits from the Savings Bank would be
carried or held by the bank of discount. In short, the
interests of the bank of discount would be in conflict
with the interests of depositors in the Savings Bank,
and in this confl.ict of interests, with the power of control all in the hands of one of the parties, it was plain
enough to see which party would fare worst in the
strife. Human nature is much the same in boards of
Saving Bank managers as elsewhere, and the temptation to make the most of such a connection, without
dishonesty, would be hard to resist. In short, it would
be found, quite generally, that where this connection
existed between two institutions of such diverse purposes, the expense of sustaining it was greater than
would be the maintenance of a separate establishment
for the transaction of Savings Bank business. Such, at
least, was the line of argument suggested.
The other practice complained of arose from the wide
discretion granted to trustees under the form of chart_ers originally adopted, and, indeed, under the general
law. As we have seen, the disposition that should be
made of the moneys deposited was scarcely subject to
restraint at all, and as discounting the notes of responsible partie~ was the common business of banks, and
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HISTORY OF BAVINGB BAN.KB.
of moneyed men and moneyed institutions generally,
and afforded the readiest means of making the deposits
received produce immediate profits, it is not strange
that the practice should have gained currency in Savings
Banks. But it is not the less true, that such use and
employment of the funds of Savings Banks is not in
accordance with Savings Bank principles. There is a
hazard concerning the best personal security, from
which bonds and mortgages and public stocks are
exempt, and the only true theory concerning the administration of Savings Banks is, that so far as possible,
every element of hazard shall be eliminated from its
transactions. Every thing for safety, and nothing for
profit that is incompatible with safety, should be the
rule and guide of these institutions.
Besides, the invasion of what is distinctively the
province of ordinary banks, and of what distinctively
is not the province of Savings Banks, tends naturally to
incite jealousies and competitions on the part of the for.
mer institutions, which find themselves thus supplemented in their proper sphere of operations.
The commissioners further note and comment upon
the attitude of some of the older Savings Banks, which
claimed the right to exercise the full powers granted
by their charters, without regard to the restrictions
imposed by the general act for the regulation of Savings Banks, passed in 1834.
The result of this conflict of opinion is given elsewhere. Ante, p. 69.
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llA..SSACHUSET.l'S; LEGISLATION, Ero., 1838-1860.
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LEGISLATION IN 18G8.
The act prohibiting any officer, or member of a committee, charged with the duty of making investments,
from borrowing the funds of the institution, was in
this year amended so as to prohibit them from being
sureties for any borrower; for the purpose, doubtless,
of preventing these parties from obtaining moneys
from the institutions wbich they controlled, under cover
of lending to third parties, for whom they would
become sureties.
SUGGESTIONS AND LEGISLATION IN"l859-00.
In 1859, attention is directed by the commissioners,
to a practice then gaining currency, which has its parallels in other States, of declaring an agreed rate of
interest or dividend, without reference to the earnings
or profits of the institution declaring the same. Legislation is recommended to correct the abuse arising
from this practice.
The commissioners further recommend, that investments be authorized in the stocks of the New England
States and of the State of New York, also in the bonds
or securities of the cities of New York, Albany and
Brooklyn, and the cities of New England generally.
The practice, by Savings Banks, of discounting
paper is again fully discussed, and it would seem with
more force and fervor than the occasion demanded, in
view of the fact that the practice was falling rapidly
into disuse, through the voluntary action of the institutions themselves.
'l'he recommendation of the commissioners r.oncern-
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HISTORY OF SAVINOS BANKS,
ing dividends, appears to have been favorably considered by the legislature, in the passage of an act
requiring the managers to cause an examination to be
made, prior to declaring any dividend, and prohibiting
them from making any except out of profits accrued at
the time; and treasurers were prohibited from paying
a dividend to any depositor until authorized by a
vote of the trustees. Both wise and salutary provisions.
MULTIPLYING SAVINGS BANKS.
In the report of the Bank Commissioners, made in
1860, the discussion of the topics of the previous
report, to which reference has been made, was continued. The commissioners also refer to and discountenance the policy of the legislature, which there,
as in other States, was rapidly gaining ground, of incorporating Savings Banks to be located near each
other, thus introducing competitions and jealousies,
increasing the aggregate expense of sustaining the
system, substituting conditions of weakness for con. ditions of strength, and all without any compensating
advantage in the way of promoting the convenience of
·
depositors.
The report for the following year marks an era in
this depart.ment of information, so distinctive as to
justify a chapter for its exposition.
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JlASSACHUSETTS: BANK OOM'BS' REPORT, 1861.
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CHAPTER VIIT.
BANK COM.MISSIONERS' REPORT, 186L
The report of the Bank Commissioners, made in
1861, was by far the most valuable contribution to
the subject, ever made to the legislature of Massachusetts. It was a thorough and complete review of
the theory, policy, condition and workings of these
institutions.
The commissioners were George Walker, J. F. Marsh
and W. D. Forbes, and they seem to have entered upon
the duties assigned to them with an earnest conviction
of the importance of the interest which they were
caJled to serve, and with a very clear and intelligent
apprehension of the nature of the work which they
were engaged to perform.
I believe I can r~nder no more acceptable service
than to introduce copious extracts from this valuable
report. As will be seen, it gives an admirable summary of the condition of the Savings Bank interest,
not only in Massachusetts, but elsewhere in New England, in the State of New York, and in Great Britain,
and valuable comparisons are drawn concerning the
growth and progress of the system in these different
localities.
.&tracts from the Report of 1861, of the (Jondition 0/lul,
Operatwn of Savi'Tl{Js Banlcs for 1860.
The savings of the industrial classes are a fair index
of the prosperity, and indeed of the moral condition
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HISTORY OF SA VINOS BAN.KS.
of any people. The periodical valuation of estates
shows the increase of realized wealth among those who
control the capital, and direct the business energies of
the Commonwealth, and in great measure support the
burden of its taxes ; but it gives no token of the condition of the poor. It has been claimed to be the tendency of modern civilization to make the rich richer and
the poor poorer. However true this may be in countries governed on a different system from our own, it
does not seem to be the character of our material
development. Whatever of wealth and of the comfort
and even luxury which wealth brings, and is enjoyed
by our people in the aggregate, is shared to a degree
which is unknown elsewhere, bv all classes of the pop*
*
*
i
*
*
*
ulation.
It will be observed that the number of Savings Banks
has increased from twentv-two in 1834, to eighty-nine
in 1860, or more than fourfold ; the number of depositors from 24,256 to 230,068, or 858 per cent ; the
deposits from $3,407,774 to $45,054,236, or 1,222 per
cent; the average to each depositor from $140.49 to
t195.83, or 39! rr cent : the average of the deposits
to each person o the population from $5.58 to $36.59,
or 555 per cent ; the percentage of the population
who are depositors from 4 per cent, or one person in
25, to 18Jfer cent, or one person in 5-i\-. ThP, average
expense o management for six years from 1834 to
1839, was¼ of one per cent on the deposits; while £or
six years from 1855 to 1860 it was only 11080 of one per
cent. In 1860 it had fallen to¼. The aver~e of dividends for the five years from 1840 to 1844, mclusive,
was about 5¼ per cent. In the six years,. from 1855 to
1860, inclusive, it was a little less than 6¾ per cent.
Taking the ten years from 1850 to 1860, the deposits increased from $13,660,024 to $45,054,235, or 231
per cent. In the same/eriod the population of the
Commonwealth increase from 994,512 to 1,231,065,
or about 24 per cent; the valuation from $597,936,992
to $897,795,326, or about 50 per cent; and the bank
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MASSACIIUSE'ITS: BANK COM'RS' REPORT, 1861.
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capital ( the means required to CSITJ on the business of
the Commonwealth), from $36,925,060 to $64,619,200,
or nearly 75 per cent. This comparison shows how
greatly the accumulation of industrial savin~ has
exceeded the other ratios of development m the
State.
Let us now examine the progress of Savin~ Banks
in Great Britain and Ireland (the United Kingdom).
As we have not all the items necessary to a full com•
parison down to 1860, we will take the period from
1831 to 1867, inclusive, which covers the same number
of years as that embraced in the Massachusetts returns.
From 1831 to 1857 the deposits in the whole United
Kingdom increased from £14,575,165 to £37,090,558,
or 154 per cent; the depositors from 436,670 to 1,366,560, or 213 per cent, while the average to each depositor declined from £33 7s., or about $161.47, to £2'l
ls. 6d., or about $131.05. The population of the United Kingdom in 1831 was 24,419,429, and in 1857 it
is estimated to have been nearly 29,000,000; an increase
of about 18 per cent. The wealth of that country is
not so easily ascertained, there being no valuation of
all property, real and personal, for taxation. The total
value of British property can only, therefore, be estimated by a complicated process, and we have not seen
any such estimate for 1831. Prof. Levi, in his recent
and valuable treatise on taxation, estimates it in 1841
at £4,000,000,000 and in 1858 at £6,000,000,000, an
increase of 50 per cent in seventeen years. The proportion of the population who were depositors in 1857
was 4 ;10 , or one person in 21, and the average of deposits about £1 6s., or $6.25 to each person of the population. Mr. Scratchley estimates that in England and
Wales alone the proportion in 1858 wa.s about £112s.,
or $8 to each person of the population, and that one
person in 16 wa.s a depositor. We learn from the same
author, that at the same date, the depositors in Savings
Banks stood in the following proportion to the population in other countries: In France, one in 37 ; in Bel-
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HISTORY 01.t' SAVINOS BANKS.
gium, one in Si ; in Germany, one in 42. The expense
of management in Great Britain averages a little more
than¼ of one per cent, while in France it rather exceeds
that fraction.
In New York the first general return of Savings
Banks was made January 1, 1858, in pursuance of statute 1857, chapter 136. The increase in the several
items from that date to the last return, 1861, was as
follows: The number of institutions increased from
54 to 71 ; the depositors from 20:i,804 to 300,693, or
47i per cent; the deposits from t41,472,672 to $67,•
440,397, or 62-l per cent; the average to each dep<:>sitor from $203.24 to $224.28; the percentage of the
population who are depositors from 5.88, or one in 17,
to 7.16, or one in 14; and the average of deposits to
each person of the population from $12.66 to tl5.79.
Besides the amount specifically due to depositors, the
institutions of New York hold a considerable surplus
to cover depreciation of assets. We shall speak of
this surplus fund in another connection. In 1861 it
amounted to $2,949,260, or 4f per cent on the whole
deposits.
* . * . *
i
*
*
*
Having now stated the condition and progress of
the savings institutions of our own State, and also of
those of Great Britain and New York, separately, let
us for a moment, place the results side by side, and
state the conclusions to which they lead. We have
selected the two States named for illustration, because
they may be taken as the best types, the one of European, and the other (if we except our own State), of
American advancement ; yet a comparison will show,
that the savings of the poorer classes, as represented
by deposits in Savings Banks, have grown ·to a greater
volume, relativelr., in our own State than in either of
the others. While in Massachusetts one person in a
little more than five of the population is a depositor,
in Great Britain the proportion is not more than one
in 20. In the most favored part of that kingdom,
England and Wales, it is one in 16; in New York it
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is one in 14. Again, the average deposit to each per,
son of the population is in Massachusetts $36.59,
while in Great Britain it is only $6.25, in England and
Wales alone, $8, and in New York, $15.75. Looking
again at the rapidity of accumulation, we find that
while in Massachusetts the increase in deposits in a
period of twenty-seven years was 1,222 per cent, in
Great Britain in a like period it was only 154 per cent.
It is but just to mention that the increase of deposits
in New York has been more rapid in the four years
covered by its returns, than in our own State. This
is partly due to a more rapid increase in the number
of depositors, but it is also measurably attributable
to the compounding of the interest upon a greater ca_pital, the ratio of growth increasing, year by year, with
the magnitude of the principal upon which the interest
is cast.
We may be justly proud of this comJ?arison. It
shows a superior and an improving condition of the
laboring classes, and it reflects the highest honor upon
that educational system, which, while it involves a
heavy annual outlay to the State, brings back to it a
far richer return, in the intelligence, the virtue, and
the material condition of her people.
But there are other lessons yet to be learned from
the study of these figures. They are an "annual re~ister" of the business condition of the country. Their
periods of rapid growth, or of stagnation or decline,
rndicate a corresponding prosperity or depression in
commercial affairs affecting the whole people. Let us
examine some of these periods. The most rapid
increase in deposits took place in the years 1852 to
1853, 1858 to 1859, and 1859 to 1860. In the first of
these years it was $4,968,794; in the second, $5,509,448, and in the third, $5,629,817. The greatest actual
amount of money deposited was doubtless in 1852-3,
since in the later years the accumulation from comP.?und interest has lar~ely swelled the aggreB.'ates. To
illustrate this proposition : The total deposits in 185 2
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HISTORY OF SAVINGS BANKS.
were $18,401,307. If we may supPose the whole of
this to remain undrawn and productive for a year, the
interest upon it at six per cent would be $1,004,078;
while upon the deposits of 1858, $33,914,791, the
interest would be $2,034,888, and on $39,424,418, the
deposits of 1859, it would be $2,365,465. Deducting
these sums severally from the increase stated for the
years in question, and the net increase from money
deposited, would be $3,964,716 in 1853; $3,474,660 in
1859; and $3,264,352 in 1860. Such are the fluctuations which always attend a general tide of progress.
The waves of the sea do not encroach upon the shore
with equal footsteps, and the irregular circles in the
oak's trunk, indicate a growth, now rapid, now slow,
as it has been stimulated or retarded by external influ.
ences.
We have noticed the periods of progress ; those of
depression are no less remarkable. Thus, if we ~o back
to the disastrous year 1837, we find that the mcrease
of deposits to 1838 was only $87,966, and of depositors 499, while from 1836 to 1837 the increase of depos·
its was $406,847, and of depositors, 2,778, and from
1838 to 1839 the increase of deposits was $738,766,
and of depositors 3,623. Still more striking is the followin~ contra.M: From 1842 to 1843, the mcrease of
deposits was only $35,095, and of depositors onl7 630 ;
while from 1843 to 1844 was witnessed the hitherto
unparalleled addition of $1,325,798 to the deposits, and
6,4~2 to the depositors.
Equally noticeable is the fluctuation in the average
amount held by each depositor. A decline in the
ratio of increase shows a general depression of the
industry of the State, which stops accumulation ; a
decline in the average deposit shows how far this
depression has compelled those who have already begun
to husband their earnings, to fall back upon these
reserves for subsistence. While in Great Britain we
have seen a steady decline in the average, between 1831
and 1857, from $161 to $131, or $30, in Massachusetts,
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in a like period, we witness the gratifying increase
from $140 to $195~ or $55. This upward progress has,
however, been marked by occasional pauses, and even
retrogressions. The largest average was in 1853, when
it reached $199.05, having increased nearly $20 in two
years, but in the following year, 1854, the decline was
equally rapid, for the average fell to $189.88. At no
time ( until the present exceptional year) has . there
been an actual decline, either in the deposits or number
of depositors. In Great Britain and Ireland the fact
has been far otherwise. In Ireland, famine and emigration wrought such a change in the aggregate
resources of the poor, that between 1846 and 1849,
the deposits had declined from £2,924,910 to £1,223,851, and the depositors from 96,650 to 45,839. The
decline had indeed brought the industrial savings to a
lower point than where they had stood sixteen years
before, the figures having stood in 1833 - deposits,
£1,327,122, depositors, 49,170. A similar, though less
marked decline, occurred in Great Britain. In England, between 1846 and 1848, the deposits fell from
£26,759,817 to £24,985,730, and the depositors from
900,933 to 899,606. In Scotland, the decline was from
£1,383,866 to £1,081,110, and in the number of depositors from 90,301 to 86,056. In Wales, the decline in
amount was sli~ht, while the number of dep<>sitors
e~rienced a slight increase. In the whole United
Kmgdom, the deposits declined, between 1846 and
1848, from £33,694,642 to £30,117,771, and it was not
till 1852, after an interval of six years, that they
recovered their former volume.
The history of the withdrawal of deposits in Great
Britain is also valuable, as illustrating the important
service which Savin~s Banks render to the laboring
classes in periods of idleness or distress. In the seventeen years from 1841 to 1857 inclusive, the amount
withdrawn by depositors exceeded the amount deposited by £3,114,136; yet, in spite of this, by the cumulative power of compound interest, the aggregate
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HIS'l'ORY OF SAVINGS BANKS.
deposits increased, in the same period, £10,718,751.
In nine out of the seventeen years, the withdrawals
exceeded the deposits, and in the years 184 7 and 1848,
which were marked by ~reat commercial distress in
England, the excess of withdrawals over deposits was
more than five millions of pounds sterling. These
figures show how much more frequently in great Britain thµ,n in our own State, the annual earnings of the
poor prove inadequate to their subsistence, and how
much oftener they are forced to rely on their accumu•
lated savings. Our own returns do not state the
amount of withdrawals, but there is no doubt that
with us even, they sometimes exceed the deposits.
This was probably the case in 1857, when the yearly
gain was only $899,215, a sum considerably less than
the interest upon the deposits of 1856. Nearly a mil•
lion of dollars must have been withdrawn more than
was deposited, in that disastrous year. In New York,
the excess of withdrawals was more than $1,700,000.
It is to be regretted that the annual withdrawals, as
well as deposits, have not hitherto been stated in our
Savings Bank returns. They are given both in England and New York, and we recommend that hereafter
these returns be required to specify the amounts deposited and withdrawn during the year. * * -it *
The investment of Savings Bank funds is a subject
of some embarrassment, and complaints are frequently
made by managers, that they cannot always find a use
for their money in the investments authorized by law.
As we have shown by reference to bank capital, the
funds have accumulated faster than the channels for
their employment, and the difficulty has hitherto seemed
of a senous and growing character. The course of
legislation has been, in some respects to enlarge, and
in others to restrain the liberty of investment. The
public stocks of the New England States, other than
Massachusetts, have recently been added to the list of
authorized securities, and we see no reason why this
list may not, with equal safety and advantage, be
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JliSSAOHUSE'ITB: BA.NX 00.M'BS' REPORT, 1861.
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enlarged by adding the public debt of the cities of
Portland, Hartford, Providence, New York, Albany,
and Brooklyn. All these cities possess an ample municipal property, and enjoy a high credit. The unhappy
events which have _plunged our country in a civil war
may, however, fnrmsh the Savings Banks with abundant securities of a high order, without opening to them
a wider choice than now exists by law. It is not probable that de.Posits will increase rapidly during the pendency of this struggle,* but as the industry of the State
returns to its wonted channels, or finds new ones opened
to it, as is now rapidly being done, the accumulations
will again commence, and Savings Banks will be in the
receipt of moneys both from deposits, and interest, and ,
the payment of loans. It is to be hoped, tha.t, both
from motives of patriotism and of pecuniary advantage, large investments will be made in the debt
of our own and the neighboring States, which have,
with such alacritr,, come forward, in the time of
their country's penl, to pledge the wealth and the crea•
tive energies of their people to sustain our national
existence. These debts are based upon an ample prop•
erty, upon a State credit which has never been tarnished, and upon the promises and faith of a people
whose productive capacity, and habits of economy,
could not be more forcibly illustrated than in the hl.8tory of those very institutions whose aid they will now
invoke. In urgently commending these State stocks
to the attention of Savings Bank trustees, we do not
by any means, exclude from their favorable regard the
public 1:1tocks of the United States, of which we have
elsewhere spoken. The pledge of the nation's faith
and resources comprehends those of each and all the
States, but in the creation of great local debts in every
State, it will be necessary hereafter, more than ever
before, to find a market for them among their own citizens, and the institutions which garner up the savings
• A reference to the tabular statement of ihe ,rrowth of &.-togs Banks during
the period covered by the war, will abow bow far astray were the oommlaalooera
In their Judirment..
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HISTORY OF BA VINOS BANKS.
of those who individually po~sess too little to invest it
for themselves.
We would also recommend, as has been done in a
former report, that Savings Banks be authorized to
loan directly to the Commonwealth, as well as to invest
in its public securities.
Notwithstanding the present and prospective prominence of public stock, other investments will absorb a
considerable portion of the funds of these institutions,
and the character of each of those authorized by law,
demands from us a passing notice. It is to be borne
in mind, in the first place, that eafety and not profit, is
the consideration mainly to be regarded in the investment of trust funds. There must be no ambition to
make large dividends ; no alluring of depositors by
promise of extraordinary interest; no trenching on the
ground reserved for banks of discount ; and above all,
no rivalry between Savings Banks themselves. All
have not equal advant~es of locality or association,
and some will necessanly be more profitable than
others. The location of a Savings Bank is not selected
with reference to the opportunities for investment, but
solely with a view to facilitate and encourage the saving of those earnings, which might otherwise be wasted.
A great diversity does, and must, on this account,
exist, in the kinds of investment most favored by trustees in different parts of the Commonwealth.
Next to safety, convertibility is of the highest consequence. The funds of depositors are subject to
withdrawal on short notice, and a considerable part of
them must be so invested as to be readily turned into
· cash at any moment. It is not deemed wise to keep a
large amount of cash on hand., and to obviate the
necessity of it, deposits on interest in banks of discount are authorized by law. Formerly, the amount
of these deposits was not restricted, but it is now limited to seven per cent of the total deposits in the savings institution. We think the limit might safely be
extended to ten per cent, provided the whole deposit
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79
should not exceed a certain amount. In New York
the limit for such deposits is twenty per cent, and not
exceeding $100,000 in any one bank.
.
The public stocks of which we have spoken, possess-, 1
the element of convertibility in the highest de~ee. '
Next to these stand bank stocks. In ordinary times
these can be readily sold, and without any considerable
sacrifice on their fair value. This is especially true of
the stocks of Boston banks, for which the daily sales
at the brokers' board, and the weekly sales by auction,.
afford a constant market. Country bank stocks are
only less convertible, because the circuit within which
their value is known is more limited, and contains fewer
buyers, but they seldom fail to bring a fair price, when
required to be parted with. The present depression
of bank stocks will probably lead Savings Banks to
invest more guardedly in them in future, but as the
causes of this depression are altogether temporary and
exceptional, and the extent of their depreciation in
value is greatly overestimated in the popular mind, we
believe that they will speedily regam their place in
public favor.
Loans on stock collaterals stand next in order. If
the securities are judiciously selected, and taken with
a sufficient margin, such loans can usually be realized
in a very short time; but it is, unfortunately, too often
true, that borrowers expect the greatest indulgence in
the time of payment, so long as the security remains
good, and managers are slow to press them, or to force
the sale of their collaterals.
Loans upon the credit of individual names will, perhaps, be regarded as next in the rank of convertibility. •
This class of investments is somewhat peculiar to our
State. In New York it is prohibited altogether, and
in England and France it is not included in the author•
ized classes, and even in our own Commonwealth it is
permitted to be resorted to only when the deposits
"cannot be convenientl,y invested in any or al,l the
nl,()(/a " otherwise specified. The language of the stat.
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filBTORY OF BAVINOS BANKS.
ute indicates that the legislature preferred other modes
of investment, and permitted this to be availed of only
when those previously enumerated should prove inadequate conveniently to absorb the accumulating funds.
There have, no doubt, been periods when other invest•
ments could be less conveniently found than at present,
and certain localities where it was not deemed prudent
to lend on mortgage of a generally declining property,
but we think that in the increasing abundance of public stocks, there will be less inducement hereafter than
heretofore to invest on merely personal security, and
that the limit, µow fixed at fifty per cent of the total
deposits, mi~ht with propriety be restricted within
narrower limits. Such would seem to be the prevail•
ing sentiment in the Commonwealth, the average of
personal loans in the whole State being less than 20
per cent of the whole de:eosits. While there are many
personal loans of a very high character, and upon which
there is very small risk of loss, and also great readiness
of convertibility, there are many others which are very
slow and practically inconvertible. We think it highly
desirable that such loans should be made upon a definite time, when they should be required to be paid;
but we do not, in making this suggestion, wish to be
understood as sanctioning a considerable class of loans
upon pemonal security, which have obtained favor in
certain localities, and which, if within the letter of the
statute, are certainly foreign to its intention. We refer
to loans upon what is essentially business paper. The
form of these loans is according to the statute, the
notes being signed by three parties, and they are
• usually written on a time which would fall within the
limits of ordinary bank accommodation ; but the
makers are sometrmes all partners of one house, and
exposed to the same business risks ; and to show that
they themselves regard such notes as single name
paper, they pledge their regular business paper for its
security. We have observed often, that the class of
paper so pledged is of an inferior character, being
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either too long, too remote, or too little known to meet
with favor at the discount banks. We recall an
instance last summer, when exchange in western cities
ruled at ten per cent and upwards, where all the collaterals held by a certain Savings Bank near Boston,
for the notes of a respectable mercantile house, were
payable in Illinois, . Wisconsin and other western States,
of which not a sin~le piece could then have been discounted at a bank m State street. It is true that they
were taken at a margin, and this is usually the case;
but they ought not to have been taken by a Savings
Bank at all.
The operation of such loans is precisely this, that a
merchant, having culled out of his "bills receivable"
all such notes as he can get discounted at bank, carries
the balance, which are either too long, or too poor, to
be negotiated in the regular way, to a Savings Bank,
whe1·e he gets a considerable loan upon them. He is
enabled, by this process, not only to expand his own
credit to an unwarrantable de~ree, but also to indulge
his customers in longer credits than it is either well
for them to have, or for him to give. The injury to
the public and to the mercantile system is great and
immediate. Long credits have done more than any
other instrumentality ( unless it be an unsound currency) to injure American trade. There is a growing
conviction of this truth, and the spirit of legislation
should promote, rather than impede, the introduction
of a better system. We see no more simple method
of preventing such a misuse of Savings Bank funds as
we have pointed out, than by further restricting the
amouut which may be loaned on personal security.
.
Loans to cities, counties, and towns have not the ele. ment of convertibility, but they are usuall7 a very
safe kind of investment. We cannot but thmk, however, that the facility with which loans have been of
late years procured by municipal corporations, both
from Savings Banks and the free banks ( which are
allowed to deposit such securities with the Auditor as
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msTORY OF SA.VINOS BANKS.
a basis for their circulation), has tempted them to increase their indebtedness to an unwise degree. There
is great laxity in the manner of taking municipal loans,
and legal questions have already arisen as to the authority of a town treasurer to bind the corporation he represented. The strictest formality should be required
by the lender, both as to the manner of authorizing
the loan, and as to the execution of that authority.
Authority to make a specific loan, of a specified insti•
tution, is altogether preferable to a general authority
to borrow not exceeding a certain sum ; and when
notes are given by a treasurer, some other authority
should certify upon them, that they are duly given,
and a certified copy of any vote authorizing the loan
should invariably be required, and should be kept on
file with the note. We desire to impress this caution
earnestly upon bank managers, because we have had
frequent occasion to object to the manner in which
loans of this character have been authenticated.
, The only investments remaining to be considered,
' are loans on mortgage. These in the form usually
, adopted-with a power of sale-are securities of the
highest order. They are, however, among the slowest
and least convertible of investments, and they need,
therefore, to be selected with great caution, and with
an eye to futm-e contin(J'encies. It is not prudent to
loan on real estate which is declining in value, unproductive, or slow of sale as compared with other property. Property which yields an income is always
safest, because it provides for the interest for which it
is pledged. We highly approve the plan adopted by
some institutions, which requires a certain percenta~e
of the loan to be paid annually. Although it ad1ls
somewhat to the labors of the officers of the bank, it
is a great safeguard against depreciation in the security,
and 1t encourages thrift and economy in the borrower;
and if the property is not of a kind to emanci.rate itself
gradually from debt, it is not such as a Savmgs .Bank
ought to loan upon. There are now localities within
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MASSACHUSEITS : BANK COM RS
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83
the Commonwealth, where, from a general depreciation
in the value of real estate, the mortgages held by the
local Savings Banks cannot be made to pay- the debts
for which they are held. The statute limit for mort~age investments is seventy-five per cent of the deposits. We think it will be rarely found expedient, in
practice, to approach this limit. The president of the
largest Savings Bank in this oountry, after an experience of more than a quarter of a century, in a com- ,
munication to a member of this Board, expresses
the opinion, that '' real estate securities may be safely
taken to the extent of about one-third of the entire
deposits."
-The propriety of keeping a surplus fund to cover
depreciation, has been discussed in former reports. We
have seen that such a fund is maintained by the Savin.gs Banks of the State of New York. It now amounts
to. nearly five per cent on the total deposits. The statute (Act of May 6, 1839, section 3) authorizes it to be
reserved to the extent of ten per cent. We think such
a measure extremely judicious, and would recommend
the adoption of a law in this Commonwealth permittinO', and perhaps requiring, such a reserve.
fhe present condition of the industry of the country
will not encourage petitions for the mcorporation of
new Savings Banks, nor, in our opinion, would it justify
the lrgislature in granting such petitions if presented.
The facilities for depositing savings are already everywhere ample, and the number of small and lan~isbini
institutions is quite too large. * * * *
* - -.
The separation of Savings Banks from banks of dis- ·
count, which has been frequently advocated by our
predecessors, needs to be again urged. There are at ;
present twenty-seven such institutions, which are lo-. , cated in the same rooms with banks of discount, and
managed by the same officers The evils resulting
from this practice are manifold. There is danger of
relations growing up between the two institutions more
intimate than the law allows, and it is almost certain
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HISTORY OF SA. VINOS B.A.NKS.
that the interests of one or the other will be, sooner
or later, neglected. The experienced manager whose
opinions we have already once quoted, lays it down as
. an axiom, that Savings Bank officers "should be free
from entanglements with other moneyed institutions."
In our examinations we have often found the books of
\a Savings Bank sadly in arrear, because the treasurer
1.had been too much occupied with his duties as cashier
to keep them written up. Nothing is of more dangerpus tendency than a neglect to keep the transactions of
· a moneyed corporation properlv entered and po~ted.
*
*
*
*
*
*
*
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MASEIACilUSETTS: 1862-1878.
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CHAPTER IX.
COURSE OF LEGISLATION, 1862-1873.
In 1862, Savings Banks were required to report how
often extra dividends were declared, and the average
for a series of years. In this year also a tax was for
the first time placed upon the deposits of Savings
Banks, of one-half of one per cent, which was increased
the following year to three-fourths of one per cent, and
in 1865 reduced to one-half per cent, but raised to
three-fourths per cent again in 1868.
In 1863 Savings Banks were authorized to invest in
"the public funds of the State of New York, in bonds
or notes of the cities of the New England States, first
mortgage bonds of any railroad company incorporated
under the authority of this State, which is in possession of and o~eratmg its own road, and which has
earned and paid regular dividends for two years next
preceding such investment, or in the bonds of any such
railroad unincumhered by mortgage, 9r on the notes of
any citizen of this State with a pledge as collateral
of any of the aforesaid securities, or with a pledge as
collateral of the stock of any of said railroad compa
nies at not over 80 per cent of tha market value, and
at uot over 90 per cent of the par value of such stock.
Horse railroads excluded from the foregoing provisions."
The Board of Bank Commissioners was abolished in
1865 by an act to take effect on the 1st of January,
1866, but the legislature in that year created the office
of Commissioner of Savings Banks, with substantially
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HISTORY OF SA VINOS BANKS.
the powers and duties of the previous board, and
requiring the reports of Savings Banks to be made
to him, instead of to the Secretary of State as
before. In addition to the items previously reported,
Savings Banks were also for the first time required to
return the number and amount of deposits received,
the number exceeding $300 at one time, the number
and amount of withdrawals, number of accounts opened
· and closed, and the amount of surplus on hand.
No further legislation of importance is found until
1870, when Savings Banks were authorized to hold
real estate to an amount not exceeding ten per cent of
their deposits, but only for a site and the erection of a
banking house, all the income to be devoted to the
interests of the corporation ; but no Savings Bank to
invest in this way more than $200,000.
In 1871 we find the first legislation relating to dormant, commonly called unclaimed deposits, which, however, did not take the absurd and unreasonable form
of confiscating these to the State, but was limited to a
measure designed simply to apprise depositors or their
representatives of the status of their deposits with reference to dividends. The act was to the effect that
depositors were to be notified when the amount of
their deposits exceeded the sum upon which interest
was allowed, and once in five years the treasurer of
each Savings Bank was required to publish a list
with the last known residence of the depositors reHpect.
ively, of the amounts which for two years previously
had, for the reason above stated, been entitled to no
interest.
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The purpose of putting the depositor in possession
of tl1e facts concerning his. deposit, which it might be
for his advantage to know, and of which there was a
fair presumption that he was unaware, is just and salutary, though whether this might not be effected in some
less objectionable way than by publication in the above
fonn, may be seriously questioned. The general subject receives full consideration hereafter in our discussion of the methods which have been at various times
proposed in dealing with these deposits in the State of
New York.
The legislation in 1872 would seem to indicate that
abuses in the form of favoritism in making loans, and
in the form of charges or commissions by officers for
effecting the same, had crept into the management of
some of the Savings Banks. The mode of meeting
the evil, whether real or imaginary, will best be seen
from the following extracts from the act of that year :
CHAPTER
293.
SECTION t. No Savings Bank, or any person on its
behalf * * * * shall negotiate, take or receive
any fee, commission or brokernge 1 for or on account of
any loan made by or in hehalf of any such bank * *
either to his own use or to the use of said bank, other
than shall appear on the face of the note or contract
in which the loan shall be made, except expense of
examining titles, etc.
~ 2. No officer, etc., shall refuse to consider an appli•
cation for a loan, b~cause presented by, or commg
directly from the borrower; and if such application is
rejected when there is sufficient money in the tre/lSury
to meet it, and the security offered is ample, and the
same is afterward considered on application through a
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HISTORY OF SA.VINGS BANKS.
broker or third party, the officer so violating the provisions of this act shall be deemed ineli~ble to fill
any position of honor or trust in any Savmgs Bank.
ij 3. All applications for loans shall be made in
wnting, through the secretary, or in his absence through
the treasurer of the bank ; record to be kept of applications showing date, name of applicant, amount asked
for and security offered ; and same to be presented to
board of investment. Only one of active officers, as
president, secretary or treasurer, to be at same time
member of board of investment.
§ 4. Savings Bank Commissioner to see that forego•
ing provisions are not violated.
~ 5. Penalty not less than twice the amount illegally
taken and received.
This concludes all that is material pertaining to the
course of legislation concerning Savings Banks in the
State of Massachusetts. It will be seen that since
1834 these institutions have been subject to the operation of a general statute, no provisions conflicting with
the general law on the subject ever being introduced
into acts of incorporation, which have all been of uniform tenor, as shown on p. 51, ante.
The system of supervision established under the
direction of an officer having no other duties to engage
his attention, and who was required to examine each
Savings Bank annually, would seem to afford every
guaranty possible of thoroughness and efficiency. Of
course it is possible for the best devised system to fail, by
committing its administration to unworthy hands ; but
no such misfortune has befallen this great interest in
the State of Massachusetts.
Tht policy concerning investments which has pre•
vailed in Massachusetts, in the admission of personal
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M.ASS.AC-HUSE'ITS : 1802-1873.
89
securities, bank stocks, and the like, is one that would
not be deemed safe in New York; but we shall see that
bad or corrupt management has in the latter State sometimes defeated conservative legislation, while the air of
more liberal Massachusetts is free from the taint of
fraud in the administration of her Savings Banks.
12
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HISTORY OF SA VINOS. BANKS.
CHAPTER X.
STATISTICS OF GROWTH AND PROGRESS.
Inasmuch as the reports of Savings Banks in Massachusetts did not, untilquite recently,·embrace a statement of the amount deposited, and the amount withdrawn in each year, it was of course impossible from
these to arrive at any conclusion concerning what is a
most interesting subject of inquiry, the aggregate work
performed by these institutions for the public since their
institution in that State in 1816. It would be gratifying
to be able to trace the growth and progress of each institution from year to to year, through all their vicissitudes.
But this is rendered impossible as stated. I had hoped,
however, by application to the institutions themselves,
to obtain from them the aggregates of their deposits
and accounts, as these would give a comprehensive
summ'ary of the work they had accomplished of great
interest to the statistician and philanthropist. The ill
success which attended that effort will be seen in the
statistics which follow. With details of individual Savings Banks as here given, I have connected a statement
_of such items as seem to be of general interest.
STATISTICS FURNISHED BY SAVINGS BANKS.
SALEM SA VINOS BANK.
This was the second chartered institution in the
State, and its progress has been gradual, but constant,
as will be seen from the statistical statement below. I
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91
llASSACHUSETI'S: STATISTICS, ETC.
am informed by the treasurer of the institution, Chas.
L Symonds, Esq., that the bank has never lost a dollar by any investment made. The late president,
Joseph S. Cabot, who died during the last summer,
had been connected with the institution as trustee,
vicE:•president and president, for fifty-two years. From
the following statement it appears that its growth from
organization to as late as 1834, a period of sixteen
years, was quite slow. The first deposit was received
April 15, 1818.
St,ati8t-ical Statement, 1834.
Open accounts ........................... .
2,205
Amount on depoBit ........................... . $360,852
January 1, 1874.
'Number of accounts opened since organization ..
54, 100
Number of accounts closed. . . • . . ... . ...... .
38,300
Number of open accounts, January 1 ........ .
15,800
Amount deposited including interest ......... . $19,709,337
Amount withdrawn .........•... . ........... 14,109,337
Amount on deposit, Jannary 1 .............. .
5,600,000
lnterCBt credited .... . ....... ; ............. .
4,702,887
The foregoing does not correspond exactly with the
figures in the tabular statement, for the reason that
the latter is made up for October 25, 1873, while the
above is furnished by the treasurer as an approximation for January following.
NEW BEDFORD INSTITUTION FOR SAVINGS.
Incorporated June, 1825; first deposit received August 15, 1825.
'Ihe following table compiled by the treasurer, ChM.
H. Peirce, exhibits in detail the growth and progress
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92
HISTORY OF SA.VINGB BANKS.
of this institution. The table as furnished was even
more full and complete than the following, but I was
compelled to omit three columns of statistics to adapt
the table to these pages. The column of deposits does
not include dividends, which must be added to the
former to produce a correct result. The columns of
cents are omitted, but were used in finding the totals.
Memorandum of Progress of tM New Bedford Institu•
flWn for &wings.
Year.
1825.• . • . •
1826..•. . .
1827 ......
1828. ... ..
1829- ... . .
1830... . ..
1831 ....•.
1832.. . ...
1833. . ... •
1834. . • . •.
1835......
1836......
1837. . • .•.
1838......
1839... • .•
1840.. •. ..
1841 ... . . .
1842 •.• ...
1843 . • ....
1844......
1845 . .. ...
1846. . .. . .
1847 ... . ..
1848. . . .
1849.....•
1850....•.
1851 •.....
1852 . . ....
1853. . ... .
1854.. . ...
1855 . .... .
1856......
No.of
open
aoo'te.
145
276
430
6o2
748
973
1,16o
......
......
..... .
......
... ...
.... ..
......
......
......
......
......
..... .
.. ....
2,102
2,286
2,332
2,493
3, 132
3,402
4,572
5,113
5,463
5,978
6,171
6,638
Deposited
during the
year.
$13,051
22,414
55,476
39,955
48,392
77,795
71,149
59,185
50,146
26,070
67,710
63,788
31,627
51,862
55,325
55,555
67,133
55,235
73,182
133,561
157,415
113,019
163,321
109,¢3
204,362
430,140
577,901
432,533
480,200
444,738
532,265
475,034
Withdrawn
during the
year.
Dividends
credited.
......... .........
$2,524
7,436
16,942
22,956
25,185
41 , 530
64,863
58,943
6g,529
50,8o8
72,717
65,604
43,834
53,733
47,322
64,154
66,768
73,123
79,542
91,343
134,o67
120,022
I 50,257
159,354
175,991
359,218
397,4g6
410,271
512,901
485,900
5o8,015
$501
1,500
3,623
4,765
. 6,313
8,799
14,270
11,612
7,871
6,467
10,243
10,741
9,230
10,887
11,8o7
12,507
13,151
11,634
13,435
16,468
18,129
18,920
19,6gg
40,667
29,122
43,655
52,944
54,716
147,543
81,4o8
88,26o
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Totalam't
ofdepoelt&
$13,051
32,941
So,981
103,993
134,195
193,120
231,538
240,130
242,945
207,358
230,727
232,042
2o8,8o5
226,o63
238,543
258,582
274,070
275,688
287,382
354,836
437,376
434,457
4g6,676
476,o81
561,758
845.030
1,107,369
1,195.351
1,3 19,996
1,399,376
1,527,149
I ,582,429
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93
MASSAOHUSETI'S: STATISTICS, Ef0.
No. of
Ye11r.
open
acc'ts.
1857.. ... .
1858. ... ..
1859. . • ...
186o.. . • . .
1861. . .. ..
1862 .... •.
1863 . .....
1864. . ..• .
1865 ... . . .
1866.. .. ..
1867.... . .
1868 . .••..
1869.... ..
1870......
1871 . . . .. .
1872.... . .
1873- .... •
Total .. •
6,900
7,164
7,642
8,362
8,623
9,561
10,420
10,888
10,574
11,305
12,047
12,559
13,299
13,86o
15,021
16,412
17,448
........
D~slted
du cg the
year.
Withdrawn
durtne the
Dividends
credited.
year.
Total am't
of deJ>l'slt&
979,576
1,301,114
878,26o
941,663
1,048,452
1,193,325
1,203,286
1,233,¢6
1,350,748
1,740,632
90,559
127,8o2
I 17,635
131,623
140,279
166,909
192,734
210,o84
226,193
262,072
298,956
332,735
366,882
401,785
457,099
5o8,672
$1,529, 192
1,749, 122
1,962,982
2,215,663
2,358,866
2,789,875
3, 190,664
3,541,78o
3,253.388
3,747,702
4,268,462
4,748,687
5,194,936
5,638,496
6,429,8o2
7,242,979
7,794,327
$20,094,192
$4,905,072
. .... .. ..
$431 ,359
523.412
567,234
627,481
616,689
845,479
928,68o
1,137,957
8o2,637
1,146,38o
1,200,350
1,229.721
1,3o6,839
1,279,963
1,610,484
1,705,951
1,783,307
$576,739
394,042
481,176
492,436
6o5,110
554,750
$22,983,446
*92,142
694,Soo
Whole number of accounts opened ........ . ..
58,571
''
"
''
"
closed . . .. . .. .. . . .
41 ,023
Amount deposited, including dividends . . . : .• . . $27,888,519
SPRINGFIELD INSTITUTION FOR
SAVINOS.
Incorporated and commenced business in 1827.
The following extracts from a report of the managers of the institution, made in 1858, gives a sufficiently
detailed account of its operations during the first thirty
years of its existence. It exemplifies the extremely
moderate growth of this interest in this country during the early years of its history.
"This institution was first incorporated in 1827, and
was one of the earliest Savings Banks in the State.
During the first seventeen years of its existence its
growth was slow in the extreme, and in 1844, its deposits had only reached the sum of $49,415.22. That its
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HISTORY 01<' SAVINOS BANKS.
progress had not been greater was owing to various
causes. The great benefit and value of these institutions had not, then, been completely apprehended and
appreciated, and the most successful mode of managing
them had not been adopted. Durin$ these first seventeen years of its existence, its entire deposits were
loaned to the Springfield Bank at five per cent per
year, and its whole business hardly amounted to any
thing more than an open account at that bank. In
1844, the Springfield Bank declined longer to take and
manage the funds of the institution, or to pay any
thing for them, and, in consequence, a new organization
of the institution took place, and the system of management was substantially adopted, under which it has
reached its present position. The effect of this re-or·
Banization was immediately perceived in the rapid
mcrease of its deposits and dividends. When the present mode of management was adopted in 1844, the
amount of deposits received from the Springfield Bank
as the result of seventeen years' operation, was $49,415.22. In December, 1849, when the business of the
institution was finally .removed from the Springfield
Bank to its present location, its deposits had increased
to $202,458, and from January 1, 1850, to May, 1857,
they continued to accumulate till they reached the sum
of $670,757. From 1844 to May, 1850, the institution
paid an annual interest of four per cent, and since May,
1850, of five per cent, and, to those who have participated in the surplus dividend once in five years, the
annual interest has averaged seven per cent.
This uninteITupted increase of its deposits, in face
of the fact that, since 1850, four new Savings Banks
have gone into active operation in the county, and three
of them at points whence this institution had usually
drawn a very considerable portion of its deposits, is
ceiiainly very satisfactory evidence of the continued
confidence of the community in the institution, and of
the fidelity, energy and economy with which its officers have managed its affairs.
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M.A.SSACHUSl!.'TTS : STATISTICS, EfC.
Since its present organization was adopted, the institution has never lost a dollar of the funds intrusted to
its care, with the exception of one or two small sums
paid to persons who had become wrongfully possessed
of depositors' books, and a depreciation in the·value
of the stock of the Grocers' Bank helcJ by the institution, the extent of which has not yet been ascertained.
Statement of Ope-rations from Organization in 1827 to·
May 1, 18:38, 30 Years.
DURING YEAR ENDING MAY 1.
Amount
receh·t:<l.
1844 (Balance due this date) .. ............ .
1845 ...............•...•..................
1846•.....................••.. . ...........
1847 ........•.... . ...•.... .. . . •...........
1848......................•.....•.........
1849....••..••.................••.....••..
1850..•.....• . ............•...•.•.........
1851 ..••...•..•.......••.................
1852 ..••...••.•...•.....•...............
1853...........••..••.....•...............
1854.........•••...•. ' .............•.....
1855 ..•.. . ............•..................
1856....••......•••...•.....•.•...........
1857 ...••......•..•....•...............••.
1858....•.•.•...•.........•...............
t49,315
82,432
67,651
82,55 I
89,991
72,252
87,913
151,983
178,030
220,717
247,818
199,262
184.345
162,010
121,120
Totals... .. ................ . . . . . . . . . .
Dividends credited to May 1, 1858.........
J1,997,391
250,186
Total credits to 8,547 depositors....... . . .
Deduct amount paid to 5,804 depositors. . .
J2,247,577
1,632,6o4
Leaving due to 2,743 depositors.... . . . . . .
$614,973
.i\.mount
paid.
$43,520
33,413
43,216
68,7o6
83.938
96,674
62,315
112,215
127,66o
I 50,137
235,208
191,487
175,783
208,235
J1,632,6o4
We have not the details of growth during the subsequent years, but the aggregate from organization to
the close of 1873, was kindly furnished by the treasurer, Henry S. Lee, in reply to my inquiries, and is as
follows:
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HISTORY 01'' SA VIN GS BANKS.
Number of accounts opened since organization. .
43, 600
Number of accounts closed since organization. . .
29, 100
Number of open accounts . . . . . ... . ... . .. . ... ·
14,500
Amount deposited, including dividends .. ... .. $18, 259, 503
Amount withdrawn . . . . . . . • . . . . . . . . . . . . . . . . 13,027, 207
Amount due depositors, Jan. 1, 1874. .. .. . ...
5,232,296
Amount of dividends credited. . . . . . . . . . . . . . .
2, 283, 761
From the foregoing it appears that the deposits during the first sixteen years were less than $50,000.
During the next fourteen yearR they were, not including dividends, not quite $2,000,000, and the dividends
during that period $250,000; while since May, 1858,
during a period of about fifteen and a half years, or
half the former period, the deposits have been nearly
$14,000,000, and the dividends over $2,000,000, or
more than the entire deposits during the first thirty
years ; while there have been in operation in that city
two other Savings Banks whose aggregate deposits in
October, 1873, were nearly $2,500,000.
W OROESTER CoUNTY INSTITUTION FOR SA.vmos.
This Institution received its first deposit June 4,
1828. The following exhibits its condition in 1834,
and at the beginning of 1874:
1834.
Open accounts .. . . ............ .. . ... ........
Amount on deposit ... ....... . ... . . . ...... .. .
1, 246
$165,542
1874:.
Whole number of accounts opened . ... . ... . .. .
56,014
40,842
''
"
"
closed . .. . ·. : . . .... .
"
Number of open accounts, Jan. 1 . .. . . . . .. ... .
15, 172
Amount on deposit, Jan. 1 .. .. . ... .. . .. . . . .. . $5,383, 756
"
of interest (dividends) credited .. . . . .. . 4,583,885
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MASSACHUSETI'S: STATISTICS, Ero.
97
The treasurer, C. A. Hamilton, Esq., in reply to my
circular for information, furnishes the above, and says:
"Of the first 6,000 accounts opened, 373 are still
open. The whole amount deposited since organization
cannot be ascertained without a great deal of labor, as
in the beginning the accounts were not kept in a very
lucid manner, the treasurer being at the same time
cashier of a bank."
It is evident that the institution has long since outgrown that impediment.
A noticeable feature of the foregoing, is the amount of
dividends, nearly equal to the amount now on deposit,
showing that the balance remaining on deposit has been
uniformly large.
SAVINGS.
Commenced business January, 1835.
NANTUCKET INSTITUTION FOR
Statistics Ja,nuary 1, 1874.
1, 635
Number of open accounts. . . . • . . . . . . . . . . . . . . . . . .
Due depositors................................ $586,554
Dividends since organization.. . . . . . . . . . . . • . . . . . • 544, 694
No other statistics given. The institution is located
on an island whose inhabitants number about 4,200,
about one-third of whom, it would appear, are depositors.
Over· 650 of the accounts are for less than $50 each.
QUINCY
SAVINGS BANK.
Statutics Ja,nuary 1, 1874.
Date of first deposit, April, 1845.
7,466
Whole number of accounts opened....•...•..••
4,421
closed ...........••
"
"
"
"
Number of open accounts.................... .
3,045
Amount on deposit ...........•.............. $1,001,139
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lil:STOJtY OF SAVINGS BANKS.
The foregoing was furnished by the institution. The
whole amount deposited and the interest credited a1·e
not given.
,vAREHAM
SA VINOS BANK.
Statilltics January 1, 1874.
Date of first deposit, April 19, 1847.
4,674
Whole number of accounts opened .............. .
2,996
"
"
"
"
closed . .•• .. . . . ... .• . •
N um her of open accounts.. . .. . . .. . . . . • .. . . . .. . .
1, 678
Amount on deposit ..... . ... . .........• . . . ..... $572,284
The foregoing was furnished by the institution. The
whole amount deposited and the interest credited are
not given.
w ALTHAM
SA VINOS BANK.
Statilltics January 1, 1874.
Date of first deposit, June 1, 1853.
Whole number of accounts opened. . ... . . . . . . .
9,640
"
"
"
"
closed. . . . . . . . . . . . . .
5, 669
Number of open accounts. ............ .. ......
3,971
Amount on deposit ... . ...... . .. . ............ $1, 204, 847
The above, furnished by tha institution, omits the
whole amount deposited, and the amount of interest
credited.
wOROESTER FIVE CENTS SAVINGS BANK.
Statistics January 1, 1874.
Date of first deposit, July 1, 1854.
Whole number of accounts opened . . .......... .
12,681
6,122
"
"
"
"
closed............ •.
6,559
Number of open accounts ..•........•..•.....
Amount deposited, including interest . . ..... .. . $2,558,260
"
withdrawn ....... . .....•. . . . ..•.•••• 1,343,554:
"
on deposit ...... . ....... . .. . .. . .... . 1,214,706
Interest credited . .. . .. ........... .. ........ .
380,122
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99
MASSACIIGSEITS: STATISTICS, ETC.
The treasurer of the institution, George W. \Vheeler,
to whom I am indebted for the foregoing, also furnished
me with a detailed statement of the deposits and inter•
est credited for each year since organization, which will
be found below. He also, during 1873, kept a statistical record of the number and amount of deposits
made, classifying them according to their size from
$5 upwards. A summary of these for the year is
given, as possessing interest in connection with a topic
concerning the ministry of Savings Banks, elsewhere
discussed. I am further under obligation to Mr. Wheeler
for some of the incidents recorded in that chapter.
Yearly Deposi'ts and Interest credited in the Worcester
Fi,ve Cents Savings Bank.
YEAR.
1854- . . .. . ....•••• .•.•... •.... .. . .
1855..........•.•••..•••..........
1856...... ... . ••••. .. •. .. . ... •. . .
1857.. • ..•..... •. . .. .• ••.. .• .. ....
1858.................. •...... . . ..
1859. ... ............ . ...•• .•.• ....
186o.. ... .... . ••. ........... •.. . . .
1861. . ................... .. ...... .
1862..••....•..•......•....•.••...
1863.. ..•. •.... ... •...• ..••.....
1864.....•.......••••......••..•..
1865 .. . ...•.. ... .•. • .••. ••. .......
1866. ...•.....•••...•.• • .• •.•....
1867... ..• .•.•...•..•...... • ......
1868..............••.•.•..•.•..•..
. 1869.•........•.•••••....••...... .
1870.....•...•.•••................
1871 ...••......•.••••••••....••.••
1872 ........•.....••••••••..•.....
1873......... ........... ........ .
1874, six months ................. .
Extra, 1859, 1868................. .
Deposil.9.
Dlvldenda.
$8,809 20
14,412 32
15,999 53
22,720 70
24,257 19
38,297 07
53,198 34
33,3o6 89
62,q84 53
67,702 63
75,572 70
42 ,5°5 34
64,422 39
119,277 66
172,283.08
241,194 97
226,900 85
244,255 53
284,902 58
366,035 o6
$282
790
1,294
1,¢8
2,78o
4,254
5,9(>6
6,884
8,891
10,710
11,3¢
10,Soo
12,4¢
19,965
29,761
36,479
44,453
52,343
6o,812
67
78
95
29
87
11
43
19
74
65
71
87
74
OJ
42
66
61
91
42
34,700 ¢
23,o61 14
$380,122 25
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HISTORY 01'' SAVINGS BANKS.
Deposits -in 1873.
CLAsa.
Number.•
Amount..
Under $5 .•............... • .•...•....•...
Under 10 and not under $5. . . . . . • • • • • ..
10 . ........ .. ...
Under 25
Under 50
25
50 .... .. . • ..... .
Under 100
100 ....•...•.....
Under 300
"
Over 300 .•••.•.•.... . .•.. • .•.•••••... . ..
......... ....
3,074
735
932
8o5
6oo
469
272
$5,905
6,340
17,6o7
33,774
50,439
89,733
162,233
Total. •.•... . . . .......... . .. . •....
6,887
.. .. ..
.. . ..
71
02
79
57
43
74
8o
'---
$366,035 86
• These a.re not Identical with acoounta; the aa.me account receiving frequent deJ)09lta during the year.
NORTH BROOKFIELD SAVINGS BANK.
Statistics January 1, 1874.
Date of first deposit, September, 1854'.
Whole number of accounts opened.. .. .. . . . ......
2,827
"
"
"
"
closed . . . . . . . . . . . . . . . .
1, 698
Number of open accounts.................. . ....
1, 129
Amount on deposit ..••.......•. . ......... . .. . • $250,969
The treasurer, Bonum Nye, Esq., says that the whole
amount deposited and the interest credited cannot be
given, owing to the destruction of the earlier records
by fire.
PLYMOUTH FIVE CENTS SAVINOS BANK.
Statistics January 9, 1874.
Date of first deposit, July 3, 1855.
Whole number of accounts opened. . . . . . . . . . . . . . .
3, 783
"
"
"
"
closed. . . . . . . . . . . . . . . .
1, 393
Number of open accounts. . . . . . . . . . . . . . . . . . . . . .
2, 390
Amount deposited, not including interest ...••.... $850, 522
Amount on deposit. . . . . . . • . . . . . . . . . . . . . . . . . . . • 462, 073
The above is furnished by the treasurer, D. J. Robbins, Esq., who says he is unable to give the amount
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lUSSAOBUSETTS : STATISTICS, ETO,
101
of interest credited. This, of course, prevents me from
making any deduction as to the amount withdrawn.
FrvE CENTS SAVINOS BANK.
The following extract from the twentieth report of
this institution, made to the corporation April 7, 1874,
presents a complete view of its origin, progress and
present condition.
The distinguishing feature of this institution is the
low average amount due to each depositor, being but
i189.22, while.the average in all Savings Banks in the
State is over $300. The depositors are more than
twice the number in any other institution in the State.
BOSTON
Report.
In the month of November, of the year 1853, a few
individuals met to consult upon the expediency of
establishing an additional Savin~ Bank m this city,
to induce tlie young and industnal classes to make a
beginning to save, by encouraging deposits as small as
five cents. The result of the deliberation was an
application to the Legislature by the Rev. Edward
Edmunds and others, for a charter providing for the
receiving of small deposits, and givin~ minors the right
to withdraw their money in person, without a guardian.
It is now twenty years since the charter of the Bos,
ton Five Cents Savings Bank was granted by the Legislature of Massachusetts.
From the time of its organization to the present, its
prosperity has been uninterrupted; showmg conclusively that such an institution was needed.
Tlie growth and success of the bank, as may be seen
by the tabular report herewith annexed, has been large
and almost unceasing.
No year since it commenced business has the number of accounts closed exceeded the number of accounts
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109
msTORY OF SAVINGS BANKS.
opened ; and at no time, during the several panics and
:financial disturbances which have overtaken the business community for the past twenty years, has the bank
suffered embarrassment in any way in meeting all demands made upon it.
One of the most favorable features to be considered
is, that during the great pressure in the money market
of last year, though depositors had the privilege to
withdraw all of their deposits without notice, the
whole amount drawn from the bank, from the fifteenth
day of September to the fifteenth day of December,
was $107,793.06, less than was drawn in the corresponding months of the year previous.
The whole number of deposits and wit'hdraw~s
since the bank was organized has been 1,331,152;
whole amount deposited, $45,125,946.42; whole amount
withdrawn, $33,708,734.84; and the total amount of
interest paid depositors has been $5,475,381.20.
The number of depositors who have on deposit less
than $50 is 36,529; $50, and less than $100, is 5,235;
$100, and less than $500, is 14,416 ; $500 to $1,000
inclusive, is 9,441.
The subjoined table indicates the operation of the
bank from year to year:
i
>
ti
ai
g...
<.9
1855 .. . .
1856 . ...
1857 ....
1858 . ...
1859 ....
186o ... •
1861 .•••
1862 . ...
1863 . ...
1864 . . ..
1865 . ...
1866 . ...
6,583
3,222
2,771
1,990
4. 153
3,730
2,400
510
3,694
4,687
2,645
1,753
if
'ii&.
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c..,
<cc
;;:,-•
...".J
Cg&.
CO V
<r
t275,o88
t370,533
289,637
315,293
220,789
663,077
611,397
372,012
41,233
867,209
937,921
111,496
h32,421
513,251
654,930
709,754
1,142,212
1,457, 557
1,383,932
1,093,017
1,758,339
2,218,332
2,579,272
2,232,302
I
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$95,445
223,613
339,636
488,965
479, 135
846,159
1,011 ,920
1,051,784
891,129
1,28o,411
2,467,776
2,364,723
Digitized by
t5,013
17,249
30,710
41,677
•100,568
92,969
116,511
125,217
144,335
•257,897
202,312
190,822
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108
MASSACHUSETTS: STATISTICS, ETO.
I .,..,~;
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1867 .. ..
1868 ....
1869 ....
1870 ....
1871 ....
1872 . . . .
1873 . ...
1874 ....
3,824
4,191
4,318
4,263
2,429
3,320
2,359
2,779
$977,676
1, 185,952
988,185
1,024,973
673,763
764,478
598,8o8
630,638
$2,849,100
3,443,ooS
3,288,66o
4,474,623
3,714,135
3,875,128
3,809,320
3,558,532
$1,871,423
2,257,056
2,300,475
3,449,649
3,040,372
3,110,650
3,210,511
2,927,893
$220,277
271,438
•795, 190
367,886
414,263
4i2,976
46,442
•1,141,620
Total. ..
65,621
$11,417,211
$45,125,946
$33,708,734
$5,475,381
• Include extra dividends.
tI>ecreue.
FIVE CENTS SA VINOS BANK.
St.ati.~tic8 January 1, 18 74.
Date of first deposit, October 6, 1855.
STONEHAM
Whole number of accounts opened.. .. .... ... ...
"
"
"
"
closed. . . . . . . . • . . . • . •
Number of open accounts.. .. ........ .. ........
Amount on deposit ................... . . ......•.
Interest (paid) . . .. ..... . . . ............... . . . ..
3,116
1, 903
1,213
$256,874
73, 110
The above furnished by the institution does not give
the whole amount deposited. The statement concerning interest is in terms as given, and is supposed to
refer to so much as has been withdrawn, and not to
the whole amount credited.
NATICK FIVE CENTS SAVINGS BANK.
Statistics Jawuary 1, 1874.
Date of first deposit, October 4, 1859.
Whole number of accounts opened ..••.•........
"
"
"
"
closed ..••.•.• ........
Digitized by
3,515
1,952
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104
HISTORY OF SA.VINOS BANKS.
Number of open accounts..... . .. . ...... .. .. . ..
1,563
Amount deposited, including intereat. . . . . . . . . . . . $921, 303
Amount withdrawn... . .. . . .. .. .. ...... . . . .... 594,749
Amount on deposit. . . . . . . . • . . . . . . . . . . . . . . . . • • • 326, 554
Interest credited. . • . . • . . . . . • . . . . . . . . . . . . . . . . . . 82, 984
The details of amount deposited, and interest cred•
ited for each year, are also furnished by the treasurer,
James Whitney, Esq., as follows:
The first items are for 1869 and 1860. The last
' are for six months only.
Deposits.
186o . ... . ......•. . ... . •.. . .. .....• . . .
1861 . ... • . .• . . .• • •. . . •. .• • .... . .....•
1862 ••••.•••. . .••.. .•..• .• •• ...•••. • .
1863 .. .• ..••.. • •.•.. .. .. . • • . • .. .•• •..
1864 •••• • •• . . • .•...
1865 • •.• •. .•. . ..••.• . ... . ............
1866 .• . . ; . . ••.•••••• • •• •. ....••• ••...
1867 .....• . . • .. •• ••• • •••.. .. . .. •.. .. .
1868 ••••.••. •• •.•.• • . • . . .••..•. • .. .. .
1869 ••. . .•• •.. .• ... •. ... .. ..... . ... ..
1870 ........ .. ... . . . . . . ... . . .. . . .. . ..
1871 • • ••. • ..•. . . .. .. . ..••.•. ••• • . ...•
1872 •••. . .. . .. • . .. .... . .. .... . . . .. .. .
1873 • . • •. •• •.•• • •.••••• • . . . • .•. .. . ...
1874 • ..• ..••.. . .• • .•.•••.... .. . .. . .. .
.. ... .. ........ ..
Interest.
t10,443 70
3,321 68
JI , fo6 44
15,490 58
24-ogo 58
18,48g 34
22,301 96
37,587 43
36,769 84
93,467 83
102,279 04
I 10,685 02
130,640 21
114,491 45
107,154 89
$138
210
212
591
891
1,017
r,367
2,174
2,990
5,516
12,402
12,177
15,767
17,709
9,815
SAVINGS BANK,
II
17
81
17
o8
34
22
66
97
6g
$82,983 67
$838,319 47
PEoPLES'
70
84
51
52
88
w OROESTER.
8taUsflics Jam,,ua,,ry 1, 187 4.
Date of first deposit, December 31, 1864.
Whole number of accounts opened.... . . . . . . . . .
16, 226
"
"
"
"
closed. . .. . . • . . . . . . .
7, 25~
Number of open acco11.nte. . . . ......... . .. ... ..
8,974
Amount deposited, including interest . . . • . . . . . . $7, 260, 280
Amount withdrawn . . . . . . . . . . • • . . . . . . . . . .. . . 4, 193, 227
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MASSACHUSETTS : STATISTICS, ETC.
105
Amount on deposit ....................•.•..• $3,067,053
Interest credited • • • • . . . • . • . • . . . . . . . . . . . . . . . .
711, 887
The above was furnished by the institution and
exhibits a remarkable growth for a period of only nine
years.
w EST
SAVINOS BANK.
Stai'istics Janua1-y 1, 1874.
Date of first deposit, June 15, 1867.
BOSTON
Whole number of accounts opened. . . . . . . . . . . .
14, 469
5, 869
"
"
"
"
closed. . . • . . . . . . . . .
8, 600
Number of open accounts, about......... . . • • . .
Amount deposited, including interest . . .•.. , . . • $6, 095, 461
Amount withdrawn . . . • . . . . . . . . . • . • . . . . . . . . . 3, 097, 250
Amount on deposit.......................... 2,998,211
Interest credited .•......... ·. . . . . . . . • . . . . . . . .
488, 405
The foregoing was furnished by the treasurer, J. H.
Wilder, Esq., who further attributes the success which
in six and a half years has secured a deposit of nearly
$3,000,000, to the following innovations upon previously existing methods.
1. Discarding extra dividends and dividing the full
earnings every six months.
2. Commencing interest upon deposits on the first
of each month, instead of quarterly. Other Savings
Banks in Boston have been induced, by the success
wbich has attended these changes in established usages,
to copy the example of this institution.
Doubtless the result of the experiment serves to
illustrate and enforce the principle for which we con•
tend in another place, that varying practices concerning the payment of interest or dividends are desirable
14
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106
HISTORY OJ!' SA VINOS BANKS.
in order to meet varying necessitie11, or at lea.'lt varying
preferences on part of patrons.
So urn
WEYMOUTH
SAvmos
BANK.
Statistics January 1, 1874.
Date of first deposit, April 7, 1868.
966
Whole number of accounts opened ..... . . . .... . .
232
"
"
"
"
closed . . . . . . . . . . . . . . .
734
Number of open accounts .•.• . ..•.. • •.•.•. • . • ..
Amount deposited, including interest . . . . . ..• • .. $383,027
Amount withdrawn ••••.•••...• . ••• . .. .. ..• . . . 133,527
Amount on deposit . ..•..•• . .. . . ..• .... . ....... 249,500
56,082
Interest credited ................. ·.. . ..... . ... .
The foregoing was furnished by B. F. White, Esq.,
treasurer.
wEBSTER FIVE CENTS SAVINOS BANK.
Swti.~tics Jawuary 1, 187 4.
Date of first deposit, August 10, t 868.
Whole number of accounts opened. . . . . . . . . . ••••
2,364
824
"
"
"
"
closed . . . . . . . . . . . . . . .
Number of open I\Ccounts . ... . . . . . . . . . . . . . . . . . . .
1, 540
Amount deposited, including interest . . . . . . . . . . . . $456, 151
Amount withdrawn . . . . . . . . . . . . . • • • . . . . . . . . . . . 211, 171
Amount on deposit. . . . . . . . . . • . . . • • . . . . . . . . . . . . 244, 980
23, 393
Interest credited. . .. .. .. . . .. . . . . . . . . . . . . . . . . . .
The above was furnished by the treasurer, Edwin
May, Esq.
TAUNTON SAVINGS BANK.
Stati.'itics January 1, 1874.
Date of first deposit, July 3, 1869.
Whole number of accounts opened ...... . .... .
"
"
"
"
closed . . . . . . ...••. •
Digitized by
5,4:58
1,699
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107
MASSACHUSETTS: STATISTICS, ETO.
3,824
Number of open accounts ......•........ . ....
Amonnt depositeJ, including interest .. . . ..... . $2,188,220
832,899
Amount withdrawn . .. ...... . .. . .. .... . ... . .
1,355,321
Amount on deposit . ........ . ....... . .. . . . .. .
170,157
Interest credited ....... . .. . ......... . ... . .. .
The above was furnished by the institution.
MUNSON SAVINGS BANK.
Statistic.g January 1, 1874.
Date of first deposit, June 1, 1872.
Whole number of accounts opened. . . . • • . . . . . . . •
"
"
"
"
closed. . . . . . . . . . • • . . •
Number of open accounts . ......... .. ..... . ....
Amount deposited, including interest .......... . .
Amount withdrawn. . . . . . . . . . . . . . . . . . . . . . . . . . .
Amount on deposit . .. . ................. .. . . . ..
548
70
478
$153, 187
13, 491
139,696
The above was furnished by the institution and is
complete except the item of interest credited is not
separately stated, but as this would be small it is not
material
BANK.
Statistics January 1, 1874.
Date of first deposit, October 5, 1870.
UXBRIDGE SAVINGS
Whole number of accounts opened.. . . . . . . . . • . . . .
991
"
"
"
"
closed . . . . . . . . . . . . . . .
211
Number of open acconnts.. . . .. ... . .... . .... .. .
780
Amount deposited, including interest .. . .... .. ... $303,713
Amount withdrawn. . . . . . . . . . . . . . . . . . . . . . . . . . . 122, 730
Amount on deposit.. . . . . . . . . . . . . . . . . . . • . . . . . . . 180, 983
Interest credited.. . .. ... . . . . . . . . . . . . . . . . . . . . . • 27, 294
The foregoing was furnished by the treasurer, C. A.
Taft, Esq.
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108
HISTORY OF SAVINGS BANKS.
NORTH AVENUE SAVINGS BANK, CAMBRIDGE.
Statistics January 1, 1874.
Date of first deposit, August 31, 1872.
Whole number of accounts opened. . . . . . . . . . . . . . .
129
"
"
"
"
closed . . . . . . . . . . . . . . . .
16
Number of open accounts................ . ......
113
Amount deposited, including interest ............. $30, 154
Amount withdrawn. . . . . . . . . . . . . . . . . . . . . . . . . • . .
6, 154
Amount on deposit.. . • . . . . . . . . . • • . . . . . . . • . • . . . . 24, 000
The above facts were furnished by the institution.
'l'he interest credited on a deposit so small, for a period
of a little over a year, could not exceed a few hundred
dollars.
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.MASSACHUSETTS: STATISTICS, ETC.
109
GENERAL STATISTICS OF GROWTH AND
PROGRESS.
Having thus put on record such detailed statistics
as I have been able to procure, there is nothing left to
do but to fall back upon the published records for such
further information as they contain, bearing upon the
growth and development of the Savings Bank system
in Massachusetts. Our starting point will be, of course,
with the reports made in the year 1834.
Our :first table exhibits the contrast in the condition
of the 23 institutions in operation in 1834, with the
condition of the same institutions as reported in 1873.
It will be seen that the amount deposited in these
23 institutions in 1873, over $14,000,000, was more
than four times the whole amount on deposit in 1834,
that being less than $8,500,000. The amount held on
deposit had, in these 40 years, increased over 21 times,
and the number of depositors over eight times. Of
course the growth of the system in the State at large
greatly exceeds this, as will be seen from other tables.
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-....
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TABLE showing cumparative condiliun of Savings Ban/ls in 1834, and of same Institutions in 1873.
l
1834.
c:i
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ii~
NAMlt OF INSTITUTION.
Open
Accounts.
>o
]
1831
1816
1833
1831
1832
1828
0
~
,,.
~
"'C")
0
~
~
1831
1828
1829
1826
1825
1820
1831
1828
1821
181
1828
1827
Barnstable ..........................
Boston, Provident . ..........•... . ...
Boston, for Seamen1 • • ••••••••••••• • •
Dedham . .......... • ..... . ........
Fairhaven .... . ... . . . ............. ...
Fall River.......... . ................
Gloucester' ........ . . . .....•........
Haverhill ..................
Lowell ............................. .
~nn ............. . .. .. .......... . ..
ew Bedford . .... . .. . ............. ..
Newburyport .. . .. . .. . . . .. . ........ . .
Newton ........... . .............•• .
Plymouth ........... . .......•.......
Roxbury (Boston) .....•••......... . .
Salem . . . ............................
Salisbury and Amesbury.............
Springfield' . . . . . . . . . . . . . . • . . . . . . ...
142
11,495
272
538
102
335
240
327
1,026
461
1,162
1,513
61
703
668
2,205
263
......
Amount on
Deposit.
t17,16o
1,686,202
32,937
61,166
9,102
46,692
20,014
25,731
114,105
33,646
207,764
232,46o
1,829
91,672
83,913
36o,852
30,557
. ........
1873-
Open
Accounts.
Amount on
DeposiL
Amount depo9ited In z873.
3,868
31,885
18,212
3,476
1,410
11,128
ti,502,572
12,787,700
6,842,947
1,039,940
766,347
5,274,998
$243,926
1,665,593
1,303,439
148,755
243,154
1,019,859
7,284
5,379
5,075
17,327
10,100
1,69<>
6,785
6,949
16,079
4,073
14,322
2,458,209
1,926, 150
1,557,7~
7,778,5
4,328,542
316,342
1,922.651
2,374,679
5,7¢,214
1,126,581
5,137,141
311,215
386,121
520,939
1,761,¢1
664,318
142,186
212,320
663,144
807,717
243,771
... .....
1,457,375
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1827
1829
1834
183,
182
Taunton' . .. ....... . .................
Warren ~Charlestown) . . . ... .. ..... .
Wellfleet ......•......... . .... .. .. . .
Weymouth . . .... . .. . ...... . .........
Worcester County...... . .... . . . .. . ..
845
622
4
26
1',246
121,938
62,556
832
1,097
165,542
3,799
9,942
1,007
:z,377
I 5,207
23 Institutions .. . ...................
24,256
$3,407,773
197,434
I Name changed
t Failed In 1844,
to Suffolk Sarillp Bank.
•Though or~nlzed In 1827 It appears not to have reported lta Oj)lln.tlona In r83-4. Probably deemed too limited to require notice. For
9tatement of lta growth, eee ,a,u1, p. 95,
0
cg
N
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I
1,343,140
3,:z6:z,7g8
305,188
753,129
5,185,500
t73,787,091
I
572,412
731,028
100,953
96,818
822,203
t14,119,207
4 Original in9tltution reporting In 1~, failed In 1843, and wu aucIn r873.
ceeded, I suppoae. by that found repo
• Incorporated under the general law o that year.
;
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112
HISTORY OF SA VINOS BANKS.
The following table exhibits the condition of all the
Savings Banks in Massachusetts reporting in 1834, as
compared with all in 1873, in respect to the character
of their investments, amount of surplus, and the per
cent of interest paid, to the total amount on deposit.
Of course the ratios are not exact, but approximate
sufficiently near for all practical purposes. It will be
seen that the banks in 1834 reported no surplus.
INVESTMENTS, RTC.
Agirregate
1834-
Public Funds . ... ...• . . . . .. .
$2,000
Loans on Public Funds .. . .. ........
Bank stock .. . . ..... . . . .. . .. 1,192,097
Loans on Bank Stock. . .....
557,930
DeP.osits in Bank .. . . ....... 520,66g
Railroad Bonds... . .. . .. . . . .
Loans on Railroad Stock . ... ....... .
Invested in Real Estate . . ...
Loans on Mortgage of Real
Estate .... . . .. . . ..• .. . . .. . 387,396
Loans to Counties, Cities and
Towns . .. . . • . .. .... ... ...
269,781
Loans on Personal security .. 283,744
Cash on hand. ....... . . . . • . .
24,953
Miscellaneous •....•.. . . .. .. 169,203
Surplus . .. . ..... .. ....... ..
Amount of dividends . ....• . 138,576
Aggregate
1873.
cent
Per
Per
cent
1834.
1873,
$17,530,640
1, 123,214
21,733,490
1,572,687
2,367,824
6,098,435
495,237
2,273,749
0
0
34
16
15
0
0
0
8
1-2
10
7-10
100,4o6,767"
II
·· ·· ·· ···
14,722,283
48
7
7
17
5
0
1-2
5
35,260,386
2,125,490
... ......
3,159,593
10,8o7,go6
I
3
1-5
I
8
7-10
:>
I
I
4
The growth and progress of the Savings Bank system in Massachusetts in its entirety, is best exhibited
by the subjoined table, taken from the report of. the
Savings Bank commissioner. A table in this form
was first compiled by the bank commissioners for the
report made in 1861, from which we have elsewhere
extracted so largely. Its great value in presenting at
a glance the condition and growth of Savings Banke
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MASSACHUSET.1'8: STAT18TICS1 ETC.
113
from year to year, has led to its continuance as a feature of the annual reports. Two col:umns, one of the
population of Massachusetts at different periods and
the other giving the total expense of conducting the ,
business of Savings Banks in the State, have been
omitted in order to reduce the table to the dimensions
of our smaller page. These are not material, however,
as the ratios derived from them are retained, and these
contain all of real value which the omitted aggregates
wou1d furnish.
15
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Google
TABLE exhibiting the number, condition and /rt(l{rtSS of the Sm·ings Banks of Alassachusdls, in each year,from
1834 lo 1873, i,,dusfre.
.;
....
oli
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116
HISTORY OF SAVINGS BANKS.
The increase in deposits it will be seen is quite variable from year to year, fluctuating between a loss of
four and one-fifth per cent, and a gain in one year of
as high as 27 per cent, a variation of 31 and one-fifth
per cent. A better idea of the growth of the system
will be derived from a comparison in periods of about
five years. As the term for which the record is made
is not divisible by :five, we make the :first period four
years ; we have then the following:
1834 to 1838 ..... Increase, tl, 461, 620- 42.9 per cent.
1838 to 1843. . . . .
1843 to 1848... .
1848 to 1853.....
1853 to 1858. . . . .
1858 to 1863. . . . .
1863 to 1868.....
1868 to 1873.... .
"
.,
"
•'
"
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,,
2, 066, 154 - 4-2. 4
5,034,901 = 72.6
11, 399, 654 = 95. 2
10, 544-, 870 = 45
22, 968. 856 = 67. 7
37,954,508 ~ 66 . 7
107,357,007 = 115.3
"
"
"
"
"
"
"
The results in the above form are so astounding, that
if they stood alone, or were exceptional in their character, their correctness would challenge investigation.
But so far from being exceptional, we shall find as we
proceed, that in other States a like wonderful growth
has been maintained.
The topics suggested by these exhibits are not local
or special in their character, and are consequently
reserved for consideration until the facts and :figures
concerning the development of this interest in other
States are produced, and combined so far as practicable
with the foregoing, and a common line of deduction
and discussion derived from their united testimony can
be entered upon.
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MASSACHUSETTS: STATISTICS, ETC.
117
The unexpected delay in completing this work enables me to give a summary of the progress of Savings
Banks in Massachusetts during the year ending October,
18 74, as the same is found in public journals.
Nnmberof depositors . . ... .. . . . .... . . . . ~ . . .
702,099
Amount of deposits .. . ....... .. ...... . . . . . $217,452,120
34,853
Gain in number of depositors . . . . '. . .. . .... . .
Gain in amount of deposits ..... . . .. ..... . . . $14,389,964
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118
HISTORY OF SA VINOS BANKS.
THIRD SECTION;
SAVINOS BANKS IN THE STA.TE OF
CONNECTICUT.
CHAPTER XI.
GENERAL COURSE OF LEGISLATION.
Savings Banks had their inception in the State of
Connecticut by the incorporation of the "Society for
Savings," at Hartford, which act was approved June t,
1819. Like the pioneer institutions in Massachusetts,
New York and other States, it has, in practical resul_ts,
immeasurably surpassed the hopes and expectations of
its founders, and nobly justified the motives and purposes which called it into being. The charter will be
found in full in the Appendix, from which the character
of its provisions can be de1ive<l. The institution was
organized and the first deposit received in July, 1819,
the same month in which the first Savings Bauk in
New York was opened. The population of the county
of Hartford, which we may assume to have been tributary to the support of the institutitlD, was at this time
about 47,000, and of the State about ~75,000. In
1870 the population of the county of Hartford was
109,000, an increase of about two and one-third times
in fifty years ; and the population of the State was, at
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CONNE<.,'TICUT: COURSE OF LEGISLATION.
119
the latter date, 537,000, an increase of 1.95 times
during the same period. On the first of December
after the opening of the bank, the first dividend was
declared, amounting to $~7.al, and the amount remain•
ing on deposit after the above credit of interest, was
$4,352.77.
It is said that the incorporation of this society
was vigorously opposed by members of the General
Assembly from the rural districts, upon the ground
that its tendency would be to draw away money from
the country and conceiltrate it in the city of Hartford.
Theirs was a misreading or a misapplication of the
scripture: "There is that scattercth, yet increaseth;
and there is that withholdeth more than is meet, but
it tcndeth to poverty."
The order of incorporation of the first twelve
Savin~ Banks in this State was as follows:
Society for Savings, Hartford ............ : . . . . . . . . . .
Savings Bank of New Haven* .... . ........ . .... .. .
Norwich Savings Society ...... .. ............... . ..
Middletown Savings Rank ......... .. ... ...........
Savings Bank of New London. . . . . . . .. . . . . . . . .. . . . .
New Haven Savings Bank . . . . . . . . . . . . . . . . . . . . . . . . .
Plainfield Savings Bank (closed) . ......... . ... ... ...
Savings Bank of Tolland ..........................
Bridgeport Savings Bank . . . . . . . . . . . . . . . . . . . . . . . . . .
Willimantic Savings Institute . . . . . . . . . . . . . . . . . . . . . .
Derby Savings Bank ......................... , ....
Salisbury Savings Society... ... . . . . . . . . . . . . . . . . . . . .
1819
1820
1824
1825
1827
1838
1839
1841
1842
1842
1846
1848
* Appears never to have organized: was 11ucceeded by the incorporRtion
of ihe Nuw Haven Savings Bank, in 1838.
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120
HISTORY OF SAVINOS BANKS.
In tracing the course of legislation in this State,
concerning Savings Banks, we shall find no material
modification in the form of charters, except in the
direction of imposing some form of limitation con•
cerning the manner in which the moneys received
should be used and employed by the corporation for
the advantage of depositors, which will be considered
in its proper place.
ORGANIZATION.
The charter uniformly named the first corporators,
and empowered them to increase the number at
pleasure. In some later charters the corporators were
required to elect associates to fill .vacancies, so that
the number of corporators should not be reduced
below a certain limit, varying from ten to twenty-five.
Seven corporators, one of the same being an officer,
constituted a quorum. It would seem, from the provisions of section six of the charter of the Society for
Savings, that it was not contemplated that the general
control and management of the institution should be
exercised by the entire body of corporators, as is the
case in New York, but that the same might be delegated, with full powers, to the officers and " trustees"
chosen by the corporators for that purpose. Such
provision would seem to be a necessary incident to
the power to increase the number of corporators indefinitely, as under such practice the corporation might
become too unwieldy to exercise executive functions
with efficiency and dispatch. The power to delegate
authority to conduct the operations of the institution
to a subordinate board, would further be rendered
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CONNECTICUT: COURSE OF LEGISLATION.
121
necessary, if but .one meeting of corporators should
be held in each year, as under the same section might
he done. In some charters, however, the number of
corporators was limited.
No provision for involuntary vacancies seems to
have been made by law until 1871, when it was
enacted, that neglect to attend meetings for three years
without reasonable excuse, or a conviction of 'crime,
should vacate the office of a corporator, on the same
being declared by a unanimous vote at an annual meeting. Rather a tedious process, one would think, for
getting rid of the association of a convicted criminal!
There was, however, less occasion for a regulation creating vacancies otherwise than by death or resignation,
where the number comprising the body of corporators
was, or might be by act of the members, unlimited.
By an amendment to the charter of the Norwalk Savings Society, the corporators were required each year
t;o chose nine directors to serve for one year, but no
corporator could serve as dirt>ctor more than three
years out of four.
NOTICE OF INCORPORATION.
An act in 1858 provided, "that no petition for the
incorporation of any Savings Bank shall be heard by
the general assembly, unless public notice thereof shall
have been given by advertisement setting forth the
proposed location of such Savings Bank, in some newspaper published in the county where such Savings
Bank is proposed to be located, at least two weeks
before the fi_rst day of the session in which such hear•
ing is to be had."
16
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122
IDSTORY OF SAVINOS BANKS.
We have no means of knowing whether this act
shared the fate of a similar ,effort in the State of New
York, to check the rapid increase in the number of Savings Banks, by restricting the consideration of the legislature to such as should give promise of success by
challenging public criticism. I suppose there was
nothing in this act that could bind any subsequent
legislature that might choose to consider and pass a bill
of incorporation that had not been introduced pursuant
to the forms prescribed in the above act.
But the passage of the act shows at least, that occasion was found for interposing some impediment to
ill-considered acts of incorporation, which experience
was doubtless common to all the States; and it further
shows that one legislature was found sufficiently alive
to the importance of well-considered action, to make
an effort at least to secure it.
By an act in 1870 notice was required to be given
of annual and special meetinf,rs of corporators ; and it
was also deemed important this year to prohibit the
removal of any Savings Bank to another town without the consent of th~ general assemb!y.
INVESTMENTS.
The first Savings Bank charter in this State appears
not to have recognized the principle of investments as
now understood and provided for, as we find that in
this charter provision was only made for 'loaning the
moneys received by the corporation, and the same was
left to the discretion of the managers,• subject only to
the requirement that the loans should be made in a
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123
CONNECTICUT: COURSE OF LEGISLATION.
manner consistent with the laws of the State. In the
following year, however, the Savings Bank of New
Haven was incorporated, with similar powers in regard
to loaning the deposits received, and was further authorized to invest the same in the purchase of bank
stock or any other public stock of any State or of the
United States, but it does not appear that a bank was
ever organized under this charter; and in 1821 the
like privilege was accorded to the Society for Savings,
by an amendment to its charter. The reference above
made to "other public stocks," after the words "bank
stock," suggests the inquiry whether calling bank
stocks public stocks, even in an act of legislature,
make8 them such ?
Though, under the general power confe1Ted to loan
the moneys received on deposit, Savings Banks might
unquestionably accept the mortgage of real estate as
security, this form of security was not specifically mentioned in any charter until 1827, when the Savings
Bank of New London was incorporated, with power
to loan the moneys received, by order or consent of a
majority of the directors, on mortgage of real estate or
other undoubted security, or to invest the sameas previous charters had authorized -in the stock of
any bank in the State of Connecticut, or in the public
stock of any State or of the United States. Though
in the charter of the Savings Bank of New Haven,
the investment in bank stock was not in terms limited
to the stock of Ccnnecticut banks, the uniformity with
which, in other·charters, this limitation was expressed,
leads to the conclusion that the same was implied in
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124
IDSTORY OF SAVINOS BANKS.
case of the New Haven Savings Bank. In 183~, however, the privilege was accorded to the Norwich Sav•
ings Society, and to the Savings Bank of New London,
to invest in the stock of any banks in the cities of
New York, Boston, or Providence, also in the stock
of the Bank of the United States. Thereafter there
was little change of importance to notice in the powers
of Savings Banks, concerning investments, until the
same were modified by a general act relating to these
institutions, passed in 1843.
This act prohibited the investment of the moneys
or funds of Savings Banks in the stock of any bank
of discount, or in the stocks or bonds of any State,
city, or other corporation, or in post notes, except such
investment was necessary in order to obtain the payment of a debt previously contracted and owing to
any Savings Bank, and which could not be otherwise
obtained. Loans, also, were prohibited unless secured
by mortgage of unincumbered real estate within the·
State (a limitation not previously imposed), equal in
value to double the amount of the loan. From this prohibition concerning loans, however, ten per cent of the
· amount of deposits in any Savings Bank was excepted.
The perversity and inconsistency of modern legislation
is exemplified in the fact that the very first charter,
an<l, for that matter, all subsequent charters, granted
after the passage of this act, confen·ed privileges in
the matter of investment, in direct contravention of
the foregoing provisions. Thus, the Derby Savings
Bank, incorporated as the Derby Society for Savings,
in 1846, was authorized to invest twenty.five per cent
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CONNECTICUT: COURSE OF LEO.IBLATION.
125
of the deposits in bank stock or United States stocks,
or to loan the same on undoubt~d pergonal security;
and the Norwich Savings Society was, by an amendment to its charter in this same year, authorized to
subscribe to the stock of the Merchants' Bank. In
short, Savings Banks were incorporated with powers
and privileges utterly at variance with the provisions
of the general law, which, so far as imposing any
restraints is concerned, might as well have never been
enacted.
In the charter of the Derby Savings Bank, above
mentioned, there was introduced, for the first time, a
feature which subsequently became as nearly the set•
tled policy of the State, concerning the investments
of Savings Banks, as any thing so capricious as legislation could become. This was an implied requirement
to invest at least three-fourths of the deposits in mort.
gages of real estate. Subsequent charters contained, ,
some of them a provision requiring one-fourth, others
two-thirds, some one-half, to be thus invested, while
many were not restricted as to the amount.
The act of 1843, above referred to, was modified, in
1847, by providing that where the deposits of any Sav.
ings Bank were less than $120,000, such Savings Bank
might loan not exceeding $30,000 on such personal
security as the trustees, directors or managers should
approve, but not more than one-half the deposits were
to be so loaned. In 1851 the act was further amended
by authorizing one-half of the deposits in any Savings
Bank to be loaned on personal security, all other loans
to be on mortgage of real estate within the State.
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HISTORY OF SAVINOS BANKS.
Neither the act of 1843, nor this amendment in 1851,
provided for any investments except in mortgages; but
the charters uniformly authorized the purchase of bank
stocks and United States stocks, and some of them the
stocks of other States. It should have been noted, that
in 1848 the Bridgeport Savings Bank was authorized
to invest 15 per cent of its deposits in the bonds of the
city of Bridgeport. This was the first specific recognition of municipal bonds as a desirable investment for
Savings Banks, and this, as will be seen, was made in
the face of the explicit prohibition in the act of 1843
concerning such investments.
After this time, a ~ommon form of authorizing investments in Savings Bank charters was in these words:
"to loan or invest in a manner not inconsistent with
the laws of this State," etc. Frequently, however, this
would be coupled with specific provisions concerning
investments, at variance with the general laws, whereby
the latter would, in some of their features at least, be
rendered nugatory. Thus, the Collinsville Savings
Bank, besides loans on mortgages to the amount of
one-fourth of the deposits, was authorized f:urther "to
invest in the stock of any banks in the State, or any
other public stock of any State <:>r of the United States,
or of the cities of this State, New York, Albany, Boston or Providence, or undoubted personal security, or
in a manner not inconsistent with the laws of this
State," etc. Not all charters were as liberal in their
provisions concerning investments as this one, but in
very few of them were they held to the uncompromising strictness of the general law.
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CONNECTICUT: COURSE OF LEGISLATION.
127
In 1858 the loans authorized on personal security
were restricted to one-third of the deposits, but were
restored to one-half in the following year. By the
same act, in 1858, the portion of deposits ( one-third,
subsequently one-half) allowed to be loaned on personal security were permitted to be invested '' in the
public stocks of the New England States, New York,
Ohio, Pennsylvania and Kentucky, or of the United
States; in the stock of any bank in this State, New
York city or Boston, in the public stock of any incorporated city, town or borough in this State, or of the
cities of New York, Boston, Providence or Albany."
It will be seen that this was a very marked and
decided enlargement of the powers of the general law,
in fact exceeding the powers specifically conferred by
any previous charters, except in the matter of State
stocks, introducing many securities for investment
not !:,efore recognized. In 1862 Savings Banks were
authorized to invest a still larger proportion of their
deposits in the Stocks of the New England States and
of the United States, or in those of municipalities in
Connecticut; and in 1868 the range of investment was
extended so as to embrace the stocks of New Jersey,
Ohio, Michigan, Indiana, Illinois, Wisconsin and Iowa,
and of the cities of Brooklyn, Troy, Rochester and
Buffalo, in addition to those previously enumerated.
It will appear from a review of the foregoing provisions, that despite the desultory and incongruous
action of the legislature concerning the investments of
Savings Banks, the general policy was toward the
encouragement of loans upon mortgages of real estate
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within the State of Connecticut, in preference to other
forms of investment. The impracticability of effecting such loans advantageously was doubtless the occasion of frequent appeals from the managers of Savings
Banks for a removal of the restrictions imposed, and
resulted, according to the temper of varying legislaures, in the changeable and . capricious pr~visions
which we have noticed.
The deposits in bank we must presume to have been
made unde_r the general powers, always sufficiently liberal for the purpose, of making loans, as there appears
to he no special provision in any charter or general law
upon this subject, except in case of the Norwich Savings Bank, which by an amendment of its charter in
1840, was authorized to loan moneys to any bank, notwithstanding the corporators were stockholders therein.
This was done doubtless to remove the implied prohibition against such loans, found in nearly all charters,
which forbid the corporators directly or indirectly to
borrow the fun~s of the Savings Bank with - which
they were connected. Doubtless loans to or deposits
in any bank in which such corporators were stockholders, were not commonly regarded as a violation or
evasion of this provision, as we find no other instance
in which the action of the legislature was invoked to
remove such implied disability, though it can hardly
be possible that similar conditions did not exist in
many other localities.
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PURCHASE OF REAL EST.ATE.
Few of the original charters contain any provision
authorizing the purchase of real estate for any pur•
pose. But, as the occasion would arise with the
growth and expansion of any institution, rendering
the possession of a banking house desirable or neces•
sary, the legislature was petitioned for authority to
make such purchase, which was commonly conceded,
but upon terms limiting such investment to a specific
sum, varying, we may presume, according to the con•
dition, ability and needs of the institution. The first
act of this kind, of which I find any record; was in
1833, when the Society for Savings, at Hartford, was
authorized to expend in this way not exceeding $7,000.
Of course the institution has long since outgrown the
facilities which such a sum would procure, and doubtless has, without difficulty, obtained the desired relief
from the legislature. A few charters are found, in
which a limited sum is authorized for this purpose,
and one in which there is no limit, except that the
investment shall only be for the use of the institution
in the transaction of its business, in this respect conforming more nearly to the prevailing practice in the
State of New York.
LATER LEGISLATION.
The latest legislation concerning investments, had
in 1873, is in the direction of prohibition; the first
excluding .railroad stocks or bonds, and the other forbidding the purchase of any note, bill, draft, check, or
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other mercantile paper on which only one person
or firm shall be holden - technically known as " one•
name" paper. This seems to have been enacted in
deference to the opinions of the bank commissioner,
who had reported adversely to such investments.
There would seem to be no occasion for the first pro·
hibition mentioned above, as the general laws conferred no authority to make such purchases as are
there excluded; nor is the power to invest in railroad
securities found in but two charters, unless it is to be
inferred from the broad provisions of the earlier acts
of incorporation. It is evident, however, that the
power to make such investments was claimed and
exercised somewhat generally, and it was deemed
expedient to correct, by specific prohibition, what
might become, if it was not already, an abuse of discretion. The commissioner's report for 1873, indeed,
shows investments in railroad stocks and bonds
amounting to $1,254,707, or one and seven-tenths per
cent of the assets of all Savings Banks in the State.
Two S~vings Banks were in 1869 authorized to
invest in the bonds of any sclwol district in the State,
the only instances of the kind brought to my notice.
The requirement to invest a given proportion of
the deposits in any specific security had. as we have
seen, been directed to mortgages of real estate, as high
as three-fourths being by many charters required in
this form; but in 1872 the Operatives' Savings Bank
of New Haven was incorporated, and one of the provisions of its charter required one-fifth of its deposits
to be invested in United States, Connecticut or New
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Haven city bonds, as a special fund to meet extraordinary demands of depositors; but the total amount of
this fund was limited to $100,000. This partakes
somewhat of the character of what is known in New
York charters as an available fund; with the advantage, however, of being limited to investment in truly
available securities, and not left, as in the latter State,
to be loaned on call, at the discretion of the trustees,
upon the least available securities in the market. This
departure is, however, significant only of the disposition of the legislature, and has no practical bearing,
as it does not appear that the bank was organized.
SURPLUS.
None of the charters of Savings Banks in Connecticut contain any provision for the accumulation of a
surplus, from which to make good any losses arising
from bad debts or depreciated securities. The necessity for some provision of the kind seems first to have
attracted the attention of the legislature in 1847, when
it was enacted that any Savings Bank might reserve
out of its surplus earnings-whatever these may be
presumed to be I - "such sums as might, ~om time
to time, be conveniently reserved, not exceeding the
sum of five thousand dollars for the sum of two hundred and :fifty thousand dollars of deposits," which.
would be two per cent upon that amount. Where the
deposits of any Savings Bank exceeded the sum of
$250,000, such bank might reserve one per cent upon
such E'xcess, but not to exceed in all the sum of
$15,000. This was called by the act a" contingent
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HISTORY OF SA VIN GS BANKS.
fund," but its object was clearly the same as that of
the surplus fund of the New York Savings Banks.
It was further provided that the banking house or
other fixtures for the use of the bank or society should
form a part of said contingent fund, though such a
requirement would seem to be altogether aimless and
inconsequent. Yet, perhaps not more so than many
other features of legislation concerning these institutions, which, like other human interests, must take
their chance of being legislated upon oftentimes by
bodies of men who are profoundly ignorant of their
nature, purpose and needs.
In 1854 the amount of surplus or contingent fund
authorized to be reserved was increased to two and
one-half per cent of the total deposits; and in 1868 it
was made five per cent, the banking house and fixtures
to be a part of the same, as before.
LIMITATION OF INDIVIDUAL DEPOSITS.
Every Savings Bank charter in this State, I believe,
has limited to a definite sum the amount that might
be received from any one depositor, not in the aggregate, but in one year; and, upon the whole, this
seems to be a more rational method of restricting the
operations of Savings Banks to their legitimate purpose, than the New York policy of trying to limit the
aggregate that may be received, but allowing that
aggregate to be received in a single deposit. If one is
so favorably circumstanced that he can save from his
earnings $1,000 annually, it does not seem to be good
policy to allow him to deposit this sum for five years
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in the institution of his choice, and then compel him
either to withdraw and otherwise invest this accumulation, or seek a new depository for his surplus earnings thereafter. And the common and peJiectly vl;\lid
objection to deposits of large sums, that in time of a
run their withdrawal depletes the resources of the
bank too rapidly, applies with little force to large
deposns which are the accumulation of a long period.
I believe it will be found that the depositors who, by
good fortune in business, combined with frugality, have
in a series of years, accumulated very considerable sums
in Savings Banks, are extremely tenacious in their hold
upon the depository they have chosen. Many instances
have been naITated to me by Savings Bank officers, in
New York, in accounting for a larger deposit than they
were authorized by law to hold, of the persistence of
such depositors in refusing to withdraw and invest
their money, even though offered assistance in obtaining a good bond and mortgage yielding a higher rate
of interest than the bank would pay. It is the lJltge
de~sits in large sums, commonly placed in Savings
Banks for safety and p~ofit uptil a desir~ble form of
investment presents itself, that are so sensitive in time
of general financial insecurity. I cannot believe that
the accumulation of quite large sums, the gradual savings of years of honest labor and fair good fortune,
would subject Savings Banks to any considerable
embarrassment nor to any peril.
The limit that may be received from any depositor
in one year varies in the different charters, commonly
from $200 to $500. In 1850 it was fixed by general
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HISTORY OF SAVINGS BANKS.
statute at $400, and thereafter most charters named
the same limit; some simply referred to the general
law defining the limit, while a few confined the deposit
of $200. In 1872, however, the
to the original
limit was fixed by general statute at $1,000. This
seems, under the changed conditions and relations of
things as compared with those existing when the original limit of $200 was applied, to be a very fair and
rational provision.
sum
DIVIDENDS OB INTEREST TO DEPOSITORS.
The profits of Savings Banks, credited from time to
time to depositors, are called, interchangeably, interest
or dividends. These profits are mainly derived from
interest on investments and loans. So are those of
banks of issue or joint-stock banks. The profits of the
latter, distributed to shareholders, are called dividends,
while those of the former, distributed to depositors, are
frequently called interest. I see no good reason for
this distinction in terms, applied to essentially the
same thing produced in essentially the same way.
Interest has a special, legal and technical signification.
It is always fixed and determinate in advance, either
by law or by agreement of parties. Dividends are
indeterminate until earned and declared, or should be
so, and bear some defined ratio to profits, as no profits,
no dividend. All the characteristics of dividends attach to the distribution of profits to depositors; they
have none of the characteristics of interest. I prefer,
and shall the refore employ the term dividend as being
more significant, truthful and appropriate.
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The provision in the original charter of the Society
for Savings, that the income or profits of the deposits
"shall be applied and divided among the persons making the deposits, their executors or administrators, in
just proportion, with such reasonable deduction as may
be chargeable thereon," is substantially preserved in
all subsequent charters-.
This uniform provision was modified by a general
act in 1847, in the following words:
"All the increase, profits and earnings on the deposits and on the contin~ent fund in any Savin~ Bank or
Society, after defraymg the expenses of said bank or
society, as provided in its charter, and after deducting
the losses of said institution~ shall be semi-annually
divided and applied among the depositors in the said
institution, their executors or administrators, in just
proportions; ·provided, no dividend need be made on
any other fraction than one-half of one per cent.''
TAXATION OF DEPOSITS.
As early as 1846 the deposits in Savings Banks
were made the subject of taxation. The policy was
to tax them as personal property, as other property
was taxed ; but only deposits in excess· of $250 were
made liable. The secretaries of the several Savings
Banks were required to return to the assessors of the
towns in which the depositors resided, the names of
such depositors and the amount of their deposits.
Non-resident depositors were also taxed in common
with residents, the tax being, we presume, paid by
the institutions holding the deposits, and the same was
paid into the treasury of the State.
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HISTORY OF SAVINGS BANKS.
In 1862 this mode of taxing the deposits was
changed, and the Savings Banks were required to pay
to the treasurer of the State one-eighth of one per
cent on the total amount of their deposits, which was
to be in lieu of all other taxes upon the institutions
depositors therein. This tax was in 1857 increased
to three-sixteenths per cent, in 1859 to one-fourth per
cent, in 1862 to one-half per cent, and in 1864 to threefourths per cent; but, under this last increase, the real
estate of any Savings Bank, over and above that
required and used by the institution in the transaction
of its business, was also subject to taxation. In 1869
this latter rate of. taxation was re-imposed, but with
an exception of United States bonds, exempt fyom
taxation, and certain bonds of the State on which the
tax was one per cent.
In 1872 the rate of taxation was still further modified, so as to be one-half per cent on the deposits
loaned on real estate, and one per cent on the amount
of all other deposits not invested in untaxable securities, as United States bonds. The encouragement thus
~ven to loans on real estate will be noticed.
or
COMPENSATION TO OFFICERS.
Under the provisions of the various charters of Savings Banks, no president, vice-president or trustee could
receive any compensation for his services. This prohibition was somewhat relaxed by a general law in
1868, which authorized Savings Banks, whose deposits
exceeded $500,0001 to pay the president such compensation as the trustees might deem just and reasonable;
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CONNECTICUT: COURSE OF LEGISLATION.
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but in 1873 the salary, which any Savings Bank might
pay its president, was limited, after the next annual
election, to $300. Of course, merely nominal service
was expected for such merely nominal pay.
BORROWING FUNDS.
One salutary provision runs through all the charters
of Savings Banks in this State, as in the State of New
York: "That no member of the corporation shall be
the hirer or borrower, or surety for any hirer or borrower of the funds of the corporation, or any part
thereof." In excluding the corporators from the rela.
tion of suretyship, the statutes of Connecticut were in
l
advance of those in New York State.
PENALTY FOR VIOLATION OF LAW.
The act of 1858, defining what should be the loans
and investments of Savings Banks, was enforced by a
provision making those trustees who assented to a violation of the provisions of the act, jointly and severally
liable to the Savings Bank for any loss that might
result therefrom ; and the penalty for violating the
provisions of the act of 1873, prohibiting the taking
of more than seven per cent interest upon loans, or
investing in railroad stocks or bonds, was a fine of
not less than $1,000 nor more than $5,000.
RATE OF INTEREST RECEIVABLE ON LOANS.
In 1873 Savings Banks were prohibited from taking
more than seven per cent per annum on loans, either
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HISTORY OF SAVINOS BANKS.
as bonus, commission or tax, or in any other way,
directly or indirectly ; but were allowed to deduct six
months' interest in advance.
Why such a prohibition should be necessary, in
view of a general usury law, which must have been
operative upon Savings Banks as well as upon indi. viduals, is not very clear; but it may be presumed
that real or supposed abuses had grown up, which the
existing laws failed to correct, as the penalty of forfeiture could only be enforced at the will of the borrowers, who, as is well known, are not prone to become
parties to such a proceeding. The penalty for violating this provieion, besides that of forfeiturewhich we suppose still to have been operative under
the general usury laws - was not less than $1,000 nor
more than $5,000, and we suppose this might be sued
for by the State prosecuting officer; and, as it was
made the duty of the bank commissioner to require
strict conformity to the provisions of the law on the part
of Savings Banks, there was perhaps some likelihood
that violations of the law might be detected and punished, or, what is better, prevented altogether. Still
there is left unsolved the doubt why Savings Banks
should have been selected for more stringent discipline
in this matter than other corporations or than private
individuals. The act seems to have been incited by
the recommendation of the bank commissioner, as will
hereafter appear, which shows, at least, that he was
an independent and honest official, and not at all
blind to the faults of Savings Banks, nor backward in
exposing them and seeking to have them corrected.
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CONNECTICUT: COURSE OF LEGISLATION.
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WITHDRAW A.L OF DEPOSITS.
The Savings Bank charters in this State quite uni•
formly contain a provision to the effect that deposits
may be withdrawn upon giving some defined term of
notice, commonly four months. There is, perhaps, no ·
special advantage between this and leaving the withdrawal subject to such regulations as the board shall
prescribe, as in most other States. It is certain that
the notice required, when left to the discretion of the
trustees, has commonly been less than the above, as
defined by the statute in Connecticut.
Practically, however, it makes very little difference,
for the usage we presume to be alike in all cases, to
pay on demand without notice, except in seasons of
peculiar exigency, rendering such course impracticable.
We know, as a practical fact, that the managers of
Savings Banks are very reluctant to enforce the rule
requiring notice before withdrawing deposits, and in
our judgment there is far more danger to the welfare
of depositors, in the disposition to pay without notice,
than in any abuse of the discretion with which they
are invested to require it.
The subject generally will be more fully considered
·
hereafter.
BA.VINO AND BUILDING A.SSOOIA.TIONS.
These were a modification of, or innovation upon
the Savings Bank system, which for a time acquired
some degree of popularity in the State of Connecticut,
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HISTORY OF SAVINOS BANKS.
and doubtless had the effect somewhat to attract to
themselves moneys that would otherwise have found
their way to the regular Savings Banks. Their object
and methods will best be seen by the following summary of the general act, passed in 1850, authorizing
their formation :
They were "authorized to receive deposits in payment of shares of stock or otherwise, not exceeding
11,000 from one individual in one year; to loan to
members, upon real or personal security, or upon pledge
of stock in the association; to receive a bonus for such
loans, as might be agreed upon, in addition to legal
rate of interest; to loan to those not members, at the
legal rate of interest; also to purchase, with such of
its funds as could not be loaned to members on good
securit7, the stock of any city, of any incorporated
bank m this State, the stock -of State of Massachusetts, New York, and of U nitcd States, and no others."
They were also required to make detailed reports of
their operations to the general assembly. The bank
commissioner says of them, in 1855 : '' Their object is
to furnish a place of deposit for small sums; also to
use deposits and capital in making loans to stockholders on terms that will enable them to own their own
dwellings."
The highest deposit was reached in 1858, when it
was $2,391,302, and the stock was $2,390,643.
The result of this experiment does not appear to
have been satisfactory, for in 1858 their formation
thereafter was prohibited, and provision was made for
closing those already formed.
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CHAPTER XII.
OF SUPERVISION AND REPORTS.
The first act of a general character relating to Savings Banks in this State was in 1833, and required
these institutions to make a return annually to the
comptroller of public accounts, under a penalty for
neglect of $100, of all moneys belonging to each of
them respectively, with a statement of the amounts
belonging to residents and to non-resident'! separately.
Whether these returns were required as a basis for
taxation, or for statistical information only, does not
appear. I do not find any of these returns in the
public documents of that early day, and hence infer
that they were destroyed or pigeon-holed by the officer
to whom they were directed. Access to the State
records failed to disclose any of these early returns,
and, if preserved, the information gleaned from them
would doubtless be very meager and unsatisfactory.
In 1837 provision was made for the appointment of
two bank commissioners, but the act conferred no
powers or duties upon these officers in connection
with Savings Banks. I do not find such powers specifically conferred until 1853; but the commissioners
report, in 1846, that they had required statements from
and had examined every Savings Bank in the State.
They speak of their appointment "last year" (1845),
and also refer to the same in" 1844." In this report-
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HISTORY OF SAVINGS BANKS.
apparently the earliest published document on the
subject, the commissioners make a few judicious and
timely observations concerning Savings Banks; but
the bulk of the text, as also of the tabular statistics,
relates to banks of issue. There is indeed no sum·
mary made of the statements of Savings Banks. These
will be found in their appropriate place in this volume,
and form the starting point in the statistical history
of these institutions in this State.
As we cannot suppose the l?ank commissioners would
have charged themselves with this duty without
authority, it is perhaps fair to presume that I have
somehow overlooked the act conferring it, although I
have diligently and carefully examined the statutes to
find when the relation thus assumed was instituted,
and find nothing until the act of 1853, above noted.
The act of 1843, which we have before cited under
the topic of Investments, further made it the duty of
some officer of every Savings Bank, annually, on or
before the second Wednesday of May, "To transmit to
the general assembly a statement, under oath, of the
condition of the institution of which he is treasurer,
secretary or clerk, on the first day of April, specifying
the number of the present depositors, the amount of
deposits, the amount deposited in the past year, and
the amount of deposits withdrawn, the amount and
rate of dividends, the balance of profit and loss, the
amount of expenses for the year, the amount of interest
due and unpaid, the amount loaned on real estate, the
amount loaned on stocks and other personal estate, the
amount loaned on notes not secured, the amount invested
in real estate and the locality thereof, and the amount
invested in stocks, bonds, or other personal estate, specifying the name and quantity thereof; and if the treasurer,
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CONNEOTICUT: SUPERVISION AND REPORTS,
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secretary or clerk of any Savings Bank or Savings Society
shall neglect or refuse to make such statement as aforesaid, he shall forfeit and pay to the treasurer of the State
a sum not less than ten nor more than one hundred dollars,
according to the nature and circumstances of the case."
I have no means of knowing how fully this requirement was complied with, as the returns, if made, were
not published. I have a conviction that they were
generally made, and filed without notice or any action
thereon. I found in the office of the secretary of state,
at Hartford, the original ~eturns for the years 1848,
184-9 and 1851. The returns for 1850 could not be
found, nor for previous nor subsequent years. Yet it
is very possible that they are somewhere in his office,
and will be brought to light when, upon the completion of the new State house, now in progress, the
removal of his office to more commodious quarters
shall afford opportunity for filing, arranging and
depositing such documents in proper order and accessible place, which, in his present crowded and overflowing apartments, is simply impossible. Every
facility for the prosecution of my search, which his
office afforded, was freely extended to me; and for the
interest manifested and the assistance rendered by the
aJiaches of the office, I desire to express my grateful
acknowledgments.
The report of the bank commissioners for 1847 I
have been unable to find among any of the published
documents of that State ; but the report of these
officers, made in 1855, refers to it, and gives the number of depositors and the amount on deposit, as stated
in that report-the former being 22,663, and the latter
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HISTORY OF SAVINGS BANKS.
$3,221,591. It is only in this way that I have been
able to give, by even quasi authority, these items for
that year. The corresponding items for 1848, 1849
and 1851 were obtained, as above stated, by copying
from the original returns of Savings Banks, made to
the general assembly in those years.
Finding no returns for 1850, I was compelled to make
an estimate from the best data I could procure. These
I found in the report of the comptroller of public accounts, who in his report in 1852, remarks that the
deposits of Savings Banks reported to the legislature
of 1851 was very nearly $4,500,000. As the report.s
made for April 1, 1851, show a deposit of nearly
$5,500,000, I infer that the report to which he alludes
must be that showing the condition of Savings Banks
in 1850.
That he was not referring to the returns for 1851, is
evident from the fact that he estimates these, not yet
returned, at $5,000,000, which, as will be seen, was
nearly half a million short of the true amount.
On the strength of that statement of the comptroller
of public accounts, I estimate the deposits in 1850 at
$4,450,000, which besides being in accord with his
statement, corresponds with a rational presumption
founded upon the rate of growth in former and in subsequent years.
For the years 1852 and 1853, I found no returns
from Savings Banks, but the report of the comptroller
of public accounts gives the amount of deposits on the
1st of July in each of these years, as returned for taxation, and I have used the figures as given by him,
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CONNECTICUT: SUPERVISION AND REPORTS.
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though I am not sure whether these represent the total
deposits or only those in excess of $250. I am inclined
io believe, from the correspondence in the aggregates,
with what might be presumed to be the rational increase from year to year, that they represent the entire
deposits. In the first of these years, however (1852),
the deposits of the Waterbury Savings Bank are not
included, though the bank was certainly in operation,
having reported in 1851 and being reported by the
comptroller in 1853. Comparing the returns of theRe
two years, being respectively $1 l,544 and $31,084, I
estimate its deposits in l 85:? at $20,000, and have so
changed the aggregate of the comptroller's returns for
that ·year. The numher of open accounts for these
years are estimated at 40,000 in 1852, and 45,000 in
1853, the same being reported in 1851 at 37,608, and
on the 1st of January, 1854, at 50,950. My estimates
are, therefore, upon these data, clearly within the facts.
In this way I am enabled to fill the period from 1846
to 1854, for which there are no returns of Savings
Banks in the volumes of documents published in this
State. Indeed, it was not until after 1850 that there
was any uniformity or system pursued in printing and
publishing, still less in preserving legislative or other
documents.
In 1854, and tl1ereafter, the returns of Savings Banks
form a permanent feature in the documentary volumes
of the State, and from these the aggregates in our tables
are thereafter derived.
At the legislative session in May, 1848, the joint
committee on banks report that the deposits in Savings
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HISTORY OF SAVINGS BANKS.
Banks amount to nearly $4,000,000, the amount as will
be seen from our table. was $3,686,805, and they recommend that these institutions be placed under the
supervision of the bank commissioners. It would appear from this that they were not under such supervision in 1848, whatever may have been their status
in 1846.
As has been already stated, this recommendation
received legislative sanction in 1853, when the bank
commissioners were authorized to visit and examine
Savings Banks, and were required to report the results
to the general assembly.
The first published report concerning Savings Banks
after that already noted in 1846, was made for the
1st of January, after the passage of the above act.
This gives the year of incorporation, the number of
depositors, the amount deposited and withdrawn during the year, the amount due depositors, and the surplus of each institution in the State. From this it
appears that the amounts deposited and withdrawn
during 1853 were, respectively, $2,471,721 and $1,278,928, and the surplus reported $101,034; other items
will be found in the tables herewith.
The text of the commissioners' report, in the year
1855, contains nothing of interest. In 1856 they call
attention to the fact that some Savings Banks have
failed to comply with the law requiring one-half of
the deposits to be loaned upon the security of real
estate, and deprecate the im·estment of so large a proportion, as is the practice with some institutions, in
miscellaneous stocks and bonds.
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In 1857 the report shows that more than half the
deposits were loaned on mortgage, and the remainder
nearly equally divided between various bonds _and
stocks and loans on personal security, the latter pre·
ponderating. The commissioners again express their
disapproval of these investments, and especially oppose
the practice of loaning money out of the State in order
to realize seven per cent. The same topics form the
staple of successive reports, and more stringent legis
lation is recommended to correct the practices com
plained of, which resulted in the passage of the act, in
1858, regulating the loans and im·estments of Savings
Banks in accordance with the recommendations of the
commissioners. The commissioners also comment on
the careless and negligent methods in the transaction
of business which characterized certain institutions,
such as taking stock collaterals without having the
same transferred, and discounting notes without the
indorsement of the parties in whose favor or for whose
benefit they were discounted.
In 1859 the condition was reported to be much
improved, though the making of loans outside the
State and buying business paper at considerable discount was still prevalent. The commissioners express,
in this report, a doubt of the ability of Savings Banks
to continue paying to depositors so high a rate of dividends as six per cent, which appears at this time, and
for some time previous, to have been the prevailing
rate.
In 1860 the commissioners use the following language:
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IIIS'fORY OF SAVINGS DANKS.
"The laws upon our statute books rela.tin~ to Savings Banks are, in the opinion of the commissioners,
inadequate to the proper protection of their depositors.
Their hitherto good management has been secured
more by the character and inteQTity of the persons
who had them in charge than from the protection
which has been afforded them by our laws."
They also make various recommendations which in
their judgment will add to the security of depositors,
some of which were incorporated into subsequent
legislation. Reference is again made, by the commis•
sioners, to the dangers attending the effort to pay six
per cent 'to depositors, and a limitation to five and
one-half per cent recommended ; and the same subject
engages their attention the following year.
The act of 1862, giving to _Savings Banks a wider
range of investments, is referred to by the commissioners in their report, in 1863, as having proved salutary
in practice, a,nd they declare that no further legislation
is necessary. It should also.be noted, in this connection,
that the legislature of 1862 required from Savings Banks
much more full and complete returns than they had
made hitherto, and these were now to be made to the
bank commissioners, and not to the general assembly.
In these returns they were to present a complete balance-sheet of their transactions, which would of course
reveal, not only the amount of moneys received from
all sources, but what had been done with them in the
way of investments, losses and expenses. Any form
of Savings Bank reports that falls shorts of this is, in
so far as it falls short, defecth·e.
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CONNECTICUT: SUPERVISION AND REPORTS.
149
In 1864 the commissioners report an improvement
in the condition and workings of Savings Banks gen•
erally. Much of this was doubtless due to the facili•
ties which the time afforded for making safe and
profitable investments in the securities of the United
States government ; and the same conditions had
greatly stimulated the increase of deposits, which
now amounted to nearly $27,000,000.
A summary of the assets of Savings Banks is given
in the report, as follows :
Loans on real estate ....................... . $12,850,258
Loans on stocks and bonds ................. .
1,994,657
Loans on personal security ......... . ....... .
1,300,026
Invested in bank stocks ... •. ............. . ..
1,598,014
In vested in railroad stocks and bonds ........ .
868,715
In vested in United States government securities, 6,481,530
In vested in real estate and other .. .. .... .. .. .
1,666,500
126,765,700
Deposits reported at . ... . . ........ . ........ . $26, 954, 802
This would seem to show a deficiency, which may
arise from reporting assets at cost which, taken at their
market value, would produce a surplus.
In 1865 we gather from the commissioners' report
the following items of general interest: Of the 48
institutions reporting, one paid dividends at the rate
of six and one-half per cent; 20, of six per cent; nine
of five and one-half per cent; and 18, of five per cent.
The amount of taxes paid to the State was $178,310.77,
and to the United States $65,734.37, making a total in
taxes of $244,045.14, being abont eight-tenths of one
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HISTORY OF SA VINOS BANKS.
per cent on their deposits. With such dividends and
such a burden of taxation, it is not surprising that there
should be a deficiency in the assets, at cost, to meet the
liabilities. This burden of taxation does not escape
the notice of the commissioners, who recommend a
change in the system whereby large depositors may be
made subject to local taxation, like the owners of other
personal property, and small depositors be exempted
altogether.
The report made in 1866 of the operations in 1865,
comments upon the very considerable decrease in the
deposits, amounting to nearly $2,000,000, and accounts
for it upon the ground of the favorable opportunity for
investing in government securities commanding a higher
profit than Savings Bank deposits. But this cause had
been equally operative during the two or three years
previous, while the deposits had been steadily increasing. A more rational explanation of this decrease,
which was by no means confined to the State ·of Connecticut, is to be found ' in the fact of the return to
their homes of thousands of soldiers, who, before leaving for the war, had deposited their bounty money in
the Savings Banks, and now withdrew it to use in business or for other purposes. Very many of them,
besides their bounty money, managed to put by a part
of their wages, and on their return had a very considerable capital with which to commence business. In
this year, the duties of commissioner were, at the June
session, devolved upon a single officer, and were so performed down to and during the remaining period cov•
ered by this history.
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CONNECTICUT: SUPERVISION AND REPORTS.
151
The investments · of Savings Banks then stood as
follows:
Loans on real est.ate•. .. ... . .. .. ......... . ... $11, 491, 197
"
" stocks and bonds. . . . . . . . . . . . . . . . . . .
1,470,786
"
" personal securities.. . .. ..... .... . . . .
1,281,456
Invested in bank stocks ... . .. . ... . . . ....... .
2,041,519
784,973
"
" railroad stocks and bonds ........ .
8,194,220
"
" United States bonds. .. .. .. ...... .
194,239
"
" real estate. . . . . . . . . . . . . . . . . . . . . .
Deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$25,458,390
27, 319, 013
Apparent deficiency . . . . . . . . . . . . . . . . . . . .
$1, 860, 623
United St.ates tax paid. . . . . . . . . . . . . . . . . . . . . .
St.ate t.ax paid.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
t153, 436
192, 128
Total •..... . .. ... : . . . . . . . . . . . . . . . . . . . .
J345, 564
-----
In 1867 the commissioner reports that several Savings Banks pay seven per cent dividends, and recommends that they be restricted by law to six per cent.
The loans on real estate, otherwise mortgages, had risen
to over $13,000,000, and the investments in United
States stocks to over $9,000,000.
In the following year these had become, mortgages,
116,787,715, and Unitt>d States bonds, 110,191,713.
The commissioner recommends that a surplus of five
per cent be authorized, and that the commissioner have
power to make such discretionary order as he may
deem expedient where he finds the business of any
Savings Bank conducted in an illegal or unsafe manner. This seems to have been suggested by a similar
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HISTORY OF SAVINGS BANKS.
recommendation in the New York report of the previous year. . These recommendations were favorably
considered by the legislature, and laws to give effect
to the same were enacted. Another recommendation
made by the commissioner, was favorably considered
by the legislature in the enactment of a law requiring
the trustees of each Savings Bank annually to appoint
not less than two auditors, not trustees, to examine the
books, accounts and securities, and make a sworn state•
ment of the condition of the institution, in January of
each year, one copy to be forwarded to the bank commissioner and one to be placed on file in the bank
examined.
In 1869 the loans on real estate had increased to
$21,031,619, or more than one-half of the assets, and the
investment in United States bonds amounted to $10,585,029. The amount of State tax paid was ~340,332,
and to the United States government $61,516.
In 1870 the loans on real estate had increased to
$26,081,162, and there was a small reduction in the
amount of government honds. The amount of taxf's
paid to the State was $312,000, and to the government, $73,706.
Attention is called, in the report of 1871, to the
evils arising from granting special privileges to certain
Savings Banks, in their charters, and uniformity is
recommendeJ. From this it appears that the disposition of managers of Savings Banks, and the pliancy
or negligence of legislators, were very much the same
in Connecticut as in other States. V aiious infractions
of the law are commented upon, and more stringent
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CONNECTICUT : SUPERVISION AND REPORTS.
153
penalties recommended. A limitation of dividends to
six per cent is again urged, and that the surplus allowed
be increased to · ten per cent. This report contains a
summary of the condition of the Savings Banks in
New England at the close of 1869, except in the State
or Vermont, in which Savings Banks never attained a
high degree of efficiency. This summary we will
reproduce here, as follows:
Massachusetts .. . • •.• . .. ....... •.
Rhode Island .. • •• •• •. . . . .... ... .
.Maine ...• ...... • . . .. . . . . . .. . . . ..
New Hampshire . •. •....... . . ... .
Connecticut , ...• . ... ... . . ... . .. .
Add Vermont, as derived for this
History .... .. . ... . . . . . .. . . . .
Total . . .. . .. . . ... . . . .. . . . • · •
Number
of banks.
Number of
depositors.
Amount of
deposits.
131
25
36
45
58
431 ,769
67.238
39,527
71,536
165,692
f11:z , 119,016
295
775,762
$216,340,751
II
11,000
2,740,278
Jo6
786,762
$219,081,029
:z7,o67,072
10,490,368
18,759,461
47,904,834
The report in 1872 attributes the rapid increase of
deposits to the disregard of the law limiting the
amount receivable from one person, and discountenances the deposit of large sums. The commissioner
fails to give any data for his conclusions, and the
increase in the aggregate of deposits does not of necessity establish any infraction of the law, which, by permitting deposits of $400 from any depositor in one
year, would allow of a much greater increase than
that made. In this year, as we have elsewhere noted,
tlie amount receivable from one depositor was increased
to $1,000. · It appears from the report, also, that the
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HISTORY OF SAVINGS BANKS.
practice of disrounting what was known as "one-name
paper" was not wholly discontinued.
In 1873 we find a somewhat interesting
of
the progress of Savings Banks in the State, from which
it appears that the whole number of depositors since
the organization of the earliest Savings Bank in the
State, down to first January, 1873, was 541,887, or
more than the entire population of the State in 1870.
It is much to be regretted that we could not have also
a statement of the total deposits and of the interest
credited since the first Savings Bank was organized.
In 1872 there was deposited, including interest, $21,864,553, and withdrawn $15,979,628. Sixty per cent
of the deposits was loaned on real estate, amounting
to $43,174,000. The State tax paid in 1872 was
$448,567, and to the United States $173,912.
The report opposes the practice of investing in railroad bonds as being against the perfect security of
depositors, which should be the first consideration.
It is also stated that, since the repeal of the usury
laws, some Savings Banks are charging eight per cent
for loans on real estate, and the practice is strongly
condemned.
The failure of the Staffordville Savings Bank is
noted, as the necessary consequence of investments
and loans - railroad and personal securities - not
authorized by law.
resume
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OONNEOTICUT: STATISTICS, ETC.
CHAPTER XIII.
STATISTICS OF GROWTH AND PROGRESS.
The following statements embrace all the statistics
of growth and progress which 1 have received from Sav.
ings Banks in answer to my inquiries for information
thereon. It will be found that these are in many cases
incomplete, the amount deposited and the total amount
of dividends credited not being included. As there is
no source of information from which these facts can be
derived, outside of the institutions themselves, the record is as nearly complete as it could be made. I regret
that it covers the transactions of so few institutions in
the State, and that concerning so many of these it is
defective in the respects indicated. Perhaps in some
future edition of this work it may be practicable to
make good the deficiencies herein acknowledged and
apparent. We will at least indulge such hope.
STATISTICS FURNISHED BY SAVINGS BANKS.
SocIETY
FOR
SAvmos,
HARTFORD.
Statistic8 Jan'Uary 1, 1874.
Date.of first deposit, June 14, 1819.
90, 468
Whole number of accounts opened. . . . . . . . . . . . .
66, 619
"
"
"
"
closed . . . . . . . . . . . . .
Number of open accounts..... . ........... . . ..
23,849
Amount on deposit. . . . . . . . . . . . . . . . . . . . . . . . . . 17, 135, 608
Whole amount deposited, and of dividends, not given.
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HISTORY OF SAVINGS BANKS.
WILLIMANTIC
SA VINOS
INSTITUTE.
Statistics January 1, 1874.
Date of first deposit, June 28, 1842.
Whole number of accounts opened...............
7,398
"
"
"
"
closed. . . . . . . . . . . . . . . .
4, 633
Number of open accounts.. . ............ ........
2,765
Amount on deposit .......•. : .... .... .....•.... 1753, 032
Whole amount deposited, and of dividends, not given.
The treasurer, H. F. Royce, Esq., says the institution
has never failed to make regular semi-annual dividends,
which is not, however, an exceptional experience, and
that it has always paid depositors on demand without
notice. It did this even during the panic of 1873!
when over one-eighth of its deposits were withdrawn,
nearly all of which was returned within the next three
months. It claims a surplus of nearly ten per cent,
seven and three-tenths, which is unusually large in
that State.
DEEP RIVER SAVINGS BANK.
StatutiCIJ Janu.ary 1, 1874.
Date of first deposit, July 29, 1851.
Whole number of accounts opened.... . . . . . . . . . .
2, 551
1, 500
"
"
"
"
closed. . .. . . . . . . . . . . . .
1,051
Number of open accounts..... ..... . ... ........
Amount deposited, including dividends.. . . . . . . . . 1749, 487
Amount withdrawn.. . . . . . . . . . . . . . . . . . . . . . . . . . . 446, 704
Amount on deposit.... .. ...... . .. ..... ........ 302, 783
Amount of dividends credited . .................. 154,546
The foregoing was furnished by the treasurer, R.
P. Spencer, Esq.
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CONNECTICUT: STATISTICS, ETC.
GROTON SAVINGS BANK, MYSTIC RIVER.
Statistics January 1, 1874.
Date of first deposit, July 14, 1854.
3,750
Whole nnmber of accounts opened .... . . ...... . .
2,275
"
"
"
"
closed ... . ... . . .. ... .
1,475
Number of open accounts . •.•.. . ......... . .....
Amount on deposit .. .... .. . . . .... . . . .. . ...... . $562,466
Amonnt of dividends credited . . . . . .. .. . ........ . 311,721
Whole amount deposited not given.
CONNECTICUT SA VIN GS BANK, NEW HAVEN.
St,atUJtiC8 January 1, 1874.
Date of first deposit, July 8, 1857.
Whole number of accounts opened .. •... .. about
20,000
15,344
"
"
"
"
closed . . . . . . . . . "
Number of open acconnts.... . ... . . . .. ..... . . .
4,656
An1ount on deposit .... ... . ... . ....•...... . . . $2,045,430
The above are all the items furnished.
w ESTPORT SA VINOS
BANK.
StatistiC8 January 1, 1874.
Date of first deposit, September 1, 1860.
Whole number of accounts opened .. . • .. .. . ....
"
"
"
"
closed . , ..... ..•• • . .
Number of open accounts ...••...•.•.... . ....•
Amount deposited, including dividends . . ...... .
Amount withdrawn . . . . . . . . . . . .•. . .. . . .. . . ..
Amount on deposit .. . . .... .. .... • .. . . . .... . ..
773
416
357
$210,001
127,943
82,058
The amount of dividends credited is not given; but,
on so moderate a sum deposited in thirteen years, these
must be small.
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HISTORY OF SAVINGS BANKS.
MEOH.A.NIOS' SAVINOS BANK, HARTFORD.
St,ati.8tiC8 January 1, 1874.
Date of first deposit, January 4, 1862.
5,198
Whole nnmber of accounts opened .. . . . .. ... . .
2,722
"
"
"
"
closed ..... .... ... .
Number of open accounts. . ......•...•........
2,476
Amount deposited, including dividends . ..... . . $2,384,457
Amount withdrawn ·..... . . .. .. . ..... . . . . ... . 1,416,015
Amonnt on deposit . . ... . ..•........ . ... . ...
968,442
Amount of dividends . .. ....... . .. . ... .. . ... .
276,797
SA VINOS BANK OF NEW BRITAIN.
St,atistws JanUO!rJl 1, 187-l.
Date of first deposit, August 26, 1862.
Whole nnmber of accounts opened . ......•.. . .
4-, 783
2,528
"
"
"
"
closed . .. .. . . .. • . . .
2,255
Number of open acconnts . . .. ..... ... .. . ... . .
Amount deposited, including dividends . ... . .. . $1, 751, 839
Amonnt withdrawn . • . • ...•. .. .•......• • ... . 1, 141, 028
(HO, 811
Amount on deposit . • ••.••.•. . .••..•.........
159,027
Amount of dividends credited . . .• . . . ....•....
The treasurer, S. Rockwell, Esq., who furn_ishes the
data for the above, deprecates the "tinkering" of the
Savings Bank laws by the legislature, from year to
year, with little knowledge of their character, condition or needs, as calculated to create distrust of their
soundness in the minds of depositors. He favors the
fostering care of the State through intelligent and
well-considered legislation, guarding against abuses,
but not embarrassing by onerous requirements and
restrictions that do not conduce to security.
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CONNECTICUT : STATISTICS, ETC.
DlllE
SAVINGS
BANK
159
OF NORWICH.
8tatutic8 Ja1n111M"!J l, 1874.
Date of first deposit, September 27, 1869. ·
Whole number of accounts opened (new) ..... .
5,893
1,315
"
"
"
"
closed. . . . . . . . . . . . .
Number of open accounts .................. ..
4,578
Amount deposited, including dividends ....... . 11, 108, 500
Amount withdrawn ....•....................
358,294
Amount on deposit ......................... .
750,206
Dividends credited ......................... .
78,534
Mooous
SAVINGS BANK.
Stati8tws January; 1, 1874.
Date of first deposit, September 3, 1870.
Whole number of accounts opened.. . . . . . . . . . . . . .
498
"
"
"
"
closed. . . . . . . . . . . . . . .
76
Number of open accounts. . . . . . . . . . . . . . . . . . . . . .
422
Amount deposited, including dividends . . . . . . . . . . $85, 433
Amount withdrawn. . . . . . . . . . . . . . . • . . . . . . . . . . .
27, 871
Amount on deposit. . . . . . . . • . . . . . . . . . . . . . . . . . . .
57, 562
Amount of dividends credited . . . . . . . . . . . . . . . . . .
5, 749
The institution suffered a loss by robbery in April
last, but passed a dividend and went on.
DIME SAVINGS BANK OF HARTFORD.
Stati8tws January; 1, 1g74,
Date of first deposit, October 1, 1870.
Whole number of accounts opened ............ .
10,268
"
"
"
"
closed . . . . . . . . . . . . . .
2,683
Number of open accounts.................... .
7,585
Amount deposited, including dividends ....... . $1,323,472
Amount withdrawn ........................ .
823,846
Amount on deposit ......................... .
499,626
Amount of dividends ...................... .
44,398
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IIISTO&Y Olt SA VIN GS B,.uiKS.
wINDSO&
LOCKS SA VINOS BANK.
&atistics Ja,nuary 1, 1874.
Date of first deposit, August 15, 1871.
411
Whole number of accounts opened...............
"
"
"
"
closed. . . . . . . . . . . . . . . .
106
Number of open accounts ..................... .
305
Amount deposited, including dividends . . . ... .. . $83,344
42,166
Amount withdrawn ...•...• ......... . ..... .. . .
41,178
Amount on deposit ........................... .
Amount of dividends credited ................. .
3,990
CROMWELL DIME SAVINGS BANK.
Statistics January 1, 1874.
Date of first deposit, October 2, 1871.
356
Whole number of accounts opened ........ .
117
"
"
"
"
closed . . . . . . . . . . • . . . .
239
N um Ler of open accounts ...................... .
Amount deposited, including dividends .......... . $116,471
73,654
Amount withdrawn ...... ... ... . ......... ... . .
42,817
Amount on deposit .... . ...................... .
5,061
Amount of dividends credited ..... . .... ..... .
wOODBURY SA VINOS BANK.
Statistics January 1, 1874.
Date of first deposit, July l 1, 1872.
315
Whole number of accounts opened............... .
29
"
"
"
"
closed ...... .......... .
286
Number of open accounts •..•.................. ;
Amount deposited, including dividenJs ........... . $32,572
4,114
Amount withdrawn .•.......•...................
Amount on deposit .•............ . .... . ......... 28,458
!\mount of dividends credited.. . . . . ....... .. .. .'.
1,201
.,
I
'
\
I
I
I
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CONNJl::cTICUT: STA'l'ISTIC81 ETC.
16 J
STAFFORD SAVINOS BANK.
Statutic8 January 1, 1874.
Date of first deposit, - - - - . , 1872.
Whole number of accou11ts opened . ... . . . . . . . . . .
549
''
closed. . • • . . . . . . . . . . .
55
"
"
"
Number of open accounts......... . ............
494
Amount deposited, including dividends.. . . . . . . . . . $167, 498
Amount withdrawn . . . • . • • . . . . . . . . . . . . . . . . . . .
23, 093
Amount on deposit.. .. ........................ 144,405
Amount of dividends credited.. . . . . . . . . . . . . . . . . .
3, 725
This young and small institution makes three and
one-half per cent semi-annual dividends.
GENERAL STATISTICS OF GROWTH AND
PROGRESS.
The growth of Savings Banks in the State of Connecticut will be seen from the following tables, made
up, so far as the material of the reports would admit,
after the plan of those showing the growth of the system in Massachusetts. The percentage of increase in
accounts and deposits for each year is not sought to be
given here, as there is no material significance in these
minute expressions of change, and the percentage in
periods of five years gives a much more clear and satisfactory view of the growth of this interest than the
same for each year. This will be apparent upon referring to the corresponding table for the State of Massachusetts, ante, pp. 114, 115, where the yearly percentage of growth is given.
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HISTORY OF SA VINOS BANKS,
In the following table is exhibited a comparison
between the conditioDB of the institutions first reporting in Connecticut in 1846, and of the same institutions as reported on the 1st of January, 187 4, also a
comparison of the amount on deposit at the former
period and the amount deposited during the year 1873,
in the same institutions.
CONDITION AP1t. 1, 1!46.
COJ<DmON ]Alf, I, 1874-
Open
Open
Amount deposited ill
NAME OF
INSTITUTION.
acc'ts.
Bridgeport....
Middletown ..•
New Haven...
Norwich ......
New London..
Plainfield , ....
Tolland ...... .
Sav. So. Hart..
Willimantic ...
Amount due
depositors.
761
3.478
2,294
2,448
1,246
125
559
7,898
215
$125,791
548,3o8
403,238
357,7o8
240,779
18,610
52,437
976,963
22,128
9 Institutions. 19,024
$2,745,965
acc'ts.
Amount due
depositors.
7,013
8,972
12,000
12,744
5,954
$2,86o,240
5,502,074
3,757,983
7,320,524
2,868,520
$629,914
1,427,936
1,049,001
1,205,541
46o,239
284,313
7,135,6o8
753,032
50, 581
1,389,6o6
220,663
$30,482,294
$6,433,481
closed
766
23,849
2,765
74,o63
1873.
.......... ...... ..
Our next table presents a comparison of the investments of Savings Banks in 1846 and in 1873. The
percentage of the different classes of securities preserves a remarkable uniformity. The same is true of
the surplus, while the rate of dividends exhibits a
material increase, corresponding with that in other
States:
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OONNEOTIOUT : STATISTICS, ETO.
Arau., 1846.
JANUARY, 1874-
INVBSTHBNTS.
Amo1111t.
Bonds and mortgages ... • ••
Public funds, viz:
U.S. bonds .•...•.. . •....
State bonds..........••••
City, county and town .•.
Bank and railroad stocks
and bonds .•.•.••••••....
Real estate .••.•...........
Loans on bank and other
stocks ..................
Loans on personal security..
Cash on tiand ..•.•...••...
Miscellaneous .••.•........
Surplus ...••••••••........
Dividends .•.•....• ·........
.2,203,046
45,175
13,000
3,000
29,175
Per
ceot.
AmOWlt.
77.7 '47,226,893
Per
cent.
63
14.7
1.6
10,857,519
4,039,564
171,112
7,000
6
0.2
4,877,370
519,840
0.7
69,405
231,434
78,724
11,627
71,467
120,915
2.4
8.2
2.8
0.4
3
4.4
4,o61,936
4,534,881
1,403,023
1¢.117
2,756,767
4.~02,649
5.5
6
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5.9
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.......... .....
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.... *6,817,955 .....
6.6
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TA.BLE exl,i'!Jih"ng tile number, contfih"on and progress of Savings .Banks in Connecticut from April, 1846, lo
January 1, 1874.
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GAIN IN ACCOUNTS IN GAIN IN Duos,n IN
P1:a100s ors YKARS. PHIODS OF 5 YKARS.
DAT&
No.of
banks.
Open
IICCOUDts.
Galnlno~
accoun
Duo to
depositors.
Gain In
dopolits.
AmounL
Per
cenL
AmounL
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cent
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April, 1846 •..•••.•.•.•••
0
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1847
1848
1849
1850
..
1851
July, 1852
..
1853
Jan'y, 1854
..
1855
..
1856
,
1857
1858
1859
186o
1861
1862
1863
1864
186~
..••••••••••••
.••••••••••.••
•..•.•••.•••••
.......•.•••••
..............
..............
...•.••••••.••
...••.....••••
.............
...•...•.••••.
..............
••••••••••••••
..............
..............
.•••••••••••••
..............
.•.•••..••••••
•..•. . ..••....
...•.•.••...•.
9
9
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15
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21
23
26
28
29
29
35
37
44
45
49
48
49
19,024
22,663
26,557
28,675
32,000
37,8o8
40,000
45,000
50,95o
54,589
56,000
61,392
48,027
66,709
75,792
84,614
88,373
103,727
116,681
121,682
........
3,639
3,894
2,118
3,~
5,
2,192
5,000
5,950
3,639
J,411
5,392
-li,365
I
,68:z
9,o83
8,822
3,759
15,354
12,954
5,001
$2,745,965
3,221,~J
3,686, S
3,962,68o
4,450,000
5,466,444
6,698,158
8,1i5,016
8,8 3,397
10,006,131
10,844,933
12,162,136
12,562,594
14,052,181
16,565,284
19,377,670
19,983,959
23;146,936
26,954,802
29,142,288
........
475,526
465,214
275,875
487,3:zo
1,016,444
1,231,714
1,436,8t
748,3 I
1,122,734
838,802
1,317,:zoi
400,4g
1,489,5
2f3,103
2, 12,386
606,287
3,162,979
3,807,886
2,187,486
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5,168,784
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12,902,621
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1866 •.......•....
1867 ..............
1868 ..............
1869 ........ ... •.•
1870 •.•.. .. . .•....
1871 ..•..... . ..• •.
1872 ..•. •.•. . •. ...
1873 . . •...........
1874 ..............
50
54
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107,572
127,004
138,846
149,919
165,692
177,887
18g,o87
201,742
204,741
-14,110 1-27,319,013
31,224,464
19.43:z
11,842
36,283,46o
41 ,803,681
11,073
15,773
47,904,834
12,195
55,297,705
I 1,200
62,717,814
12,655
68,523,397
2,999
70,769,407
1,823,275
3,905,451
5,058,996
5,520,221
6,101 ,153
7,392,871
7,420,109
5,8o5.583
2,246,010
33,238
28
14,848,879
S5
54.822
37
28,965,726
70
The decrease in accounts during 1857 and 1865, and in t he amount of deposits during the latter year, will be
noted That in the accounts in 1857 is inexplicable in view of the gain, though small, in the amount of deposits.
That there should be some decrease in the number of accounts, though a gain in the deposits, is not remarkable; but so large a difference as that found above-over 13,000-does not seem reasonable. Very possibly
the 48,027 is a misprint for 58;027, which would make the decrease 3,365 only. But the figures are as reported
for that year, and I have no data, except conjecture, for correcting them . The decrease in both accounts
and deposits, in 1865, is rational, and the causes are considered elsewhere.
The report for January 1, 1875, shows the following: Number of banks, 86; open accounts, 206,274; increase,
1,533; due depositors, $73,7.83,So:z; increase, $3,014,394; surplus, $2,992,219; increase, $235,452.
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166
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BISTOBY OF BAVINOS B.AND.
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FOURTH SECTION;
SA.VINOS BANKS IN THE STA.TE OF RHODE
ISLAND.
CHAPTER XIV.
INCEPTION AND COURSE OF LEGISLATION.
The first Savings Bank incorporated in the Stat.e of
Rhode Island was "The Savings Bank of Newport,"
in June, 1819, the charter of which will be found in
the appendix.
In October of that year the Providence Institution
for Savings was incorporated, the charter of which,
though less minute and elaborate, conferred substantially the same powers as the form.er.
The Bristol Institution for Savings was incorporated
also in the same year, with substantially the same provisions in its charter as the Providence, but appears
not to have organized under that charter. It was
re-incorporated in 1841. Thus the smallest State in
the Union had, in 1819, incorporated three Savings
Banks, while no other State, except Massachusetts, had
chartered more than one. The two institutions which
organized are in a flourishing condition at this time,
and have worthily fulfilled the expectations founded
upon them.
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BBODB ISLAND: OOUBSE OF LEGISLATION.
167
Their condition at the date o:£ their last annual statements, December 4, 18'13, was as follows:
SAVINOS BANK OF
NEWPOBT.
Rt11ourctJJ.
Mortgagee. . . . . • • • • . • . . . . . . . . .. . . . • • . . • • • . tl, 050, 117 79
St.ock investments........................
916, 940 00
lnveated in bonds................... . .... 9, 927, 890 00
Loaned on public .bonds. . . . . . . . . . . . . . . . . . .
79, 000 00
Cash on hand. . . • • . . . . . . • . • . . . . . • . • . • • • • .
38, 321 94
Banking house. . . . . . . • . . . . . . . • . . • . . . . . . . .
30, 000 00
Total resources.. . . • • . • • . • • • . • . . .. • • t3, 642, 269 66
.Liabilitua.
Due depositors.......•.•...••.........••• t3, 510, 758 76
131, 510 90
Profits (surplus)..........•••• ; . • . . . . . . . . .
Total liabilities.. . . . • • . • • • . . . . . . . . • . t3, 642, 269 66
Number of depositors, 4,897. Rate of last dividend, six
months, three and one-half per cent. A.verage rate of annual
dividends last three years, seven per cent.
PROVIDENCE INSTITUTION FOR SAVINGS.
Res<n.1,rces.
Mortgages......•........................ t3, 016, 916 90
Stock investments ..... : . . . . . . . . . . . . . . . . . .
333, 400 00
Invested in bonds. . . . . . . . . . . . . . . . . . . . . . . . 1, 553, 000 00
Loaned on personal security . . . . . . . . . . . . . . . 1, 390, 854 47
Loaned on collaterals.....................
537,300 00
Cash on hand. . • • . . . . . . . . . . . . . . . . . . . . . . . .
135, 804 89
Real estate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30, 000 00
Total . . ....... . .. . : . . . . . . . . . . . . . . . t6, 997, 275 56
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HISTORY OF SA VINOS BANKS.
Liabilitiea.
Due depositors. . . . . . . . . . . . . . . . . . . . . . . . . . . $6, 739, 579 06
Profits.................. . .... . ... . .. . . . .
257, 696 50
I
Total. . • • • .. .. .. .. . .. . . .. . . . .. .. .. $6, 997, 275 56
I
Number of depositors, 17,415. Rate of last dividend, six
months, three and one-half per cent. Average rate of annual
dividends, last three years, seven per cent.
No more Savings Banks were incorporated until
1828, when the Pawtucket Institution for Savings
was chartered, with powers substantially the same as
those conferred on the Providence Institution. The
institution, however, did not organize until 1836,
under a re-enactment of substantially the old form of
charter. The amount of deposits which it might in
the aggregate receive was limited in the act to
$100,000, which limitation was extended in 1846 to
$300,000. Subsequent legislation must have been
invoked to remove this restriction also, for in December, 1873, it held deposits amounting to more than
$2,000,000. Indeed, the restriction thus very commonly imposed in charters must have been aR commonly removed.
In 1832 the Warren Seamen's Friend Society was
incorporated with power to receive deposits, and the
surplus was to be devoted to the general and benevolent objects of that society. As might have been
anticipated, the institution did not succeed as a Savings Bank, for the reason, probably, that when people
put money in a bank they expect to derive some profit
therefrom, and most people like to select their own
objects of charity.
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RHODE ISLAND: COURSE OF LEGISLATION.
169
The Warwick Institution for Savings, and the Woonsocket were both incorporated in 1845.
FORM OF ORGANIZATION.
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 trustees, to whom the management of the
affairs of the institution was committed. In the case
of the Providence Institution the corporators were 126
in number, but seven of these constituted a quorum.
Such a form of organization doubtless has certain
advantages over that of a smaller number of corpora.
tors, who are themselves the board of trustees, and
directly control the management of the institution.
Among these advantages is the association of a
larger number of persons of character and influence,
having a responsible connection with the institution,
and being in a degree interested in its success and pros•
perity. The name, fame and credit of the institution
will thus be more widely extended than if limited by
the association therewith of a smaller number of names.
We can easily enough perceive other incidental advantages attending this form of organization, imch as
the ease ,vith which the responsible management can,
at each recurring anniversary meeting, be re-formed,
and discordant elements eliminated. We do not see
how the corporators could have any personal interest
to serve, incompatible with the interests of the institu. 22
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HISTORY OF SA.VINOS BANXS.
tion. Their power in connection with the direction
was exercised only in the election of the board of
trustees. The annual recurrence of this duty would
bring in review the character of the previous management, and result in a vote of confidence or lack of
confidence, according as the duties devolving upon the
board of trustees had been well or ill discharged,
which would naturally be indicated by their re-election
or the election of others in their places. In any event,
the fact that the management was thus liable to review
at each recurring annual meeting, could hardly fail to
exert a wholesome, restraining influence.
Under the form of organization which commits the
control and direction of affairs to the whole body of
corporators, instances are. not unfrequent, in which
ambitions, jealousies, and sometimes mere perversity
of disposition, have seriously impaired the effectiveness of administration which ought to prevail, and
which, but for these discordant elements, might prevail H in such cases there were an intelligent constituency, of character and influence, sufficiently numerous to remove all likelihood of being controlled by
interested motives, yet not so numerous as to destroy
all sense of personal responsibility, to whom the existence of such conditions could be made known, and
who might quietly bring to bear that powerful temedial agent in such cases, the silent vote, we can but
think many of the evils and annoyances that attend
the permanent form of corporate control, as at present
exercised in some States, would cease to exist, and,
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RHODE ISLAND : COURSE OF LEGISLATION,
171
when found interposing themselves, would easilyalmost unconsciously-be removed.
In these respects, therefore, if in no others, we think
.this form of organization superior to that which commits to the body of corporators the direction of affairs,
and invests each corporator with functions, for the
indiscreet exercise of which he can never be called to
account. What disadvantages such a system may
possess, the writer has no means of knowing from any
personal acquaintance with its practical workings.
INVESTMENTS.
It will be seen, from the provisions of the earliest
charters, that, while an effort was made to give legislative direction and limitation to the investments of
Savings Banks, or at least an indication of preference
concerning their character, by designating '' public
stocks, either of the United States, this State, or some
of the towns thereof," and also bank stock, as those
among which it should be the duty of the trustees to
invest, the practical force of this as a limitation was
quite broken and destroyed by the further mention of
" private securities, at the discretion of a standing
committee of the board," which practically left the ·
range of investments quite unlimited..
.
The various charters subsequently granted do not
appear to have varied materially, in this respect, from
the foregoing ; whence we may infer that the discretion conferred was so far wisely exercised as not to
invite criticism. The departures from the provisions
above set forth were more in the form of statement
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HISTORY OF SAVINGS BANKS.
than in any essential broadening or narrowing of the
powers conferred, as where the phraseology which we
have noted as common in other States was sometimes
adopted, of requiring the moneys deposited, "to be
used and improved to the best advantage."
While, therefore, the form of charters was somewhat
varied, there was not such difference in the powers
really conferred as to give to any one institution any
considerable advantage over others, and we find a very
considerable degree of uniformity in the classes of
investments reported by the different banks.
Not until 1858 was there any general law designed
to promote uniformity in respect to investments, and
to impose upon all Savings Bank alike, certain defined
limitations to their discretion. This was sought to be
effected by the following provisions of sections 66 and
57 of chapter 273, Laws of 1858 :
"SEc. 66. All institutions for savings may, and shall
hereafter, invest their receipts in such public stocks of
any State, or of the United States, or in any bank
stock, or in notes or bonds of any town or city, or
other public securities, as they- may deem safe and
secure ; or they may discount, m accordance with the
provisions of sections 24 and 25 of this act, the notes,
bonds or drafts of individuals or corporations, secured
by the public notes, by bonds or stocks aforesaid, or
by mortgage of real estate.
"SEc. 57. Not more than one-half its receipts
shall be invested in notes, bonds or drafts of individuals, or corporations, unless secured as above ; but such
reasonable amount as is customary, or may be deemed
proper, may be deposited in bank, payable on demand,
whether drawing mterest or not."
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RHODE ISLAND: COURSE OF LEGISLATION.
173
In one direction the foregoing extended the area of
investment to quite a large number of Savings Banks
which by their charters were prohibited from investing by not being permitted to invest in the public
securities of other States. As we have seen, all were
not thus limited, being permitted to exercise absolute
discretion as to the character of their investments,
under the elastic phrase " to be used and improved to
the best advantage." But by the foregoing the securities of any State were, in specific terms, authorized
for investment.
REPORTS AND SUPERVISION.
The earliest action of the Rhode Island legislature
looking in the direction of .making the trustees of Saving Banks 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 a return of
their condition on the first Monday in July following.
There were then seven institutions in operation, if we
include the Warren Seamen's Friend Society which
had a merely nominal existence, and was half bank
and half a charitable association. Of these seven institutions, all except the Bristol reported their condition
under the above-mentioned resolution ; and at the
October session of the general assembly the secretary
of State was directed to publish the same. These
reports being so few in number as not to greatly
encumber this history, are elsewhere given in detail.
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HISTORY OF S.A.VINGS BANKS.
In 1849 the action of the general assembly took the
more defined and permanent form of a legislative act,
requiring returns from these institutions of their condition on the fust Monday in October to be made
annually to the general assembly.
Such returns were to embrace the following particulars:
Amount of deposits.
Number of depositors.
Number whose deposits were under $100; between
$100 and $200 ; between $200 and $500; between
$500 and $1,000; and those of $1,000 and over.
Largest amount due to any depositor.
Amount invested in bonds and mortgages.
Amount invested in stocks, specifying the same, with
names of institutions ( or corporations) in which stocks
were held, with the respective amounts.
Amount loaned on personal security.
Amount of cash on hand.
Amount of profits on hand.
Amount and rate per cent of last dividend.
Average rate of dividends for the last three years.
Amount of reserved profits at time of last dividend.
Amount of deposits not liable to be claimed.
This last item is returned by only three out of the
37 institutions reporting in 1873, and these, of course,
return " none," just as, if called upon to return the
name of the depositor who would probably be fust to
withdraw money from the bank on the next day, they
would say "don't know I"
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RHODE ISLAND : OOURSE OF LEGISLATION.
175
These items have not been materially changed since
1849, except that, concerning the size of deposits, only
the number of those of $500 and under $1,000, and
those upwards of $1,000 are now required to be reported. In 1857, besides the amount which the treasurer might have a suspicion any depositor had generously though silently donated or devised to the
institution, he was required to return the names of
those whose deposits had remained unpaid for twenty
or more years, and in 1858 this term was reduced to
five years. Though I do not find that this last requirement has been repealed, it does not appear to be very
faith~y regarded, for we look in vain for any information of the kind in any of the published reports
from Savings Banks in this State: The subject of
"unclaimed deposits," and the principles properly gov•
erning the same, will be found fully discussed elsewhere; hence, further comment at this point is not
called for.
In 1856 these returns were required to be made to
the secretary of state, who was directed . to designate
some day between November_ 15 and December 15 as
the day for which the return was to be made; and he
was also directed to prepare and publish an abstract
of the returns. In 1857 the returns were directed to
be made to the bank commissioners, and in 1858 their
direction was again changed to the State auditor, to
whom they have since been and are now made.
It does not appear whether any official examination
of these institutions is in fact made, nor that the
auditor has any powers concerning them, except to
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HISTORY OF SA VINOS BANKS.
designate the day for which they shall make up their
returns, and, we must presume, incidentally some
power to compel compliance with the law. The bank
commissioners were, in 1857, authorized by law to visit
and examine Savings Banks, but to what extent the
power conferred was exercised, the public records do
not disclose.
The bank commissioners compiled the returns of
8avings Banks but once - in 1857 - and made but
brief comment concerning them, recommending only
that they be prohibited from making mortgage loans
upon property in other States than Rhode Island.
DIVIDENDS.
The prov1s10ns of law concerning dividends are
found only in such charters as contain reference to this
subject, there being no general law regulating the
matter. These may therefore be presumed to reflect,
in every instance the views of the corporators, rather
than any settled policy of legislation. It will be noticed that the rules and regulations of the Savings
Bank of Newport are incorporated into and made a
part of the charter. The same is true of the Providence Institution and of some others. In this way,
what in other States, particularly in New York, are a
part of the by-laws, and subject, of course, to revision
and alteration by the trustees, are here a part of the
fundamental law, and can be changed only by the legislature; for, though the act authorized· the corporation
to modify the by-laws, it is difficult to see how such
power could be exercised in such manner as to affect
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RHODE ISLAND: COURSE 01!' LEGISLATION,
177
any of the regulations embodied in the act of incorporation. The provisions which will be noted in the
charter under consideration, are substantially , those
that prevail in other institutions in the State, and, for
that matter, in most other States. The noticeable
features are that, in order to be entitled to a dividend,
moneys must be on deposit at the time that a dividend
is declared - in other words, moneys withdrawn between dividend periods are entitled to nothing for the
portion of time which they remained during such
periods - also~ that dividends shall be declared only
for full periods of three or six months.
The rate per cent of such dividends is commonly
left to the discretion of the trustees, and there seems
to be nothing to prevent this discretion being exercised
in paying a low rate of dividends regularly, with such
higher rate, from time to time, in the form of extra
dividends, as they may deem proper. Whether, under
the law, the trustees can so discriminate between
deposits of a given amount and those of a larger sum,
as to pay different rates upon such different sums,
admits of question; an immaterial question, however,
practically, as it would seem from the returns made,
that the rates are uniform on aJl sums. It is also evident that the rate is not uniform at different periods,
as the semi-annual dividends are frequently found to
be at a different rate from the average of 'three years.
The high rate of these dividends in late years is quite
remarkable, but one institution reporting an average
of less than seven per cent, and many of them as high
as eight per cent. Such rates show a wonderful suc23
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HISTORY OF SAVINGS BANKS.
cess, and are evidence, also, of strict economy in management ; perhaps, also, of something else !
An exception to the prevailing rule concerning the
. discretion of the trustees in regulating the rate of
dividends, will be noted in the charter of the Savings
Bank of Newport, where the rate is fixed at two and
one-half per cent, semi-annually, with extra dividends
once in three years. But it would seem as though all
these restrictions and limitations were repealed in
later years, as they no longer seem to control the
action of this corpor~tion.
LIMITATION OF AMOUNT OF DEPOSITS.
We have already noticed the effort made in many of
the charters to limit the aggregate amount of deposits
which institutions might receive, as $100,000, $400,0001
etc., and the futility of the effort as manifested by the
fact that the prescribed limit had long since been
reached and passed.
Limitations as to the amount which any person
might deposit in the aggregate, or within a certain
period of time, will be · found in various charters, but
·these do not appear to have been very effectual, as single
deposits above $60,000 are reported, and the .average to
each depositor in the State is exceptionally high, being
$500.59. We must presume, therefore, that this limitation, like that concerning the aggregate deposits of
any institution, has been abrogated. The exceptionally
high rate of dividends paid, doubtless has much·to do
with inducing large deposits, as seven per cflnt or even
more, with the privilege of withdrawing the principal
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RHODE ISLAND : COURSE OF LEGISLATION.
1'19
at any time, must be a strong temptation to capital in
large amounts. Some allowance must also be made
for the fact, that, no legal impediment being offered to
the deposit of large sums, there is less occasion, than
there would be otherwise, for a depositor to open a
large number of accounts for what is in fact a single
deposit, so that the number of accounts more truly rep•
resents the number of actual depositors, and the average
to each depositor is more truthfully stated than in those
States where the restriction upon deposits is evaded
by the devices we have mentioned.
WITHDRAW AL OF DEPOSITS.
The restrictions upon the withdrawal of deposits,
which will be noted in the 14th rule under the charter
of the Savings Bank of Newport, we must presume to
have been greatly modified in practice, and, probably,
also by an amendment to the charter. Such a provision is well to have in reserve, but as a binding obligation could not fail to be embarrassing to depositors to
a degree that would seriously impair the prosperity of
any institution enforcing it. A like restriction upon
the withdrawal of deposits was incorporated in other
charters, but we presume it to have been removed from
all. Thus the Providence Institution for Savings has
the same restriction in its original charter, but is not
governed by it now, and during the panic in 18'13 paid
its depositors as usual on demand without notice.
PROHIBITIONS.
The prohibition against loaning any of the moneys
of the institution to trustees is enforced in the most
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HIS'l'URY 01'' SA VINOS BANKS.
practical and salutary manner, by making all who even
by their presence and silence countenance such loan,
personally responsible for the same.
In at least one charter, loans are prohibited even to
corporators, but this does not seem to be the import of
the prohibition in charters generally. In some, or at
least one, even the trustees are not excluded from the
privilege of borrowing the moneys deposited, but this
is altogether exceptional
DEPOSITS OF MARRIED WOMEN AND MINORS.
The policy of protecting the deposits of females from
the claim of husbands, appears to have first found favor
in the State of Rhode Island, which in 1841, by an ·
amendment to the charter of the Providence -Institution for Savings, provided substantially as follows:
that "Every person making any deposit personally,
may withdraw the same and the interest thereon, notwithstanding such person be a married woman ; and
the receipt of such married woman shall be a sufficient
discharge of said corporation for the sums so withdrawn." The same principle was recognized in the
original charter of the East River Savings Institution
of New York, in 1848, and was supposed by the corporators of that institution to be the earliest legislative
sanction of such a policy, and I had conceded to that
institution the priority in the direction of such beneficence, until I chanced to find the above in the statutes
of Rhode Island. In 1850 a similar provision was
embraced in the charter of the W ake:field Institution
for Savings, and it was in the same year that the prin-
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RHODE ISLAND: COURSE OF LEGISLATION.
181
ciple was recognized by a general law in the State of
New York. It is now believed to be a common feature
of Savings Bank legislation in all the States. Similar
protection to the deposits of minors was extended by
law in New York as early as 1820, as elsewhere set
forth, but I do not find any thing of this nature in the
laws of Rhode Island pri,or to the above charter of the
Wakefield Institution, which places the deposits of
minors on the same footing, as regards protection, as
those of females. Since that time the provision has
become a common though not uniform feature of Savings Bank charters in this State.
No other distinguishing features have marked the
legislation of this State concerning Savings Banks, if
we except from such designation the taxation .of the
deposits of these institutions, which is fixed at twentyfive cents upon each $100 of such deposits and of
reserved profits.
So far as I have been able to discover, but a single
charter authorizes the accumulation of any surplus,
and this but three per cent ; though, as there is no
absolute requir~ment that all the profits shall be
divided among the depositors, the subject of dividends
being left to the discretion of the trustees, the power
to hold a portion of the profits in reserve to meet
contingencies may doubtless be fairly inferred. It is
evident the managers have so regarded their powers,
as the last annual report shows a surplus of nearly
four per cent.
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HISTORY OF SAVINGS BANKS.
CHAPTER XV.
STATISTICS OF GROWTH AND PROGRESS.
It is now in order to present such statistics as we
have been able to procure, illustrating the growth and
progress of Savings Banks in Rhode Island. Our
effort to procure details concerning each Savings
Bank have not been more successful here than in
other quarters; but such as have been furnished, in
reply to my inquiries, are here produced as a matter
of justice to those who have seconded my efforts, and
also in. the hope that they may furnish the basis from
which, in some future edition of this History, more
full and complete details may be made.
Replies to my inquiries were made by seven out of
the thirty-seven institutions in the State, and not all
of these were able or willing to give a statement of
the aggregate work accomplished, as shown by the
whole number of accounts opened and the total amount
of deposits. received. Of course, such fragmentary
details as I have received do not admit of tabulation
for the purpose of exhibiting aggregates or making
comparisons, and for these we must look to the more
full and connected, though imperfect, records compiled
from the annual statements.
The statistics given of the Providence Institution
for Savings were furnished by the treasurer, S. C.
Blodgett, Esq., at a visit made by me to that institution
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183
RHODE ISLAND : STATISTICS, ETO.
while in the city prosecuting my researches at the
capitol ; and for these, as for other valuable information furnished by that gentleman, I desire to express
my acknowledgments.
Columns of cents were used in making up totals,
though omitted from the table.
STATISTICS FURNISHED BY SAVINGS BANKS.
PROVIDENCE INSTI'fUTION FOR SA VINOS.
[Incorporated and supposed to have commenced business in 1819.)
TABLE exhi/,iti11g the gro·wth of tlte institution from 1846 lo 1869,
inclusive, and for the year 187 3-4.
YEAR.
1846
1847
1848
1849
1850
1851
1852
1853
1854
1855
1856
1857
1858
1859
186o
1861
1862
1863
1864
1865
1866
1867
1868
1869
1-874
•. ... ... . .... .. ..
..... . . . . •. . ... . .
•.. . .. •. . . . .. ....
•. . .... . . . . ..... .
..•.. ..• .. .. . . ...
... .. ....... .....
• . • . •.... . . ......
•. ... • .. •. ...... .
•.
•.. ..• .... . .. . . . .
. . • .. .... .. . .... .
• ..•. . .. ... . .....
.. .. •. ..• . . . .. ...
. ... .. .•. ... . . ...
•. • ..... . .• .. .. . .
.... .... ..... .
····· ... .. ...... .
• . .. .• •. ..•..• • • .
•... .. ....... .•• .
• .. . . . .. . .. . .. ...
.... .. .. .
.. . ... • •• .••.. ...
. ... . . . . .. .... . ..
. . ....... . .......
• . .. .. ... ... ... . .
•.. .. •••• . ... .. . .
.. .. ..
Number
of open
accounts.
Receipts from
depositors.•
Payments to
depositors.
3,714
4,,33
4,381
4,673
5.426
6,356
6,827
8,007
8.718
8,962
9,642
9,149
9,156
10,338
I 1,295
10,608
11,902
12,667
13,198
13,312
14,637
15,879
16,247
16, 551
18,992
$16o,394
202,316
193,537
211,743
284,611
345,859
347 ,o6o
398,168
450.347
420,370
439,290
495,481
356,2o6
518,410
556,770
393,988
478,565
594,621
743,074
787,531
1,o62,398
1,005,876
920,926
845,676
1,567,402
$123,774
I 56,555
179,o63
192,912
183,973
217,364
263,789
270,448
363,203
405-431
386,469
573,835
451,214
290,757
383,008
508,464
376,157
402,6o7
611,237
807,253
659,303
737,207
898,632
1,017,357
1,275,428
• Do
001
Amouot of
deposits.
$534.425
6o3,757
644, 176
692,011
822,223
993,728
1,127,007
1,312,822
1,473,307
1.562,768
1,738,822
1,695,849
1,758,728
2,085,059
2,372,303
2,373,163
2,658,976
2,971 ,486
3,248,305
3,420,783
4,083,177
4,001,421
4,918,188
5.017, 130
7,556,882
include di\'idends.
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184
HISTORY OF SA VINOS BANKS.
The statistics of growth prior to 1846, the treasurer
informs me, cannot be given, owing to a partial destruction of the records by fire. We have nothing
concerning the operations of the institution between
the years 1869 and 1874, except what might be com•
piled from the annual reports, which do not give the
receipts from, and payments to, depositors.
wOONSOCKET INSTITUTION FOB SAVINOS.
First deposit received August 23, 1845.
Number of accounts opened, to close of 1873 . . . •
Number of accounts closed ........ . .........•
Number of open accounts... . .... . ....... . ... .
Amount deposited, incJuding dividends, since
organization. . . . . . . . . • . • . . . . . . . . . . . . . . . . . .
Amount withdrawn . • . . . . . . . • • . . • • . . . • . . • • • •
Amount due depositors at close of 1873 . • • • . • • •
Amount of dividends.... . ......... .. ........
17,770
11,001
6,769
$8, 615, 459
5, 749, 911
2, 865, 548
1,431,217
The following table, furnished by the treasurer, L.
W. Ballou, Esq., exhibits the amount received from
depositors and the dividends credited in each year
since organization. The per cent of dividends being,
to 1849, five per cent; from 1850 to 1863, six per cent;
thereafter, seven per cent, until 1873, when it was
seven and one-half per cent. The columns of cents are
omitted, though used in making up the totals.
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RHODE ISLA.ND : STATISTICS, ETO.
YEAR.
Depoalta.
1845 . . . •• •
1846 . .. .• •
1847 .. . • •.
1848 . .....
1849 .. .. .•
1850 . . • • •
1851. . • •••
1852 • •... •
1853 ...•.•
1854 • •• •. .
1855 . .•...
1856 ... •. .
1857 . .. . . .
1858 . ..••.
1859 ... •..
t20,o66
32,515
31,730
19,3°3
21 ,962
3o,409
41,336
57,249
86,889
So,496
104,123
128,315
86,531
133,483
I 55,972
Dividends.
$286
1,651
1,649
2,793
3,035
3,831
4,956
6,223
9,247
11,194
14,315
17,832
17,867
19,796
24,919
PEOPLE'S SAVINOS
Deposits.
YKAR.
i86o .• .. .
Dividends.
$137,838
1o6,005
178,491
204,548
195,407
309,579
476,524
498,616
599,973
654,952
648,717
767,390
812,118
573,692
$29,212
28,944
33,038
36,996
50,295
54,257
72,381
89,846
102,140
118,697
134,704
156,279
J78,276
205,643
Total.. $7,184,242
$1,431,217
1861 . . .• .
1862 ... ..
1863 .....
1864 ... ..
1865 . .. ..
1866 . .. ..
1867 ... . .
1868 . . .. .
1869 . ....
1870 • . . . .
1871. ....
1872 . ....
1873 .. ...
BANK,
PROVIDENCE.
First deposit received December 1, 1851.
Open accounts at close of 1873. . . . . . . . . . . . . . .
6, 009
Amount deposited, including dividends, since
organization . . • . . • . • . . . . . . . . . . . . . . . . . . • . $11, 552, 086
Amount withdrawn since organization. . . . . • • • • 7, 553, 255
Amount due depositors at close of 1873.... • . • • 3, 998, 831
wICKFORD
SAVINOS
BANK.
Fint deposit received August 1, 1855.
Number of accounts opened since organization .. .
2,610
Number of. accounts closed since organization . . .
1,545
Number of open accounts at close of 1873.....••
1,065
Amount, including dividends, deposited ......• • $1,432,762
955,867
Amount withdrawn ....•. : ....••• . .... • .....
Amount due depositors at close of 1873 •... . ...
476,895
Amount of dividends credited . • ••. . ..... • . .. .
261,139
FRANKLIN SAVINOS BANK,
p AWTUCKET.
First deposit received June 3, 1857.
Number of accounts opened . . .. • .... .. .. . . . .
3,880
24-
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HISTORY 01'' SA VINOS BANKS.
Number of accounts closed..................
t, 602
Number of open accounts at close of 1873.....
2,278
Amount deposited, dividends included........ $2,298, 844
Amount withdrawn . . . . . . . . . . . . . . . . . . . . . .
854,481
Amount due depositors at close of 1§73.......
1,444,363
Amount of· dividends since organization ...... ·
442, 529
Average rate of dividends for the last three years, 8 per cent.
per annum.
p ASCOAG
SAVINGS
BANK.
First deposit received October 1, 1864.
Open accounts at close of 1873. . . . . . . . . . . . . . . .
Amount due depositors at close of 1873 . . . . . . . .
1, 011
$550, 354
The above is all that was furnished in reply to my
circular of inquiry, all of which, except the first item
of information, could be obtained from the annual
report of the auditor.
PRODUCERS' SAVINGS
BANK,
wOONSOCKET.
First deposit received June 26, 1868.
Number of accounts opened since organization,
Number of accounts closed since organization .. .
Number of open accounts at close of 1873 ... .
Amount due depositors at close of 1873 ...... .
Amount of dividends since organization ..... .
HOPKINTON SA VINGS
BANK,
703
236
467
$255,072
· 42,106
wYOMING.
First deposit received July 15, 1870.
Number of accounts opened since organization ..
Number of accounts closed since organization ..
Number of open accounts at close of 1873 ... .
Amount deposited, including dividends ...... .
Amount withdrawn ...........•............
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$217,997
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RHODE ISLAND: STATISTICS, EI'O,
Amount due depositors at close of 1873. • . . • . .
Amount of dividends since organization . . . . . .
212, 320
32,582
It seems hardly credible that but $5,677 should
have been withdrawn from a total deposit of $218,000
in three years and a half; but the amount deposited
and the amount remaining due, as given by the institution and stated above, will produce no other result.
GENERAL STATISTICS OF GROWTH AND PROGRESS.
Next in order we will present in detail the condition of the Savings Banks in this State on the first
Monday in July, 1848, as shown by their statements,
made for the first time on that day, pursuant to a resolution of the general assembly, as previously noted.
Retwrns maile by Saving.'J In.stitutwns in Rlwde ls'land
in 1848.
PROVIDENCE INSTITUTION FOR SAVINGS.
Number of depositors, 4,385.
Amount due depositors ..... . .. . .. ....... ... $640,011 08
Surplus • • • . . . • • • • . • • • . . . . . . . . . . . . . . . . . . . • 46, 440 39
$686,451 47
Res<Yl/h'ces.
Public funds (U.S. stocks) ..... . $34,600 00
Bank stock ...•..•. . ..• . ..• .. .. 190,050 00
50,000 00
Loans on railroad bonds . . . • . ..
Loans on mortgage, real estate ... 298,045 00
50,000 00
Loans to city of Providence . • ..•
20,000 00
Loans on personal security ...•.•
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lilSTORY OF SAVINGS BANKS.
Loans on personal security and collateral .. . .. . . . .... . ..•.. . ... 112,400 00
Loans to Butler Insane Hospital . .
14,000 00
17,356 47
Cash on hand . . ... .• ••. . . . ....
----1686,451 47
The difference of about $4,000 between the above
deposits and those for the same year found on page 183,
ante, is to be accounted for by supposing the statements to be made at different dates in the same year ;
the above being for July and the former for September.
WARWICK INSTITUTION FOR SAVINGS.
Number of depositors, 574.
Amount doe depositors . . . . • . . . . • . • . . . . . . . . • 1107, 524 36
Resources.
Bank stock . ........ . ..... . . . . . $27,000 00
Loans on real estate mortgage ... .
75,100 00
Loans on bank stock .... .. .... . .
1,000 00
Paid for premiums . • • •• ...•.. . •
1, 278 12
61 68
Paid for expenses ...••.•.• . . . .
Overdrawn on interest account to
65
pay dividend .... . .. . ....... .
3,083 91
Deposits in bank .......... . .••
107,524 36
SAVINGS BANK OF NEWPORT.
Number of depositors, 786.
Amount due depositors . . . .. . . . . . .... . . . . . .• 1108, 958 18
Surplus . . . . . . . . . . . . . . . . . . . • • . . . . . . . . • . . . .
1, 633 27
$110,591 45
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RHODE ISLAND: STATlSTICS, ETC.
Res011,rces.
Loans secured by mortgages . . . . . $26, 495 23
Notesofmanufacturingcompanies,
20,820 22
Bank stock (in eighteen banks)...
62,080 00
R. I. bridge stock. . . . . . . . • • • • . •
1, 196 00
- - - - - $110,591 45
PAWTUOKET INSTITUTION FOR SAVINGS.
N nmber of depositors, 767.
Amount due·depositors . . . . . . . . . . . . . . . . . . . • • $130, 828 67
Ru~ces.
Bonds and mortgages .... .•..• .
Bank stock .. • .••••.• • ... • • . ..•
$85,780 00
18,000 00
103,780 00
The above exhibits a deficiency for which I am
unable to account, as the institution, in .its report,
claims a surplus of over $2,000. The error must arise
from the inadvertent omission of some items of assets
by the institution, or from mistake by the printers in
setting the copy.
WooNsocKET INSTITUTION FOR SA VINOS.
Number of depositors, 443.
Amount due depositors . . • • • . • • • . . . • • • • • . . . . $66, 941 31
Surplus . . . • . . . . . . . . . . . . • . • • . . . . . . . • . . . . . .
852 54
Res011,rces.
Bank stock .... . . .... . .. .. .. .. . $53,016 00
Bonds and mortgages ...... .... .
Notes and bills . . ......... . ... •
Cash in bank .. . ... . . .. ....... .
$67,793 85
56,800 00
9,875 00
2,102 85
$67,793 85
WARREN SEAMEN'S
FRmNn SocIETY.
Four depositors, to whom is due .. ..•. . . ... ..
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HISTORY OF SA. VIN GS BANKS.
To the foregoing should be added the Bristol Institu•
tion for Savings, not reporting, from whose returns made the next year-we derive the following esti•
mates for 1848:
X umber of depositors, 150.
Amount due depositors . • • • • . . . . . . . • . . . . . . . .
$20, 000 00
Summary of the foregoing.
Number of
depositors.
NAME 01" INSTITUTION.
Bristol (estimated) .•••.................•..
Newport . ...........• .•.•.... •. .......•. .
Pawtucket .............•.................
Providence .........•.....•.......... •...
\.Varren .........•...•.....•..............
Warwick ..........•..••.••..•.••....••...
Woonsocket .... . .......••.•....•...•....
150
786
767
4,385
4
574
443
Total ............••....•..••.•.......
Amount due
depositors.
$20,CXX)
108,958
130,828
640,011
185
107.524
66,9.p
$1,074,447
For the purpose of comparison, we present the fol•
lowing summary of the condition of the same institu•
tions, as reported in 1873. The Wa1Ten Seamen's
'"'ociety, as its condition foreshadowed, closed soon
after its statement was made, in 1849.
Number of
depositors.
NAME OF INSTITUTION.
....
Bristol ..............................
Newport .................................
Pawtucket ...............................
Providence ........... ...................
\.Varwick .......................•..•.•....
Woonsocket .....
Total
···················· ···
............................ .. ..
Amount due
depositors.
1,033
4,879
3,866
17,415
2,523
6,615
$:?61,127
3,510,758
2,o63,972
6,739,579
1,36o,373
2,871,058
36,331
$16,8o6,867
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RHODE ISL.AND: STATISTICS, ETC.
Increase in 25 years : Depositors, five times ; depos•
its, nearly 16 times.
The returns ih this State do not state the amount
deposited during the year.
Comparing the investments of the two periods, we
make the following table, in which, of course, all the
Savings Banks reporti:pg at each period, respectively,
are represented. The increase in amount and per cent
of surplus, also in the amount of dividends and per
cent of the same on the whole amount of deposits, is
given.
INVESTMENTS.
Aggregate,
Aggre!!'ate,
1848.
1873.
Per cent, Per cent,
1848.
1873.
-Mortgages of real estate ... $552,220 $24,338,982
Bank and other corp'n st'ks, 300,146
2,576,333
Nat'l,State,andmun'pl b'ds,
84,6oo
6,266,774
R.R. and other corp 'n b'ds,
1,707,813
56,196
N otcs of cities, towns, etc .. ..... ...
365,500
Loans on personal security,
10,637,429
30,875
Loans on collaterals ..... . .
44,220
1,853,846
Cash on hand and in bank,
29,726
648,791
Real estate . ............ . ..
.. .
216,533
Su~lus . . ..•..••.. . .......
1,78o,430
23,436
Dividends ............... .
24,012
1,701,864
.....
50
27
7 1-2
5
. ....
3
4
2 1-2
.....
2 1-5
4 1-2
50
5 1-3
13
3 1-2
1-2
22
4
I
1·3
1-3
34;
7 1-5
The following table_ exhibits the growth of the system· from year to year, from the time of making public
record of the condition of Savings Banks to the close
of 1873. The labor involved in making up this record
can only be appreciated by any one who shall attempt
to duplicate it from the original records. He will
then find that there is not in the State library, nor in
the office of the secretary of state, nor, so far as I
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192
Hl~TORY OF SAVINGS BANKS.
could ascertain, in any other public or private library
at Providence, a complete set of the reports from
which this table is compiled.
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TABLE exhibiting IM number, rondiliun a11d progress (}/ Sa,·i11gs Bea11ks i11 Rhude Island /r"m 1848 lo 1874.
•
YEAR.
:O,.o. of
banks.
No. of open
accounts.
Increase
in ~cc'ts.
INCR&AS& IN
'
Amount due to Increase lo am't Depositors' Increase.
due depositors.
dtpositors.
Number.
-~
(It
0
cg
N.
~
~
C")
0
~
~
1848
1849
1850
1851
1852
1853
1854
1855
1856
1857
1858
1859
186o
1861
1862
1863
1864
1865
1866
1867
.... .. . .... .. .. . . . .
. ....• .. .. ... ..... ..
.. •.. . ....... ... . . ..
.............. ... . . .
.. ~ ........•......•.
. . .......... . . ... •..
... • ... •.. . . ........
..••.. • •. .... . .. ...
..•... .•. •.. ... . ....
.•• • . .... . .. ........
...... . ... • ... .... ..
... •• . ••. . . ..•... . ..
. ... . .... .. . ....... .
. .. : .. .. . .. .... •.•. .
.. .. . .. . . ......• . .•.
.... .... . . .. .• . ...••
. .......... ... .. ....
.. . . . . . . . .. .. .. ....
.................. . .
... ... ..... . •... .• . .
1868 ···· · ··· · · · · " " " "
7
8
.. ..
9
10
12
14
15
18
18
20
21
21
22
21
21
23
23
25
25
25
Ps•100s
Per
cent.
OP
F ava
YIIARS.
Due depositors.
Amount
of increase.
Per
cent.
~0
t:i
6,¢0
7,983
9.295
11,161
13,3¢
16,989
20,338
23,229
27,002
27,259
27,643
31,833
35,405
34,8o7
37,774
40,827
44,752
45,574
52,859
59,071
63,501
.. . .. .
1,023
1,312
1,866
2,235
3,593
3,349
2,891
3,773
257
384
4,190
3,572
-598
2,¢7
3.o53
3,925
822
7,285
7,212
4,430
$1,074,447
1,209,075
1,495,545
1,907,233
2,474,109
3,308,769
4,104,091
4,834,312
5,797,857
6,079,053
6,349,621
7,765,771
9,1 63,76o
9,282,879
9,56o,441
JI ,128,713
12,815,097
13,533,o62
17,751,713
21,413,647
24,408,635
....... ...
f134,628
286,470
411 ,688
566,876
834,66o
795,382
730,221
¢3,545
281,1¢
270,568
1,416, 150
1,397,889
119,119
277,562
1,568,272
1,686,384
717,¢5
4,218,651
3,661 ,934
2,994.988
. ... .. . .
. .. .... ... ...
. ..
t.'11
u!
5·
t:i
-
10,029
158
$2,234,322
2o8
10,654
63
3,040,852
92
13,184
48
4,779,092
75
22,6741
55
13,279,922
120
I
~
....
~
~
....
TABL E-( Conhnutd).
co
~
YEAR.
No . of
banks.
No. of open
accounts.
Increase
in acc' ts.
lNcausa
I
. . . .. . ... . ...... ...
..... .. ...... ... ...
.. . ... . ... .. .... . ...
. ..... .. .. ... .......
........ ........ ....
25
26
33 1
36
37
67,238
72,891
79,676
88,664
93, 124
3,737
4,553
6,785
8,988
4,46o
P11uoos
Amount due to Increase in a.m' l Depositors ' Increase.
depositors.
due depositors.
Number.
1869
1870
1871
1872
187 3
IK
$27,007,072
30,708,501
36,289,703
42,583,538
46,617,183
$2,658,437
3,641,429
5,581,202
6,294,835
4,033,645
Per
cent.
OF F'lva
Y&AJIS.
Due depositors.
Amount
of Increase.
Per
cent.
.
29,623
46
$22,208,548
ij
91
After 1848 the statemen ts, until 1855, were made up for October ; in 1856
and 1857, for Decemb er; from 1858
to 1867, for Novemb er, and thereafte r for Decemb er. It will be observed
never interrup ted, except that in 1861 there was a decrease of 598 in the that the progress of the system was
number of deposito rs.
0
cg:N.
~
~
C;
0
-
&
rv
I
Since the above table was prepared, the report
December, 1874, hu been received, u follows: Number of banks! 37_;
accoun~, 98,5311; Iner-, 5,415; amount duo depoillton,for'48,771,501
number of open
; Iner-, la,154,318; IUIJ)lua, 11,665,go,,. Two of the 37 naututlona
aro In proof liquidation .
CJ>
►
;J
¢1
CJ>
i=
FIFTH SECTION;
SAVINGS BANKS IN THE STATE OF NEW
HAMPSHIRE.
CHAPTER XVI.
INCEPTION AND HISTORY OF FIRST SAVINGS BANK.
The subject-matter of Savings Banks was considered in the legislature of New Hampshire as early as
1819, for, in the Senate Journal of that year, we find
the following record : "A bill entitled 'An act to incorporate the Portsmouth Provident Society ' was
brought up, read a second time, and on motion voted
that the further consideration of said bill be indefinitely postponed." This was probably the earliest
consideration given to Savings Banks in this State, but
fortunately it was not the latest; and in 1823 the effort
was successfully renewed, and the Portsmouth Savings
Bank incorporated.
The charter of this institution will be found in the
Appendix, where we have collected all the earlier
charters for the purpose of exhibiting the special features which characterized the inception of Savings
Banks in the several States.
HISTORICAL SKETCH OF THE PORTSMOUTH SAVINGS BANK.
The following extract from the report of the treasurer, J. F. Shores, Esq., made to the board of trustees
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196
HISTORY OF SA VINOS BANKS.
on the fiftieth anniversary of the institution, has been
kindly furnished by that officer for incorporation into
this History. The consi<leration of the subject of
chartering a Savings Bank, above referred to, doubtless had its inception in the movement spoken of in
the following extract as having originated in 1818,
culminating, as elsewhere set forth, in the charter of
the Portsmouth Savings Bank, in 1823.
&tract frorn tlw Trea.rsnrer' s Report, rruule tltis day
(Aug. 6, 1873), bdng the .fiftwtli anniver8ary of tlw
establisliment of the Bank.
" I cannot close this report of our doings for the past
year without some reference to the fact that we now
enter upon the second half century of our existence as
a Savings Bank.
"The first Savings Bank in this country was opened
in Phila<lelphia in 1816; the second in Boston in 1817;
the third in New York in 1819. The founders of the
latter, when they presente<l their petition to the New
York legislature, asked for an act of i11eorporation 'to
ameliorate the condition of the poor,' under the name
of 'The Society for the Prevention of Pauperism in
the City of New York.'*
"In 1818 -fifty-five years ago, and one year previous to the establishment of tlic New York Sa,·ings
Bank - a meeting of gentlemen interested in the
subject was helcl in this town, arnl an association was
formed for establishing a Provident Institution, as will
be seen from the original paper now hanging on the
wall of our room.
• Not strictly correct. The foun<lers applied un<ler the name of the "Society for the
Prc\·ention of Pauperism," etc. (an association already formed). for the incorporation of
a Sa\'ings Bank, and one of the recognized objects of such an institution was·• the amelioration of the condition of the poor/' and this was spcci6cally recognized by the legislature in the preamble to the act of incorporation, (See Appendix.)
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NEW IIA!'tlP::iHlRE: FIRST SA VING8 BANK.
197
"An act of incorporation was not obtained till June,
1823, when the Portsmouth Savings Bank was chartered 'for the purpose of enabling industrious persons
of all descriptions to invest such parts of their earnings as they can conveniently spare in a safe and
profitable manner.'
.
"The first meeting of the corporation was held July
23, 1823, at the office of the New Hmnpshire Fire and
Marine Insurance office (now the Athe11reum). There
were present, Jeremiah Mason, Enoch G. Parrott, Jas.
Rundlett, Nathan Parker, John McClintock, Jacob
Cutler, Ichabod Bartlett and John W. Foster. The
act of incorporation was accepted, and a committee
appointed to prepare a set of by-laws. The meetin~
adjourned to July 30, when the committee reporteu
and the by-laws were adopted. A final orgamzation
of the ·corporation was made August 7, 1823, by the
choice of Nathaniel A. Haven as president, Samuel
Lor<l as treasurer, and as trustees, Levi Woodbury,
Enoch G. Pan·ott, James Rundlett, Edward Cutts, John
Haven, Hunking Penhallow, Henry Ladd, Samuel
Lord, N. A. Haven, Jr., Jacob Cutler, Peyton R. Freeman, Alexander Ladd, John "\V. Foster, Ichabod Bartlett, Nathaniel B. March an~ Timothy Upham.
"A circular was then prepared and published, setting forth the objects of the hank and the good expected
to result from its operations, a copy of which now
ban~ on the wall of our room.
"1fhe bank was first kept, as the circular expresses
it, 'in the northerly chamber, over the New Hampshire
Bank; enter at the left hand door and go up stairs.'
The New Hampshire Bank then occupied tlds building. In 1824, on the establishment of the Piscataqua
Bank, the Savings Bank was removed to the corner of
State and Pleasant streets; in 1835, to the room for.
merly occupied by the United States Branch Bank
(now occupied by the New Hampshire National Bank);
then, in 1844, to our present location, which we held
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HIS'l'ORY OF SAVINOS BANKS.
in common, first with the Piscataq.ua Exchange Bank
and afterward with the First National, till 1869, when
the building was divided and this bank took the
northerly half and enlarged it to suit its business pur•
poses.
"The bank was opened for business on the 20th of
August, 18~3, and on that, day the following persons
made deposits:
No. 1. Rebecca Hardy ...................... . $16
2. Hezekiah and Hannah P. K i111 ball ...... . 65
3. Augustus Morrison ................... . 20
4. Isaac T. Frye . . ......... . .. ... ....... . 20
5. Synthia Langton .......... . .......... .
5
6. Elizabeth Walker ................... . . 240
7. Maria W alkcr . . . . . . . . . . . . . . . . . . . . .. . 240
8. Susan Parker Badger ................. . 10
9. Elizabeth Ann Badger ................ . 10
"Of these books, No. 6 is the only one now in existence, being tlie property of the North Parish, to whom
it was bequeathed by Miss Elizabeth Walker. The
ori~nal deposit was $240, which, in 1838, was reduce<!
to f188. During the fifty years the dividends on this
deposit have amounted to $1,191.71, of which there
has been withdrawn $871.49, leaving the present deposit $560.22.
"Nathaniel A. Haven was president eight years,
1823-3 l ; Henry Ladd was ~resident eight years,
1831-39; Jas. Rundlett was president one year, 1839-40;
Robert Rice was president four years, 1840-44; William M. Shackford was president 25 years, 1844-69;
"\Villiam Simes has been president since 1869.
"Samuel Lord was treasurer 46 years, from 1823 to
1869; James F. Shores has been treasurer since 1869.
"The bank started with the promise to pay five per
cent per annum, semi-annually; but a year's experience
taught them that the promise could not be fulfilled,
and in July, 1824, it was reduced to four per cent, and
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NEW HAMPSHIRE : FIRST SAVINGS BANK.
199
continued at that rate till January, 1871, and since
then it has been five per cent.
'' The extra dividends have been: In 1828, 13.90 per
cent; in 1833, eight per cent; in 1838, 17 per cent; in
1843, 10.50 per cent ; in 1848, 12.55 per cent ; in 1853,
14.38 per cent; in 1858, 12.50 per cent; in 1863, 11.50
per cent; in 1868, 20.30 per cent; in 1873, 9.67 per
cent; total, 130.30 per cent. The regular dividends
have amounted to 202¼ per cent.
During the first year the deposits amounted to ... $28,319 58
Of which there was withdrawn during the year . .
2, 101 28
The two dividends of the year amounted to . . . .
$26,218 30
471 94
Amount of deposits at close of first year. . . $26, 690 24
"To show the increase of the business of the bank,
I will give the figures of the first five years and of the
five years just closed :
At the close of the first five years there had
been deposited ...... . . . ... . .. . ..... . .. .
Regular dividends had been . . .. . . .... .. .. .
Extra dividend, fifth year .... . .......... .
$115,020 34
9,100 34
4,352 95
Withdrawals during the five years.. . .......
$128,473 63
42,893 49
Balance on <leposit . . . . . . • . . . • . . . . . . . •
-----$85, 580 14
Doring the five years just closed there has
been de~sited .. ... . ...... . . .. . .. ... . .. $1,116, 036 57
Regular dividends have been . . . . . . . . . . . . . .
341, 087 35
120,062 34
Extra dividend . . . . . . . . . . . . .. . . . . . . . . . . . .
Withdrawals during the five years . ... . . . ...
$1,577,186 26
919,391 02
Increase during the five years.. . . . . . . . .
$657, 795 24
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HISTORY OF SA VINOS BANKS.
During the fifty years there has been deposited ... . .... .. . . .. .. . . ...... .. . . .. . ... $4,905,374 36
Regular dividends have been . . . . . . . . . . . . . . 1, 122, Ob7 15
Extra dividends have been. . .. .. .... . . . ....
527, 128 47
The withdrawals have been . .... . . . .... . . . .
$6, 554, 589 :,8
4, 473, 216 51
Leaving on deposit ...... ... . . ........ $2,081,373 47
"But, to show more fully the workings of the bank
as a matter of profit to the individuals, and as giving
the financial history of the bank, and also as an illustration of the value of money placed at interest at a
low rate, I would cite the deposit of $20, made Dec.
17, 1823, four months after the bank went into operation:
After the extra of 1828 { it !'mo~nted ~o $ 26·79
.
bemg simple mterest at
it
~mo~nted ~o $34.59
{
"
" 1833 bemg simple interest at
1838 { it ~mo~nted ~o $47.95
"
bemg simple mterest at
{ it ~mo~nted ~o f63.08
"
" 1843 be111g simple mterest at
1848 { it ~mo~nted ~o $84.51
"
"
bemg simple mterest at
it
~mo~nted ~ $115.01
{
1853
"
bemg simple mterest at
{ it ~mot!nted t~ $154.13
" 1858 bemg simple mterest. at
{ it ~mo~nted ~ $205.11
" 1863 bemg simple mterest at
{ it ~mo~nted ~ $291.58
"
" 1868 bemg simple mterest at
{ it !'mo~nted ~o $392.29
"
" 1873 bemg simple mtereat at
8 per cent.
6
"
7-J
"
6¼
"
6f
"
"
7¼
"
"
"
61-i;
"
6-h "
8¼
"
6/r
"
"The regular and extra dividends amounting to 332.55
per cent, being an average at simple interest of 6.65
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NEW HAMPSHIRE: FIRST SA VINOS BA.NK.
201
per cent; yet, by the power of compounding, the
mterest has amounted to 1860 per cent on the original
deposit, or about 37 percent, per annum, simple interest."
In 1869, the solicitor of this bank, Hon. W. H. Y.
Hackett, favored the writer with some interesting
reminiscences of the institution, which, though covering in part the same ground as the foregoing, bring
to view some features not therein commented upon,
and justify their insertion here.
SKETCH FURNISHED BY MR. HACKETT.
"The Portsmouth Savings Bank was incorporated
in June, 1823. It was the first Savings Bank incor·
porated or organized in this State. Neither the legislature which incorporated it nor the community in
which it was to be located had much confidence in its
beginning.
"It began in a small way, and gradually attracted
the attention and secured the confidence and deposits
of persons of small means, for whom it was organized.
No deposit from any one person is received larger than
$300, but the accumulation of interest on that sum is
added to the principal and allowed to remain as long
as the owner desires. The bank has uniformly refused
to enlarge the amount which one person might deposit.
"Some time after this bank was organized other
banks began to be organized, in other parts of the
Stnte, substantially upon the plan of this bank.
"The bank organized here soon after the Sunday
school was established, and for the same purpose, and,
to a considerable extent, by the same persons. It was
essentially a philanthro.Pic enterprise, intended to elevate the character and improve the condition of young
people and people of small means. This bank and
several others in the State have adhered to the original
plan. The effect on this community has been decid•
26
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HISTORY OF SA VINOS BANKS,
edly favorable. It has improved the habits, as well
as au~ented the means, of those for whom it was
established.
"The Savings Banks have, in their influence upon
the people, greatly reduced the suits for the collection of debts. It is a fact that, though in this State
the Savings Banks are liable to the trustee process,
yet this bank, having had more than 25,000 depositors,
has ne,Ter been held as a trustee of· a person who had
a deposit in the bank.
"More recently several Savings Banks have been
established with a view to become banks of discount
and deposits, or as aids to stock banks, and are offering and paying larger rates of interest than this bank
has paid.
" ·w ithout undertaking to predict what may be the
result of this modification of the policy of institutions
of savings, we have thought it better for our depositors,
whose supposed interest has been our care and guide,
to keep down the rate of interest and the amount of
individual deposits. In this way every depositor is
induced to leave his money at work for time as long
as he can spare it, and no large depositors can have the
power, in times of panic, to remove the available
means of the bank to the prejudice of the small and
confiding depositors.
The amount of deposits in the bank at the last
quarter was .. . ..•• . ..•••••...• . ..•..•• $1, 248, 925 82
The amount of surplus . . . . . . . . . . . . . . • . . • •
150, 000 00
"Perhaps a few words and figures can give you a
better history of the working of the bank, and to this
end I would state the result of two deposits, made
soon after the bank was organized, viz. :
Deposit No. 143, of $20, made December 17, 1823,
amounted, July 18, 1868, to . ... . .. . ........ . . $291 88
Deposit No. 343 of $20, made Aug. 4, 1824, seven
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NEW ILUIPS.HIRE: FIRST BA VINOS BANK.
months and 18 days later, amounted at the same
time to. . . . . . . . . . . • . . . . . . . . . . . . . . . . . . . . . . . . $268 88
Difference, more than the original deposit. . . .
$22 70
" Perha{>s I may as well state that Wm. M. Shackford now 1s and has been president since August 14,
1844.
" Samuel Lord has been, ever since the organization of the bank, treasurer, and Wm. H. Y. Hackett
has been for about the same time solicitor for the
bank."
The order of the incorporation of Savings Banks in
New Hampshire, down to 1846, was as follows:
Portsmouth Savings Bank. . . . . . . . . . . . . . . . . . . . . . . . . .
Savings Bank of the County of Strafford (organized 1824),
Exeter Savings Bank (not organized) . . . . . . . . . . . . . . . .
New Hampshire Savings Bank . . . . . . . . . . . . . . . . . . . . .
Meredith Bridge (Laconia 1) Savings Bank . . . . . . . . . . . .
Connecticut River Savings Bank . . .... . ..... . .......
New Market Savings Bank . . .... . ...... . .... . .... . .
Cheshire Provident Institution for Savings .... . •.....
Franklin Savings Bank (not organiz~) ..............
Sullivan Savings Institution .. ...... .. .. . ...... . ....
Somersworth Savings Bank .............••. . .......
Manchester Savings Bank . . . .............. . .... . ...
1823
1823
1828
1830
1831
1831
1832
1833
1833
1838
1845
1846
Concerning the Exeter and the Franklin, noted
above as not organized, I give only the presumption
in the case. It is possible they were organized and
failed or dhcontinued; but if so, it was prior to
1849, as they are not embraced in the commissioners'
returns for that year. I give to the system the
benefit of the doubt in enumerating them as not
organized.
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HISTORY OF SA VINOS BANKS,
CHAPTER XVII.
COURSE OF LEGISLATION.
SUPDVISION, EXAMINATION, ETC.
Prior to 1847, it appears that no supervision by
the State was exercised over Savings Bank1:1, except
that in 1845 an act was passed which defined the compensation to be allowed to commissioners making an
examina~ion of Savings Banks under the direction of
the governor. From this it would appear that the
governor might direct such examination when he
thought proper; indeed, the power to examine was
conferred upon the governor in the first charter. Of
course there was, under this provision, no '?-niform or
systematic examination of these institutions.
In l847, however, it was made the duty of the bank
commissioners, or one of them, at least once in each
year, and oftener if the governor should require, without previous notice, to make personally a full examination of each Savings Bank in the State.
The first report of operations under this law was
made in 1849. This report is made up from the :reports of the examinations made by each commissioner,
and, besides giving a statement of the condition of
each institution examined, gives a brief summary of
items of interest, historical and otherwise, which we
cannot do better than transcribe in full to these pages,
and the same will be found post, pp. 211-220.
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NEW HA?tlP8IlIRE: COURSE OF LEGL"lLATION.
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Although this report of examinations made in 1849
is the first which I have been able to find amongst the
published documents of the State, it would seem that
the duty imposed by the law was discharged in 1848;
for we find the deposits and accounts for that year in
the summary of progress given in later reports. There
are, however, some anomalies between the statements
for the two years which I am unable to explain, as the
falling off, from 1848 to 1849, of 342 in the number
of accounts and $55,148.97 in the amount of deposits.
No specific form of examination, nor of reports of
the results of examinations, appears to have been pre•
scribed until 1869, when the commissioners were
required to "give in their reports a detailed statement
of all the items of expense of all Savings Banks, with
the names of the treasurer and clerks and the salary
of each ; to report the kind and amount of stocks and
bonds held by each of said banks, with the par value,
the cost to said banks, and the market value. at the
date of examination ; also the amount of the treasurer's
bond, with all such information as will tend to give
the true standing of tbe banks examined."
In addition to the examination by the commissioners, the trustees were required, by an act in 1872, to
thoroughly examine their bank once in six months ;
and, where the deposits exceeded $500,000, they were
required to make such examination four times a year,
and to report the same to the bank commissioners.
The purpose of the legislature in the foregoing, as
in its legislation generally, appears to have been to
Lecome apprised of the actual condition of the several
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HISTORY OF SAVINOS BANKS.
Savings Banks in the State from time to time. Hence
no statistical information is called for. We are thus
deprived of any means of kno,ving, from year to year,
what number of persons has been reached and affected
by the ministry of these institutions, and what amounts
have been received and paid by them, and the amount
or value of these savings as expressed in the form of
dividends.
ORO ANIZA TION.
It will be seen from the charter of the Portsmouth
Savings Bank (section 5), as also from explanatory
comments of some of the following reports, that the
form of organization differed from that in the State of
New York and some other States, being more like that
in Rhode Island.
Under this the board of corporators is somewhat
large, usually numbering from 40 to 50 members, who
elect from their number, annually or at other periods,
a board of trustees, usually from 12 to 18 in number,
to whom the affairs of the bank are committed.
The term of incorporation in the several charters
was not uniform, some being perpetual and some
limited to 40 and some to 20 years. Prohably every
institution whose term ha.'i expired ha.'i had its charter
renewed, either in perpetuity or for an additional term.
There appears to have been less general legislation
affecting Savings Banks in New Hampshire than in
most other States, their powers being derived from
and regulated by their charteffl and the amendments
thereto.
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NEW HAMPSHIRE: COURSE OF LEGISLATION1
20'1
INVESTMENTS.
Not until 1869 does there seem to have been any
general provision directing and limiting the investments of Savings Banks. These were defined in that
year by section 3 of chapter 4, amending chapter 58
of the general statutes, as follows:
"One-half of the deposits hereafter received in Suv•
ings Banks, and one-half the investments hereafter
made by same, shall be invested in notes and mort~ages of individuals residing or doing business and
having a place of business in this State; in the stock
of banking associations located in this State; in the
first mortgage bonds of any railroad company incorporated under the authority of this State, which is in
possession of and operating its own road, and which
has earned and paid regular dividends for two years
next preceding such investments, or in the bonds of
any such railroad company whi_ch is unincumbered by
mortgage; in bonds and loans of this _State, or of any
city, county or town therein, or in notes of individuals
or corporations residing or doing business and having
a place of business in this State, with sufficient sureties or collaterals."
Tlie emphasis given to the restriction of loans to
residents of the State would seem to indicate a Apecial
purpose m the act to correct a practice, which had
doubtless grown up, of making loans outside of the
State for the sake of higher interest attainable in this
way. Beyond this, the measure in respect to the securities authorized would seem to enumerate those com-
208
HISTORY OF SAVINGS BANKS.
TAXATION OF SAVINGS BANKS,
Savings Banks in New Hampshire were early regarded as legitimate subjects of taxation by the State.
As early as 1848 an act was passed requiring treasurers
of Savings Banks to notify the assessors of all deposits
in excess of $100, held by residents of any town, with
the name of the depositor and the amount of each
deposit. This, of course, was to give information to
the assessors of personal property which they should
include in their tax levy.
In 1865 Savings Banks were required to pay a
specific tax of three-fourths of one per cent on the
whole amount of deposits and accumulations, in lieu
of all other taxes upon such deposits or against depositors on account thereof. In 1869 this was increased
to one per cent. This tax was payable to the treasury
of the State, and in 1871 a penalty of twelve per cent
per annum was imposed for delay in paying over the
same when due.
COMPENSATION TO OFFICERS.
It will be seen, from the charter of the Portsmouth
Savings Bank, tl1at trustees were prohibited from receiving compensation or other emolument, except that
the treasurer or secretary might have a reasonable
allowance made to him for his services. The same
feature characterizes other acts of incorporation.
This was made the subject of general legislation in··
1869, by requiring the salary of the treasurer and
clerks to be fixed by the 'trustees annually, and by
limiting the total expense of any institution, including
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NEW H.AllPSHIRE: COURSE OF LEGISLATION.
209
the salaries, to not exceeding $4,000. In 1872 this
provision was modified by authorizing Savings Banks
having deposits in excess of $1,000,000 to incur expenses beyond the limit of $4,000, but not to exceed
an amount at the rate of one-eighth of one per cent
on the excess of deposits over $1,000,000. Thus, a
Savings Bank with $2,000,000 of deposits could incur
expenses amounting, first, to $4,000-in coip.mon with
all Savings Banks - and, in addition to that, at the
rate of one-eighth of one per cent on the deposits in
excess of $1,000,000, which would be $1,250, or $5,260
in all. It would seem that character, ability and
fidelity to public trust were so common in New Hampshire as to call for no very flattering overtures to command their service, or the total expense attending the
care and custody of $2,000,000 could not be reduced to
a little more than one-fourth of one per cent upon that
sum. It was also further provided that the duty imposed
upon trustees of examining the affairs of the bank
might be performed by a committee who should be
entitled to receive proper compensation for the service.
Of course this did not enlarge the amount of authorized expenditure, but changed the direction of it.
USE OF FUNDS BY TRUSTEES.
The charters of Savings Banks do not seem originally to have contained the restriction, quite common
in other States, against the use of the funds or deposits
in Savings Banks by the trustees or officers. Not until
1870 does this seem to have engaged the attention of
the legislature, when very stringent provisions upon
97
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210
HISTORY OF SAVINGS BANKS.
the subject were enacted, providing that no person
indebted to any Savings Bank, as principal or surety,
should be ~ligible to election as trustee, and that thereafter no Savings Bank should make any loan to any
of its officers or receive them as surety for any loan,
except with the unanimous consent of the trustees,
given in writing and filed with the treasurer.
BONDS OF OFFICERS.
By the act of 1869, to which frequent reference is
made, and which was a sort of revision and codification of provisions concerning Savings Banks, treasurers
were required to give bonds in the sum of $25,000 ;
and, where the deposits exceeded $100,000, the bond
was to be increased in the sum of $5,000 for each
$100,000 or fractional part thereof. These bonds were
to be recorded at length, and an attested copy to be
filed with the secretary of state.
The foregoing comprises substantially all the legislation in this State in relation to Savings Banks, which,
as we have before remarked, is less voluminous than
in most other States where these institutions have
been established.
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NEW lLUIPSHIBE: STATISTI081 ETO.
CHAPTER XVIIl
STATISTICS SHOWING CONDITION AND PROGRES&
With the exception of the Portsmouth Savings
Bank, no answer has been made ·by any Savings Bank
in New Hampshire to my inquiries for facts, statistics,
or incidents in their history. We have, therefore, only
such facts as can be derived from the published
reports, which exhibit the condition of these institutions from year to year since 1848.
As before remarked, the first published returns
which I have been able to find were those of the bank
commissioners made in 1849. These I subjoin i~ the
form and in the order in which they appear in the
documents of that year, the text or comments being
that of the commissioners. These reports comprise, as
will be seen, the returns of ten Savings Banks, and
are as follows.
. PORTSMOUTH SAVINOS BANK.
[Examined April 11, 1849.]
Investments ... . ..• . ..•...•.•..••••..•.•••• $3907 813 10
Deposits .....•...•.•••..••.••• $380, 119 99
6,827 19
Last dividend . . .. • • .. • .. .. . .. •
3, 866 06
Surplus ............... : .. .. • ..
- - - - - $390, 813 10
Incorporated June 26, 1823; charter perpetual. Willi&..--u
M. Shackford, president; Samuel Lord, treasurer. No bad
or doubtful investments; chiefly State and city stocks. In-
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HISTORY OF SA VINOS BANKS.
vestments yielded at the rate of $22,460 per annum at date of
examination. Annual _expense last year, $1,202.24. Dividends four per cent per annum, and residue once in five years.
Twenty dollars deposited Dec. 17, 1823, amount.a now to
$86.10, equal to 13 per cent, simple interest.* Thorough
examination twice a year by committee. Number of accounts
opened since bank commenced, 7,742• .
MANOHESTER
SAVINOS BANK.
[Examined April 17, 1849.J.
Asset.a.
Seventy shares Merchants Bank .•
$7,098 75
Ten shares Columbian Bank ...••
1,005 53
Notes secured by mortgage ..... .
10,142 00
400 00
Notes secured by pledge of stock,
$18,646 28
Liabilitie8.
Due depositors . . . . . • • • . . . . . . • • $14, 730 00
Due Manchester Bank. . . . . • . . . .
2, 956 45
Profits ....•• ~ • . • • . • . . . . . . . . . .
959 83
$18,646 28
Incorporated 1846; charter perpetual. Securities all good.
Quarterly dividends at rate of four per cent per annum; earnings about six per cent. Trustees not indebted, either as principal or surety. Treasurer gives bond $3,000. Committee
of trustees examine the affairs of the bank thoroughly once a
year. Whole expenses since organization, $357.17. Number
of depositors, 130.
• This famous deposit has become a promioeot feature lo the annals of this institution.
It figures io the original History of Savings Banks of the State of New York. page 285,
and its growth and progress will be found detailed io the historical sketch of this baok,
01111, page 200, where it has increased to J392.29.
It bids fair to out-rfral the schoolboys'
problem of the penny put at compound interest at the beginning of the Christian era!
According to the assumption of those who fear that Savings Ranks may ultimately absorb
all the property of the country, this single deposit must, after the la1•se of centuries, •
gather to itself all the propeny of the country. including that of all other Savings Banks!
What would happen, then, if there were another such In another bank 1
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213
NEW HAMPSIIIRE : STATISTIOS, .BT0.
NEWMARKET SAVINGS
BANK.
[Examined April 7,-1849.]
Below is the sworn statement of the treasurer, of its means
and liabilities as they existed that day. His books appear to
me, after a full examination, to be carefully and correctly kept,
furnishing full means of ascertainin_g the condition of the
bank without other aid. I <UY1ibt Mt, therefore, tlte accivracy
of his etatement. *
Assets.
Dne from town of New Market . . $2,909 04
Due from New Market M'fg <Jo . .
16,224 91
305 19
Interest accmcd .....••..•.. .. .
Cash on hand ..•.• . ..•..••...•
118 45
$19,557 59
LioJYilitua.
Due depositors . . . • . • • . . • . • . . . . $18, 812 27
Interest account, four per cent, esti188 12
mated . . .. . • ....... . ......••
Profits ................. . .. . . .
557 20
$19,557 59
Incorporated 1832; perpetual charter. Tmstees examine
bank once in six months. First dividend December, 1832one and on&-third per cent for four months; since then regular
semi-annual dividend at four per ce_n t, and three extra, amounting to seven per cent in all; average for 16 years, a little less
than four and one-half per cent. Expenses for 1848, $41.03.
(Might not higher interest be obtained 1) Number open accounts, 404.
•Significant u to the mode of cooductlog the eumloatloo 1
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HISTORY OF BA VINOS BANKS.
CKE8HIRE PROVIDENT INSTITUTION FOR SA.VINOS.
(Examined May 5, 1849.]
..Auets.
Debt.a due . • • • . . . . • • • • • • • . . • • • 1358, 392 79
Cash on hand . .. .. .. .. .. • .. .. •
860 89
- - - - - $359,253 68
Lwlnlitia.
Due depositors .. .. .. • • .. .. . . .. 1358, 154 82
Surplus. . . . • • • . • • • . . • . . . • • . . . .
1, 098 86
- - - - 1359,253 68
Incorporated July, 1833, for 20 years. Fifteen trustees chosen
annually, from whom is chosen a board of investment of five
persons. Corporators, 48; limited to 50. Number of depositors, about 2,300. Investments are, on mortgage of real
estate, about one-half; bank and railroad stocks (loans), about
one-ninth ; 130,000 in railroad bonds, and balance on notes
with personal security. No officer except treasurer has compensation. Dividends, five per cent, semi-annually, and extra
once in five years; last extra dividend was nearly one and
one-third per cent for each of the five years. Treasurer's
account made up and examined weekly by one or more trustees, semi-annually by another committee, and annually by a
third. Expenses in 1848, $523.11. One deposit over $3,000,
one between 12,000 and $3,000, ten between $1,000 and
t2,000, about 100 between $500 and $1,000.
SULLIVA.N
SA. VINOS INSTITUTION.
[Examined May 9, 1849.]
..Asset8.
Amount of loans ........... .. .
$7,840 34
Oash on hand .. .• . . ..... • .. • . •
87 00
$7,927 34
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NEW HAMPSHIRE : STA.TISTIOS, E'l'O.
Lial>iliiiu.
Due depositors . . . • . . • • . . . • . . • •
Surplus. . . . . • • . . • • . • • • . . • • . • • •
S7, 833 05
94 29
S7,927 34
Incorporated June 26, 1838, for twenty years from that
date; organized October 30, 1847. Corporatore, 89; directors,
18. Present number depositors, 113. Loans made by monthly
committees of three directors each. Nearly one-half loans on
mortgage of real estate ; balance, notes, with sureties. Debts
due the institution all deemed good. Only treasurer receives
compensation. · But one deposit over S500. Two dividends
been declared, two and one-half per cent semi-annually; extra
once in five years to be declared.
CONNECTICUT RIVER
SAVINOS BA.NX.
[Examined May 10, 1849.]
Assets.
All debts due . . . . • . . . • • • • • . . • • . . . • . • • • . . . • t124, 827 55
Lwl>il,itus.
Due depositors ...•..•...•..... $118, 056 25
Due Connecticut River Bank. • • •
1, 820 50
Surplus.......................
4, 950 80
- - - - - 1124, 827 55
Incorporated June 16, 1881 ; charter perpetual. Corporatore, 45; trustees, 18. Depositors, 660. Investments chiefly
in notes secured by real estate or sureties ; all deemed good
bot one note of $1,000, on which there will probably be a
loee; this the only loee ever sustained. No real estate. Only
treasurer receives compensation. Interest, five per cent,
payable semi-annually; extra dividend once i~ five years.
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HISTORY OF SAVINGS BANKS,
NEW HAMPSHIRE SAVINGS BANK,
CONCORD.
[Examined May 11, 1849.]
Asset,.
Debts due bank. .. . . . . • .. .. .. .. $175, 263 62
Bank stocks. . . . . • • . . . • . . . . . . . .
18, 559 50
Interest due, not received . . . . • . •
8, 214 56
Oash on hand • . .. . .. .. . .. • .. ..
2, 692 26
- - - - 1199,729 94
Lwl>iUtia.
Due depositors, principal. . . . . . . . $154, 362 00
Doe depositors, interest to Jan. 15, 28, 596 40
Unclaimed extra dividend.......
248 15
Surplus ; • . . • • • . • • . • • • • . . • . . . • 16, 523 89 - - - - $199,729 94
Incorporated 1830; perpetual charter. Corporators, 48;
trustees, 18. Whole number of depositors from beginning,
5,391. Loans principally in notes secured by mortgage; balance on notes with sureties, or on bank, railroad or manufacturing stocks. Debts deemed good, except about $700. No
real estate, except a tract estimated worth $150, taken for
debt. Treasurer receives compensation; also investing committee, one dollar each for each meeting, weekly; also paid
for time and expenses when out on business of the bank ; this
in violation of charter. Dividends, four per cent per annum.
Surplus divided once in five years. Expenses of the year,
including treasurer's salary, $600 == $948.02. One member of
investing committee indebted to bank S500, contracted before
his appointment.
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NEW HillPSillRE! STATISTIOS, ETO,
SAVINOS BANK
21'1
FOR COUNTY OF STRAFFORD.
[Date of examination not given.]
Real estate:
Assets.
Brick building on Central street, 14,625 00
New Hampshire Hotel........
5,425 00
Lot on Orchard street . . . . . . . • • 1, 000 00
111,050
1,170
1,677
Cash .................................. . .. .
326
Notes ....•......•..............•......... 287,142
Old Dover Bank stock ...........•....•....
147
One hundred shares Strafford Bank .......... .
10,000
Albany city stock .•..•...........•.......•.
1,000
Railroad stock, to wit:
328 shares Boston & Maine . • . • 134, 960 00
129 shares Worcester .. . . . . . . . . 14, 125 00
228 shares N orthem . . . . . . . . . . 22, 800 00
133 shares Old Colony. . . . • . . . • 12, 898 00
200 shares Cocheco. . . • . . . . . . . . 20, 000 00
104,783
Furniture in hotel ...........••....... . .•..
Deposits in Strafford Bank ...•.•....... •....
00
00
17
76
45
00
00
00
00
Total .............................. $417, 296 38
Liabilities.
Amount of deposits ...••....... ,1400, 461 18
Apparent surplus .. . . • . . . . . . . . . 16,835 20
- - - - $417, 296 38
From the apparent surplus should be deducted :
Estimated loBB on real estate...... $3,000 00
Estimated loss on furniture. . . . . • •
400 00
For doubtful notes . • . . • • • • • • . • • •
757 00
t4, 157 00
Trne surplus .. .. .. .. .. .. . .. . .. .. . . .. 112, 678 20
28
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HISTORY OF SA VINOS BANKS.
Hardly probable that stocks will for some time bring
above prices. No doubt, however, that bank can at any time
pay depositors in foll. Interest, five per cent. Number of
depositors about 2,500; generally small amonnts. Treasurer
receives t700, which covers all expenses of institution. Incorporated 1823; organized 1824.*
SA VINOS BANK OF COUNTY OF STRAFFORD, DOVER.
[February 12, 1872.]
.Assets.
Market value.
Loans on real estate ..........•••...
Loans on personal security ........ .
Loans on collateral security ....... .
Real estate ..•.....••..............
Corporations in New Hampshire ... .
U. S. registered bonds ............ .
City of Dover bonds . • . . . • . ...... .
City of Chicago bonds ............. .
Cincinnati city bonds .............. .
St. Louis city bonds ............... .
Boston & Maine R. R. stock ....... .
N orthem R. R. stock ............. .
Boston & Albany R. R. stock. . . . ..
. •..........
Bank stock . . . . . . • . .
Town of Wolfeborough bonds ..... .
Town of Barrington bonds ........ .
Town of Farnham bonds .......... .
Town of Madbury bonds .......... .
City of Dover bonds . . . . . . . . . . . . .
Deposited in Strafford Bank ....... .
Cash on hand ..••••....••••...•....
$252,457
454,642
11,535
3,000
236,000
362,6oo
100,000
99.000
52,000
18,200
54,437
17,475
30,900
23,500
8,000
7,8oo
2,500
6,000
12,000
39,873
10
13
31
00
00
00
00
00
00
00
00
00
00
00
00
00
00
00
00
00
04
17
Totals •..••.••..•••••••...••... $1,791,929 65
On books.
$252,457
454,642
11 ,535
3,000
236,000
336,378
98,000
96,437
50,937
17,200
54,437
4.831
21,825
17,000
8,000
7,8oo
13
31
00
00
00
12
00
50
50
00
oo
45
00
00
00
00
2,500 00
6,000 00
12,000 00
39,873 04
IO 17
$1,730.864 27
• The foregoing exhibit seems so unpromising, with an apparent surplus of about four
per cent, an estimated surplus of about three per cent, and a class of investments almost
certain, if forced upon the market, to wipe out the surplus and leave a deficiency, t'!lat we
cannot forbear to cast our eye forward and see what the future has in store for an lnstitut.ion so environed ; hence we subjoin the condition of this institution as reported in 1871,
twenty-three years later. It illustrates the good sometimes wrought by judicious /,ttit¥
11/0111.
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.NEW HAMPSHIRE! STATISTICS, ETC.
Semi-annual dividend, two and one-half per cent; an extra
once in five years, the last being about eight per cent for the
period.
Li.abilities.
Due depositors . . . . ... ........... . . . . $1,593,219 55
Surplus..... . . .. .. . ..... . ......... . .
137,644 72
$1,730,864 27
Add to surplus.. .. .... ... .... ...
Market value . . • . .. .. . . . • . . • . .. .
$137,644 72
61 ,o6S 38
Doubtful loans .•.. ••••...• ..•. ..
Protested . . ... .. .•.. . • . .••..••. .
Bad • •••••• • •• • •..•. •.. ••••• .....
$8,000 00
16,000 00
1,650 00
25,650
True surplus . • • • • • • • • • • • • • • • • • • • . • • • • • • • . . . . • •
00
$173,o6o 10
SoHERSWORTH SA VINOS BANK.
(Date not given.]
.Aaaete.
Notes ..... . ... . . . .... ... .... . $4-3,34-6 14:
150 shares Great Falls Bank .. . .•
50 shares Great Falls & Conway
Railroad .... .... .... .. .. . . .
Cash. .. ...... .. .. .. . ...... .
15,000 00
5,000 00
237 4-0
.63,583 54
Liabilities.
Deposits.. . . . . . . . • . . . . . . . . . . . • $61, 665 21
Balance profits . . • • . . • • . . . • . . • .
1, 918 33
$63,583 54
Incorporated 184-5 ; charter expires 1885. The above balance was the surplus after deducting dividend of January 1,
1849. Rate, two and one-half per cent semi-annually. Annual expenses $200, including treasurer's salary. Trustees
liable as principals for $2,750, and as sureties for $6,721.39.
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HISTORY OF SAVINOS BANKS,
MEREDITH BRIDGE SAVINGS BANK.
Assets.
20 shares Belknap County Bank ..
U. S. six per cent stock ...... . ..
Bond of B., C. & M. R.R ... . . .
Notes ............ . ..••..•.. ..
Interest accruing ...... . ... . .. .
$2,000
5,000
500
41,122
665
2,057
Cash ... . ....•....... . ........
00
00
00
47
30
79
$51,345 56
Lwl>uitw.
Deposits. . . . . • . . . . .. .. . . . . . . .
Reserved fund. . . . . .. .. . . .. .. ..
Profits on hand . .... .. ..... .. . .
$50, 346 25
527 95
471 36
$51,345 56
Debts all deemed good. Interest, five per cent; extra in
1847 of $73Q, and 1842, one of $898.75. Treasurer, $160.
Below will be found a summary of the foregoing,
and a comparison with the reported condition of the
same institutions in 1874:
Open
accounts,
accounts,
Open
Due
depositon,
depositors,
1849.
1874.
1849-
1874-
Cheshire . . . . ...... .• ...
Connecticut River • .. . .
Manchester .... . ..•.. ..
Meredith Bridge* . . . •..
New Hampshire ..•.. . ..
New Market .. .. .. .. . . .
Portsmouth . . . •. .......
Savings Bank of Strafford County . •.••.. . .
Somersworth .....•....
Sullivan •...••• ••.. .. ..
2,724
"66o
130
38o
1,187
404
2,930
S,900
Ten institutions •. • ...
NAMB OF INSTITUTJON.
Due
1,996
3,461
245
7,056
$358,154
I 18,056
14,730
50,346
154,362
18,812
38o,119
$1,738,335
257,799
2,504,845
537,372
1,o64,909
39.337
2,110,049
3,o8o
474
113
4,963
2,371
2,214
400,461
61 ,665
7,833
2,088,369
621,199
12,o82
34,534
$1,564,540
$11,808,172
1,176
5,152
845,958
• Supposed to report In 1874 under name of Laconia Savings Bank .
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NEW HAMPSHIRE: STATISTICS, ETO.
Depositors' accounts increase a little less than three
times. Amount of deposits increase about seven and
one-half times in 25 years.
The following table exhibits a comparative view of
tho investments in 1849 and in 1873, mso far as the
defective form of reporting the items for the former
year would admit. It will be understood that, for
that year, both the amount and the per cent of the
several classes are approximations only, from the imperfect data given. I do not make the total investments in 1873 correspond with the amount given in
the report for that year by some $300,000 ; but, as I
use the items furnished, the result cannot be far wrong.
INV&STM&NTS, 1849.
INVHSTMU'TI, 1873.
NAME OP' SECURITIES.
Amount.
Loans secured by real estate,
Loans on collaterals ... . ...
Loans on personal security . .
Public funds, viz. :
U. S. and State bonds . ...
County, city and town b'ds
and loans . . ... . .. .. . ..
Bank and railroad stocks and
bonds . ... . ... ... ....... .
Cash on hand ... . .
Miscellaneous .. . ... . • .. . . .
Per
cent.
$8o4,000
175,000
300,000
18
16o,8oo
10
50
II
~
144,000
20,000
4,200
9
I 1•5
2-5
Amount.
Per
cent.
$7,086,810
2,496,519
5,904,313
23 1-2
8 1-5
19 3-5
1,904,218
6 1-5
5,440,630
18
5,8o4,772
632,892
791,562
19
2
24-5
The following table, exhibiting the number, condition and progress of Savings Banks in New Hampshire from 1848 to 1874, iF1 derived from a table found
in the annual report of the bank commissioners, made
to the legislature in May, 1874:. The column showing
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HISTORY OF SA VINOS BANKS.
the increase in deposits from year to year was found
to contain a number of errors, which are corrected in
the table here given. The date for which the report.ed
conditions are stated is in April or May of the year
given, commonly the latter.
If the progress of Savings Banks in New Hampshire,
as revealed by this table, is less striking than in some
of the other States, it, nevertheless, when considered
in connection with the growth in population and
wealth, exhibits a very substantial growth, and is perhaps a fairer index of the development of the Savings Bank idea, pure and simple, than is found in
some States whose merely financial exhibit is more
wonderful than the following.
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TABLE slwwing the growtl, of Savings .Banks in New Hampshire /rt>m 1848 to 1874.
blc:a&ASS
DAT&.
0
cg
N.
~
~
C")
0
~
~
1848
1849
1850
1851
1852
1853
1854
1855
1856
1857
1858
1859
186o
1861
1862
1863
1864
1865
1866
1867
.... .. . ... . . .. . .....
. .. ..... . .. . .... . . . .
. ............... .. ..
... . ........ . . ......
..... . ....... . . ... ..
. .. . ... .. .. .... .. . . .
. ... .... .... ... ....
•• •••••••••••• • • •• . •
•.•••. • • ••• .•••• • .. •
. ••.••••••••.• • • • • • •
. .• • • •• • •• •• ••• . ••. .
.•• • •••••. • • • ••• ••. •
. • ••••••••• .• •••••• •
........ .. .. . .......
• .. • ..••• ••• • • •• • • • •
•• •. •. . • ••• ••• •. • •••
••• .•• • • •• •• • •..••• •
• ••••••.••.••• • •..• .
. • ... .• .....•••... ..
• ••• ••••• • .•• • •• • • . .
1868 ... .... . .. .. . ...... .
1869 .....•.... .........•
No. of No. of open Increueln
bub.
IICCOUnts.
open 11CC'ta.
9
IO
12
13
rs
16
16
17
19
20
21
23
26
26
27
27
28
29
29
28
31
38
12,424
12,o82
13,031
14,316
15,771
18,105
20,145
21,300
23,489
24,786
23,463
26,762
30,828
35,590
35,920
39,358
43,175
43,572
42,894
47,792
55,218
62,931
... .. ...
-342
949
1,285
1,455
2,334
2,040
1,11s
2,1 9
1,297
-1,323
3,299
4,o66
4,762
33°
3,438
3,817
397
--678
4,898
7,426
7,713
Amount due
depositon.
~, ~, i
IN PslUODS OP F1vs YILUIS.
Iner-In
amount due
deposlton. In number of
open acc'ta.
.. .
....
l.S
... .....
Flnt period
$1,619,689
from ,a.a to
1,564,540 -$155,149 1854, 6 yn.
1,641,543
77,003
1,776,768
135,224
2,009,617
232,849
2,507,909
498,292
7,721
3,222,261
714,351
3,341,256
118,995
196,1o6
3,537,363
210,922
3,748,281
3,588,65 -159,627
6,617
4,138,822
550,164
721,202
4,86o,024
5,590,652
730,627
62,933
5,653,5~
6,56o,3
900,722
16,810
7,661,738 1,101,430
7,831 ,335
169,597
26,265
7,857,6o1
10,463,418 2,001,817
13,541,534 3,07 ,116
16,379,857 2,838,322
18,359
...
In amount due
deposlton.
ti!
ii.--
Finl cer'd from
1'48 O1854, six
yean.
=
I
61
t1,6o2,572
99
33
916,561
29
63
3,522,916
85
'
42
8,718,119
114
i:,.,
~
j
l)O
l)O
~
T A.BLE-( Continued).
YEAR.
No. of
banks.
No. of open
accounts.
Increase In
open acc'ts.
t,:)
~
I
Amount due to Increase In
de,ositors.
lNCRKASB tN PBRIODS OP F1v11 YKARS,
...
0
amount due
depositors.
In number of
open acc'ts.
...
•
~~
~:!
u ..
.. u
In amount due
depositors •
""
Q. ·-
0
cg
N.
~
~
C")
0
~
-
~
1870
1871
1872
1873
1874
.... .. ...... . .......
....................
.. . . ................
....................
.... . ...............
45
52
54
61
64
70,918
77,472
86,790
94,967
92,788
7.987 $18,759,461 $2,379,003
21,472,120 2,7 I 2,659
6,554
24,700,774 3,228,654
9,318
8,177
29,671,114 4,97o,339
-2,179
28,829,376 -841,738
if
"ti
l-s
~
29,857
47
$12,449,519
75
By the courtesy of Hon. A. J. Fogg, chairman of the bank commissioners of New Hampshire, I am enabled
to supplement the above table with the following statement of the condition of Savins-s Banks at the close of
the examinations April r, 1875: Number of banks, 68; number of depositors, 96,938; increase, 4,150; amount
due depositors, $30,214,585; increase, $1,385,209 ; amount of surplus, $1,520,726.
-Decr.N.
I
~
~
~
t,:I
II>-
~
~
SIXTH SECTION;
SAVINGS BANKS IN THE STATE OF MAINE.
CHAPTER XIX.
INCEPTION AND DEVELOPMENT.
It seems like a singular coincidence that the impulse
to the organization of Savings Banks should find cul•
mination in legislative action thereon in so many States
in the notable year 1819. In New York, Pennsylvania,
Connecticut and Rhode Island, the first acts of incorporation date from this memorable year, and in New
Hampshire the subject was considered, though not
matured, whilst in Maryland the first charter was
passed in December, 1818. In the same year (1819),
and before its admission as a State in the Union,
the legislature of Maine incorporated the " Institution for Savings of the Town of Portland," which
entered on a prosperous career, but failed during
the reverses of 1838, owing, it is said, to the nature
of it.s investments. Unfortunately-as this event
occurred before the era of Savings Bank disclosures, through examinations or reports to the legislature - we have no means of knowing what
were the particular investments which precipitated
this untoward result. So far as we know, this is the
only instance in the country where the inception of
29
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HISTORY OF SAVINOS BANKS.
the effort to establish Savings Banks ended disastrously. In all other States the first chartered institutions still remain, as worthy and substantial monuments of the wisdom and sagacity of their founders.
We have no data from which to derive any knowledge of the extent of injury wrought by this failure,
there being nothing on record, unless it may be in the
court of chancery and not easily accessible, showing
the amount due to depositors nor the percentage of
loss. But the total deposits could not, at this early
period, have been large, and doubtless something must
have been realized with which to make a dividend to
depositors, who were thus preserved from total loss.
As throwing some light upon the probable condition
of the institution at the time of its failure, we may
notice the fact that there were then but two other
Savings Banks in operation, the Saco and Biddeford,
organized in 1827, and the Gardiner, organized in
1834. The united deposits of these two institutions
in 1855, seventeen years later, were but $419,610, and
the total savings deposits in the State, at this latter
date, were less than twice that sum, or in exact figures,
$825,815. It is probable, therefore, that so early as
1838, the united deposits in the three institutions then
existing, did not exceed $250,000, of which, if we concede to the older and more favorably located $125,000,
we shall probably indicate the highest amount which
even a total wreck of the institution, and unrelieved
loss to the depositors, could have entailed; and, as
total loss is not to be presumed, we may probably
estimate the amount as considerably below $100,000.
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MAINE: INCEPTION AND DEVELOPMENT.
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But this amount at that time would, as we very well
know, indicate a vastly greater degree of suffering and
embarrassment than even twice the amount at the
present day.
We deduce some interesting facts concerning the
development of the Savings Bank interest in the State
of Maine. As will be seen from the abstracts hereinafter presented, there were, in 1855, eleven Savings
Banks in the State, with an aggregate of deposits
amounting to $825,815, and a surplus of $41,316. As
the aggregates in subsequent reports commonly embrace the deposits and surplus as so much belonging
to depositors, we cannot, without great trouble and
labor, separate these items; hence it will be understood, unless otherwise stated, that the term deposits
embraces the profits earned and not yet divided. Of
these eleven Savings Banks, one - the Randalls Savings and Benevolent Association-was a nondescript,
of which some particulars will be found elsewhere.
Three others - the Biddeford, Lewiston Falls, and
South Berwick-were connected with banks of discount, or rather were banks of discount, with the privilege of receiving savings deposits, and all four were soon
after discontinued; the Lewiston Falls being succeeded
in 1860 by the Lewiston, a genuine and flourishing Savings Bank, and the Biddeford Savings Institution by
the Biddeford Savings Bank in I 86'7, and the South
Berwick by one of the same name in 1866, both apparently of substantial character. This leaves but seven
Savings Banks in the State whose charters ante-date
1855, and but twelve out of the fifty-six with charters
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HISTORY OF SAVINGS BANKS.
ante-dating 1666. Forty of the whole number of
Savings Banks in the State are, or were in 1878, less
than seven years old.
We find, further, that the seven Savings Banks
organized prior to 1855 held, in 1873, $13,284,374 of
the $29,556,523 of deposits and profits in all the institutions, or nearly half of the entire amount ; and the
twelve Savings Banks organized prior to 1866, which,
of course, embrace the seven last mentioned, held
$19,510,820, or about two-thirds of the total deposits
in the State.
The order in which the fifty-six Savings Banks of
Maine were organized was as follows :
YEAR.
1827 ••••• • ••••
1834 •• •• •••••.
1848 • • ••••• • ••
1852 •••••• • •••
1854 ••• ••• • •• •
1858••• • •• • •••
No.
I
I
3
I
YEAR.
No.
1859• • ••• • •• ••
186o ... . .•. •• •
1861 ... • • • . . . ••
1866 . •• •••...•
1867 .• • •••••..
1868 ... • • • •••.
2
I
4
2
9
YEAR.
No.
1869 • . ••• •.• • •
1870 •••.• • • ••.
1871 ..•• • •••..
1872 • • • •• • • • . .
1873 .• . •• • • • ••
9
7
6
5
2
It will be noticed that an impetus was given to the
development of the Savings Bank system in this as in
other States, in respect to the number of institutions
organized, very soon after the close of the late war,
forty-four of the number having commenced after that
period. The development in respect to the amount of
deposits is equally remarkable. At the close of 1860
the deposits and profits were $1,539,257; in 1865 they
were $3,336,828* (a falling off of $336,000 from 1864);
• Whether thne embraced pro6ts or not. does not appear ; It Is supposed they do.
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MAINE: INCEPTION AND DEVELOPMENT.
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whilst, as will be seen, in 1873 they had risen to the
relatively enormous sum of $:!9,556,000. That is,
from 1860 to 1865 the deposits had but little more
• than doubled in amount, while from the latter date
to 1873 the increase was nearly nine times.-
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HISTORY OF SA VlNGS BANKS.
CHAPTER XX.
CHARACTER
o•• LEGISLATION.
The charter of the Saco and Biddeford Savings
Iustitution, which will be found in the Appendix, was
the model upon which subsequent acts of incorporation
were framed. It will be seen that the organization
was simple and natural, with very little in the way of
machinery or conditions and provisos. A certain
number of corporators were named, to whom was
given the power of adding to their number at dis- _
cretion, and upon this body of corpora.tors all the
powers and duties prescribed in the act of incorporation were confen-ed. These were, to receive deposits,
to use and improve the same to the best advantage,
and apply the net income or profits by dividing the
same among the depositors in just proportion. Of
course, under a form of organization so simple and free
from complexity as this, much is intrusted to the
character of those to whom so large powers and sucl1
wide discretion are committed. Indeed, more confi•
deuce seems to have been reposed in the wisdom and
integrity of the corporators than in the restraints that
might be imposed upon their actions by law.
The original charter of the Gardiner Savings Institution, granted in 1833, contained a provision requiring
five per cent interest to be paid ; but tl1is clause was
subsequently repealed, before the institution was or-
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MAINE: CHAKACTirn 01<' uxmn,ATION.
~31
ganized, in 1834. Doubtless the organization was
delayed by the presence of this obnoxious and unreasonable clause.
It was not until 1848 that the fow-th act of incor•
poration was passed, that of the Augusta Savings
Bank, with provisions similar to those in preceding
charters. Meantime the original Po1-tland institution,
incorporated in 1819, had failed, as herein before stated,
leaving but two in operation upon the incorporation of
the fourth. Thus a period of nearly thirty years, put
in successful operation but three Savings Banks in
the State.
In 1849 the Biddeford Bank, and in 1850 the South
. Berwick Bank, both banks of discount, and, we suppose, of circulation also, were authorized to receive
deposits as Savings Banks, and in 1852 the legislature
chartered the Lewiston Falls Bank and Savings Institution, with a capital of $50,000, conferring upon it,
of course, the usual banking powers, with the right,
also, of receiving deposits as a Savings Bank. The
effort to combine the quite dissimilar objects and pur•
poses of regular banks of discount and circulation and
Savings Banks, does not seem to have been successful,
as we find that the experiment was, after a few years,
abandoned, and they were all superseded by genuine
Savings Banks.
The Bangor Savings Bank, Portland Savings Bank,
and Bath Savings Institution, were all incorporated in
1852, without any features that distinguished them
from others, except that in the charter of the Portland
Savings Bank there was a provision making it subject
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HISTORY OF SA VIN GS BANKS.
to examination by the bank commissioners at their
discretion.
In 1854 the Hallowell Savings Institution was
incorporated by an act which embraced but three sections, covering, however, essentially the same ground
as previous charters in the use of the following Jan.
guage: "And to enjoy all rights and privileges incident to similar corporations."
In this year also, the Randall Savings and Benevolent Association was incorporated, with the unique
feature that all of the profits over six per cent were
to be devoted to some benevolent purpose. It maintained a feeble existence until l861, when the trustees
voted to close it up. Its condition in 1855 will be
found in the reports of examinations made by the bank
commissioners, hereafter introduced.
As no distinguishing features marked the course of
legislation in the incorporation of Savings Banks thereafter, we will not further note the progress made in
this direction.
HADE SU13JEOT TO EXAMINATION.
Savings Banks generally, were first made subject to
examination by the bank commissioners in 1855.
These officers were first appointed under a provision
of the Revised Statutes enacted in 1840, but their
duties were by that act limited to banks of discount,
which they were required to examine at least once in
each year, and to make a report of the same to the
governor and council. By the act of 1855 the same
duties were imposed upon them concerning Savings
Banks.
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MAINE: CHARACTER OF LEGISLATION. -
233
As this first examination constitutes the starting
point of statistical information concerning the Savings
Banks in this State, we shall transcribe the return of
the same in full in a subsequent part of this section.
The two bank commissioners were in 1868 superseded by a single officer, denominated an examiner of
banks and insurance companies, with powers concerning these institutions similar to those previously exercised by the bank commissioners, and subsequently the
duties were divided between an examiner of banks
and an insurance commissioner, and so remain at the
present time.
GENERAL ACT OF 1869.
The first general act for the incorporation and regulation of Savings Banks was passed in 1869, and if it
did not wholly derive its inspiration from, it was certainly stimulated by, the effort elsewhere narrated to
enact a general law for the incorporation and management of Savings Banks in the State of New York in
1868. A general summary of the provisions of this
act and the subsequent amendments thereto will serve
our purpose of giving the latest status of Savings
Banks before the law in the· State of Maine.
Section 1 provides for the incorporation of Savings
Banks, and grants the exercise of the powers conferred
by this act and by the existing charters and general
laws concerning corporations.
Section 2 frovides for the election, annually, from
the body o corporators, of five trustees, who shall
have entire charge and control of the affairs of the
institution, except as otherwise provided in the b7laws. Provides also for elections to fill vacancies m
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HISTORY OF SA VINOS BANKS.
the board of trustees, and to add new members to the
body of corporators.
Section 3 provides for the election of officers by the
board of trustees, containing substantially the provisions of existin~ charters.
Section 4 ref1mres an examination of the affairs of
each Savings Bank by the trustees thereof as often as
once in six months.
Section 5 directs the trustees to see to the proper
investment of the funds of the institution, which investments are to be made in any manner which they
may regard as perfectly safe, except that no loans are
to be made on the secwity of names alone, nor, either
directly nor indirectly, to any trustee, nor to a firm of
which any trustee is a member.
Section 6 requires the net income ( except as hereinafter provided) to be divided semi-annually to depositors of three months' standing, though deposits of a
shorter time may be included; and the trustees are
not required to divide earnings so close as to embrace
a fraction of less than one-fourth of one per cent, the
balance being carried to a new account for the next
dividend. No deposit is to be received under any
contract or agreement to pay any specified rate of
interest or dividend for its use.
Section 7. Before making any dividend, one-fourth
of one per cent of the net earnings of the dividend
period is to be set apart as a reserved fund, to be kept
constantly on hand, to secure the depositors against
losses and contingencies until the same amounts to five
per cent of the total assets ( changed to ten per cent
m 1871 ). All losses are to be charged to debit of the
reserved fund account.
Section 8 defines the duties and powers of the treasurer.
Section 9 makes it the duty of the trustees to insure
real estate held absolutely, or by mortgage, if the same
is insurable
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MAINE: CHARACTER OF LEGISLATION.
235
Section 10. Deposits of married women made payable to themselves. A general act in 1860 had made
similar provision for the deposits of minors, where not
fraudulent.
Section 11 makes it the duty of the treasurer to
make an annual report of the condition of the institution to the bank examiner.
Section 12 prohibits any officer from using or appropriating any of the funds under penalty as for embez·
zlement.
SUPPLEMENTARY AND AMENDATORY.
In 1871 private banks, and banks of discount not
organized in pursuance of law, were prohibited from
holding themselves forth to the public as Savings
Banks, a precaution found necessary in the State of
New York as early as 1858.
In 1872 several additional and amendatory sections
were enacted.
The first section imposed a tax of one-fourth of one
per cent upon the deposits of Savings Banks, payable
to the State treasury, for the use of schools.
Section 2 required dividends to be made once in six
months, but not to exceed three per cent ; the balance,
except that set apart to the reserved fund, to be divided once in four years ; changed to once in two
years at the succeeding session of the legislature.
Section 3 provided that the examination required
to be made by the trustees might be made by two or
more of them, who should report to the bank examiner.
By section 4 the treasurer was required to return
to the assessors the names of persons pledging bank
stock as security for loans, and the amount of the
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HISTORY OF SA VINOS BANKS.
same. The purpose, to reach these securities as personal property liable to taxation, is obvious.
Section 6 prohibited the trustees from investing the
moneys deposited in unfinished railroads or roads
whose net income was not sufficient to pay the interest on its funded debt; or in the bonds of any town
or county, out of the New England States, issued in
aid of any railroad.
By section 6 the trustees were autho1ized to receive
a reasonable compensation for their services in making examinations and returns.
Some immaterial amendments were made in the
following year, but nothing that modified the essential
charSicter of the general law concerning Savings Banks.
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MAINE: ABSTRACT OF ANNUAL REPORTS
237
CHAPTER XXI.
CONDITIONS OF PROGRESS AS SHOWN BY REPORTS
We here present in full the first report of the examination of Savings Banks, made in 1855, and follow
that with the aggregates in succeeding years, with
such comments from the text of the reports as serve
to reveal the conditions of this interest from time to
time.
AUGUSTA SAVINGS
BANX.
[September 30, 1855.]
.Aaaeu.
State and city stock • .•• .. . . .. .. $15,600
Notes secured by bank stock and
36,900
city scrip ... ......... . .. .. .
1,320
Town note .. . .. . .. . . . ....... . .
3,300
Thirty-three shares State Bank . .
Y armooth and Portland first mort10,000
gage railroad bonds . . . . ..... .
3,073
Cash . . .. . ... . .. . ..... .. ..... .
12,951
Mortgages . . .. .•.•... .. .. . .. ..
00
00
00
00
00
00
06
L-iaJ>ilities.
Due depositors . . . . . . . . . . . . . . . . $80, 582 00
Profits . . . . . . . . . . • • • • • . . . . . . .
2, 562 06
$83,144 06
$83,144 06
Incorporated 1848. Re~nlar semi-annual dividends, two
per cent; extra dividends once in five years, the last being
two per cent. Notes considered good.
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HISTORY
o~• SA VIN GS BANKS.
BANGOR SAVINGS
BANX.
[October 24, 1855.]
Asse'la.
$5,000
City note .......•.............
4,000
County of Penobscot note .... ~.
8,000
City of Bangor bonds ......... .
3,300
Notes ...........•............
7,707
Deposited in bank ............ .
850
Cash on hand ...••..........•.
164
Interest ...•.•..•..•.....•...•
00
00
00
00
35
00
30
$29,021 65
Liabilities.
Due depositors .·. • . . . • • . . . . . . . . $28, 331 00
690 65
Profits . . . . . . . . . . . . . . . . . . . . . . .
$29,021 65
Incorporated 1852. Regular dividends, tw<., and one-half
per cent; extra dividends every five years. .Notes deemed
good.
BATH SAVINGS INSTITUTION.
[October 6, 1855.]
Asse'la.
Loaoe on notes ...... . ........ . $13,514
1,500
Town scrip .................. .
1,275
.
...............
Railroad bonds
9,412
Bank stock .................. .
455
Cash on hand ................ .
00
00
00
00
28
$26,156 28
Lialnlitus.
. . • . . . • $23, 113 55
.
•
•
•
.
.
.
.
.
Due depositors
3, 042 73
Interest . . . . . • . . . . . . • • . . . . . . . .
$26,156 28
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Incorporated 1852. Semi-annual dividends, two per cent;
balance of surplus divided annually. Notes regarded as well
secured.
BIDDEFORD SA VINOS INSTITUTION.
[September 8, 1855.]
Ass11ts.
Bank stock ..... . .......•.. . ... $14,200
Stocks ...............•........
11,600
Notes ... . .... . ....... .. . . ... .
60,003
Cash •...•..••......•......•..
10,612
00
00
08
72
$96,415 80
Liabilities.
Due depositors . .. • . .. • .. .. . .. . $90, 424 78
Balance . . . . . . . . . . . . . . . . . . . . . .
5,991 02
$96,415 80
Incorporated 1849. Semi-annual dividends, two per cent
for two years, and two and one-half per cent for two years
more. Stocks, quoted at par in the statement, are worth
more. Notes all considered good. Connected with Biddeford
Bank, which guarantees deposits if assets are insufficient.
GARDINER SAVINGS INSTITUTION.
[October 5, 1855.]
Asset8.
Bank stock. . . . . . . . . . • • . . . . . . . . $17, 750 00
City, State and railroad bonds. . .
72,000 00
Guaranteed stocks . . . . . . . . . . . . .
11,000 00
Railroad stocks. . . . . . . . . . . . . . . .
28, 400 00
Notes of cities and towns . . . . . . .
11,975 10
Notes of indi vidnals ~estimated). .
42, 892 00
Interest and dividends accrued . ..
2, 650 90
Cash on hand . . . . . . . . . . . . . . . . . .
3, 878 56
- - - - - $190,546 56
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HISTORY OF BA VINOS BANKS.
Liabilitw.
Doe depositors ...•.... . .... . .. $182,595 10
Interest doe. . . . . . . . . . . . . . . . . • .
7, 951 46
- - - - - $190,546 56
Incorporated 1833; went into operation 1834. Regular
semi-annual dividends, two per cent, and extra dividends once
in five years ; the latter always sufficient to average total interest to depositors more than six per cent, and during the
last five years about eight per cent. Investments all regarded
as perfectly safe.
HALLOWELL SA VINOS INSTITUTION.
[October 5, 1855.]
Aaaets.
$1,700
City of Hallowell scrip . .. . ... . .
35
Interest (estimated) ....... . . .. .
997
Notes secured by mortgage . •. .••
4
Cash on hand . ••••..••..•. ... .
00
00
00
62
$2,736 62
Liabil,iti,ee•
. Due depositors . . . . . . . . . . . . . . . .
Interest (estimated) . . . . . . . . . . . .
$2, 679 62
57 00
$2,736 62
Incorporated 1854, and went into operation in July of that
year. Semi-annual dividends, two per cent; surplus divided
every five years. Investments safe.
LEWISTON FALLS SAVINOS INSTITUTION.
[September 14, 1855.]
Aaaeta.
, Notes receivable . • ...• .. .. . .... $18,900 00
940 01
Cash .... . . .•• . . . •. .... ... . ...
$19,840 01
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H.A.INE: ABSTRACT OF .ANNUAL REPORTS.
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Li.abiUtia.
Due depositors .. . . . . . • . . . . . . . . • . • • • . . • . . . • .
119, 840 01
Notes secured as follows :
112, 350 by $14, 500 bank stock.
3, 250 by indoreers.
3,000 by $10,000 manufacturing stock.
300 by $1,000 railroad bonds.
Incorporated 1852. Semi-annual dividends, two per cent;
no extra dividends provided for. Connected with Lewiston
Falls Bank, which guarantees payment of depositors.
PORTLAND SAVINGS
BANK.
[September 11, 1855.]
Asset.a.
State, city and county securities .. $14,290
Mortgages of real estate ....... .
38,265
Railroad bonds ........... .... .
20,012
Other securities (1) •.••••••••. ••
3,500
Bank stock ........... ........ .
1,500
Expense account ..........• ..••
Cash ........... ........... .. .
00
65
50.
00
00
6 00
890 99
$77,965 14
Li.abiUties.
Due depositors . . . . . . • . . . . . . . . • $77, 283 54
Balance of profits .. ."...... . . . .
40 60
Interest . . . . . . . . . . . . . . . . . • . . • .
641 00
$77,965 14
Incorporated 1852. First dividend, May, 1853; five per
cent per annum on periods of nine, six and three months;
dividends since, at rate of six per cent per annum. Depositors
receive net profits. T'l"U8tees deem moneys securely invested.
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HISTORY OF SA VINOS BANKS,
RANDALL'S SA VINO AND BENEVOLENT AssOCIATI01".
Aaaef,f.
Bank stock ... . .......... . . .. . .
Mortgages of real estate ..... . . .
Estimated interest due ... . .. . .. .
Expense account .............. .
Cash on hand .• . .•......•. . ...
$4,000
838
79
50
1,226
00
53
44
00
21
$6,194 18
Liabuitua.
$6, 020 02
99 23
74 93
Due depositors .. . .. . . . . . . .. .. .
Estimated interest .. • .. .. .. .. ..
Surph:ur . . . . . • . . • • . • . • . . . . . . • .
$6,194 18
Incorporated 1854. Receives deposits of five cent.s, and
pays interest on two dollars; six per cent to be paid if so
much accrue. After paying six per cent and expenses, any
balance of profits is to be applied to benevolent objects.
Treasurer is the depositary of his own bond l Moneys are
received through agents appointed in different places. Notes
good and amply secured.
8AOO AND BIDDEFORD SA VINOS INSTITUTION.
[September 9, 1855.]
A88e"8.
Bank stocks ..........• . .. . ••.• $55,564 05
Railroad bonds and stocks ....••
88,244 05
City and Portland and Bath bonds, 35,145 83
100 00
East Boston Ferry stock .... .• .•
74,459 53
Loans on notes . •• •..••...•.. . .
Cash . . . . . . . . . . . . . . . . . . . . . . . . •
199 08
- - - - - $253,642 54
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.HAINE: ABS'.l'RACT OF ANNUAL REPORTS.
243
.Liabil-itie8.
Due depositors . .... . .. . . .. . ... 1237, 015 39
Profits . . . . . . . . . . . . . . . . . . . . . . .
16, 523 36
103 79
Balance, suspense account.......
- - - - - 1253, 642 54
Incorporated 1827. Oldest institution in the State. During
first few years had only a small amount of deposits. Present
number of depositors, 1,280.* Regular semi-annual dividends,
two per cent; balance of profits divided every five years.
Railroad stocks not in all cases ·worth par, but average dividends received by the institution from its investments is 6.47
per cent.
Soum
BERWICK SAVINOS BANK.
[September 12, 1855;]
Asset,a.
Loans lll'!cured by indorsers . .. . •. 176,239 75
Bank stock .. ...... . .. . ....•. .
3,250 00
Profit and loss . ... .• ... • ......
241 00
1,813 02
Cash ...... . . . . . ... . ....... . . .
181,543 77
L-ioJJil,it,ies.
Due depositors . . . . . . • . . . • • . . . • 177, 930 09
Profit and loss . .... . . .... .... . .
3, 613 68
181,543 77
Incorporated 1850. Semi-annual dividend of two per cent
on deposits of less than one year, and two and one-half per
cent on deposits of one or more years' standing. Connected
with South Berwick Bank, which guarantees payment of depositors.
• Tbe oDly inaUtuUoa coacernlag which this item la reported.
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HISTORY OF SA VINOS BANKS.
18G6.
The next report of the bank commissioners was
made under date of December 30, 1856, and presented
the following
Summary.
Number of depositors . . ... . ..•...... 4,947
Due depositors (total assets) .•.••.....•.•.•.. 1919, 571 85
Average to each depositor. . . . . . . . . • • . . • • . • . •
185 88
The commissioners, at this early day, discern the
need of uniformity in the provisions relating to the
organization and government of Savings Banks, and
recommend a general law for this purpose. They also
comment unfavorably upon the intimate connection,
in a few instances, of Savings Banks with banks of
discount. We have previously noted that three of the
institutions reported the · previous year were only
ordinary banks of discount and circulation, with Savings Bank powers superadded to their ordinary functions. Without l~gislative action, however, the connection appears not to have been sufficiently profitable
to justify its continuance, and ceased after a few years.
The commissioners report the general condition of
the Savings Banks examined as favorable.
1857.
The commissioners make but the briefest referenee
to that part of their duties connected with Savings
Banks, and give no details, nor even a general summary. From other sources we gather that the total
assets of Savings Banks were about $968,325, a gain
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over the previous year of a little less than $40,000.
As at this time very little surplus had been accumulated, the reported assets represent very nearly the
amount due to depositors.
1858.
The commissioners offer not a word concerning
Savings Banks, and give no summary of their condition, which appears to have changed but little from
the preceding year, the assets being estimated at
t968,194.
181>9.
In this year we have the following summary, without a line of comment :
Number of depositors ....... .... .... . 4,997
Doe depositors . . . . . . . • . . . . . . • . . . • . . • • • . • . . 1885, 211 37
Profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38, 186 41
Total assets . . . . . . . . . . . . . . . . . • • . . . . . . . • 1923, 397 78
The above indicates a falling off from the two previous years; but the evident indilference of the
commissioners to this part of their duties leads to a
rational conjecture that they may not have been especially careful to secure accuracy in these results.
1860.
The commissioners, as usual, appear to :find nothing
in the condition or workings of Savings Banks worthy
of comment, and negligently sandwich ·the aggregates
of these institutions between the statistics of other
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:JIISTORY OF SAVIN GS BANKS.
banks and the text relating to the same.
aggregates are as follows :
These
&vmmary.
Number of banks.................... 14
Due depositors . . . . . . . . . • . . . . . . . . . . . . . . . . $1, 466, 457 56
72, 800 34
Profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets .. , • • . . . . . . . . . . . . . . . . . . . . $1, 539, 257 90
The above result more than confirms our suspicions
that the aggregates, as given, of the two previous
years m11St . have been erroneous. That there should
have been a falling off in 1868, resulting from the
financial disturbances in 1857, would be reasonable;
but it is also quite as reasonable that some part of the
very large gain reported in 1860 should be credited
to 1859. It is to be understood, however, that these
aggregates relate to conditions not at the close of the
year for which they are reported, nor on any uniform
day, but at a period in the latter part of the year,
commonly extending through October and November.
1861.
Summary.
14
Number of banks..... . . . . . . . . . . . . .
Number of depositors . . . . . . . . . . . . . . 9, 818
Due depositors ....... _....•..... , ........ $1,620, 270 26
88, 691 40
Profits . . . . . . . . • . . . • . • . . . . . . . . . . . . . . . . . .
Total assets ..................... .... $1, 708, 961 66
The text of the report is brief, and refera to the
gratifying fact that no failure of a Savings Bank has
ever occurred in the State, the commissioners forget-
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ting or not knowing of the failure of the first Savings
Bank incorporated. They refer, also, to the passage
in safety of the Savings Banks through the :financial
crisis of 1857, and comment favorably upon the
economy with which these institutions are conducted,
the expense being merely nominal. In this year the
Randall Saving and Benevolent Association, whose
peculiar character has been elsewhere noticed, resolved
to close its operations.
1862.
In this year, the bank commissioners, Messrs. A. 0.
Robbins and Francis K. Swan, appear to entertain an
inklligent . and conscientious apprehension of their
duties in relation to this rapidly growing interest.
Their report for the year 1862, found in the documents
of 1863, was by far the most elaborate, comprehensive
and appreciative that had yet been made. In it they
quote extensively from the report of the. Masi:Sachusetts bank commissioners, made the previous year, and
from which we have also taken liberal extracts in
another part of this work. From their report we
derive the following statement of the amount due to
depositors in each of the fifteen Savings Banks doing
business in the State :
Summary.
Augusta Savings Bank .... ................••
Bangor Savings Bank ..... . . . . ..... ....... .
Bath Savings Institution ...•..•....•.•••..•.
Biddeford Savings Institution . . .......•....•
Brunswick Savings Institution •........••..••
t164,461
120,076
88,760
118,308
23,609
Carried forward .......................•
t515, 214
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HISTORY OF SAVINGS BANKS.
Brought forward .....•..•.....••••••.•
Calais Savings Bank ...... . .... . ....... . .. .
Gardiner Savings Bank .... . ... .... . . .. . ... .
Hallowell Savings Institution .. . ..• . . • ..•...•
Lewiston Institution for Savings .. ... . ......•
Portland Five Cents Savings Institution ... .. .
Portland Savings Bank ... ...... . .. . .... . .. .
Randall Saving and Benev't Institution (closing),
Saco and Biddeford Savings Institution • . .....
South Berwick Savings Bank ... • ..• . ........
York County Five Cents Savings Institution . .
1515,914:
961
930,315
97,096
69,418
87,083
452,088
4:, 228
373,705
86,551
29,500
Total deposits (profits not reported) . . . . . .
$1, 876, 165
With a trne and rational interest in the subjectmatter with which they have been brought into official
relations, the bank commissioners also present a summary of the aggregate deposits in the Savings Banks
of the New England States and the State of New
York in 1860, as derived from their returns to the
proper departments as follows :
1860.
Number
of banks. Due depo!liton.
STATB.
Vermont . .. . . •...•.••. • .••.... . •• •... . .•• •.
Maine . . ...•. •.. .• ....••.. .• ... •••••... ••. . .
Rhode Island ... •••• .. .•• ; . •• ••• .. . . .. . • . •. .
New Hampshire .. . • .•••.•• .•• •.. ..... . . . ...
Connecticut. . . . . . . • . . •.•. •••.• •. . • ... . . . . .
Massachusetts .. .•••.•.•••• •.• .
.. ..........
Total New England .. ............. .....
New York •.. . • .... . . •• . . •••. .••• •• .•.. : . ..
Total New England and New York ..... .
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14
21
26
64
86
... .
$1,145,263
1,466,457
7,765,771
4,86o,o:z5
18,132.121
39,424,419
72
t12,794,756
67,450,397
.. ..
$140,245,143
.HAINE: ABSTRACT OF ANNUAL REPORTS.
249
1868.
Summary.
Number of banks. . . . . . . . . . . . . . . . . . . . 15
Due depositors . . . . . . . . . . . . . . . . . . . . . . . . . . $2, 641, 476 41
Text brief, and not especially practical.
1864.
Summary.
Due depositors .. ... .. .. .. . .. . ..•...... .. $3,672,975 85
luma of Assets.
United States government securities ........ $1,072,636 52
State securities . . . . . . . . . . . . . . . . . . . . . . . . . .
232, 913 00
Oit.y, town and county .. . .. . ... . ....._. . . . •
582, 831 00
Te~ brief, but satisfactory.
1865.
Summary.
Number of depositors . . . .. . ....... 18,308
Due depositors . . . . . . . . . . . . . . . . . . . . . . . . . . f3, 336, 828 02
_Decrease from previous year... . . . . . . . . . . . •
336, 147 00
The bank commissioners account for this decrease
by the withdrawal of deposits to invest in government
seven and three-tenths treasury notes. Doubtless this
contributed somewhat to the result; but the return
of many thousand soldiers, who had deposited their
bounty money on going to the war, and now withdrew
the same to engage in business, also had its effect.
1866.
Summary.
Number of banks .. . . . . .. . . . . . . . . . . . . 18
Number of depositors ... ... ... . . .. 19,786
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IDSTORY OF SA VINOS BANKS.
Due depositors . . .... . . . ..•............ .. $3,946,433 82
Increase from previous year . . . . . . . • . . . • • • .
609, 605 80
Text practical and judicious. Comment on the
alleged fact that not a dollar of loss had ever been
sustained by depositing in Savings Banks. Whether
we are to understand from this that the failure of the
first incorporated institution was without loss to depositors, or that the statement was made without
knowledge or in forgetfulness of that failure, we have
no means of knowing.
1867.
Summary.
Due depositors . . . . . • . . . . . . . . . . . . . . • • . . . • $5, 598, 600 00
Twenty banks reporting.
1868.
In this year we have the report of the first sole
examiner of Savings Banks and insurance companies,
under the late law. The position had been most for•
tunately and worthily conferred on Hon. A. W. Paine,
whose industry, fidelity and intelligence in the discharge of this and other important public duties, have
made his name familiar beyond the borders of his own
State.
Swmtmary.
Number of banks . . • • • . • . . . . • . . . . .
28
Number of depositors . • . • • . . . . . . . . 30, 528
Deposits and profits . . ........... . . .. ..... 18,032,246 71
A summary of the investments is also given, as
follows:
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United States government securities .... • •• • fl, '126, 146 00
State, county and municipal. . . . . . . . . . • . . . . 1, 294, 511 00
Corporation securities . . . . . . . . . . . . . . . . . . • .
869, 045 00
Real estate . . .. . . .. . ......... . ...........
176,551 00
Corporation stocks . . . . . . . . . . . . . . . . . . . . . . .
449, 561 00
.Mortgages of real estate . . . . . . . . . . . . . . . . . . 1, 811, 241 00
Notes secured by collaterals . . . . . . . . . . . . . . . 1,118, 288 00
Notes secured by indorsers . . . • . . . . . . . . . . . .
7'15, 285 00
Cash •. . . . . . . . . . . . • . . . . . . . . . . . . . . . . . . . . .
809, 5'11 00
.Miscellaneous, furniture, safes, etc . ... . . . . . .
2, 048 00
Total . . . . . • . • • . . . • . . . . . . . . . . . . . . . . . $8, 082, 246 00
The text of Mr. Paine's report discusses this important and rapidly-growing interest more fully and
intelligently than any of his predecessors had done.
He points out serious defects in existing laws, referring to the various charters, which embraced nearly
all the law there was for the government and control
of these institutions. He recommends a limited number of tmstees, to be selected, we suppose, from the
body of corporators, as was subsequently provided
for. His experience and observation had doubtless
led to the conclusion that, where the management and
direction of affairs was committed to a large body of
corporators, the result was either general inefficiency
or the concentration of too much power in the hands
of a single managing officer. He would also require
a bond of the treasurer, and that trustees make oath
to the proper performance of their duties.
Concerning investments he takes conservative
ground, maintaining that regard should be had to
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lliSTORY OF SAVINGS BANKS.
absolute safety. Security, he regards as primary and
fundamental ; profit, as only secondary and incidental.
He also recommends that the purchase of real estate
by any Savings Bank be limited to ten per cent of the
deposits, though it is not made to appear that any
serious abuse had arisen from investments in this
direction. He favors mortgage security as exception•
ally safe, and notes that not a dollar of loss had been
sustained by the Savings Banks from the destructive
fire at Portland; but, as a further precaution, recom·
mends that trm1tees be required to insure mortgaged
property. He does not favor personal security for
loans, neither does he recommend legislation to prohibit it. He favors the accumulation of a moderate
surplus, as a security against losses. He discountenances extra dividends, and would provide some
means whereby trustees may be compelled to discharge
the duties they have undertaken to perform.
The e:ffect of this report is seen in the action of the
legislature to which it was addressed, by whom the
general law already noticed, and summarized on pages
233-235, was enacted, embodying many of the recom•
mendations of the report.
1869.
Summary.
Number of banks............. ....
87
Number of depositors ............. 89,527
Due depositors . . . . . . • . • • . . . . . . . . . . . . . . . .
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1870.
Swmmary.
43
Number of banks .. .... .. .. . ...... .. .
Number of depositors . .. . ...... .. .... 54,155
Amount of deposits (including surplus)......•• t16, 597, 888
Surplus.. . ..... ... .. . ......... . . . . . . . . . . . .
768,097
Leaving amount credited and due depositors, t15, 829, 791
The commissioner, in commenting upon the average
rate of dividends of Savings Banks in the State (seven
per cent), suggests the propriety of requiring a larger
amount to be credited to the reserve or surplus fund,
against such time of financial depression as is likely
to be attended by large demands upon the resources
of Savings Banks, and a depreciation in the value of
the securities from the conversion of which the demand
must be met. The commissioner further says :
"The policy contemplated in the institution of Savings Banks was that of absolute safety to depositors,
with such profits only as should be compatible with
that condition. And, as they were designed to be
permanent institutions, conducted for the benefit of
persons of moderate means-for operatives, women
and children, who have neither the time nor knowledge of business and of persons sufficient to judiciously
invest their own funds -it is of the utmost importance that investments of unquestioned security should
be sought, rather than those paying high rates, so as
to insure moderate dividends and less fluctuation in
the deposits. A lar§e reserve would be of vast importance to ·this end.'
The following comparison, illustrating the development of the Savings Bank system in the State, is
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HISTORY OF SA VlNGS BANKS.
made by the commissioner : In 1860 the deposits in
Savings Banks averaged to each inhabitant of the
State $2.33; in 1870 the deposits averaged to each
inhabitant, allowing the same basis of population,
$26.40.
1871.
Swmmary.
Number of banks. . . . . . . . . . . . . . . . . .
49
Number of depositors . . . . . . . . . . . . . . . 79, 411
.A.mount of deposits and surplus .. . . . .. . . .... . $22, 787, 802
1872.
Summary.
Number of banks. .. . .. . .. . . .. . .... .
54
Number of depositors ..... .. . .. . . .. . 81,320
Amount of deposits and surplus . .. . . ... .._... $26,154,333
Amount of dividends . . . . . . . . • . . . . . . . . . . . . .
1, 384, 510.
United States tax paid . . . . . . . . . • . . . . . . . . . . . .
69, 779
State tax paid. . . . . . • . . . . . . . . . . . . . . . . . . . . . .
119, 159
Added to reserve fund, at least one-half per cent. = = = = =
The text of the report recommends caution in organizing new banks ; the first time, we believe, in
which that matter receives attention. Investments
in western securities are not favored.
1878.
Summary.
Number ot banks .. ....... . . . ...
56
Number of depositors . .. . . .. .. .. 91,398
Amount of deposits and profits ...... . .. . $29,556,523 84
Gain in deposits from previous year .. ...•
3,402,190 81
As this statement was made for the third day of
November, at a time when the financial panic had
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wrought its worst results, we may say the exhibit is a
remarkable one. The gain during the year bad exceeded the gain of the previous year by more than
$35,000, while a very considerable falling off might
have been rationally anticipated. It will be seen that
the gain in the State of New York was, on deposits,
but $233,464, though to institute a fair comparison
with the foregoing, the gain in assets in the latter
Rtate should be given, which was $2,259,399.
The bank examiner discusses various topics connected with the interest supervised by him-with intelligence and good sense. He notes with favor the fact
that the large deposits, which most unfavorably affect
Savings Banks in time of financial difficulty, are diminishing, and favors a law, with proper restrictions,
• that shall prohibit Savings Banks from declaring any
dividend on sums exceeding $2,000. He further
recommends that Savings Banks be authorized by law
to require sixty days' notice of intention to withdraw
deposits. It would seem that, so far as the chartered institutions were concerned, they had all the power needed
in the premises. See charter of Saco and Biddeford
Savings Institution, section 3, last cilause : Appendix.
The examiner calls attention to the fact that, notwithstanding the prohibition in the act of 1869, the
reports show an aggregate of $368,828.74 loaned on
names alone; and, though approving the policy of the
law, and deprecating its violation, he suggests an
abatement of its strictness by allowing some portion
of the deposits to be thus loaned in preference to
investing in Western securities, which he regards a8
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HISTORY OF SAVINGS BANKS.
altogether undesirable. He further recommends that
dividends be limited to three per cent semi-annually,
and that no extra dividends be declared until the
reserve fund amounts .to fifteen per cent of the
deposits.
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JLUNE : STA.TISTIOS, ETO.
CHAPTER XXII.
STATISTICS OF GROWTH AND PROGRESS.
We will now present the condition and work accomplished by Savings Banks in the State of Maine,
so far as these can be derived from their replies to my
inquiries upon the subject, made in the same form
in which they were submitted to other Savings Banks
throughout the country. It will be seen that returns
to my inquiries were in some form, more or less complete, made by ten of the fifty-six Savings Banks in
the State. Where no other date is given, 1st of
January, 1874, will be understood. These will be
followed by the usual tables, showing the development of the system at large.
STATISTICS FURNISHED BY SAVINGS BANKS.
AUGUSTA SAVINOS
BANK.
[Returns made for July 1, 1874.]
Date of first deposit, October 9, 1848.
10,744
Number of accounts opened . . . . . . . . . . . . . .
5,957
Number of accounts closed................
4, 787
Number of open accounts.. • . . . . . . . . . . . . . . .
Amount deposited, including dividends ..... $5, 236, 532 59
Amount withdrawn . . . . . . . . . . . . . . . . . . . . . . 3, 273, 537 85
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HISTORY OF BA.VINOS B.ANKB.
Amount due depositore ........ . .. . .•..... $1,962,994 74
Dividends credited prior to July, 1874 * . . . .
545, 700 47
About three-fourths of the whole number of open
accounts are for less than $600 each.
BATH SAVINOS INSTITUTION.
Da~ of first deposit, August 17, 1852.
Number of accounts opened to Jan. 1, 1874..
5, 747
Number of accounts closed. . .. .... . .. .....
2, 777
Number of open accounts Jan. 1, 1874. . . . ..
2,970
Due depositors at above date . . ....... .. . .. $1,585,519 67
Amount deposited and amount of dividends, since
organization, not given.
CALAIS SA VINOS
BANK.
Date of first deposit, August 29, 1861.
Number of accounts opened . . . . . . . . . • . • • . .
N um her of accounts closed . . . . . . . . . . . . . . . .
Number of open accounts.... . . . ... . .. . ...
Amount due depositors at periods mentioned below :
DATE.
Aug., 1866 ... .. . ... ..
1867 .. . .. •••• .•
1868 ...• • •.•.•.
Jan., 1869 ...
1870 .. • .. ..••••
DATE.
Amount.
$8,180
8,049
29,922
35,292
57,650
1, 550
752
798
Amount.
Jan., 1871 . . .. ...••. •
$95,258
1872 . . . . .. .•.. .
1873 .• .. . .• • ...
1874 . . • •• • •....
July, 1874 . .. .•. .• • ..
169,o65
195,785
232,38~
251 ,503
Dividends credited since organization, $39,648.
Amount deposited since organization not given.
• Dividend earned, and to be credited Aug.
1,
wlll locreaae the above to about $6oc,,oal,.
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GoRJLUI SA VINOS BANK
Date of first deposit, April 25, 1868.
Amount of first deposit, ten cent,.
No items given concerning number of accounts opened or
maining open.
Amonnt deposited from organization to July
$137,018
1, 1874, including dividends ............ .
56,142
Amount withdrawn ..................... .
80,876
Due depositors July 1, 1874 .............. .
11,431
Dividends credited to depositors .......... .
re-
65
41
24
12
The returns made to my inquiries state that the
gross amount of deposits paid out is $44,711.29, which
I suppose, however, to be exclm,ive of dividends
credited and withdrawn. I deduce from other items
that the amount of deposits and dividends withdrawn
are as given above, $56,142.
LEWISTON INSTITUTION FOR SAVINGS.
Date of first deposit, July, 1860.
Amount deposited, inclu<lingdividends ..... $3,668,380 08
Amount withdrawn. . . . . . . . . . . . . . . . . . . . . . 2, 567, 771 86
Amount due depositors. . . . . . . . . . . . . . . . . . . 1, 100, 608 22
Amount of dividends . . . . . . . . . . . . . . . . . . . .
395, 144 67
Average rate of dividends, 7.64 per cent.
No statement given concerning the number of depositors or accounts.
MAINE SA VINOS BANK, PORTLAND.
This institution was chartered March 29, 1859,
under the name of Portland Five Cents Snvings Jn.
stitution. In 1868 its name was changed to the above.
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HISTORY OF SAVINGS BANKS.
Date of first deposit, June 4, 1859.
Number of open accounts . .. . .............
11, 551
Amount due depositors . . • . • • • . • . • . . • . • . . • $3, 664:, 469 78
The treasurer of the institution, A. M. Burton,
remarks that other inquiries made he is unable to
answer, for the reason that the records, cash-books
and journals of the institution were destroyed in the
great fire of July 4, 1866.
NEWPORT SAVINGS
BANK.
Date of first deposit, Jone 9, 1866.
Number of accounts opened .. ... .... ... •..
Number of accounts closed .. . .... . ... •. ...
Number of open accounts.. ......• . . . .. .. ...
Due depositors January 1, 1874 . .. • .......•
1,806
912
894
$191, 682 40
Treasurer states that the whole amount deposited
cannot be given. The amount, however, from August,
1870, to November, 1873, is stated at $298,268.
PORTLAND SA VINOS BANK.
Date of first deposit, July 3, 1859.
Number of open accounts Jan. 1, 1874 .. .. . .
Amount due depositors . . . ...... ••. .. ... ..
Amount of dividends credited since organization . . .. • .•..•.. . .. .. . .... . . .... . . ....
9,700
$4,066,197
1,684,749
The treasurer is unable to give further statistics of
the work accomplished by the institution, owing to
the imperfect system of keeping the books and records
during the first years.of the institution. 'l'he foilowing extract, furnished by the treasurer, supplies some
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items of interest concerning the institution not otherwise attainable :
"Although not organized until 1862, it is the third
oldest institution of the kind in the State,* the Saco
and Biddeford Savings Institution having been organized in 1827 and the Gardiner Savings Institution in
1834. From various local causes the growth of the
bank was very slow, and in May, 1862, it had only
accumulated deposits to the amount of $408,363.27.
In 1866 the bank began to feel the influence of the
distribution of money among all classes by the business activities of the war, and for several years its net
increase was over $600,000 per year, or the deposit
increased $200,000 more in one of these years than in
the ten years from 1852 to 1862. The deposits now
amount to the sum of $4,003,588.89. The first president of the bank was Gov. Albion K. Parris, who,
however, remained in office but a few months, and was
succeeded by the late Phinehas Barnes, Esq., who resigned as president in October, 1863, although he continued to fill the important :post of legal adviser
of the bank until his death, m 1871. Oliver Gerrish, Esq., was chosen temporary president to succeed Mr. Barnes, and in May, 1874, the Hon. J. B.
Brown was elected president, which office he still
holds.
"The managers of the institution have been chosen,
with scarcely an exception, from the most active and
public-spirited men in the community, and the funds
of the bank have been invested in such a way as to
secure the greatest safety and at the same time assist
in developing the various business int~rests of the city.
At least one-half of the assets of the bank is loaned on
•This seems to be an error, as the Augusta Saving• Bank, a la.rge 'aod 1louri1blog ioltltutioo, was incorporated lo 1848, and the Bangor Savings Bank was organized March 17,
1852, about three months prior to the opening of the above. The Bath Savings Institution
was incorporated in the same year (1852), but was not organized until August. It appears,
therefore, that the Portland Savings Bank is the fifth lo order of age or existing IDstltutioos, and not the third, u stated in the extract. It is, however, the largest.
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HISTORY OF SAVINOS BAN.KS.
mortgages and collateral securities to citizens of the
city, while but a small proportion of the whole assets
is invested in bonds of first-claBs cities and counties
outside of Maine.
"The first treaBurer of the bank was James Merrill,
Esq., upon whose death, in 1859, Joseph C. Noyes, Esq.,
was chosen his successor. At this time, April 1, 1859,
the deposits amounted to $161,825.62, and the bank
had only been kept open on Wednesdays and Satur•
days, between the hours of 11 and 1 o'clock. Under
Mr. Noyes the bank WM kept open every working day
between those hours, and the office hours were gradually extended to the regular working hours. At his
death, in July, 1868, the deposits amounted to $2,273,
266.11. He was succeeded by his son, Frank Noyes,
who had been Msistant treasurer.
"The bank, up to the time of the fire, occupied one
of the small offices in the old Canal Bank building.
It was then removed temporarily to Free street, until
the completion of the building known as the Portland
Savings Bank block, on Exchange street, in May, 1867.
"The rate of interest paid by the bank has never
been less than six per cent, compound interest, and
from May, 1866, to November, 1869, it was seven per
cent, since which time it has paid six and one-half per
cent, for 1870 and 1871, and under the new law pays
six per cent for 1872.
'
" In this connection it is interesting to note the rapid
accumulation of money at compound interest. The
first deposit in the bank, July 3, 1852, of $100, was
made by a gentleman, since deceased, for his daughter.
This deposit has never been added to or subtracted
from since. In November, 1862, it amounted to
$181.60, and at this date the original $100 has increased to $37 4.56.
"Since the foundation of the bank, no money has
been loaned on personal security. No money is loaned
to any officer or manager, and the total losses from
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263
HAINE: STATISTICS, ETC.
bad debts in the last twenty years has not exceeded
,2,000.
SOLON SA VINOS BANK.
Date of first deposit, April 14, 1869.
Number of accounts opened since organization,
Number of account.a closed since organization,
Number of open accounts Jan. 1, 1874 .•...•
Amount deposited, including dividends .....
Amount withdrawn ................•..•••
Amount due depositors . . ........•...•...•
Amount of dividends credited .......••.•.•
w EST w ATERVILLE
387
124
263
$56,865 57
28,288 72
28,fi76 85
3,309 29
SAVINOS BANK.
Date of first deposit, May 10, 1869.
Number of accounts opened .....•.....••.•
Number of account.a closed ..........••••••
Number of open aecount.s . ... .... .. ......•
Amount deposited, including dividends ....•
Amount withdrawn .... . •.•••...•.....•• •
Amount due depositors ......•..•.....•...
Dividends credited ..........•..••........
900
367
533
t234,715 58
137,884 47
96,831 11
16,194 92
The village is largely manufacturing, and the popu•
lation constantly changing, which makes the changes
in deposits frequent and considerable.
The table below is constructed to show the progress made in eighteen years by the institutions whose
earliest returns were made in 1855, when the total
deposits in eleven banks were less than $1,000,000;
and is, in brief, a summary of the reports for that year
as heretofore given, with a comparison of their condi-
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HISTORY OF SA VIN GS BANKS.
tion, as reported in 1855, with that of the same institutions existing and making returns in 1873.
NAME OF INSTlT UTION.
Du e deposi~ Due depositors,
includ mg surors, 1855.
plus , 1873.
Open
accounts,
1873.
Aug usta ... ... ........
Ba ngo r ...... . . . . .. . . .
Bath . . ... .. .. .........
Bidde fo rd . .. .. .... . . ..
Ga rdin e r . .. ... ..... ...
H allowe ll . ... . ..... ..
Lewiston Falls ........
Portland .. ........ . . . .
Randall's . .. .. .... .. . . .
Saco a nd Biddefo rd .. . .
South Berwi ck .... ....
Profits o r surplus . .. .. .
$80,582
$1,927, 241
28,331
2,341 ,205
23, II 3
1,704,531
90,4 24 Sup.e rseded
1,023,016
I 82,595
2,679
403 ,582
19,840 Supe rseded
77,283
4,424,689
6,020
C losed
1,46o,107
237,015
77,93o Superseded
41 ,316 ... ..... ..
4,643
5,728
2,908
Eleven banks . .....
$867,131
$ 13,284,374
.. ... .
3,208
1, 253
..... .
9,688
Am ount
deposited
1873.
$589,03:2
683,819
468,761
. .. . .. ..
220,720
121,573
. . . .. . .. .
1,262,132
..... .
3,755
.. ....
. ... ..
. ·· ···· ··
338,473
. ... . ....
.. ... ... .
31,183
'3,684,510
The number of depositors is not given in the report
for 1855, but, as the number reported for 1856 was
4,9 27, we may estimate them for the previous year at
4,500, and in the seven institutions reporting in that
year which reported in 1873, they may be estimated
at 3,500. The deposits and profits in c;hese seven
institutions were $672,917. Comparing, then, the
condition of the institutions reporting in 1855 with
the conditions of the same institutions that continued
in existence and reported in 1873, we have the following as the growth during eighteen years:
Increase in depositors or open accounts, from 3,500
to 31,183, or nearly nine times.
Increase in the amount on _deposit, from $672,917
to $13,284,374, or about nineteen and one-half times.
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.MAINE: STATISTICS, E'I'O.
265
As has been previously stated, the Biddeford, Lewiston Falls and South Berwick banks were subsequently closed, without loss, as we presume, and each
has been superseded by an institution in active and
successful operation at this time.
The Biddeford Savings Bank was organized in
1867, and had deposits and surplus, November, 1873,
$533,662.
The Lewiston Institution for Savings was organized
in 1860,and had deposits and surplus, 1873, $1,070,059.
The South Berwick Savings Bank was organized in
1866, and had deposits and surplus, 1873, $203,228.
The location of the Randall's Savings and Benevolent Association not being given, I am unable to determine whether it had any local succession. It never
attained sufficient prominence to make its fate or survivorship of any considerable importance.
Below will be found a comparative table showing
the amount and per cent of the different classes of
securities in 1855 and 1873, as nearly as they can be
made up from the data furnished by the returns of
those years respectively. Those for the former period
do not in all cases distinguish between loans on notes
secured by real estate or other collateral and loans
upon personal security alone; and the later reports
include, among loans on collaterals, loans made
directly to municipal corporations, which tends to
confusion in an attempt to classify investments upon
the basis of the nature of the security offered. So,
loans on collaterals appear to embrace loans on personal security only. As the result is approximate
34
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HISTORY OF SA VINOS BA.ND.
and comparative only, the per cent is not carried to
remote fractions.
1873,,
1855.
SECURITIES.
AmounL
Mortgages of real estate .........
U.S. bonds . .. ............. .
State, county and city bonds .....
Bank stock ... . ...... . ...........
Railroad stock and bonds ........
Loans on collaterals and personal
security . . . . .. . ....... . .... . .
Real estate .......... . ...•• • .....
Cash ....... . . .. ........ ........
Miscellaneous .. . ........ . ... . . . .
Per
ceoL
6
$53,051
·····
··· ..17
16o,130
108,916
184,531
21
326,207
37
....... .
31.07•
3,225
12
I
..
3½
½
Amount.
Per
CCDL
$7,319,777
974,104
8,o86,219
66o,652
4,566,199
25
6,123,002
231,581
768,140
826,845
21
3
27
2
15
I
3
3
It will be seen that the changes in the course of
eighteen years have been considerable, and that the
tendency has been toward improvement in the class
of securities in which investments are made.
The general progress of the Savings Bank system
in Maine is shown by the following table. It will be
observed that the wonderful development of the sys•
tern is embraced within a period of about fifteen years.
The figures in the column "due depositors" will be
found not to agree with those in a recent report
showing the growth from 1860 to 1870. In that
table the deposits bometimes included profits, and
sometimes not. We have, for the sake of uniformity,
sought to bring all "t? a common basis.
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TABLE shmuing the grutl'lh a11d pro1;ress o.f S,n•i11gs Banks in Maine .from 1855 lo 1874,
INCREASE IN PaR100s o,
YBAR.
No. of
banks.
No. of open
accounts.
Increase
in open
accounts.
Amount due to
Increase In am't
depositors.
Jue dc:positon.
Increase in
number of
open acc'ts.
--
0
cg
N.
~
~
C")
0
~
~
1855
1856
1857
1858
1859
186o
1861
1862
1863
1864
1865
1866
1867
1868
1869
1870
1871
1872
1873
1874
............ . . .. ... .
....•••.••..•..•....
• ••••. ... . . . ........
................•...
.•.•• .••.. ....•.••.•
.• • • • .• • •..••••••...
.•.••• ••• ••••••• •.• .
••...•••••••••••• ••.
....................
....................
•• .•.• .. .••••••••.• •
•••.•••••••••••••...
.••••.••••••••.••••.
• •••••• • •.••.•.•....
••••.•••.•.....•.••.
..• • ...•.....•...•..
.· ...................
.•••... . •..••..• • .•.
•••••• • .• •..• .... • •.
••.••••••...•.••..•.
11
11
II
12
13
14
14
15
15
15
15
18
20
28
37
43
49
54
56
58
*4,500
4,947
• 5,500
• 5,6oo
4,997
• 7,500
9,818
* 11,000
* 14,000
• 18,000
18,308
19,786
* 24,000
30,528
39,527
54,155
69,411
81,320
91,398
96,799
......
447
553
100
-6o3
2,503
2,318
1,182
3,000
4,000
308
1,478
4,214
6,528
8,999
14,628
I 5,256
11,909
10,078
5,401
$867,131
919.571
968,325
968,194
923,397
1,539,2 57
1,708,961
1,876,165
2,641,476
3,672,975
3,336,828
3.946,433
5,598,6oo
8,032,246
10,839,955
16,597,888
22,787,8o2
26,154,333
29,556,523
31,051,963
..... .....
$52 ,440
48,754
-131
-34.797
615,86o
169,704
167,204
765,31 I
1,031 ,499
-336,147
009,6o5
1,652,167
2,433.646
2,807,709
5,757,913
6,189,914
3,376,531
3,402,190
1,495,440
Fn·a
YBARS.
...0.;
H
.....
,_v
<> C
i:i..·-
'o .
Increase in
amount
due depositors•
First period,
three years.
First period,
three }"Cars.
....
i
Cd
."'""
Cl,,""
--
Ii!::
~
lo,J
1,100
24
$101,o63
12
8,400
150
1,673,282
173
16,528
u8
5,390,770
204
6o,870
200
21,524,277
268
_i
a
t:.:.
• Estimated.
-Decrease.
~
"
SEVENTH SECTION;
SAVINGS BANKS IN THE STATE OF
VERMONT.
CHAPTER XXIII.
CONDITIONS
OF DEVELOPMENT.
It is, perhaps, profitless to inquire what were the
causes that delayed the inception and that have r&
tarded the growth of the Savings Bank system in the
State of Vermont, as compared with other New Eng•
land States. But some of the more obvious causes
that have tended to this result lie so nearly upon the
surface of any investigation, that they may be briefly
indicated. We can bfst call attention to these by
instituting comparisons between Vermont and New
Hampshire, which, to superficial eye, present so many
features in common.
Thus, they are in juxtaposition, being separated
only by the Connecticut river; possessing similar
characteristics of surface, soil and climate, their respecti ve northern and southern boundaries being, for
all practical purposes of comparison, coincident.
They are of nearly identical area, New Hampshire
having 9,280 square miles, Vermont having 9,056
square miles.
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VERMONT: CONDITIONS OF DEVELOPMENT.
Their population respectively, from 1820, is shown
by the following figures :
is...,
1830,
18.fo.
1850.
186o.
1S,O.
N. Hampshire, 244,022 269,328 284,574 317,976 326,073 318,300
Vermont .. . .. 235,¢6 280,652 291,948 314,120 315,098 33°,55 1
The character of the population would seem to present, at least, no features of striking contrast.
· Thus far the conditions which would seem favorable
to the development of Savings Banks in the one State,
would seem to concur equally in their promotion in the
other. Yet, while we have seen that they had their
practical inception in New Hampshire in 1823, the
first act of incorporation in Vermont was in 1846,
twenty-three years later, at which time the accumulations in the New HampshITe Savings Banks amounted
probably to about $1,500,000.
The one condition favorable to the organization of
Savings Banks is a concentrated population. It is
obvious that a population of 5,000, in a manufacturing
town, affords a more hopeful condition for the establishment of a Savings Bank than a population of
25,000 diffused over a county twenty-five miles square.
And such a statement approximates the relative conditions existing in New Hampshire and Vermont,
respectively, in 1820. At that time about one-fourth,
certainly not to exceed one-third, of the area of New
Hampshire, embraced more than four-fifths of its
population, or 205,000 out of 244,000, and a much
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270
HISTORY OF SAVINGS BANKS.
larger proportion of this was concentrated m the
southern extremity of the State.
The population in Vermont, on the contrary, was
more generally and evenly diffused over the entire
area of the State. In New Hampshire there were but
six counties in 1820, which is of itself an indication
of a given population considerably concentrated in
certain localities, and very sparsely diffused in other
parts. Vermont, on the other hand, had, in 1820,
thirteen counties, with its population quite evenly distributed among them; and but one county has been
formed since in that State, while in New Hampshire
there have been four.
We thus find that the condition of a concentrated
population, favorable to the establishment and growth
of Savings Banks, existed, and we may say still exists,
in New Hampshire, in a much greater degree than in
Vermont.
Another condition favorable to the institution and
growth of Savings Banks is the development of those
industries which employ large numbers of people at
fixed rates of wages, paid promptly, regularly, and
at short intervals, in money. Without going into any
minute analysis of the subject, it is sufficient to say
that, in this respect, manufacturing is far superior to
agriculture. The development of manufacturing, upon
any considerable scale, concentrates capital under the
control of a few, who diffuse it among the many in
the form of wages regularly and frequently paid, and
so far remunerative as to give opportunity for saving,
with corresponding regularity, for use in the future.
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VERMONT: CONDITIONS OF DEVELOPMENT.
271
Agriculture, on the contrary, as a pursuit engrossing
the attention of the mass of the population, diffuses
capital among a larger number, who dole it out in
wages to their help, at irregular and infrequent periods. The latter, receiving their wages in considerable
sums, find it already pledged in payment for purchases
made probably with less discrimination than would
have been done with money in hand ; or, unduly
elated by the possession of so considerable wealth as
the product of half a year's labor, they proceed to
spend it with less discrimination than they would a
much smaller amount received at frequent intervals.
Whatever be the natural disposition toward economy
and thrift, we think all will agree that the conditions
of labor and wages in a manufacturing community are
much more favorable to the exercise of these virtues
than the conditions commonly prevailing in agricultural communities.
The application of the foregoing to the case before
us is easily made. New Hampshire has developed a
more diversified industry than Vermont. The manufactured products of tlie former are about double
those of the latter.
Vermont exceeds New Hampshire in agiicultural
production. The one presents a favorable condition
for the establishment and growth of Savings Banks ;
the other, an unfavorable one.
This argument goes no further, and makes no attempt to decide nor to indicate which condition is
best for the general moral and material welfare of any
people. Savings Banks had their origin in conditions
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HISTORY OF SA.VINOS BANKS.
and necessities absolutely abject and pitiful, and
proved a most efficient auxiliary in the amelioration
of those conditions. If a state of society is found in
which Savings Banks do not flourish, it may be for
the reason that there is no occasion for their ministry,
or because there is no convenient opportunity for its
exercise, or for some other reBBon. Our duty is ended
when we have indicated the conditions which have
proved unfavorable to the development of the interest
in question. Whether the conclusion to be drawn
from the fact be gratifying or otherwise, we will not
seek to determine.
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V.JlliliONT: O.H.A..RA.O'l'.ER OJ!' LEGlSLA.TION.
273
CHAPTER XXIV.
COURSE AND CHARACTER OF LEGISLATION.
The charter of the Windham Provident Institution
for Savings, incorporated in 1846, will be found in
the Appendix. It embodies the essential features
found in all charters, except as modified by general
laws, to be hereafter noted. This was followed by the
incorporation of six Savings Banks in the following
year, five of which were organized, and four are still
in operation; after which there were no more charters until 1850, when the Rutland Savings Bank was
incorporated.
INVESTMENTS.
It will be observed that section 8 of the charter of
the Windham Provident Institution provides that "all
deposits of money received by said corporation shall
be used and improved to the best advantage," etc.;
and this is the common form of direction in all Savings Bank charters in the State until 1867. Nor is
there any restriction imposed upon the discretion of
trustees concerning investments in any of the general
acts relating to Savings Banks.
The change noted above as occurring in 1867 is in
the charter of the Montpelier Savings Bank, which
reads as follows :
35
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27 4
11.ISTORY OF SA VINOS. BANKS.
"SEO. 5. All deposits of money received by said
corporation shall be managed and improved to the
best ad vantage by loaning the same, by order or con•
sent of a majority of the directors, on mortgage of
real estate, unincumbered, equal in value to double
the amount of the loan secured thereon, except to an
amount not exceeding one-half of the amount on d~
posit in said corporation; which said sum may be
mvested in the purchase of stocks of the United States
or any of them, in bank stock in any bank in this
State, or on undoubted personal security."
This was the second charter for a Savings Bank in
Montpelier, neither of which resulted in any organization, at least no reports from any such institution are
found. In 1870 the Montpelier Savings Bank and
Trust Company was incorporated, which organized in
1871. As this was a capital stock company, it is not
included in our review.
The foregoing provision appears also in subsequent
charters, and is all the restriction that appears con•
cerning investments in this State. The purpose of the
legislature appears to have been to guard the management of these institutions through the exercise of what
was deemed sufficient care in the selection of the original corporators.
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VERMONT: SUPERVISION AND REPORTS.
275
CHAP'fER XXV.
SUPERVISION AND REPORTS.
As early as ·1849, three years only after the incorporation of the first Savings Bank in the State, the legislature made it the duty of these institutions, on the
first Monday in September in each year, to report
their condition to the auditor of accounts of the State,
and this officer was directed to cause the same to be
published in his annual report to the legislature.
Under this provision, of course, no uniformity in
the statements could be expected, as each institution
would simply report, in its own way, such facts as in
its judgment expressed with sufficient fullness its
financial condition.
In 1851, however, the provision was amended by
specifying the items to be reported, as follows :
1. Number of depositors. 2. Amount invested in
bank stocks, naming the banks. 3. Amount secured
by bank stock as collateral. 4. Amount invested in
public funds. 5. Amount loaned on public funds.
6. Amount of loans on mortgages of real estate. 7.
Amount of loans on personal security, stating character of security. 8. Loans to counties and towns.
9. Loans on railroad, manufacturing, or other stocks,
with character of stocks and condition of loans. 10.
Amount of loans on pledge of bonds of any railroad,
manufacturing, or other corporation. 11. Amount of
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HISTORY OF SAVINGS BANKS,
cash on hand. 12. Dividends for the year. 13. An•
nual expenses.
It will be seen that the statistical information required is very meager, nor, in the absence of the
amount due to depositors-which item is not among
those enumerated - does it appear how a very satisfactory financial exhibit could be made. The statements of some institutions are quite full, going beyond
the requirements of the law, giving the deposits and
the withdrawals, etc., during the year, though without
absolute uniformity on the part of any institution, and
many institutions fail fully to comply with the requirements of the law in their reports.
As early as 1847 the idea of subjecting Savings
Banks to examination was embodied in legislation, .
two of the six Savings Banks incorporated in that
year being made by their charters subject to the
inspection of the bank commissioner, who was required to make an examination of these institutions
upon an application made to him, in writing, by ten
of the depositors, requesting him to do so.
In 1851 the bank commissioner was authorized to
examine every Savings Bank whenever he believed
the interests of depositors required it. In 1853, however, it was made the duty of the bank commissioner
to visit and examine Savings Banks, and make a
report to the auditor of accounts, giving, among other
things, the number of depositors, the amount of the
deposits, number and amount of dividends, etc.
Under these provisions of the law, reports have
been made, commonly in September of each year,
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VERMONT: SUPERVISION AND REPORTS.
277
showing the condition of the banks reporting at
various periods from July to September of each year.
This enables us to bring the reported condition of
Savings Banks in this State down to the summer
of 1874.
The first reports were made in conformity with the
very general and indefinite provisions of the act of
1849, but were from only two Savings Banks, the
Bellows Falls and Black River; at least these are the
only institutions from which returns were published,
although four other Savings Banks were in operation at
the time. In 1851, we :find returns from only two Savings Banks, the Bellows Falls and the Windham Provident, the Black River not reporting. Meantime the
Rutland Savings Bank had been incorporated and or•
ganized, but it made no report until the following year.
As the law invested the auditor with no power to
demand these reports, but simply to publish such as
were ·received by him, the negligence in making them
must be imputed to the officers of the institutions,
who might perhaps shield themselves under a plea
of ignorance, for it does not appear to have been
the duty of the auditor even to give notice to the
institutions affected, of the requirements of the law
in this regard. In 1852, however, :five out of seven
Savings Bank8 organized, and in 1853 seven out of
eight reported to the auditor; and thereafter the banks
generally, in some form, complied with the provisions
of the law.
·
It will be remembered that in 1853 the duty of
visiting, examining, and reporting to the auditor the
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278
HISTORY OF SAVINOS BANKS.
condition of the various Savings Banks in the State,
was imposed upon the bank commissioner, and this
duty was discharged by that officer from 1854 until
1867, when the office of bank com.missioner was abolished and the duty of simply publishing the reports
received from Savings Banks was remitted to the
auditor of accounts. It is noteworthy how much
more acceptably this duty of supervision is performed
when committed to an officer especially charged with
it, than when imposed as an incident upon an officer
whose time and attention are sufficiently engrossed
with other duties, appertaining to his specific office.
The published statements of the auditor of accounts
are presumably mere copies of the returns made t.-0
him, unaccompanied by a word of text relating to the
condition of the interest reported upon, or of suggestion concerning it, and with no summary even, ~r
aggregate of the results or facts submitted by him. :
Whoever would . know any thing of the condition of
this interest in its general aspects in the State, must
obtain it by himself summarizing, as best he may, the
details of each institution, submitted without plan,
uniformity or system, beyond the mere alphabetical
order of their arrangement upon the pages of the
auditor's report.
The bank commissioner, on the contrary, did not
regard his duty as wholly discharged when he had
reported in detail the condition of each Savings Bank
examined by him, but accompanies the same with a
summary of the increase or decrease in the assets of
each institution, an aggregate of the assets of all the
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VERMONT: SUPERVISION AND REPORTS.
279
Savings Banks in the State, and the first two reports
are accompanied by a general review of the condition
of the interest, the purposes to be accomplished by it,
. and the measures that will best contribute to such
· result, with reflections upon the defects in existing
laws for the protection of deposi~rs, and recommendations for their amendment. From the first of these
reports - made in 1854- I extract, as giving a view
of the Savings Bank interest in this State at an early
period of its history, the following. The commissioner says:
"The number of Savings Banks in operation is
thirteen;* the amount on deposit, $895,370; t gain
over previous year, $182,728.
"The importance to the public, of these and like
institutions, can hardly be over estimated. They partake of the philanthropic in design and purpose. * *
* * * They are designed peculiarly for the unin•
structed in the arts of speculative investment- the
weak, the feeble, the poor even, both men and women,
and children as well ; treasuries for administrators,
guardians, trustees, where one may always be sure to
find his own again. Safety, therefore, rather than
large interest, should be the ~eat idea of their administration, as it is of their design, if not in their actual
constitution.
"It should be known that, as the law stands, the
depositor has very little security beyond the confidence
that may be due to the unrewarded vigilance, discretion and integrity of the trustees. * * * *
• There were lo fact fourteen Savings Banks in operation at this time, the Burlington,
which commenced business in 1847, not being included lo the above, its condition and
probably its existence being unknown to the commissioner.
t This amount includes about $go,ooo of surplus, and the summary of the commissioner
always includes the surplus in the amount of deposits, This will serve to explain ditrereoces between the reports and the figures in this volume, which do not embrace the
surplus in the amount due depositors,
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280
HISTORY OF SA.VINOS BANKS.
"Not only does the trustee's fidelity to his trust lack
the stimulus of personal interest, but oftentimes his
interest is adverse to the Savin~ Bank. Thus it appears that most of the Savings Banks are connected
with banks of circulation, the cashier of the one being
the treasurer of the other; and in some instances a
majoiity of the trustees, or board of investment, are
directors of, or otherwise interested in, the bank of
circulation. It is apparent that, in such common man•
agement of both institutions, the temptation is to sub•
ordinate the interests of the Savings Bank to those of
the bank of circulation. The occasions must not be
unfrequent for transferring the debts of the bank of
circulation to the Savings Bank. Against the temptation to make such exchanges, to the disadvantage of
the latter, and to reduce it to a mere adjunct and convenience of the former, the _law opposes nothing.
Honor and fidelity in such case, which the law does
not attempt to enforce, are but other names for self.
sacrifice. Without implying that I have detected any
thing wron~ in practice in these respects, on the contrary, etc.,
* * there seems to be a necessity for
a revision of the laws upon this subject, for fornnng a
system of regulations with more and other checks
against injudicious investments and possible abuse of
powers, and with better securities for faithful administration than are found in the several charters of these
institutions.
"DANIEL ROBERTS,
"Bank Commi.sswner.
"MANOHESTER, Sept,ern,ber
16, 1864."
In his report for the following year, the commissioner notices the failure of two Savings Banks - the
Black River and Middlebury-and renews his sng·
gestions concerning a revision of the Savings Bank
laws, "suggestions," as he says "to which the subse•
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VERMONT: SUPERVISION AND REPORTS.
281
quent failure of two of these institutions has given
an illustration and an emphasis."
The facts concerning the failure of these institutions will be found recorded elsewhere.
The recommendations of the commissioner do not
seem, however, to have been regarded by the legislature, unless the following act, passed in 1857-three
years after the recommendations were made-may be
considered as incited thereby: "No president, vicepresident, treasurer, secretary, trustee or officer of any
Savings Bank shall be president, director, cashier, or
hold other official position in a bank of discount."
The commissioner may well be excused from urging
his views upon a legislature so indifferent, and there·
after the reports of this officer comprise simply the
statement of the condition of Savings Banks, without
any text or comments, except such, in connection with
the report of any institution, as are necessary in explanation or amplliication of its record.
As these returns, made by the bank commissioner,
were from examinations made by him, we naturally
look for uniformity in respect to the items reported,
and their arrangement. But no such uniformity is
found, and hence the difficulty in tabulating the facts
for the purposes of this History. That there would
be changes from year to year in the items reported, or
in the order of their arrangement, might be anticipated ; but the form and material of the reports of
the different banks are not uniform in the same year.
The only item found with persistent uniformity in all
the reports is the amount due to depositors. The
36•
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282
HISTORY OF SAVINGS BANKS.
dividends are reported with a good degree of regularity, but not uniformly, and the manner of reporting
them takes two forms: in the one, the dividends for
the year are reported ; in the other, the total amount
of all dividends since organization is reported. Of
course, under the latter form, the dividends for the
year are easily derived. Sometimes one form will be
pursued for a series of years in the reports, and then
the other will be entered upon.
The number of depositors or accounts is reported
with equal iITegularity ; in some cases and in some
years the whole number of depositors, in others only
the present number, and frequently not either will be
given. In the case of a few institutions the whole
amount of deposits from organization is given, and the
whole amount withdrawn, and in a less number of
cases the detail is so minute as to set forth not only the
whole amount of dividends as part of the deposits, but
what portion of the amount withdrawn is charged to
dividend account and what to deposit account.
The want of unity and system in the statements of
these institutions is apparent from the foregoing, and
the difficulty of generalizing a mass of facts so heterogeneous is likewise evident. I have therefore tabu•
lated for the successive years from 1850 only the one
uniformly reported item of the amount due to depos•
itors, for, to have constructed a table of other items,
in which blanks would have been as common as figures, would be of little practical utility. The facts
reported with sufficient uniformity to afford a basis
for rational estimates, I have put in the aggregates of
•
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VERMONT: SUPERVISION AND REPORTS.
283
all the banks for the entire historic period of Savings
Banks in this State. Under the head of the detailed
progress of each institution, I have tabularized those
items given with the greatest general uniformity, and
have given other items incapable of connected arrangement, from which any one interested can work out all
admissible generalizations.
We derive from these reports a general conclusion
that the Savings Bank interest in Vermont not having
assumed the gigantic dimensions and importance compared with other interests, which has characterized its
development in other States, has been less an object
of solicituqe than it would otherwise be. The largest
amount on deposit in any one bank was, at the date
of the latest returns, made in 1874, $1,403,476, and
the aggregate in all the banks in the State _was but
f5,0ll,831, or less than the amount in each of several
Savings Banks in other States.
SUBSEQUENT LEGISLATION.
Other provisions of charter and of general law
concerning these institutions present no marked nor
unusual features demanding exposition. Officers of
Savings Banks, as previously noted, are prohibited
from holding, at the same time, official connection
with banks of discount; the deposits of minors and
married women are protected by the usual safeguards
provided in other States, and deposits exceeding $260
are made subject to taxation by being returned, with
names of the depositors, to the town clerk for that
purpose.
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284
HISTORY OF SAVINOS BANKS.
The amount of real estate a Savings Bank is au,
thorized to purchase or hold is commonly limited, .by
the charter of each institution, to a specific sum vary•
ing from $2,000 to $6,000.
The prohibition against loaning funds of the bank
to trustees or officers, found in the charter of the
Windham institution, is a common feature in all
charters.
In 1869, and subsequently, we note the incorpora•
tion of a large number of institutions denominated
"Savings and Trust," or "Trust and Savings," or
"Savings Banks and Trust Companies." They are,
whatever their name, a form of trust company, having
a capital stock basis, varying from $25,000 to $100,000,
only a portion of which is paid in ; and the use of
the term Savings Bank, in connection with them, is
of course to attract a class of deposits which :would
not seek them under any other designation. I have
not included these in the following summary, regarding
them as outside of the Savings Bank system, as com·
monly understood. Where that system has no other
representative in any State than organizations of this
character, I have given to them such prominence as it
seemed they were entitled to receive, as the best exponents of the system to be found; but, where the
mutual form of organization prevails in any State, I
prefer to confine this record to their exposition.
Notwithstanding the defects of legislation which
render it impossible to present a clear and intelligible
view of the Savings Banks of the State, as a system,
and which we are constrained to believe have contrib-
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VERMONT: SUPERVISION AND REPORTS.
285
uted, in some measure, to produce the unfavorable
conditions upon which we have commented, it is not
to be doubted that cautious and conservative managemen.t, guided by the strictest integrity, and resulting
in such measure of success as the unfavorable conditions brought to view in the opening of this section
would admit, find their exemplification in this, no less
than in other States. Such institutions as the Windham Provident, the Rutland, and others that might
be named, that have ministered to the public for a
period of twenty-five or thirty years, have unques.
tionably won the public confidence by deserving it.
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286
HIBTORY OF SAVINGS BANKS,
CHAPTER XXV1
STATISTICS OF GROWTH AND PROGRESS.
The following tables, representing the growth of
Savings Banks in the State of Vermont, are compiled
from the annual reports already referred to, as indicated in our summary of the course of legislation.
These reports are more full and detailed concerning
the resources -that is, the assets or investments
of Savings Banks- than concerning their statistics of
growth, which are left to be reported by each institution in its own way. This "way" is, by some Savings
Banks, very copious and minute, though not in a form
t_o be tabulated without great labor, the report for
each year being a summary for the whole period of
the existence of the institution, from which the transactions of each year can be derived only by a mathe·
matical calculation. This calculation was made by
the writer in one instance, which sufficed to satisfy
him that it was time poorly expended ; as there were
so few that reported in that way, that no general summary of the transactions of all upon that basis of
calculation could be made.
The only thing that is uniformly reported by all, is
the amount due to depositors, and even this will
sometimes be found blank, indicating ·that no report
was made in that year.
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287
VERMONT : STATISTIOS, ETO,
STATISTICS OF INDIVIDUAL SAVINGS BANKS.
wINDHill PROVIDENT INSTITUTION FOB SAVINGB.
Commenced b11Siness January, 1847.
Name appears to have been changed to Vermont Savings
Bank in 1872.
Statistics talm,l,ated from Annual Reports.
,81
:,a"!.
YKAR.
""'
.!! !l
f§
-- -1847 ..
.....
to
1851..
1852 ..
1853 ..
1854 ..
1855 ..
1856 ..
1857 . .
1858 ..
1859 ..
186o ..
1861 ..
848
.....
1,378
1,650
1,918
2,115
2,392
1,184
1,332
1,729
1,839
•Deposits.
tl>raftll.
...
"f
;:!g
a-
g[
a ..
<'O
~
...
11
a
$139,249*
50,854t
$88,395 $10,020
Norep'rt
.. ....
.....
172,877 .
220,224 31,902
42,435
234,855
247,921
53,682
239,879 t 71,3o6
11,184
235,111
12,048
295,421
15,253
365,798
18,370
402,494
.81
a"
YKAR.
:e
'O g
:,Cc:,!.
i:i.1
g fr
.!! !l
f§
~
...
i
:E
Q
1862 .. 2,009 *444,635 tb>,689
1863 .. 2,417
23,115
557,782
1864 .. 2,666
629,452
27,007
1865 .. 2,509
545,042
27,438
1866 .. 2,443
24,¢6
550,448
1867 . • 2,7o6
664,420 t 69,200
1868 .. 3,312
33,231
75 1,551
1869 . .
869,851
1870 .. 3,924
50,634
990,564
1871 • .
1,064,335
55,177
1872 ..
1,213,093 t126,365
1,299,802
1873 ..
84,314
1874 ..
1,403,475
99,743
···· ·
.... .
.... .
.....
.......
... ..
; Include utra dividends.
The reports of the above institution were more full ·
and complete, as well as more uniform, than many
that are found in the published documents of the
State. From this, some idea may be derived of the
incongruous mass of items from which this and
the following statistical tables are compiled.
From the above it will be seen that, down to 1857,
the whole number of accounts opened from the date
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288
H.lh'TORY OF SAVINGS BANKS.
of organization, and the whole amount of dividends
declared-and not those for each year-are given.
After that time the accounts remaining open, and the
dividends for each year respectively, are reported,
except that in later years no mention whatever is
made of the number of accounts.
BURLINGTON SAVINGS
BANK.
Commenced business in 1847.
First report made in 1855.
St,atistics tabulated from Report8.
Dlridaadl.
YEAR.
...........
1855 .... ...
1856 . •..•..•.•. •• •••••.
1857 ...................
1858 .. .•• •• .•• •••. . • . • .
1859 .. ..•...•. •• . ••.•..
186o ......••..•....••..
1861 .........•••• •• •...
1862 ... . ••.• • .
1863 ..•• •. .•..•••• • .•..
1864 ....••..•...••.••..
1865 ...................
1866 ...... . ... .... .....
1867 .••••••...• .. ..• •.•
1868 ...................
1869 ...................
1870 ..... ...•••••..• •••
1871 ...................
1872 ..........•.•••••••
1873 .•..•.....••••••...
1874 ....••.••.•••••••••
.. ......
........
........
174
········
256
263
299
430
610
563
....... .
749
.... ....
1,378
········
... .... .
2,914
3,395
$26,949
21,009
23,991
20,367
20,341
25,26o
28,918
34,883
74,458
104,294
88,391
72,888
88,266
146,512
209,393
434,267
6o4,300
834,8o4
1,046,026
1,297,104
. ..............
...............
...............
$890
9 23
1,044
1,247
1,297
3,217
4,025
32
46
63
o6
87
22
92
...............
. ... .. .... .....
···············
................
...............
17,522 94
...............
·· ······ ·······
3 and 4 per cent
3 and 4 per cent
The above fairly exhibits the irregularities in the
form of reports made by the Savings Banks in Ver•
mont. The number of accounts is given only about
half the time; the dividends stated with great irregu-
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289
VERMONT ; STATISTICS, ETC.
larity, and the last two years only the semi-annual rate
is given.
BELLOWS
FALLS SAVINOS
BANK.
Commenced business January 1, 1848.
Statistws tahulat,ed, from R8'f>(»'ts.
YBAR.
1848 to 1850,
1851 ... . ....
1852 . •. .....
1853 . . .
1854 . • ... . . •
1855 . . .. •.• .
1856 . •. • . •• •
1857 . . • •..• •
1858 . .. .. . ..
1859 . .. •.• ..
186o . ..•• • . •
1861. • •••• ..
1862 . •• . . ...
1863 . •• •• • ••
1864 .. ••
1865 .. . . . .• .
1866 .••.••••
1867 .. .. •• . .
1868 . . .••• • •
1869 . • • • •• • •
1870 .•• .. • ..
1871. .. • ....
1872 ...•. • ..
1873 .. • . •• ••
1874 .. .. .. . .
Open
accounts.•
Amount
deposited.
Amount
withdrawn.
Due
depositors.
1,429
1,579
1,696
1,859
2,015
2,235
2,337
2,472
2,618
2,733
2,891
3,o68
3,182
3,352
3,558
3,6o6
'40,072
29,432
38,182
72,340
53,553
48,537
33,470
31 ,987
34,410
55,671
67,8o2
51,865
61,169
77,78o
79,483
50,419
49,212
46,350
66,613
54,190
45,935
51 ,488
54,721
65,110
51,219
$11,534
6,147
11,226
14,318
23,583
49,o61
3,,563
27,343
30,835
30,616
42,410
19,903
25,043
57,003
74,6o4
100,902
81,333
45,685
49,o31
38,648
49,778
53,16o
38,872
42,977
49,7o6
$28,i38
51, 22
78,778
136,Soo
166,770
166,247
168,153
172,796
176,370
201,425
226,817
258,878
294,904
315,681
320,56o
270,078
237,956
238,621
256,202
271,745
274,144
272,327
288,631
304,214
305,725
......
$1,311 ,009
$1,005,296
····.····
234
347
487
716
876
1,016
1,111
1,221
1,288
DITldendl.
$1,546
1,59j
2,71
t 5,884
7,504
7,737
7,682
7,910
t Ji,oo6
,454
10,166
11,635
12,643
h1,941
14,163
13,510
11,199
11,048
t 16,349
12,142
12,592
12 ,335
13,o66
ho,375
14,109
$271,309
The amounts deposited and withdrawn are derive,d
with much labor from the reports made, which give
each year the sum of these from the organization of
the bank. The amount due depositors is always given
• It doee not quite clearly appear, from the form or tile reports, whether tile figuree In
this column repretent open accounta or tbe whole number or accounta opened at the
rapec:Uve periods gtnn, tllou1h the probabilities seem to favor tile latter.
t Include utra dl'l'idends.
37
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290
HISTORY OF SAVINOS BANKS.
in the reports exclusive of the semi-annual dividend
then due and declared, and which is included in the
above table, which in this respect does not conform
to the published statements, but to the truth.
w INDSOR
SAVINOS
BANK.
Commenced business February 8, 1848.
Stat,istics talndated from Reports.
YBAR.
1852 . .. ..•• . •••••••••• .••
1853• •• .•. •• •. • •• • • • ••• . •
1854 .• . •• . •• • • ••• •• ••. . ..
1855 .• •••. •. .•••• . •• •• ••.
1856 .•. •• .• . • •••.••.• •• . •
1857 . . .••. •••••• • .•.• •• ••
1858 .•• . .•• •• . • . •• •.•... .
1859 . . • ... • . • ...•....••. •
i86o . • ..••.••• • •• • . . .... .
1861 ....•••••.••• • •• • ... .
1862 ...... . .
1863 .. .. .. .... ... . ... .. . .
1864 ........ . . ........ . ..
1865 . ..••..• • .... ••• ••..•
1866 .•• • • •• ••..••••••• •• •
1867 . •. ......•.• • .. •. . •..
1868. . .. . .... ..... ... . ...
1869 .. . . •. ••• . • • • ...• . .. •
1870 ... . . .•.•.• • •.... . . • .
1871 . •• •• • • •. . • . •• • • . • •••
1872 . . •• .•••• . • .•. • ..• • ..
1873 .. . .• •.••• •• •.•.. • • • •
1874 . • . . • ••..••.••• • ••••.
........... .
Open
accounts.
317
......
soi
52
554
5o6
48o
491
527
6o1
662
781
874
828
746
786
785
828
88o
909
961
1,011
997
Due depositors.
· $67,999
105,931
122,46o
140,259
149,267
135,016
131 ,275
137, 2 59
151,172
176,988
190,950 '
245,491
257,958
230,104
189,400
204,227
2o8,536
218,614
233,346
243,613
264,714
279,515
273,912
Digitized by
Dividends.
2¼ per cent
$5,432 21
2¼ per cent
2½ per cent
2,¼ per cent
2¼ per cent
2¼ per cent
········
·····
... ..... ....
·· ···.....
·· ···
.··....
..
$15,618
11,246
12,768
9,198
9,792
19,368
10,597
11,177
o8
42
34
86
89
78
71
56
···
.. ...·····
........
...
:t¼ per cent
2¼ per cent
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291
VERMONT: STATISTICS, ET0.
O'1TAUQUECHEE SAVINGS
BANK.
Commenced business March 15, 1848.
- &atistw.<J talndat,ed from Reports.
YBAR.
Account.s.•
Due depositor.i.
1848 ••••••••••••.••••••••....
······
t$6o,901
t 23,165
326
465
570
713
8o3
894
95°
1,040
1,152
1,258
1,36o
$37,736
62,3o6
73,777
91,821
90,o84
80,556
69,6n
74,213
85,189
84,572
78,153
82,236
93,056
93,322
86,055
89,336
¢,825
97,052
103,030
128,og6
140,370
181,732
203,050
to
1852 •. •.••• • ••••••••• ••••••..
1853 ...• •• .. ••• • • •...•••••••.
1854 ..•••••.••••••••.••.••.•.
1855 .•• •• . ••• ...••...••.••• ..
1856 .•..••••••••••••••••.•••.
1857 .....•.••..••••.••••••..•
1858 .•..•••.••.••••••••..•••.
1859 ..•• •.•••••••. • .• ~ •••....
186o .•...••••••••.••••.•••...
1861.
1862 ..•.•••.••••.•.•••••.•••.
1863 . •••• .•••••••.•• . •••... ..
1864 .•.•••••• •.•••• .••••.••..
1865 ...••...•••.•• ••• ••• • .• . .
1866 .••••••••.•.•••••••.•.•..
1867 ....•..•••.•••••..••.••..
1868 .••• .•..•••.••.••••.....•
1869 . ...••
1870 ...••...•••.•...•.•......
1871 ..•....••.•••••.•••.•••••
1872 ......•..••••••••••••. •. .
1873 . ........................
1874 . ......••..•....•..••••.•
·······················
......
.... ..
......
524
568
. .....
.................. ··· ·· ·
......
8oo
······
1,o61
J,200
Dlridends.
$1,577
2,178
3,728
3,925
4,169
3,7o8
3,439
3,182
3,762
3,990
3,759
3,626
4,88o
5,379
4,665
4,981
5,316
5,336
5,686
44
16
65
00
24
42
o8
03
17
13
45
22
21
31
26
o6
8o
34
40
.......
...
7,661 42
13,743 57
10,689 17
• Until 186, the whole number of account.s opened Is given; thereafter, when any mention is made of them, the number remaining open Is referred to.
tDeposit.s.
il>nfta.
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292
HISTORY OF SAVINGS BANKS.
Buox: RIVER SAVINOS BANK.
Incorporated 1847; commenced business April, 1848.
Statistics ~ frmn Reports.
Y&AR.
Acc:ount.s
opened.
1848 to 1850 • • . • • • .• •••• •• • .•
1851 .... •.•••. •. •• •••• • ••.•••
1852 ......... . .. . ~ • •••.••.•••
1853 . •••• .• •• •••••••• . •••.• • •
1854 • •. ••••• •• •• •• ••• • • • •. ...
... 36o
...
673
867
995
Due depositont.
$40,838
No report
79,776
114,86o
100,112
Dhidends.
..........
..t3.o64
········69
5,635 97
···· ·· ····
Failed and went into hands of receivers, December,
1854. It appears that the treasurer of the institution
had " borrowed "- that is, used-the funds, without
depositing security. No other officer was cognizant
of the treasurer's transactions. Committees signed
such papers as the treasurer prepared, without any
knowledge of the facts or any examination to verify
them. It was thought that the assets would net some
seventy-five to eighty per cent of the liabilities, which,
at the time the receiver was appointed, were $101,752.
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298
VERMONT: STATISTICS, E'l'O,
RUTLAND
SAVINGS
BANK.
Oommenced business February, 1851.
&at-~tic8 talnilated f ram Reports.
YBAR.
...........
... ..
............
1852 ..•••..••••••
1853 .••••••••••••.••.••••••••
1854 ••...••••..•..•.•.•
1855 ............
1856 .••••••••.•.•.•••••.•.•••
1857 •.•.••••••••..•...•• •.. .•
1858 •.•.••..•..••••.•.•••••••
1859 .•..••.••••••.•.•........
186o .•••••.••.••••.••.••••.•.
1861 ..••••••• ••• . ••• •••. • .. •.
1862 ....••••••.• ~ •••••.••....
1863 .••
1864 •.•••...••••••••••••.•••.
1865 ...••..••••••.•••••••••..
1866 ....•..•••••••..•••••.•••
1867 •• ..•••••..••.•.•..••••••
1868 ...••..••••.•.•••..•••.••
1869 .•.••...•...•.•.••..•.•••
1870 •.•••••••.•••••..•.••••••
1871 •.• •. • •••••••.•••. .•• .•• •
1872 .•..•.•....••••.••..••.•.
1873 •• ••••..•.•.••.....••..•.
1874 ..•.•.•.•..•••..•...••••.
······· ··············
Ae<:ounts.•
213
454
697
896
1,075
1,307
1,424
1,623
1,834
2,025
2,256
2,555
2,924
3,257
3,617
4,078
4,487
4,878
5,319
5,837
6,469
6,985
7,520
Due depositors.
$32,900
78,321
114,269
111,121
100,390
I 16,610
98,521
116,133
158,888
I 56,555
165,862
183,359
237,370
219,655
219,301
264,770
285,313
293,184
330,484
381,389
456,394
491,400
524,724
Amount deposited, including dividends •.••..•
Amount withdrawn ...•...•..........••..••
D1.-tdendl.•
$713
2,076
6,783
11,530
19,041
24,040
28,465
33,894
40,122
51,545
58,550
65,930
74,951
84,924
101,257
112,227
124,257
137,477
151,898
181,276
200,254
221,926
244,824
52
II
23
65
98
IO
61
64
93
03
33
65
84
92
27
05
05
46
41
93
65
71
65
12,349,617
1,824,893
· • The accounts Riven for each year are the whole number opened from the openinl[ of
the bank, and the dividend• are stated in the same manner. The dividend• each year are
given for the later years; but our table wu prepared for the other form, and the adftlltage is too slight to justify a change.
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294
IDSTORY OF SA VINOS BANKS.
BRANDON SAVINOS
BANK.
C<-mmenced business August 8, 1853.
The first report, made July 22, 1854, shows the
following: Accounts opened, 57; closed, 13 ; open, 44.
Deposited, t5,832.19; withdrawn, t2,221.92; due,
$3,610.57. Thereafter only the amount due depositors is reported each year, as follows: 1855, $2,835;
1856, $1,019; 1857, $671; 1858, $867; 1859, $880;
1860, $42.
Never attaining any considerable volume of busi•
ness, it soon closed, without loss to depositors.
PASSU.MBIO SAVINGS BANK, ST. JOHNSBURY.
Commenced busine88 in 1853.
St.at-istws tabulated frmn Repm·ts.
Open
accounts.
YEAR.
1853 .......•.•...•••••...•...
1854 ......•. • .•.•.•.....•....
1855 ...... ................•..
1856 ......•..••••••..••..•••.
1857 .••..•••••••••••..••....
1858 ... .•.••••. •• •••••••• • •.•
1859 ..••....• • ••.••••••••....
186o ........•.•••••••••••.••.
1861 .•...••••.•••••••••••••
1862 .•.•.••••••••••••••••••..
1863 .••.•.•••.•••••.••••••••.
1864 .....
1865 ..•...•.•• •••••••••••• •• .
1866 .....
1867 .•...••••••.••••••••••••.
Due deposlton.
158
JOI
3°7
J02
293
26o
245
JOO
349
...................
................. .. . .... . ,
1868 .•... •.•••.•••••••••.••••
1869 ..••.•.•.•••••••••••
1870 .• ••.••••. • ••••••• •••• •.•
1871 ....•.•••••••••.•••••••••
1872 ...•.••.•••.•••••••••••••
1873 ...•••••••••..••••••• ' •• •
1874 ....... ....... .. .........
592
890
1,091
1,114
1,3o6
$18,895
37,482
42,966
41,018
36,859
31,976
J0,832
32,371
43,133
49,384
87,462
142,4o6
108,558
88,373
89,o63
90,367
96,236
1o6,154
118,8o3
143.159
174,876
198,542
Div;deads.
····$718
······
..... ... S3..
······ ····
······· ...
··········
1,539 93
. ·· · ······
········· ·
······· ···
··········
·
.·········
··· ······
······· ···
··········
··········
· ··4,5o6
······6o·
5,203 29
6,000 00
* 14,556 04
8,497 lS
• K&tra dl'rideod Included,
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VERMONT: STATISTICS, ETO.
295
WIND.Hill CoUNTY SATINGS BANK.
Oommenced January, 1854.
Statistics t,ahulated from Reports.
Y.BAR.
Accouot1.• Due depositon.
1854 . .. • . • ... •• .•.. .• .. . .....
1855 . .. . ... .. . .. •.. .• . • .. .. . .
1856 .. ...
1857 •.• • ..• •• • •• •• • . ..• .. .. •.
1858 .... ••• •• • •• •.• • . . . . . ... .
1859 .. . ..
186o ...• . • • .• • •... .. .. .. . . . . .
1861. ... ......... . . . ... . .. .. .
1862 • • •• ••.•••• • •..•..• . • . .. .
1863 ...... .. .. .. .. ... .......
1864 . ••..••••• • ••.. • .• • • . ....
1865 .•••••• • .• •• . . •.•. . . . . .. .
1866 . • •• ••.. ••• •. . ••• • . • .. . •.
1867 . ••..•••• • •••
1868 •••• • •• • • ••••. ••• . . . . ••..
1869 .•• • •.. . •••• • .. •• ... •. . . .
1870 . . .. • •. •• • •• • .• • . •. • •.. ..
1871 • .. •. • . • ••••• . . . • .• .• . .. .
1872 .• • •• • •••• • • • .• . . . . .. . • • •
1873 . .. .. ... . .... ......... ..
1874 . . ..• . ... . . • . .•. ..... ... .
..... ...... ........
.. ......... ... .....
... .. .... ..
'6,961
14,367
19,463
21 ,170
21,750
24,864
28,092
35,455
41 , 147
70,883
89,737
82,545
55
132
182
224
241
265
294
334
269
46o
588
682
750
550
613
77,997
94,362
II 1,214
132,984
149,267
162,204
163,36<,
171,791
174,004
66o
732
813
845
898
932
DIYidenda.•
t68
514
1,378
2,351
3,36o
4,863
6,091
7,593
oo
66
79
II
42
73
53
12
..12,012
...... ..
15,229
21,129
24,731
28,734
33,682
49,851
7,940
8,984
9,352
9,564
15,391
75
o6
6o
81
30
S2
14
53
21
17
16
14
BETHEL SAVINOS BANK.
Commenced business March 1, 1854.
Statistics tabulated from Reports.
YEAR.
1854 .... ........ .. .. . ... . . . ..
1855 . .. . • • ...... .. . .• . . ......
1856 . .... . . . •.... ..• .....•. . .
Accounts.
30
39
37
Due depositon.
$6,493
2,491
1,151
Dividends.
···$220
··· ····
95
29 40
Closed after this date on account of the small amount
of business transacted, paying depositors in full.
• Uotil 1867 the whole number of accounts opened la given, except for 1862, when the
open accounts only are stated, and the same appears to be the cue from 1867 onward.
The whole amount of dividends also appears to be given lllltll 1870, from which time
the yearly amount only appears.
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296
HISTORY OF SAVINGS BANKS.
WILMINGTON
8.AVINOS BANX.
Commenced business March, 1854.
&atisUcs tabulated from Reports.
Accouota.•
YKAR.
1854 . . . .. • .. • .. . •.. • •. ••• . ...
1855 . ... •. ...• •.• .• . . . .. .
1856 ... ... • . .••••.. .• .• • • • •. .
1857 ... .•. .•.• •• . •• . . • .. •. • ••
1858 ... .. .. . . . •. • • •• • .•. • ... .
1859 ...........• • ••• •. •.• •. . .
186o . . · ·· · •·• . .•••• ••• . ••. . ..
1861 . . .. . . .. . • . • • • .. •• . • ... ..
1862 ... .. ••.••• •• • • .• . • . • .. • .
1863 •...• ... • ....• • •• • •••. • ..
1864 . .... . . . .. .• . • . •• .. • •. • ..
1865 ....... . ..• •• • • ••.. .• . .• .
1866 .. ... . .••.••• • ••• • ••. .•..
1867 . . .... . .... • .. ••• . • .• ... .
1868 ... . . .... . .•••• •••• .• . ...
1869 .... ... . ..... ... ..... . . ..
1870 •....... . •• •• . •• • • •.• •.••
1871 . ... . •. • ... . • •• • •. • •• . •. .
1872 ....... .. .•.. .••• ...•....
1873 . . ..... . ..... . ..... .. .. . .
1874 .. . . . . . . .... .......... .. .
...
Due depositon.
26
95
121
105
129
144
166
183
228
305
35°
395
407
427
. .... .....
$2,044
5,007
6,028
6,791
5,301
5,810
6,972
9,220
8,221
13,876
24,484
20,913
19,824
23.504
25.930
6J
$79
341
627
94,0
1,190
1,507
1,837
2,263
2,463
3,48o
4,564
5,546
6,358
7,414
27,94-5
32,026
42,2o6
59.125
82,144
700
340
367
37
90
52
16
99
Ilg
46
7S
31
45
79
46
58
92
... ... ... .
11,244 38
..... .....
No report
585
Dirideods.•
13.984 17
2,722 47
4,281 6o
• Until 1873 the whole number of accounts opened la given; thereafter those open on!J.
The like form of reporting dividends will be noticed.
SPRINGF~ SAVINGS
BANX.
Commenced bneinese May 3, 1854.
Statistics t,a,lndat,ed from Reports.
YEAR.
1854 .. • . • .• •• •. • •. • ••. • • • .•.
1855 . •• •. • •• . • • • • ••• • • •• •. • ••
1856 ... ...••• .• • •. • • • .•• • . • • .
1857 . ...• •• ...••• . •.•••••• • ••
1858 . •• ... .• • ••••• •• • ••••. • • •
1859 ... . ................. .. . .
Open
accounts.
98
293
340
304
268
274
Due depositon.
$8,509
36, 193
43,686
33,982
22,523
26,044
Digitized by
Diridenda.
None
t1,056
2,097
4,070
5,417
6,619
Google
83
99
o6
72
IJ
-
297
VERMONT: STATISTICS, ETC.
SPRINGFIELD SAVINGS BANK- ( Continued ).
Opeo
accounts.
YBAR.
186o ...•• •. .•• • •.•••........ •
1861 .... . ..••...••• • • ........
1862 .• .• ... • •.•• • •• •• . .•• ... .
1863 . .. • .••• • ••• •• • • •...•. • . .
1864 .. . . • . .••• ..• • .•• . ... ... .
1865 .. ..• .• . . .•. • ••••. . . .• .. .
1866 . ... . .•. • .. . ....... ..... .
1867 . . .. ..... .. .•.. • . . .... .. .
1868 ..... . .. . .• •• . •• .. .. .. ...
1869 . . ... .• ..• ...• • . .... .. ...
1870 . ..• .. . .•..• • •••. . .. . ... .
1871 .• . . •.. . •. •••. •...... •. . .
1872 .. ...•.. . .• ..• .. .. . ... . • .
1873 . ..•.•. • .. ••. • •. . .. .. •
1874 .. . •
..
····· ····· ·· ··· ·•· · ·
310
347
4o8
····485
·.
461
461
521
613
672
738
866
1,006
1,177
1,345
Due depositors.
$30,893
35,8:?7
40,694
47,o33
53,183
49.923
47,106
59,093
73,871
86,381
94,415
115.055
130,826
165,381
203,238
Dividends.
$8,o81
9,778
11,723
12,908
15,282
17-978
20,692
23,400
27,859
33,421
39,815
46,856
55,333
65,426
72,16o
40
14
58
58
88
96
74
09
21
83
73
48
04
15
46
The foregoing may be aggregated from the reports
as follows:
Amount deposited ... . ... . ....•••...• .. . •
Dividends declared .... . •... • . •• ..... . ...
$467,524 95
72,160 46
Deposits and dividends ..•..••........
Amount withdrawn .. ... • .... • ••• . ...
$539,-685 41
. 336,446 98
Due depositors .......•• • ••...... .
$203,238 43
CASTLETON SAVINGS BANK.
Incorporated 1852; first report made 1854.
The amount due depositors is given as follows: 1854,
$13,078; 1855, $9,225; 1856, $7,643; 1857, $7,589;
1858, $5,978; 1859, $7,624; 1860, $38.
Dividends are reported only as follows: 1854,
$780.27; 1855, $466.04; 1856, $411.20; 1857, $435.68.
No reports were ma<le after 1860, and it was at that
38
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298
HISTORY OF SAVIN GS BANKS.
time substantially closed from lack of encouragement
to continue in business.
MIDDLEBURY SAVIN GS BANK.
This institution never made a report, but went into
the hands of a receiver, June, 1855, with assets stated
$13,314.79, of which $10,600 were in railroad stocks
and bonds of uncertain value. The balance of assets
was said to be good. The amount due to depositors
was $12,474.21. It is doubtful if they received fifty
cents on a dollar.
NORTIIFIELD
SAVINGS BANK.
Commenced business July 27, 1869.
Reported due to depositors, 1870, $2,163; 1871, no
report; 1872, $6,639; 1873, $20,438; 187 4, $38,980.
A few other desultory items, relating to the number
of accounts and to the amount deposited and withdrawn, are given at irregular intervals, rendering them
worthless for compilation.
BRATTLEBORO SAVINGS BANK.
Commenced business January 2, 1871.
The following comprises its business as reported:
YBAR.
1871. •.•.
1872 • • • ..
Accounts.
35°
691
Due depositors.
$46,877
114,36o
YBAR.
Accounts.
1873 •••• Not stated
1,248
1874 •• ••
Due deposito11.
$182,710
239,701
-
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VERMONT: STATISTICS, ETC.
299
wINOOSKI
SAVINGS B.ura.
Commenced business 1872.
Had in 1872, $37,668 in deposits; in 1873, $59,264,
and in 1874, $67,232.
The accounts are given for 1873-74 only, and are
respectively 284 and 305. The dividen~ for 1874
only are reported, and are for that year, $4,199.
The following table is a summary of the foregoing,
in a form to show the only fact uniformly brought to
view in the reports-the amount due depositors in
each year. As no such ·summary is made by the
auditor, in his report to the legislature, the computations had to be made by grouping the scattered
returns made each year from 1850 to 1874. It was
in the work of this compilation, and that of the preceding tables, that ample compensation was found for
the limited development of the Savings Bank system
in this State, as indicated by the number of institutions in operation !
To make the following as nearly complete as possible, rational estimates were made of the condition
of institutions not reporting but known to be in oper·
ation in any year.
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300
HISTORY OF SAVINOS BANKS.
TABLE exhibiting a summary of llte growth of Savings Balllts iti
Vermont from 1850 lo 1874.
........,. .....
.9
.,
-""
co
YBAR.
.c ..
0~
00
z
1850•.•• ••.•• ••• . .
1851 ..............
1852..............
1853.... .. .. .... ..
1854....••.•......
1855 ..............
1856•....•........
1857..............
1858....•.•....•..
1859..............
1860..............
1861 .•...•....•...
1862•....•...•....
1863..•• .•.• ••.• •.
1864.....• .. .. ... .
1865•.•..•........
1866.... ... ..... ..
1867••..•........•
1868.•••.•.•••....
1869. , .•••...•....
1870.. . ..•........
1871 .. .......•....
1872........•.....
1873..............
1874...... .. ......
~l!I'
14
13
13
12
12
12
12
10
JO
10
10
JO
INCR EA.SB IN P1.1uoos
OF F1vs Y SAKS.
~ -E
oo
·"'
0 ..
z"
6
7
7
8
Dus Dsros1ToRS.
2
2
5
7
13
13
13
12
12
12
12
10
10
10
JO
10
10
JO
JO
JO
10
JO
10
9
II
II
12
13
13
13
13
13
13
JI
Amount.
Gain or loss.
Amount.
Per
cent.
-
···· ····
$199,376
282,217
$82,841
407,188
124,971
297,8o2
704,990
1¢,799
901,789
-4,382
897,407
897,432
25
875,909 -21,523
819,650 -56,259
121,1¢
940,846
170,686
1,111,532
120,4o8
1,231.940
116,893
1,348,833
1,678,261
329,428
1,952,500
274,239
I ,708,531 -243,¢9
I.589,354 -119,177
1,815,662
226,3o8
2,046,321
230,659
2,301,940
255,619
2,745,779
443,839
426,746
3,172,525
3,836,224
663,699
642,618
4,478,842
5,011,831
532,989
$702,413
35 2
39,057 4-10
1,011,654
l(Yf
349,440
18
2,709,891
117
The fluctuations in the foregoing are quite exceptional in the history of Savings Banks in this country.
There was a steady loss in deposits from 1854 to
1858, the gain in the following year barely sufficing
to recover the ground lost with an increase for the
semi-decade of less than one-half of one per cent.
Though the increase during the first five years figures
largely in the form of percentage, there is in fact very
little significance in the aggregate result, and the
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801
VERHONT : STATISTICS, ETC.
large percentage derives its consequence rather from
the smallness of the first term than from the largeness
of the last term. Estimates and conclusions, derived
from statements in the ·form of ratios, are not unfrequently deceptive, and in effect false. The practical
lying that figures are made to do in this way, by
pointing to false conclusions, perverting and falsifying
the true relations of things, is a conspicuous feature
in official statistics, especially where these can be
wrought to support a pet theory.
Instituting, as we have done in respect to other
States, a comparison between the investments at the
earliest period at which they are reported and the
latest period, we make the following table, which is
as nearly correct as the defective material would
admit.
INVRSTMRNTS, BTC.
Aggregate.
Aggregate,
1854.
1874.
Loans on mortgage .......... '445,494
Loans on personal security ..
294,528
Loans on collaterals .........
43,973
City, town and district bonds,
9,429
Stocks and bonds of private
corp'ns (R. R. and bank) ..
47,910
United States and State b'ds, ........
Real estate owned ........... ........
Miscellaneous ...............
2,735
Cash on hand and in bank ...
72,299
Surplus .....................
14,579
$2,043,665
1,773,662
135,631
433,791
Per
cent,
Per
cent,
1854.
1874.
48
32
86,882
381,732
22,288
61,667
263,830
191,317
4.8
I
39 6
34
2.6
8.3
5.2
1.6
0
0
7.3
.J
8
1.6
.4
1.2
5
3.8
We have taken the year 1854 as our earliest period
of comparison, as that is the first year in which reports
were received from as many as thirteen institutions.
Even in that year one Savings Bank in operation neg-
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HISTORY OF SA VINOS BANKS.
lected to report, but we have, from the report made
the following year, made a rational estimate of its condition and investments in 1854, and embodied the
same in the foregoing.
In further explanation of the above, we may say
that the collaterals upon which loans are made are
quite commonly, though not uniformly, bank stock
and railroad stocks or bonds, and that these also con•
stitute the bulk of the securities Qf private corporations held for investment. The miscellaneous assets
are chiefly interest accrued, or due and not collected.
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NEW YORK: PRELIMINARY.
EIGHTH SECTION;
SAVIN GS BANKS IN THE STATE OF NEW
YORK.
CHAPTER XXVIL
PRELDIINARY.
It is but natural that the writer should enjoy greater
facilities for the preparation of a history of Savings
Banks in this State than in any other. During an
official residence of many years at the capital of the
State, the public records were open to bis inspection at
such intervals of leisure as he could command from
public duties. His official position brought him into
such relations of confidence and trust -in very many
instances, relations of personal friendship as well, with
the trustees and officers of Savings Banks- that they
rendered to him that cordial and essential assistance in
supplementing defective records, which they would not
so readily accord to a stranger. It will not be understood that in these suggestions any claim is asserted as
against very great and very obvious defects in this
section of our work. The writer can only affirm that
here, as elsewhere, he has diligently improved his opportunities and these have been greater and more
favorable concerning the Savings Banks of New York
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msTORY OF SAVINOS BANKS.
than concerning those of any other State, and he would
thus disarm adverse criticism founded upon any appear·
ance of favoritism in the more elaborate treatment of
the subject in this section than was possible in other
portions of the work.
It is proper to state here for the information of those
outside of the State of New York, that this section of
the work is based upon one originally prepared and
published in 1870, in connection with the report of the
superintendent of the bank department concerning
Savings Banks in that year.
Indeed, the original conception of the present work
was merely a revision of that history, with a somewhat
more expanded reference to the subject-matter in other
States than was compatible with that distinctively local
record. It was under this view that the work was first
announced to appear in a few weeks.
But very slight consideration sufficed to apprise the
writer that he could not in justice to himself nor to the
subject, nor to his readers, suffer a work to appear under his auspices, purporting to be a history of Savings
Banks in the United States, which should in fact be a
history of Savings Banks in one State, with merely incidental and very general allusion to their origin, and
a statement of their present condition, in other States.
In short, the writer could not feel that he had dealt
honorably with himself nor toward the subject selected
for treatment, until he had made it as full and complete, as the resources which he could command would
admit.
This not only expanded the area of his investiga-
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NEW YORK: PRELIMINARY.
tions, but rendered necessary a complete revision of
the history of Savings Banks in New York ; for access
was obtained to sources of information upon many
matters that had failed to reveal themselves when that
history was prepared, so that the preparation of this
section has been attended by no less labor, but rather
by more, than attended its original compilation as an
independent history. This truth will easily impress
itself upon all who are familiar with the work in question, and care to make a comparison between it and
the section upon which we have now entered, covering
the same topics.
The greater fullness of detail which we are enabled
to give concerning the origin and inception of Savings
Banks in this State on the one hand, and concerning
the growth and character of the business and dealings
of each institution from year to year, on the other,
seems to render expedient and desirable, if not altogether necessary, a more general subdivision of the
entire record than into chapters simply, which have
perhaps marked with sufficient accuracy the transitions
from topic to topic hitherto.
The natural order in which the complete record of
this State presents itself for our consideration, seems
to be the following:
First, that which pertains wholly to the full and fair
inception of Savings Banks in this State, as indicated
by their public recognition through an act of the legislature, and the successful inauguration of the enterprise thus incorporated.
Second, that which notes the course and policy of
39
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306
HISTORY OF SAVINOS BANKS.
legislation and of official discussion concerning these
institutions, both singly and collectively, whereby there
was impressed upon them and disclosed con<-.eming
them a certain general character as a system of means
having in view a common purpose or end.
Third, the more detailed statistical or financial history of each institution with such incidents in the career
of any as we have been able to gain and as serve the fur•
ther purpose of illustrating the d~velopment of this
interest.
In other words, this section will embrace three distinct parts, as follows :
PABT
L
Inception of the idea, and incorporation and successf ul establishment of the Bank for Savings.
PART
IL
Policy of the Savings Bank system in this State as
indicated in the course of legislation and of official discussion concerning these institutions.
PABTIIL
Details of the origin and growth of each Savings
Bank in the State, comprising chiefly statistical tables
of progress from year to year.
With this preliminary and explanatory matter disposed of, we are now prepared to proceed with our
record in the order indicated.
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PART I.
INCEPTION AND SUCCESSFUL INAUGURATION OF THE SAVINGS BANK IDEA.
CHAPTER X;xvIII.
DAWN OF PHILANTHROPIC EFFORT.
Concerning the voluntary efforts of philanthropic
citizens in New York which culminated in the incorporation of the first Savings Bank, and the inauguration of the system as a legally recognized institution
in that State, I first transcribe from the memoranda of
Mr. Warner, my indebtedness to whom I have already
acknowledged in a previous chapter.
He says: "This institution (the Bank for Savings,
incorporated 1819) owes its origin, undoubtedly, to
Thomas Eddy, as is evident from extracts of correspondence published in his Life, by Samuel L. Knapp,
1834."
"Mr. Eddy had for many years been a correspondent
of Patrick Colquhoun, one of the local magistrates of
London, and connected with many of the benevolent
institutions of that city. In a letter from Mr. Colquhoun to Mr. Eddy, dated London, 19th April, 1816,he
says: 'Among other philanthropic establishments which
are yearly rismg in the great metropolis ( of London),
we are now anxiously engaged in forming a provident
institution or Savings Bank, in the western district of
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HISTORY OF SAVINGS BANKS.
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 Scotland, 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.'" [Knapp's Life of Eddy,
p. 248.]
The following is an 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 in this city,
and no doubt suggested by Mr. Eddy, after receiving
the above letter from Mr. Colquhoun.
"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. Coggeshall,
Esq., appointed secretary. The object of the meetin~
having been stated, and the .Principles of the/roposect
institution briefly and :pertinently explaine by Mr.
James Eastburn, on motion of Mr. John Griscom, seconded by Dr. Watts, it was resolved, that it is expedient
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 appointed directors:
Henry Rutgers, Thomas R Smith, Thomas C. Taylor,
De · Nitt Clinton, .Archibald Gracie, Cadwallader D.
Cold .n, William Few, John Griscom, Jeremiah Thomp-
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son, Francis B. Winthrop, Duncan P. Campbell, Jos.
H. Coggeshall, James Eastburn, John Pintard, Jonas
Mapes, Brockholst Livingston,William Bayard,Wm. H.
Harrison, Rensselaer 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.
"A meeting of the directors was subsequently held,
December 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 1'lth of December, 1816, the following officers were elected: William Bayard, President; Noah
Brovrn, 1st Vice-President; Thomas R. Smith, 2d VicePresident; Thomas C. Taylor, 3d Vice-President;
Thomas Eddy, Jr., Cashier."
Meetings were held afterward, December 24 and 31,
1816. No entry of any other meeting appears on the
minutes of the bank until April 6, 1819.
Mr. Eddy, in a letter to Mr. Colquhoun, dated New
York, 4th mo. 9th, 181'1, 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 promotin~ among them a
spirit of independence, economy and mdustry. 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 ~hich
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HISTORY OF SAVINGS BANKS.
we made an application to the legislature, and the result is not yet known." [Knapp's Life of Eddy, pp.
266, 266.J
I regard it as fully established by the foregoing, that
Savings Banks in this State had their inception in the
active efforts of Thomas Eddy of New York, whose
attention was directed to this means of relief from or
protection against the evils of poverty, by his friend,
Patrick Colquhoun of London.
The memoranda of Mr. Warner close with a state.
ment of the effort, then undetennined, to procure for
the Savings Bank an act of incorporation from the legislature. The result of this effort we are prepared to
supply from the journals of that body.
SAVINGS B.A.NKS IN THE LEGISLATURE.
AssEMBLY, February 3, 1817.
The memorial of Robert Bowne and others, inhabitants of the city of New York, setting forth, that they
have formed an establishment in said city, for the purpose of receiving, on deposit, such sums of money from
persons belonging to the laboring classes of the community as they are able to save from their earnings, and
to allow them an interest thereon, and praying that the
legislature may grant an act of incorporation to Raid
association, to be called "the Savings Bank of the city
of New York," was read and referred to a select committee, consisting of Mr. Russell, Mr. Sharpe and Mr.
Emmott.
AssEMBLY, March 11, 1817.
Mr. Russell from the select committee to whom was
referred the petition of Robert Bowne an<}. others of
the city of New York, praying for an act of incorpora-
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tion, for a Saving Bank for said city, reported that the
committee have had the same under consideration and
have given it all that attention which the numbers and
respectability of the petitioners, and the benevolence
of their intentions may seem to require. The committee submit the following as the result of their investigations on this subject: That however desirable it may
be to encourage the poorer class of community to save
their hard earnings, and to produce habits of industry
and economy by holding out motives of interest to
them so to do, still the committee are not convinced,
that, under the present state of society in this country,
an institution like this, which may be beneficial under
other circumstances, and in older countries, can be put
into operation with advantage. The expense necessarily attendant in such an establishment will lessen, if
not defeat, the benevolent views of the petitioners.
And the committee have yet to learn, whether the object might not be accomplished, with a greater :erospect
of success, and at the same time avoid a new mcorporation, by making an arrangement with one of the
banks in New York, to allow one of their clerks to
transact the business for a small extra allowance. But
as the principle is a new one, the committee are unwilling td preclude, by any opinion of theirs, the subject
from coming in the usual manner before the house,
they therefore are induced to ask for leave to report
by bill
Ordered, That leave be given to bring in such bill
Mr. Russell, according to leave, brought in the said
bill, entitled "An Act w vncorp<Yl'ate tn,e Saving Banlc
of the city of New York," which was read the first time,
and by unanimous consent was also read a second time
and committed to a committee of the whole house.
Ordered, That the petitioners have leave to print the
usual number of copies of the said bill, and the report
thereon, for the use of the legislature.
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HISTORY OF SAVINGS BANKS.
March 25, 1817.
Ordered, That the bill entitled "An Act w incorp<>rate tlte Saving Bank of the cit!/ of New York," be the
order of the day for Monday next.
AssEMBLY,
AssEMBLY, March 31, 1817.
The house then resolved itself into a committee of
the whole on the bill entitled "An Act w incorporat,e
the Saving Bank of_ the city of New Y01·k," and after
some time spent thereon, Mr. Speaker resumed the
chair, and Mr. Gale, from the said committee, reported
progress, and asked for and obtained leave to sit again.
Ordered, That the committee of the whole house be
discharged from the further consideration of the said
bill, and that the same be referred to a select committee, consisting of Mr. Pendleton, Mr. Russell and Mr.
Williams, to consider and report thereon.
ASSEMBLY,
Ap1-il 2, 1817.
Mr. Pendleton, from the select committee to whom
was referred the bill entiled "An Act w incorporate
the Saving Bank <?f the city of New Y 01·k," to report
thereon, reported, that they have had the said bill under consideration, made sundry amendments thereto,
altered the title to "An Act to incorporate an a.ssoc-iation by the name of tlie saving c01poratwn of tlie city
of New Y01·k," and with those amendments recommend
the same to be passed into a law.
Ordered, That the said bill be committed to a committee of the whole house.
This was its last appearance during the session.
The foregoing report of the special committee on this
subject is deserving of special notice, as it brings to
view one of the leading obstacles against which the
projectors of Savings Banks in this State had to contend. This was the prejudice in the public sentiment
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313
and infused into the legislature, against the further incorporation of hank8. The strife to secure charters for
banking corporations 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 expansion and resulting debasement
of the currency, disastrous consequences might ensue.
Hence, the introduction of every bill to incorporate a
"hank" 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 Savings Banks being
but little understood, their dissimilarity to banks of
discount and circulation not being comprehended, it
was enough that the word "bank" appeared in the title
to the act, to array against it the combined hostility of
the foes of banks, and the friends of a hank for themselves. This condition is suggested in the facts concerning the origin of the Bank for Savings found in
connection with the legislative history of that institution.
Hence, doubtless, the amendment suggested by the
committee, changing 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."
A SIDE ISSUE.
In this connection it is proper to notice an effort
made at the same session to secure for a piivate corporation the patronage and favor of the sentiment which
was being awakened in behalf of Savings Banks.
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HISTORY OF SAVINGS BANKS.
On the 10th of March, I find noted in the journal of
the 888embly the following: "Petition of M. Willet
and many others, praying to be incorporated as the
New York Interest Bank; referred to a select committee."
March 13, a bill to incorporate the New York Interest Bank was introduced by the committee and referred
to the committee of the whole.
This is all that is recorded of the measure, the lateness in the session doubtless preventing the bill from
being reached and considered. But it is evident, to my
mind, that some sharp-eyed financier, cognizant of the
movement in favor of a Savings Bank that should receive deposits and pay an interest on them, saw in the
Acheme plausible ground upon which to secure a private
charter for a new banking corporation. I was unable
to find the petition either printed in the journal or
among the files of legislative papers, so that my convictions of the purpose of the petitioners is only inferen•
tial, but is strongly confirmed by a more elaborate and
determined effort in the same direction subsequently,
the particulars of which will appear in their proper
place.
It will also be noticed, that the report of the first
committee upon the subject looks somewhat in the same
direction, by suggesting the expediency of reaching the
proposed object through the agency of a regularly incorporated bank.
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CHAPTER XXIX.
RE-ORGANIZATON AND RENEWED EFFORT.
The result of this first effort to secure legislative
recognition was, as appears, a failure. But the record
would seem to establish the fact that this first associa,
tion was formed, primarily, to organize a Savings
Bank. The call was for that purpose, it appears to
have been explained as such in the statement of the
objects of the meeting, and the motion of-Mr. Griscom
thereafter, was pertinent to such purpose and to no
other, to wit: "That it is expedient to establish a
Savings Bank for the city of New York." A constitution for that purpose was adopted, a board of directors appointed, and, subsequently, a committee to
secure an act of incorporation, and, later still, officers
were elected, one of whom "cashier," points clearlyto
the organization of a bank, and not of a general charitable association ; and, finally, the memorial which they
presented to the legislature in 1817, sets forth that they
had forrned an establishment for the purpose of receiv_
ing on deposit such sums of money, etc.
The evidence connecting the foregoing memorial and
the action of the legislature thereon, with the association formed on Friday evening, November 29, 1816, is
not such, perhaps; as would establish the fact in a court
of law, but is such as to render it, in my judgment,
historically conclusive. And this view is ~onfirmed
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IDSTORY OF SAVINGS BANKS.
by the facts concerning the origin of the Bank for
Savings hereafter given in connection with the statistics of that institution.
Though not successful in this first effort to secure
a charter, Savings Banks had here their inception in
this State.
In the records of organization furnished me, by Mr.
Warner, there appears a hiatus from December 31,
1816, to April 5, 1819, which last date was shortly
after the incorporation of the Bank for Savings, and
the meeting was doubtless called in view of that
event.
That hiatus I am fortunate in being able to supply
from a statement furnished me by the Hon. P. W.
fuigs, of New York.
This gentleman was cognizant of some of the early
efforts in the direction of the establishment of the Bank
for Savings, and, at my request, not only refreshed his
own memory concerning these efforts, but instituted
inquiries in quarters where information was likely to
be gained, and placed the results of his investigations
at my disposal. It is my personal conviction that he
took a more active part in the proceedings of the times
·narrated than his modest record reveals. Be this as it
may, he has been from the first the zealous friend of
these institutions, and has watched their growth and
development with the keenest interest-an interest
that abates not with advancing years. He is now,
and has been, for several years, an officer in the Metropolitan, formerly Mariners' Savings Bank, incorporated
in 1852, ~nd whose deposits now exceed $6,500,000.
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The foregoing passages were written in 1869. Mr.
Engs died May 19, 1875, in the 85th year of his age.
He continued till his decease to be an officer in the
institution above mentioned, and notwithstanding his
extreme age, no trustee was more faithful in his attendance, or more prompt in the discharge of duty, than
he. Only three weeks before his death, though then
sightless, he called at the bank to make inquiries concerning its welfare.
It will be seen that the record of Mr. Engs practically begins where that of Mr. Warner leaves off, and
is en-oneous in this only: that Mr. Engs infers that the
proceedings of which he gives account, were the first
at which the institution of a. Savings Bank in New
York was considered. This is disproved by the narrative of Mr. Warner already given. It is probable
that the want of success attending the effort to secure
the incorporation of a Savings Bank under the organiza..
tion first formed, resulted in plans of a more general
scope for the relief of the poor- plans that could be
ca.ITied into some measure of effectiveness even though
a Savings Bank were not incorporated as a part of the
operations. Besides, it was perhaps thought, that under ·
the auspices of a general society in the interest of the
./
poor, a. charter for a Savings Bank would be more
likely to be favorably considered by the legislature,
than when solicited by an association having only this
distinctive purpose in view. The result justified the
policy adopted, but detracts nothing from the merit of
the earlier proceedings as being in fact the inception
of the enterprise. The change in the form of organiza.
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HISTORY OF SAVINGS BANKS.
tion was external only; it was still prosecuted in the
same spirit by the same persons, with the addition of
others whose philanthropy was incited by the zeal and
labors of the original projectors of the scheme, and ·with
the same ultimate object in view - the incorporation
of a Savings Bank for the benefit of the poor classes.
With this explanation, the apparent contradictions
between the statements of Mr. Warner and Mr. Engs
are reconciled, and the narrative of the latter very
consistently supplements that of the former.
STATEMENT OF HON. P. W. ENOS.
"Toward the close of the 7ear· 1817, a number of
philanthropic gentlemen of this cit7, whose minds had
been earnestly engaged in considenn~ the condition of
our poor, and seeking out plans for the welfare of the
industrious and laboring classes, came to the conclusion
that the condition of our population, and the best
interest of the inhabitants at large, required that their
views should be put in a shape that would awaken the
public mind to its duty in regard to the condition and
improvement of the humbler classes in many important
respects ; and it was agreed that a meeting should be
called of persons who liad given their thoughts to this
labor of love ; the result of this was an organization,
as shown by the following extracts from their reports
and other documents, confirmed by my own recollection and personal observation at the time.
" At a meeting of a very respectable number of citi.
zens convened at the New York Hospital on Friday,
16th December, 1817, to take into consideration. the
subject of pauperism, General Matthew Clarkson was
appointed chairman, and Divie Bethune secretary. On
motion of Charles Wilkes, seconded by Wm. Johnson,
Esq., it was unanimously 'Resolved, That the citizens
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present, with those who may hereafter unite in the
meaaure, be constituted a society /or the preventwn of
paup_erism.'
"Resolved, That a committee be appointed to prepare a constitution for the government of the society,
and a statement of the prevailing causes of pauperism,
with suggestions relative to the most suitable and efficient remedies. Whereu:eon the following gentlemen
were appointed a committee for that purpose, viz. :
John Griscom, Brockholst Livingston, Garrett N.
Bleecker, Thomas Eddy, James Eastburn, Rev. Cave
Jones, Zachariah Lewis and Divie Bethune, who were
requested, when ready to report, to convene the society
for that purpose.' 'At a meeting of the society on ,
Friday, the 6th February, 1818, the report from the
committee was read, and it was 'Resolved, That one
thousand COJ>ies of the report and constitution be pub-.
lished for distribution, under the direction of the same
committee.'
''The committee named, directed their attention without delay to the objects of their appointment, and, as
they proceeded in classing the cause of poverty, coming
to the fourth head, ' Want of .Economy,' say,' Prodigality
is comparative among the poor, it prevails to a great
extent in inattention to those small but frequent savin~ when labor is plentiful, which may go to meet :
pnvation in unfavorable seasons.' This is the first 1
expression in their report which .Points to the Savings
Bank principle. Subsequently, 1t is said, 'We there-;
fore 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
laborin~ classes to make the most of their earnings by \ /
promotmg 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
'1
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HISTORY OF SAVINOS BANKS.
Baltimore having each a savings bank.' Here, then,
is the first germ of action upon the important duty of
establishing a Savings Bank in New York. The same
committee, in the second article of the proposed con•
stitution, say that a leading effort shall be 't-0 hol.d uut
ind'U{}ements t,o econ,mny and savilrom the fruits cf
their own industry in tlw seasons o great abwndance.'
" In a pencil note to my former -iend John Griscom,
on the title page of the report referred to, is the following: 'written by J. G.' 'This first report of the
pauperism society was taken by me to Europe. A few
months afterward this society germinated in my parlor
in William street, though first established at the hospital.'
"Being a near neighbor," continues Mr. Engs, "I
was present at this meeting, and remember to have
seen Thomas Eddy, Joseph Curtis, John Pintard, and
others whom I cannot name. ' Soon after the report
was made and printed,' says a note from the son of
Mr. Griscom to myself, ' a motion was made by my
father that a Savings Bank be organized, which was
immediately adopted, and the first Savings Bank in
the State of New York was organized soon after in
Chambers street, the same one now in Bleecker street,
near Broadway, and of which you possess the record
to the _J>resent time.'
"It 1s, therefore, a settled point that Savings Banks
in this State owe their origin to the ' New York Society
for the Prevention of Pauperism ' and John Griscom,
well known in this city dm-ing his life-time as devoted
' .to philanthropic, educational and scientific objects, was
: the prime mover in forming that society, but made it
'-his duty, after it was fonne~, to introduce as its most
important feature the establishment of a Savings Bank.
Surely, the city and the State owe to him and his associates a debt of gratitude, more especially as it is to be
remembered that out of this Society came the establishment of the 'Society for the care of Juvenile Delinquents, or House of Refuge,' being the first estab-
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lishment in the world on a similar plan, the great
benefits of which have been known and appreciated
wherever its example has been followed after. Succeeding the incipiency of these movements, public
meetings were called by the parent society at the old
City Hotel, in Broadway, which brought together
leading public spirited men of our city, and there were
heard the practical arguments and sound eloquence of
that giant mind, the celebrated and reverend John M.
Mason, and others of like reputation. I should fail to
record correctly the names of most of these, and might
misplace those whose public services I have been apt
to trea.~ure up as benefactors of the human race, were
I to attempt a positive record, in this instance, from
memory. 'fhey were, however, from the most energetic and useful portions of society, and have mostly
gone to their account. These gentlemen and their coworkers, by placing the establishment of Savings Banks
in the foreground of their efforts, were eminently successful in linking together minds and hearts from various grades of society, whose labors for the well-bein?,
of their fellow men have shed a lustre over our land. ' ·
It is probable that the claim made in the foregoing
nan-ative, in favor of John Griscom as the mover of
the resolution for the establishment of a Savings Bank
as part of the plan, or as the leading feature of the
society then organized, is well founded. It will be
remembered that in the narrative of Mr. Warner, Mr.
Griscom made the same motion at the meeting on the
29th of November, 1816, and it was natural and characteristic of the man that be should be the first to
renew bis motion under the auspices of the new movement, having still the same ultimate object in view.
Thus are the two namttives made consistent as a
continuous hiHtory of the early efforts of philanthropy,
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resulting in the successful establishment of a Savings
Bank for the poor, under the authority and protection
of the law, and the COITectness of both is confirmed by
the brief na1Tative furnished by the treasurer of the
Bank for Savings, of the origin of that institution, which
will be found prefaced to the statistics of that institution.
In my researches among the legislative records of
the State, I was for a time surprised to find nothing
that presented evidence of a following up before that
body in 1818, of the movement initiated in 1817, and
could not be persuaded that I had not overlooked some
evidence on the subject, through defective indices or
imperfect files, until I had examined carefully every
page of the journals of both houses, and every scrap of
writing among the dusty and ill-a1Tanged legislative
records of that year. But the natTative of Mr. Engs,
'afterward received, explains the matter fully.
· From this, it appears that the report of the commit, tee upon a plan of action for the Society for the Pre, ' vention of Pauperism, was not presented until February
/~6th, 1818, a period quite too late in the session of the
( legislature, to hope for the successful introduction of
the measure at a time in the history of legislation in
our State, when important measures were commonly
considered with great care and deliberation. Besides,
the organization of the Society appears, even at this
time, to have been quite informal, not being perfected
until some months later, a.'J stated in the memorandum
of Mr. Griscom.
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CHAPTER XXX.
.IIF.SSAGE OF GOTERNOR CLINTON, 1818,-ANOTHER SIDE ISSUE.
It will have been observed, that among the names
of directors of the Savings Bank organized in 1816,
was that of De Witt Clinton. That his far-seeing
sagacity, afterward so conspicuously manifested in the
administration of the affairs of State, should lead him
to identify himself with this enterprise is not surprising. The conditions of pauperism demanding
relief, and the agency of Savings Banks as a means to
that desirable end, had doubtless been impressed upon
his mind at the meetings of the society with which
his name was identified, and by personal interviews
with and appeals from the original and more active
promoters of the enterprise. In the fall of 1811 he
was elected governor, and brought to this elevated
position a mind and heart deeply imbued with convictions derived from the associations referred to.
Accordingly, we find in his first annual message to
the legislature, the following reference to the subject
of pauperism, and to the various philanthropic agencies
designed to mitigate its evils.
&tract from the Me8sage of Govenwr Olinton, 1818.
"Our statutes relating to the poor are borrowed
from the English system, and the experience of that
country, as well as our own, shows that pauperism
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HISTORY OF SA VINOS BANKS.
increases with the augmentation of the funds applied
to its relief. This evil has proceeded to such an alarming extent in the city of New York, that the burden8 of
heavy tmcation wMch it has imposed, 1nenace a diminu,.
tion of tlie popnlatwn of that city, and a depreciatum
_of its real property. The consequences will be very
injurious to the whole State ; for the decay of our
great market will be felt in every department of productive labor. Under the present system, the fruits
of industry are appropriated to the wants of idleness;
a laborious poor man is taxed for the support of an
idle beggar; and the vice of mendicity, no longer considered degrading, infects a considerable portion of
our population in large towns. I am persuaded that
the sooner a radical reform takes place, the better.
The evil is contagious, and a prompt extirpation can
alone prevent its pernicious extension. The inducements to pauperism may be destroyed, by rendering it
a ~renter evil to live by charity than by industry; its
mischiefs may be mitigated by diminiF;hing the expenses
of our charitable establishments, and by adopting a
system of coercive labor; and its cause8 may he removt><l
by preventing intemperance and extravagance, aud
by intellectual, moral and religious cultivation. It is the
decree of heaven that ow· lives should he spent in useful or active employment. ' In the sweat of thy fa<'t>
shalt thou eat bre·ad, till thou return unto the brround,'
was the declaration of the Almighty to our first parent-:
and a course of blind, indiscriminating, prodigal bene,·olence defeats its own object by attempting to counteract the laws of our nature, and the de~igns of ProYidence. Charity is an exalted virtue, but it ought to be
founded on reason and regulated by wisdom. While
we must consider as worthy of all praise aud patronage religious and moral societies, Sunday, free aml
charity schools, houses of industry, orphan asylums
and SAVIN GS BANKS, and all other establishments.
which prevent or alleviate the evils of pauperism, by
inspiring industry, dispensing employment, and ineul-
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eating economy; by improving the mind, cultivating
the heart, and elevating the character, we are equally
bound to discourage thol':e institutions which furnish
the aliment of mendicity, by removing the incentives
to labor, and administering to the blandishments of
sensuality."
To this we add the following extract from the reply
made by the assembly:
"All such institutions as your excellency has
enumerated, which are so obviously calculated ro alle- ·
viate the evils of pauperism, by inspiring industry,
dispensing employment, and inculcatrng economy, by
improving the mind, cultivating and elevating the
character, we shall consider as highly deserving the
public patronage.''
A joint committee of senate and assembly having
been appointed, to whom was referred that part of the
governor's speech ( or message) relative to the relief
and settlement of tlie poor, Mr. Crolius, from committee
appointed on part of the assembly, reported (April
2, 1818):
'
"That they are impressed with a strong convictfon,
that the rapid increaRe of pauperism is an evil of an
alarming nature, and that a speedy and radical reform
of our pauper system is imperiously called for to
remedy the growing evil; that, in consequence of the
indisposition of the chairman of the joint committee,
the calling of them together has been unavoidably
omitted so long that there is not sufficient time, during the continuance of the present session, to mature
a new and proper sptem." The committee were thereupon discharged.
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HISTORY OF SA VINOS BANKS.
A NEW BIDE IBSUE.
We noted in the history of legislative action upon
the subject of Savings Banks in 1817, the memorial
of M. Willett and others, praying for the incorporation of an interest bank.
The effort was renewed the following year by other
parties, and seems to have been more favorably considered, or at least it occupies a far more conspicuous
place in the journals of the legislature.
That this movement was stimulated by the effort to
establish a Savings Bank upon purely philanthropic
principles, is to my mind as clearly established as the
relation of any two historical events well can be, though
some of the names appended to the memorial would
point to the conclusion, perhaps an erroneous one, however, that some of the parties, interested in the project
of a Savings Bank, and despairing of success in securing
the favorable consideration of the legislature, had lent
their approval to this measure as the more hopeful
scheme to win success, and as the best attainable good
in the direction of a place of deposit for the earnings
of the poor. But I am persuaded that the motive of
its primary projectors was, by this device, to distract
the attention of the legislature, and under the specious
guise of the public good to be promoted, to make use
of the growing sentiment in favor of Savings Banks, to
secure to themselves a profitable franchise.
As this measure was more carefully prepared and
more earnestly pressed than that ol the previous year,
I insert here the memorial of the applicants and the
proceedings of the legislature thereon, as an interesting
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episode in the history of Savings Banks; for had the
project been successful, and interest paying banks taken
thi'.s form, they would have become merely commercial
enterprises, with no distinctive history to record.
SENATE, March 11, 1818.
The petition of W. North and others, praying for
the establishment of an interest and Savings Bank in
the city of New York, was read and referred to a select
committee consisting of Mr. J. I. Prendergast, Mr.
Swart and Mr. - - .
PETITION.
To the Honorabk the Legislatwre of the StafAJ of New
York:
The petition of the subscribers, on behalf of themselves and their associates, for an act incorporating an
interest and Savings Bank, respectfully showeth:
That your petitioners are well convinced that a bank
giving an interest on money deposited in it would be
a great public accommodation and benefit.
Your honorable body must be aware that there is a
large amount of floating capital in all commercial cities,
and that an institution which would concentrate this
capital, and loan it to active, industrious and enterpnsing men, would be of infinite advantage, and greatly
assist commerce, manufactures and trade. That such
a bank, they firmly believe, would call forth an amount
of deposits, equal to its capital, from a class of citizens
who have never kept any bank account, and who have
no interest in banking institutions; such, for instance,
as the honest and fair tradesman, who pays his debts
without a promissory note, but often acquires a property
in money beyond his immediate demands, and who looks
forward to the period when he may safely invest the
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HISTORY OF SA VINOS BANKS.
savings of a series of years in real estate, or to the fur.
ther extension of his business or calling.
That your petitioners are fully convinced that a bank
can and ought to allow an interest on money deposited
. in it, and are willing to embark their funds in an insti✓ / tution on this principle, and take the chance of derivin~
from its discounts a compensation for the risk an<l
trouble.
Your retitioners respectfully state it as their confi.dent behef, that such an institution would have a happy
tendency to check the unfortunate rage for speculat10n;
to e11ualize, in some degree, the price of stocks and
public funds; prevent those dangerous fluctuations in
the value of merchandise; greatly assist and relieve
persons whose property is at present locked up in courts
of justice, trustees, administrators and others, who are
not authorized to invest the property committed to their
charge.
Your petitioners are convinced that an interest on a
sum equal to the capital they ask for, is lost to "'idows,
orphans, charitable and other institutions, as well as to
many individuals w.ho are compelled to keep considerable sums on hand, waiting for permanent objects of
inveHtment, or to meet emergencies.
That many such receive their incomes in sums greater
than are required for immediate use, whereby they lose
an interest which otherwise they will gain from an institution of this kind.
That it would beget habits of economy, of calculation, and of foresight in all classes of the community.
That it would attract to our State and city wealthy
foreigners who would be ~lad to deposit their specie
in the vaults of a bank giving a small interest, until
time and experience should direct them to more profitable objects of investment.
It must also be well known to your honorable body,
that, in all commercial countries except our own, there
exists a means of obtaining an interest on floatin~ capital To the general objection, "That there are m the
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city of New York too many banks," your petitioners
answer, that there is not one on the liberal principle of .
giving an interest on deposits, and your petitioners {
would not ask for privileges of banking which did not j
insure to the public greater advantages than of any
similar institution/et established. A bank with the
small capital aske for by your petitioners will not
materially increase the paper circulation, especially as
it must go into operation on a specie capital.
Your petitioners respectfully state, that an institution possessing public confidence, giving an interest to
the depositor on the one hand, and regaining an interest from the borrower on the other, will rest on the
only just principle of trade-reciprocal advantage.
It 1s here that the farmer may deposit the fruits of
his agricultural labors, and wait a favorable opportunity
to enlarge his patrimonial estate. It is in such an
institution the mechanic may increase the profit of his
former labors, until he finds himself able to build a
tenement of his own. The widow and orphan may
here see the interest of any principal left for their current maintenance accumulate in a ratio similar to compound interest. It is in such a bank the successful
merchant may lay down the profits of a fruitful voyage,
and contemplate ite increase preparatory to a second
adventure.
Such an institution will induce the hazardous speculator to pause before he ventures on the ocean of uncertainty, and give every man's reason time to check
increasing avarice and overwown cupidity. Such an
institution will in short aid the admini~trator, the
guardian and the trustee, by giving an interest favorable to the trust estate co-extensive with the right of
the party to the principal.
Your petitioners assure your honorable body that
t11eir plan has obtained the general approbation and
applause of the community. The advantages it holds
out to men of small but increasing property ; the
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HISTORY OF SA VINOS BANKS.
equity and fairness of its principles; its general benefit
and utility, will command the universal suffrage.
Such are the grounds on which your petitioners ask
for a new banking institution from an enlightened
legislature. They pretend to no patronage but reason
and general utility. They offer no bonus but the
public accommodation. They ask no privileges but
such as will manifestly tend to the puolic good; and
they will submit with deference to such decision as
your honorable body shall be pleased to pronounce.
s.
ALFRED
PELL.
CHAS. GRAHAM.
FRED. DE PEYSTER.
C. WATIS.
NEw
YORK,
w.
NORTH.
WM. INMAN.
DENNIS
McCARTHY.
February, 1818.
SENATE, MMch 13, 1818.
Mr. J. I. Prendergast, to whom was referred the
petition of William North and others, of the city of
New York, praying for the establishment of an interest
bank, reported as follows, to wit:
That they have had the same under consideration,
and are of opinion that an institution that would
become bounden to pay an interest on deposits would
be of great utility, and merits the consideration of the
legislature.
First. Because they are induced to believe that none
of the present banking institutions pay an interest to
private persons on deposits. And, secondly, in a large
commercial city, where there are many mechanics,
tradesmen and others, who would have a safe place to
deposit their weekly savings, and receive an interest
of five per cent thereon per annum, until it amounts
to a sum sufficient to enable them to make a more
profitable investment, would to such persons be of
great advantage.
The committee are under the impression, that, in all
commercial countries except our own, there exists the
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means of obtaining, through public institutions, interest
on floating capital; and they believe that an institution
giving a moderate interest to the depositor on the one
hand, and regaining an interest from the boITower on
the other, founds its claim tofublic patronage on the
most equitable principles o trade and reciprocal \
advantage. They have, therefore, directed their chairman to prepare a bill, and ask leave to present the
same. Thereupon,
Orderd, That leave be given to bring in such
bill.
Mr. J. I. Prendergast, according to leave, brought in
the said bill, entitled "An act to incorpO'rate the New
York Interest Bank," which was read the first time,
and, by unanimous consent, was also read a second
time, and committed to a committee of the whole.
Ordered, That the said report and bill be printed at
the expense of the applicants.
The bill was considered in committee of the whole,
April 6, and rejected by a vote of fifteen to seven,
which was agreed to by the Senate.
On the 8th of April a motion was made to reconsider
the vote agreeing to reject the bill, which was lost by
fifteen to ten, and thus the bill failed.
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JIISTORY OF SAVINGS JUNKS.
CHAPTER XXXI.
rnrnoDUCTION, PROGRESS AND PASSAGE OF THE ACT INCOKPORATING THE B.ANK FOR SAVINGS.
I propose herein to trace the proceedings of the legi:-;]ature upon this subject, from the presentation of the
memorial of the Society for the Prevention of Pauperism, until the approval of the bill for the incorporation
of the Bank for Savings, by the council of_ r~:ri~Q!l. I
regret that the memorial and report referred to have
not been preAerved in full among the legislative.records.
We are thus brought to the year_1819, ever memorable in our history as that in which the Savings Bank
principle was recognized by, and received the support,
authority and protection of law.
None of those connected with the measure, as petitioners, corporators or legislators, dreamed of the mag•
1 nitude and importance of the work thus inaugurated.
Of the latter, some were consistently, and perhaps not
unrea."!onably, opposed to the scheme from first to last,
while others gave their assent doubtfully, and othen;
indifferently. But among them there must have been
some sagacious as well as zealous and persistent champions. I regret that I am unable to record the names
of these, except as they appear in the reports of committees, for it would be a grateful service to transmit
the names, not less of those who thus espoused the
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cause and gave to it legal and tangible form and embodiment, than of those who conceived the idea and labored
to secure its acceptance and approval.
PROCEEDINGS OF TIIE LEGISLATURE UPON THE BILL TO IN•
CORPORATE THE BANK FOR SA VINOS IN THE CITY OF
NEW YORK.
Tlim·sday, J(J;nua,ry 10, 1819.
The memorial of M. Clarkson, president, on behalf
of the Society for the Prevention of Pauperism in the !
city of ~ew York, praying certain legal provisions in i '
regard to tavern licenses, and also the incorporation of/
a Savings Bank in the said city, was read and referred
to a select committee, consisting of the members attending this house from the city and county of New York.
AssEI\IBLY,
Safllu•day, February 13, 1819.
Mr. Ulshoeffer, from the select committee, consisting
of the memhet·s attending this house from the city and
county of New York, to whom was refeITed the memorial of the board of managers of the Socie~ for the
Prevention of Pauperism in the city of New York,
reported in part:
That they have examined and duly considered the
said memorial as it respects a Bank.for Savings, to be
established in the city of New York, and are of opinion
that such an institution woultl he of the utmost utility.
The efficacy and beneficial results of these irn;.;titutions,
affording a safe and profitable means of investing small
sums of money, have been fully tested in Europe and
the United States.
The memorial, and a report of a committee, from the
before-named, society, on the subject of such an incorporation, afford facts and arguments, which, in the
opinion of the committee, will satisfy the most skeptical.
It is to be wished that such institutions might become
AssEMBLY,
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HISTORY o~• SAVINOS BANKS.
~eneral throughout the land, and they ought to nnit.e
m their support every benevolent mind. The committee
respectfully refer to the above-mentioned report, for
the necessary information on this subject; they have
approved of the draft of a hill submitted by the petitioners, which they now ask leave to bring in.
Ordered, That leave be given to bring in such bill
Mr. IDshoe:ffer, according to leave, 'brought in the
said bill, entitled "An Act to inoorp(JT'ate an a.gsooiatwn
by the 1WITlie of a 'Bank f (JT' Savings' ,in the city of New
York," which was read the first time, and by unanimous consent was also read a second time, and committed to a committee of the whole house.
Ordered, That the usual number of copies of the same
be printed £or the use of the legislature.
AssEMBLY, Saturday, Fehrua1ry 2'l, 1819.
The house then resolved itself into a committee of
the whole on the bill entitled" An Act to inco-rporau
an as8ocwtion by the name of a 'Bank of Saving8' in
the city qf' New Y 01·k," and after some time spent thereon, Mr. Speaker resumed the chair, and Mr. Green from
the said committee reported, that the committee had
gone through the said bill, made an amendment thereto
and agreed to the same ; which he was directed to report to the house, and he read the report in his place,
and delivered the same in at the table where it was
again read.
Thereupon,
Ordered, That the further consideration of the report
of the committee of the whole house be postponed
until Monday next.
AssEMBLY, Monday, March 1, 1819.
Mr. Adams, from the committee on engrossed bills,
reported that the committee have examined the engrossed bill entitled "An act to incorporate an a-s~
eiati,0n by the 1Wll'1W of a 'Bank for Savings' in the city
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of New Y01·k" (with others), and that the same is
correctly engrossed.
Thereupon, the said engrossed bill entitled "An act
to incorp01·ate an association by the narne of a 'Bank
f01' Savings ' in the city of New Y01·k" was read the
third time.
Resowed, That the bill do pass.
SENATE, Friday, March 6, 1819.
The Senate then resolved itself into a committee of
the whole on the engrossed bill from the honorable the
assembly, entitled "An act to inc01porate an associatwn h-y the narne of a ' Bank for Savings' in the city
of New York," and after some time spent thereon,
Mr. President resumed the chnir, and Mr. Frey, from
the said committee, reported that, in proceedingon the
said bill and after the same had been read in the com•
-::nittee, the first enacting clause thereof, having been
amended, was again read, and is in the words following, to wit:
Be it enacted by the peop'leof the State of New York,
'npresented in senate and assembly, That William
Bayard, John Murray, Junior, Noah Brown, William
Few, Brockholst Livingston, Cadwallader D. Colden,
George Arcularius, Thomas Buckley, Duncan B. Camp•
bell, Benjamin Clark, James Eastburn, Henry Eckford,
Thomas Eddy, Philip Hone, John E. Hyde, Peter A.
Jay, Zecheriah 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 of 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, <lefen<l.mg and
being defended, in all courts and places whatsoever;
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HISTORY OF SA VINOS B.AYKS.
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 successors, any real estate, in fee
simple or otherwise, and any goods, chattels and personal estate which shall be necessary for the purposes
.' above recited, and of selling, leasing or otherwise dis,! posing of the said real or personal estate, or any part
.· thereof, at their will and pleasure: Pr(YVide<l always,
~. That the clear annual value of such real and personal
estate, exclusive of the profits that may arise from the
, interest accruin~ 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 t111stees or managers
of said institution shall not directly or indirectly
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
~y incorporated banks other than is herein specified:
P1·ovide<l also, That the funds of the said corporation
slrn.11 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.
That debates were had thereon, and the question
having been put whether the committee would agree
to the said clause, it was carried in the affirmative.
That the yeas and nays being called for by Mr.
Os-den, seconded by Mr. Bowne, were as follows, to
wit:
For the affirmative- Messrs. Adams, Allen, Barnum,
Barstow, Bowne, Childs, Dayton, Evans, Hammond,
Hart, Knox, LivingAton, Rosecrants, Seymour, Skinner, Swart, Van Vechten, Wilson, Yates and Young.
For the negative - Messrs. Austin, Ditmas, Lounsbery, Mallery, Noyes and O(l'den.
Mr. :Frey further reported that the committee had
gone through the said bi1l, made amendments, and
•There I~ evidently an omission In the Journal, probably of the words "shall not
exceed the sum or lhe tl10usaJ11.l dvllar,i.'
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agreed to the same; which he was directed to report
to the senate, and he read the report in his place, and
delivered the same in at the table, where it was again
read and agreed to by the senate.
Ordered, That the amendments be engrossed.
SENATE,
f/a;twrday, March 6, 1819.
The engrossed bill from the honorable the assembly,
entitled " An act to incorporate an association by the
name of a ' Bank for Savings' in the city of New York,"
was read the third time.
Resolved, That the bill and amendments do pass.
Ordered, That the clerk deliver the said bill and
amendments to the honorable the assembly, and inform
them that the se~ate have passed the same, with the
amendments therewith delivered.
AssEMBLY, &turday, March 6, 1819.
Two several messages from the honorable the senate,
delivered by their clerk with the bills therein mentioned, were read, informing that they have passed
the bill entitled ' An act to incorp<»'ate an asso-
ciation by the name of a 'Ba;nk f <»' &vings' in the
city of New Y<»"k" (and another), severally with the
amendments therewith delivered.
.
Thereupon the said bills and amendments were read,
and the amendments having been again read,
The said bill and amendments first mentioned were
laid upon the table.
AssEMBtY, Wednesday, March 10, 1819.
The house then proceeded to the consideration of
the amendments made by the honorable the senate to
the bill entitled "An act to incorporate an association
by the name of a 'Bank for Savings,' in the city of
New York."
The same having been read, all of the said amendments, excepting the first, were agreed to by the house,
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HISTORY OF SAVINGS BANKS.
and the first having been amended, was agreed to by
the house.
Ordered, That the clerk deliver the said bill and
amendments to the honorable the senate, and inform
them that this house have concurred with them in their
amendments to the said bill, with the amendment to
their first amendment therewith delivered.
Friday, Ma;rch 12, 1819.
A message from the honorable the assembly, delivered by their clerk with the bill, amendments, and
a copy of a resolution therein mentioned, was read,
informing that they had concurred in all of the
amendments of the senate to the bill entitled "An act
to incor,porate an association by the name of a ' Bank
for Savmgs,' in the city of New York," except the
first amendment which they had amended.
The said amendment having been read and considered.
Thereupon,
Resolved, That the senate do non-concur with the
honorable the assembly in their said amendment to
the first amendment of the senate to the said bill.
Ordered, That the clerk deliver the said bill, amendment, and a copy of the preceding resolution to the
honorable the assembly.
SENATE,
AssEMBLY, Friday, March 12, 1819.
A message from the honorable the senate, delivered
by their clerk, with the bill, amendments, and a copy
of the resolution therein mentioned, was read, informing that the senate do non-concur with this house in
their amendment to the first amendment made by the
honorable the senate to the bill entitled "An act to
irworporate an association by the name of a 'Bank for
Savings,' in the city of New York."
Ordered, That the said bill, amendments and copy
of a resolution be laid upon the table.
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339
AssEMBLY, Monday, MMch 15, 1819.
The house then proceeded to the consideration of so
much of the first amendment made by the honorable
the senat.e to the bill entitled "An act t,o incorporate
an association by the name qf' a 'Bank for Savings,' in
the city of New York," which said amendment had
been amended by this house, and in which said amendment so made by this house) the honorable the senate
had non-concurred.
Thereupon, the said amendment being read,
Resolved, That this house do recede from their said
amendment to the said first amendment by the honorable the senate to the said bill
Ordered, That the bill be re-engrossed as amended
by the honorable the senate.
Ordered, That the clerk deliver the said amended
bill, amendments, and a copy of the preceding resolution, to the honorable the senate.
Monday, MMch 22, 1819.
Six several messages from the honorable the assembly, delivered by their clerk, with the bills and amendments therein mentioned, were read, informing that
they had concurred in the amendments of the senate
to the bill entitled "An act w incorpqrate an association
h.11 the name of a 'Bank for Savings,' in the city of
New York" ( and others).
The amended bills having been examined,
Ordered, That the clerk return the same to the honorable the assembly.
SENATE,
AssEJmLY, Monday, MMch 22, 1819.
Bill entitled "An act w vncorporate an ass0<,WJ,Uon,
by_ tlie name of a' Bank of Saving8' in the city of !few
York," received from the honorable the senate, with a
message that they had passed the same without amendment.
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HISTORY OF BA.VIN GS BANKS.
Orderd, That the clerk deliver the same to the honorable the council of revision.
Frida,y, MMch 26, 1819.
Message from the honorable the council of revision
returning the bill APPROVED.*
• The foregoing proceedings of the legislature are u nearly a Utenl tranaortp&
from the Journals ot ~e two houeee u It wu praot.loable to make.
'
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CHAPTER XXXTT
PRACTICAL RESULTS; FIRST REPORT OF BANK FOR SAVINOS;
SUCCESS POPULAR AS WELL AS SUCCESSFUL! FIRST FRUITS.
It is proper briefly to note the practical success of
this institution for a short period after its organization
and the favorable effect of this success in disarming
hostility to similar measures thereafter.
The first report of the institution was made to the
legis]ature the following year, 1820, and was accompanied by an application for an amendment of its charter
so as to authorize investments in loans upon real estate.
Concerning the subject generally, Governor Clinton,
in his message to the legislature, says :
"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 shedding a benign influence on
society. The application of this institution to authorize
loans on real estate, as well as any other provisions
subservient to its salutary objects, will undoubtedly
receive your sanction."
The following is the report of the Bank for Savings
made to the legislature in 1820, covering the operations
of only six months:
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msTORY OF SA VINOS BANKS.
REPORT.
Conformably to the provisions of an act entitled
"An act to incorporate an association by the name of
a Bank for SaV1ngs, in the city of New York," the
trustees now beg leave to present their first report to
the honorable the legislature of the State, and the hon. orable common council of the city of New York, as
follows:
First. That the Bank for Savings was opened for
depositors 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 the 3d of July, 1819, when, from
eighty depositors, the trustees had the satisfaction of
receiving the sum of $2,807.
Second. That from the aforesaid 3<l. day of July,
until the 27th of December inclusive, being a period of
six entire months, there had been deposited in the Bank
for Savings, by 1,527 depositors, the sum of $153,378.31.
Third. That the sum of $148,372.27, as will appear
by the treasurer's account hereunto annexed, has been
invested in the public funds, agreeable to law, and that
the sum of $6,606 has been drawn out by the depositors. Of those who have drawn out, the number of
forty-six have closed their accounts, and twenty-one
have only taken out a part, and, therefore, their accounts remain open.
Fourtli. The depositors havin<Y been classed under
various heads, they stand in the tooks of the trustees
as follows: [Here follows an enumeration of occupations
of depositors, embracing mechanics, lahorers, tradesmen
and domestics, 840; minors, male, 287; minors, female,
276; widows, 98 ; orphans, 20; apprentices, 15; unclassified, 24; total, 1,527.] Having given those statements, which the act aforesaid and the sense of their
own duty to the depositors required, the trustees hope
that they shall stand excused in making such remarks
as this interesting subject obviously suggests.
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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
r,rodigal ex_Penditure. The trustees, however, are gratified in saymg that few such instances have come to ·
their knowledge. On the contrary, the classifications
of depositors will furnish several instances, even of
public tavern-keepers, 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 refol'Jll 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 hi~hly 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 committee 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 q_uestions as might promote the welfare either of the -mdividual or of the institution. By this means the whole
of the board of trustees have become familiar with
the depositors, and while their confidence 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 promote careful habits
and moral feeling. The gratification which they have
received in numerous instances ha.<i amply repaid the
attending committee this gratuitous labor.
The investment of the funds has been intrusted to a
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HISTORY OF SAVINGS BANKS.
special committee, 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
reports 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 cheeks are furnished as to
prevent the possibility of the smallest loss to depositors.
The different classes of depositors will furnish various reflections calculated to place Banks for Savings
high in the esteem of the political 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 procunng 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 profligate, 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 li\Te
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 sufferers themselves, arose alike
from their want of some secure place of deposit, and
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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 temptation to loan
was the same. Though many de:positors 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 effects 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 father, .a husband, a guardian or a
friend. The talent which heaven has committed to
his care he improves for the objects of his affections ;
this, again, endears them to him, and thus the sum of
human happiness is increased and extended. It is
impossible for men continuing 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
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HISTORY OF SAVINGS BANXB.
.only delightful, but permanent. Those who have
brought their one dollar, are anxio11S to increase it to
five, and so on. The number of re-deposits sufficiently
confirms this fact; and such has been the effects on
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 immediately after landinO'.
There are severJ 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
stonns 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 rower to increase the number. One seaman in
one o the regular traders for Liver:pool, brought home
with him, in silver, $360; his captam 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 uimally 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 trustees look round 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
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comfort and security of minors, is not one of the least
blessings which shall flow from this institution. 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 generations are to be
benefited and improved.
As parents, as citizens, and as men, the trustees exult
in the prospects which the Bank for Savings holds out
to this growing city and 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 independence, and in their moral operation lessen
crime, poverty and disease. They teach man to depend
upon his own exertions; encourage industry, frugality,
cleanliness and self-respect; and effectually prevent
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 public opportunity of thanking the gentlemen connected 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 undertaken an arduous task; but in the approbation of the public authorities, the countenance of
their fellow-citizens, and the increasing comfort of the
community, they will have a full reward.
WILLIAM BAYARD,
President.
JAMES EASTBURN,
&oreta1·y.
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Accompanying the foregoing report, and referred to
therein, was the following financial statement of the
operations of the Bank for the first six months. It is
a noteworthy fact that this form of statement is preserved and used to this day in the financial exhibit.a
of this Institution.
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Firs/ Fi'na11eial Slall#UIII of llu Bank for Savings for 1819.
The Treasurer in account with the Bank for Savings.
1819.
Dr.
July.
Aug.
Sept.
Oct.
To cash from depositors. . . . '40,262 52
To cash from depositors.... 26,783 69
To cash from depositors.... 25,720 78
To cash from depositors.... 21,108 75
To interest . ... . . . ...... . ...
1,217 38
Nov. To cash from depositors.... 19,934 77
To interest.... . . . . . . . . . . . . .
300 oo
Dec. To cash from detositors. ... 19,516 88
To balance, due reasurer . .
947 20
$155,791 97
0
~
,,.
~
~
r-5"'
~
STOCK.
July 7. Bycaah,N. Y. long loan ......
July 13.
"
N. Y. State sixes ....
Aug. 5.
N. Y. State sixes ....
Aug. 10.
N. Y. State sixes ....
Aug. 16.
"
N. Y. long loan ......
"
withdr'n by deposit'r.
Sept. 8.
"
Canal stock.........
Sept. 14.
''
Canal stock ....•....
Sept. 16.
" . One million loan ....
Oct. 6.
Cith loan ............
••
wit dr'n by deposit's,
"
for expenses ........
Nov. 1.
••
Cithloan ............
·"
wit dr'n by deposit's,
for expenses ........
Dec.
Canal stock .........
withdr'n by deposit's,
'4,331
15,5i5
20,7 I
9,350
16,772
8o
87
37
g6
68
....... .
6,000 00
4,135 g6
4,250 00
20,000 00
........
........
30,000 00
........
.... ... .
16,752 8o
........
$147,911 44
"'C")
0
1819.
z
l'l:I
~
Cr.
'4,256
15,225
20,781
9,413
16,940
430
6,o68
4,186
4,313
00
15
37
29
40
00
oo
95
75
20,250 00
3,675
505
30,184
1,869
3o8
16,752
631
49
70
56
51
00
8o
00
$155,791 97
N om.-OD coml)arull[ this account with the books of tho accountant. It appears that a loss of 150,98 hu occurred, of which 1•7 wu Ill counterfeit
loilea mchaqe.
notea, and laJ,99,
=
I
i
~
I;
I
~
,Iii,,.
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350
HISTORY OF SAVINGS BANKS.
The message of Governor Clinton from which we
have quoted, refers to a petition from. the Bank for
Savings to the legislature, asking for an enlargement
of its power in making investments, etc.
In this petition the trustees set forth that" They were restrained from vesting moneys except
in governm.ent ~ecurities or in stock, created _and issued
under and rn virtue of any law of the U mted States
or of this State.
"That the price of such stock is fl.uctuating; that it
produces but six per cent interest, and often a less
profit, as the same cannot always be purchased at
par.
"With a view to make their funds as productive as
possible, the same being chiefly the property of the
poor, they pray to be further authorized to loan their
funds either on bond and mortgage on real estate in
the city of New York, or to the corporation of that
city.
"They also state the difficulties under which they
labor, in consequence of small deposits being lodg{'d
. by minors, who have not the power to withdraw such
deposits, unless through the interposition of guardians,
and pray that they may be authorized to pay such
depositors without such interposition.
"They also pray that deposits of persons deceased,
without leaving any representative, may, after sufficient time has elapsed, be applied to the objects of the
institution."
The committee to whom the petition was referred,
reported favorably concerning most of the provisions
petitioned for, and introduced a bill, which was passed,
to the following effect :
Authorizing the trustees to loan the moneys received
to the corporation of the city of New York, it a rate
of interest not less than six per cent per annum.
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Also providing that minors depositing in said institution might withdraw the same to the amount of
$250, though no guardian shall have been appointed,
provided such deposit were made by the minor personally, and not by another, for his benefit.
Also providing that the books of the corporation
should at all times be open to the comptroller or such
other person or persons as the legislature might designate, for in.spection and examination.
The notoriety given to the subjectof Savings Banks
by the proceedings and results that have been recited,
was naturally followed by efforts to secure their benefits in.other localities.
ALB.ANY SAVINGS. BANK.
The petition of William James and others of the
city of Albany, praying for the passage of an act
authorizing 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.
On the 4th of February, the committee reported as
follows:
"That they have considered the subject referred to
them, and are of 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 m(?rals, and
their great benefit to those classes of society who are
usually the most improvident.
"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 petitioners."
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HISTORY OF SAVINGS BAN.KS,
The bill would appear from the journals of the legislature to have encountered no opposition. Even the
ayes and noes do not appear to have been called for, in
any stage of its passage.
It passed the assembly on the 18th of March, and
the senate on the 23d, and was returned from the
council of revision on the 24th, approved.
In 1821 &: Savings Bank was incorporated for the
villa.ge of Utica. In reporting favorably upon this
bill, the committee take occasion to refer to the success
of the Bank for Savings as evidence ot the great utility
of such institutions. This bank, however, never went
into operation.
We have thus traced the origin of Savings Banks
in the State of New York down to the period of their
successful inauguration, under the sanction and regulation of law. To this point our record has been
necessarily coincident with the History of the inception of the Bank for Savings in the city of New York.
From this point the History of Savings Banks in this
State naturally presents two phases: first, the course
of legislation concerning them as a system of means in
the promotion of industry and economy, in respect to
the character impressed upon them through the provisions of their respective charters, and the general
statutes regulating, restricting or enlarging their powers
and privileges ; and, second, the individual history of
these institutions as indicated or revealed in their
origin, growth and progrees from year to year, from
1819 to the present time.
To pursue these separate branches of our theme
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concurrently, is quite impracticable. We shall, therefore, as previously set forth, consider, first, the course of
legislation and of official discussion concerning these
institutions in respect to the various matters that affect
their character and impart to them as a system, an individuality of its own. This will be followed by a detail
of statistical growth and progress as revealed in their
business transactions from year to year.
4-5
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354
HISTORY OF SAVINGS BANKS.
SAVINGS BANKS IN THE STATE OF NEW YORK.
PART II.
GENERAL LEGISLATION AND OFFICIAL
DISCUSSION CONCERNING SAVINGS BANKS.
CHAPTER XXXIII.
POLICY AS ILLUSTRATED IN THE FORM OF ORGANIZATION.
OF THE CONSTITUENCY OF BOARDS OF TRUSTEES.
In this State the charters of Savings Banks have all
been perpetual, subject, however, to modification or
repeal by the legislature, and with two exceptions, to
be hereafter noted, the original constituency of trustee8
has been named in the act of incorporation, and power
delegated to these to fill vacancies in their number.
There has never been any recognized principle of legislation concerning the number of trustees, nor would it
be practicable to establish one. The largest number
provided in any act of incorporation is forty-three, the
smallest nine. Between these extremes the number
varies, the larger proportion being between twenty and
thirty. This diversity arises from the manner in which
the incorporation of these institutions is promoted. As
may be presumed, they never have their inception in the
legislature. In the early history of these institutions,
the presumption is and, I believe, the facts were, that
one or more philanthropic individuals would conceive
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the idea of establishing a Savings Bank for the benefit
of the poor in their neighborhood. These would confer with such others of like mind, as they could, or as
they deemed it desirable to enlist in the enterprise,
and they would draw an act of incorporation, usually
copying the main features of one that had already
received the favorable action of the legislature, and
naming as corporators only themselves who felt an
interest in the objects of the institution to be established. This they would present to the legislature, and
receiving favorable consideration, the bill would become
an act of incorporation. In this way, the number of
trustees of the various institutions was determined by
the judgment of. the projectors of the enterprise as to
the best number to secure harmony in their councils
and efficiency in administration, or by extraneous conditions relating to the n.umber of persons of the right
spirit, character and influence, that could ·be induced
to accept the responsibilities of the management. The
c1uestion, as a practical one, seems never to have
engaged the attention of the legislature, which accepted
the proposed number as an incident concerning which
it was unnecessary to inquire.
Later in the history of Savings Banks, other considerations than those mentioned, in some cases affected
the question as to the number of trustees to be inserted
in the charter to be submitted to the legislature. It
was sometimes deemed desirable to enlarge the number
of corporators in order to secure the benefit, for the
experiment, of a wide range of personal character and
infln,•nce. Still later came the practice, not yet gone
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HISTORY OF SAVINGS BANKS.
wholly into disuse, of inserting names, not so much for
their local influence in attracting patronage to the
institution, and generally in giving to it character, and
inspiring the public with confidence in its management, as for their real or supposed power to manipulate the legislature, and secure its favorable action
upon the proposed enterprise. Whether preceding or
following the last-named in the order of time, I am
unable to say, but certainly, in these latter days, the
number of corporators began to be affected by influences of this kind ; after a bill was introduced, with
the names of the projectors as corporators, the member
from the district where the institution was to be located
would see in it an opportunity to rew_ard one or more
political favorites, or-with a lively sense of favors to
come -to gain political adherents, by causing their
names to be inserted in the bill in committee - no very
difficult feat in modern legislation- and thus the projectors of the enterprise, without having been consulted, would find their association enlarged, though,
perhaps, not in thair judgment improved. I have
before me now, the private memorandum of a Savings
Bank officer, who narrates such a proceeding as an
incident in the organization of the institution with
which he is connected; and I was made cognizant of
an attempt, by an astute legislator, to change in this
way the entire board of trustees named in a pending
bill, by inserting in their place, favorites of his own.
Whether it was the integrity and spirit of the committee in resenting the outrage, or the a.roused jealousy
of the local member in the other house, whose favor-
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ites were thus summarily thrust out, that defeated the
attempt, is not material ; the result was, if my memory
serves me, a compromise between the honorable
gentlemen, and the assignment to each, in the bill, of
an equal number of their political and personal friends !
The original number of corpora.tors was probably not
diminished by the operation.
It would be false to assert that Savings Banks no
longer have their inception in motives of philanthropy-in a desire to promote the welfare of the
humble poor. I could point to many institutions
incorporated within the last ten years, whose organization has been characterized by a spirit as pure and
self-sacrificing as that which marked the inception of
the first Savings Bank.
But it is not the less true, that not every Savings Bank
has its inception in those exalted motives, but rather
in the hope of some personal advantage to be derived
from it. A lawyer, desiring to extend his practice,
sees in a connection with a Savings :Sank, as its attorney, a large and profitable increase of his business.
In the searches of titles for loans upon bond and mortgage he reads, with the eye of hope, his own clear title
to a mansion on - - avenue, or to a villa on the Hudson. Or some one, ambitious for a secretaryship for
himself or for some dependent friend, sees in the establishment of a Savings Bank, which his influence, or
tact, or persistence, shall have promoted, the realization
of his dream. These, combining together, or acting
separately, prepare a charter after some model in the
session laws, and display their knowledge of, and inter-
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est in, the subject-matter, by carefully copying all the
grammatical blunders and logical incongruities of the
original For corporators, they insert the names of
friends upon whom they can depend to concede to
themselves the positions of which they are in quest,
and whom they have consulted concerning, and committed to, their purpose, together with the names of a
few gentlemen of high repute and commanding influence, to give character to the enterprise and produce a
favorable impression upon the legislature, but whom
they have car~fully and delicately avoided consulting,
and who, they very well know, will never accept the
responsibilities thus gratuitously thrust upon them,
but who will leave their places in the board vacant, to
be filled by the friends and devotees of these embryo
officers.
Of course the number of corporators will, in such
cases, be determined wholly by considerations of its
effect in promoting the original purpose of the projectors, to secure for themselves the emoluments of
office. It would be a difficult problem to solve, which
has precedence, at the present day, in the inception of
Savings Banks; motives of direct personal advantage,
like the foregoing, or considerations of political and
partisan expediency, such as were previously suggested.
They are not unfrequently united in the prosecution
of the same measure.
But, without entering into any discussion of this
point, enough has been said to illustrate and to establish
the fact, that the legislature, as a body, has never concerned itself with the question of the number of trus-
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tees of which a Savings Bank corporation should be
composed, in all cases leaving it to the control of
extraneous influences, either within or without the
body of original projectors, and acting upon it, when
thus controlled, as an incident in itself of no considerable importance.
The practical result has been, as might have been
predicted, the great diversity already noted, and this
diversity being a practical fact, governed by no established or recognized principle of action, it marks no
feature of historical growth and progress, but characterizes the system in the whole cow-se of its development.
The first Savings Bank had twenty-eight corporators;
the next two had each nineteen ; in 1834 one was
incorporated with forty-three trustees; some later ones
with but nine; and a recent one with twenty-eight, the
same as the first. In 1871, it was made lawful for the
trustees of any Savings Bank by resolution, to be
incorporated in their by-laws, to reduce the number of
trustees named in the charter to not less than fifteen,
by omitting to fill vacancies that might occur.
QUORUM.
In this connection it may be proper to note that the
question of the number or proportion of trustees constituting a quorum, for the transaction of business has,
equally with that last considered, been governed by
no principle in legislation, but apparently has been
left to the judgment, wishes or caprice of those who•
prepared the charter for submission to the legislature.
In most charters the number is fixed, but the propor-
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HISTORY OF SAVINGS BANKS.
tion which this number bears to the whole number of
trustees is extremely various. In some it constitutes a
majority, but in most a much smaller proportion. The
smallest :fixed number is five, which is found in several
charters; and the smallest proportional number is six,
in a board of forty-three. Neither does this feature
possess any historical interest as marking the growth
or development of a principle embodied in or applied
to these institutions, but is a mere independent fact
pervading the system, and no more marked at one
period of time than at another. Nor, except as connected with the causes producing the diversity, is there
any considerable significance or importance to be
attached to either the question of the number of trustees or the number constituting a quorum. Institutions with the larger and with the smaller number of
trustees, and with a greater or less actual or propor•
tional quorum, have alike flourished or languished,
seemingly little affected by this element in their
organization.
In the same act of 1871, above referred to, it was
further made lawful for the trustees of any Savings
Bank to designate the number constituting a quon1m.
But such number was not to be less than seven, except
when the charter authorized a smaller number. When
less than a majority was thus designated, the presence
of the president or a vice-president, and of the secretary, was required.
GROUNDS OF EXCLUSION FROM TRUSTEESHIP.
While the number thus forming the constituency in
the management of Savings Banks have never been
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regulated by any governing principle, the elements of
which that constituency should be composed, or rather
the consideration of excluding from the constituency
certain elements deemed hostile to the interests of
Savings Banks, has engaged the atte1.1tion of the legislature.
But it was not until 1853 that any policy upon this
subject was declared. In that year, the legislature, by
an act made applicable to New York and Kings
counties only, among other things, provided that it
should not be lawful for any trustee of a Savings Bank
to be a trustee of more than one Savings Bank at the
same time, nor for the trustees of any Savings Bank
thereafter to be incorporated to be directors at the
same time in any bank wherein any part of the moneys
of such Savings Bank should be deposited.
The object of the last of the above provisions was,
obviously, to exclude from the control of Savings Banks
such persons as would have an interest of their own
ad verse to that of the institution. The admission into
the councils of the board, of directors of banks of discount and deposit, it was thought might result injuriously in the direction of a policy of keeping too large
a proportion of the moneys of the institution on deposit
uninvested, or of keeping too large a proportion of the
necessary deposits in one bank, the selection of which
might be determined by the personal interests of members, rather than by a consideration of the safety or
security afforded by the standing and resources of the
deposit bank.
But the policy thus sought to be impressed upon the
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HISTORY OF SAVINGS BANKS.
Savings Bank system of this State never became, in
fact, a vital feature of it. The provision, as before
stated, was operative only in New York and Kings
counties, and there only prospectively, and herein was
subject to practical n~lification by each succeeding
legislature, which, in naming as corporators in a Savings Bank those who were at the time directors in
banks of discount, would, by such later enactment,
substantially, so far as such new institution was concerned, repeal the restrictive provision, or at least
render it inapplicable to the persons whom it had, by
act of law, named as corporatore. Besides this, the
legislature subsequently, within two years, from 1855
to 1857, incorporated nolessthaneightSavings Banks,
whose trustees were nearly, if not quite, identical
with the boards of directors in banks of discount, and
gave to the Savings Banks thus organized the names
of the banks whose directors were thus constituted
their guardians. Hence, it will be seen, that upon this
feature of Savings Bank policy, the legislature of this
State has been contradictory rather than uniform, and
that no settled policy or principle of action has been
adhered to.
Of the impolicy of so organizing or constituting a
Savings Bank Board of Trustees that its affairs may
fall wholly under the control of a bank of discount,
the writer expressed his views quite fully in a special
report on Savings Banks, presented to the Legislature
of the State of New York in 1868, and as pertinent
to the subject-matter of this chapter, that article is
here reproduced substantially as originally written.
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It may further not be out of place here to remark that
I shall find frequent occasion to quote extracts from that
report, not as expressive of the highest wisdom, nor of
convictions that have not been more or less modified
by a longer period and more extended range of obser•
vation, but as marking a phase in the public discussion
and legislative consideration of the topics treated of,
which, in fact, constitutes a part of the History of
Savings Banks in this State.
Besides, the arguments, conclusions and recommen
dations of that report have come to be so widely
accepted as a standard of authority in Savings Bank
policy, and have so considerably moulded and given
form and direction to public opinion and legislative
action in this and other States, that the omission of
them altogether from these pages, which profess to
reveal the growth of public _sent.iment and the character of official exposition concerning this interest, would
indicate a mere affectation of modesty.
.Extracts from a Specwl, Report on S(l;ViWJs Bank. .~,
Ne-w York, 1868,pp. 97-107.
RELATION OF SAVINGS BANKS TO BANKS OF DISOOUNT.
The specific office of each of these two classes of
institutions is clearly defined. They are so wholly
distinct and unlike, that there is, or should be, no
antagonism between them. For the same reason there
should be no intimate connection between them.
It is the business of the bank of discount to make
money for its stockholders, for those who have contributed to its capital, by the commissions, discounts,
interest or whatever the gains may be called, which it
receives for the accommodation afforded by it to the
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HISTORY OF SAVINGS BANKS.
public. They are a public benefit as a great many
other private enterpnses are a public benefit. But
they are still private enterprises, instituted by their
projectors for their own ad vantage and emolument.
Their capital and resources are largely invested in
what is called business paper, that is, the notes of
business men, having as their basis of security, the
products in various forms, and liable to various contingencies, in which they deal
Of course such a business is more or less hazardous,
especially when we reflect that the resources thus
invested are not alone the capital which is paid in, and
which, in the form of bank notes issued to the public,
is payable on demand, but their deposits, which often
greatly exceed the capital, and which are likewise payable on demand. In the ordinary course of business,
therefore, every bank has outstanding liabilities payable on demand, which it has resources to meet,
payable usually in from one to ninety days.
Such is the general character of the business, and
though the salutary provisions of law for the enforcement of contracts and the prevailing commercial integrity of business men, and the course and laws of trade
and commerce, enable those long practiced in watchin~
financial movements to steer clear of the more imminent dangers to which such business is necessarily
exposed, istill it is more or less hazardous, and can
attract capital to it as an investment only by the prospect of larger gains than ordinary investments in bond
and mortgage, or other securities at six and seven per
cent will yield.
The bank of discount receives deposits not primarily
for the benefit of the depositor, though it is a fact
that his convenience is promoted by the operation, but
the bank uses them as a means to increase its own
profits. In short, all the operations of a bank of discount in issuing notes, receiving deposits and discounting paper, are for the purpose of making money for
the stockholders. The public so understand it, and
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expect to pay and do pay accordingly, for the accommodation which they receive. The business of such
banks is perfectly legitimate, honorable and important
to the interests of the community, but that does not make
Savings Banks of them, nor entitle them to be in vested /
with Savings Bank powers.
/
Saving Banks, on the contrary, are instituted, not
for the promotion of the interests of their projectors, \'
but for that of the depositors. SEOURITY is their forst
consideration, pro.fit for the depositors the second and ,
subordinate consideration.
The purpose of their institution will admit of no
hazalrds; they must be SAFE. Hence the profit to be
realized from them, when conducted upon this basis of
absolute security, can never exceed, can rarely equal
the lawful rate of interest at which safe investments
may be made, for into these same investments the
deposits must be transformed, and the expenses of conducting the business will take somethmg from the
legitimate and moderate profit thus earned.
A Savings Bunk, therefore, is not merely a bank
that pays interest on deposits, but is an institution in
the liands of disinterested persons, receiving deposits
for the purpose of investment in those securities which
experience has demonstrated to be the most reliable
and safe. The profits of such an institution are the
interest it receives, the occasional premium on securities sold, or the discount on securities purchased, rents
from apartments in its banking house not required for
its own use, and a few other incidental sources. These,
after deducting the necessary expenses of conducting
the business, inure to the benefit of the derositor, in
dividends, or in a reserve for surplus for his greater
security, or both.
Such is the character of the business of a Savings
Bank. Whenever it departs from this, and engages
in discounting paper, or in buying or sellin~ exchange,
or doing any of the various kinds of busmess which
banks of discount do, in so far it abandons its real
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character, and any tendency in this direction should
be discountenanced and corrected. And so, too, banks
of discount should be restrained from assumincr the
title or the character of Savings Banks, by the offer of
interest upon individual deposits. The hazards of
banks of discount, from the causes already noted of
being liable to respond to their de:positors on demand,
from resources not yet due, are qmte enough, without
the weakening of their resources by the payment of
interest upon those deposits which they hold by so
precariou·s a tenure.
The only feature in common between a Savings
Bank and a bank of discount is this : They both receive
depo8its. But from this common point, in all their
theory, purpose and mode of operation they diverge.
A law of this State rrohibits any bank from holding
itself out to the public as a SavinO'S bank.
The principle recognized in this prohibition is a
salutary one and might with great pro;eriety be extended further and prohibit banks of discount from
accomplishing the same purpose without sign or notice,
by allowing mterest upon individual deposits. The
only object of such practice is, of course, to attract
deposits, but where there is no competition, deposits
will come in the legitimate course of business without
offering a bonus for them, and where there is compe•
tition, the result is that all advantage to either is
effectually destroyed, by both or all engaging in a
practice which all would be better off to abandon.
So, too, there is no good reason why private bankers
should not be subjected to the same prohibition, for
in some localities the practice of these in paying interest on deposits, is the most serious obstacle to success against which Savings Banks have to contend.
The ignorant and unwary only know that a bank is a
bank, and have no idea of the essential difference between a Savings and any other Bank. They fall into
the office of the private banker, and are impressed
with the advantage of a certificate of deposit bearing
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interest and transferable by indorsement, over a deposit
book not thus transferable. They know the banker,
and suppose him to be responsible; they know the
chief officer of the Savings Bank, and judge of the
safety of the institution in the same way, from a
knowledge of his personal responsibility. Supposing
both, therefore, to be equally responsible, he chooses
between the respective forms of deposit on the score
of convenience. Not unfrequently, too, his ear is
poisoned by the suggestion of the non-liability of the
trustees of Savings Banks, and the greater safety, in
consequence, of the deposit with the private banker,
whose whole estate is a pledge to the depositor!
Such practices are a fraud upon the public, and a
serious hindrance, oftentimes, to the progress of Savings Banks that have to compete with them. The distinction between Savings Banks and banks of discount,
whether private or incorporated, in regard to their
practices, should be as clearly defined by law as are
their objects in the theory of the institution of each
l'espectively. If the law should make that.distinction
to consist in withholding from the latter the right to
pay interest on individual deposits under $5,000, the
public would soon come to a realizing sense of the difference between them in this respect, and might in
time learn the essential difference m the character of
their security.
H the duty of the State to foster Savings Banks,
by protecting them from this embarrassing competition, were n~t enough to justify such a prohibition,
the duty it owes to the public at large, in protecting
them from the perils to which they are exposed by
thesef ra.ctices, 1s not only a su.ffkient jun.'{tiji.c(l.tion, but,
indee , calls loudly for such action in the name of
justice. The air has hardly yet ceased to vibrate with
the wails of widows and orphans who trusted their little
inheritance to a discount bank that promised six and even
seven per cent interest to the depositors, and of course
failed in the effort to make a profitable use of such
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deposits, except in hazardous speculations that proved
rumous to all concerned.
But whatever the State may do for the further protection of Savings Banks from such competition, and
of the public from fraud and imposition, by amendin~
the provisions of the act of 1858 in the manner indicated, its salutary purpose will, to a great extent, be
defeated under the new dispensation of banks not
amenable to the authority of the State. I have before
me the advertisement of a NATIONAL BANK in this
State, proclaiming itself a SAVINOS BANK, and offering
in that capacity six per cent interest upon deposits !
What margin, I ask, is there for a safe and profitable
employment of these deposits, in legitimate business,
after paying the internal revenue tax upon them of
one-half per cent? The Comptroller of the Currency
has turned his attention to ver-y- many petty and inconsequential details in the admmistration of his pet
banks. Would he not do well to turn to the wei~htier
matters that affect the safe and successful operat10n of
this gigantic monopoly?
But these are mstances of the assumption of the
functions of Savings Banks by banks of discount upon
their own responsibility and in their own name.
There is danger of another sort, against which it
may be important to provide, and that is, the taking
possession, wholly or in part, of a duly incorporated
Savings Bank by a bank of discount, and using it for
its own special interest and advantage. There are
three forms in which this appropriation may be made.
Fir·st. If a sufficient number of the trustees of a
Savings Bank, to form a majority of a quorum, are at
the e'l.me time directors in banks of discount, they may
combine in the interest of their several institutions,
and appropriate a larger proportion of deposits than
is necessary or desirable to keep in that form.
SecMUl. Where trustees are indisposed to tax them•
selves with the labor of overseeing the operations of
their trust, they may contract witli the directors of a
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bank of discount to receive deposits, and generally to
transact the business of the Savings Bank through
their machinery, and thus the conduct, and to a great
extent, the interests of the Savings Bank be made
subordinate to the interests of the bank of discount.
Third. The trustees of a Savings Bank may be
constituted chiefly or wholly from the directors of a
bank of discount, and thus the institution become
only a tender to the latter.
The first of these provisions is guarded ~ainst in
the cities of New York and Kings by prohibiting any
trustee from being at the same time a director in a
bank of discount where the Savings Bank deposits
are kept.
The design of this provision is salutary, thou~h
it doubtless operates disadvantageously at times, m
preventing an mstitution from securing the services of
a competent :financial adviser as a member of the board
of trustees.
The question of extendin~ the provision so as to
apply to all Savings Banks m the State has en~aged
my attention not a little. In the towns and cities of
the interior it would often be found difficult to secure
the right class of men for trustees of a Savings Bank,
without including some who were directors in a bank
of discount. Whether the difficulty is an insuperable
one may admit of doubt, but that it would often times
prove extremely embarrassing is quite evident to my
mind.
Besides, to get the full benefit of such a provision,
it should have effect immediately, which would break
up the existing organization of some institutions
entirely, and perhaps in that way inflict greater"evils
than those from which we seek to escape.
The object being to prevent any bank, or combina•
tion of banks, from getting control of the deposits of
the Savings Bank in their own interest, this might be
effected by limiting the proportion of deposits that
might be kept in any one bank to some rate per cent,
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HISTORY OF SAVINGS BANKS.
and the proportion in all banks to not exceeding
twenty per cent, and placing all under watchful supervision, to see that there is no violation or evasion of
the law, and all opportunity to abuse of the power
confided to trustees would, I believe, be effectually
removed.
The delegation to a bank of discount of the powers and
duties of the trustees of a Savings Bank, is a reprehensible practice. Though the trustees have possession of
the securities, and direct the investments, the relation
between two institutions so diverse in their character
and objectEl, is too intimate to be of mutual advantage,
and if either is to suffer from the connection, we may
rest assured that it will not be the institution whose
business is t,o makemoney. No bank is~oingtoundertake the labor of conducting the working operations
of a Savings Bank, unless there is something t,o be made
out of it. The guarantee to pay expenses, means that
they will employ some of thell' clerks, or a special clerk
for the purpose, to receive and pay money and keep
the accounts, and charge for the service-usually all
the difference between the income and the dividends
to depositors. In short, no such relation can exist
between these institutions, without the strength or
usefulness of the Savings Bank being impaired by the
connection.
And as a rule, the discount bank takes the business
as a speculation, making the most it can from the invest.
ments and deposits, paying the smallest practicable
dividends, and taking the difference f.or its trouble and
expense. But as more can be made from discounts
than from permanent investments at six or seven per
cent, of course it is the policy of the discount bank to
have a large portion of the Savings deposits uninvested,
for its own greater convenience and profit. In illustration of this tendency, note the large per cent of
deposits in those banks which are conducted by banks
of discount under contract with the trustees.
It is this tendency to expose the deposits of Savings
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Banks to the hazards of the successful management of
a hank of discount, that renders this close intimacy of
~~sociation between these institutions dangerous and
1myroper.
would not close my eyes to the fact that there are
instances in which the business of Savings Banks is
conducted by banks of discount, where this tendency
is overcome by the wise and considerate control of
trustees, where these make a convenience of the bank
of discount, and do not allow it to sacrifice the safety
of their trust to its own pecuniary advantage. But
even here is the danger ever lurking, that in the pro•
gress of events, through changes in the constituency of
the boards of trustees, a more lax policy may sometime prevail, from which peril may impend and disaster befall.
The third form of appropriation of a Savings Bank,
by and in the interest of a bank of discount, has the ·
same tendency and the same dangers as the last mentioned, besides, from its more intimate connection and
identity of interest, _added dangers peculiar to itself.
Exemplifications of this intimacy of relation, where
the trustees of the Savings Bank are largely composed
of the directors of a bank of discount that transacts the business. of the institution, are too frequently
found. Of this class, one, under the requirements of
its charter, keeps its deposits quite closely invested.
Of the remainder, all have much the larger portion of
their deposits in bank, two have all in that form, and
but one has an7 sur,elus worth mentioning.
Could the rmpohcy of this intimate connection
between Savings Banks and banks of discount have
stronger confirmation than is afforded by such disclos•
ures?
But besides these, there are other dangers to which
the prosperity, if not the Recurity of Savings Banks
thus controlled, is exposed. If the discount bank
finds upon its hands depreciated stocks, as New York
State 5s, that will command but 93 to 95 in the market,
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they have, to say the least, a strong temptat,um to sell
the same to the trustees of the Savings Bank (themselves in that relation), at par! I do not know that
this has ever been done, but if not, it has not been from
lack of motive and opportunity. rhe exposure to such
chances of mal-admimstration is enough to mark the
combination of rival interests, in the same individuals, under which it may pe effected, with emphatic
condemnation.
But the rival interests of Savings Banks and banks
of discount assume, at times, another form of development to the prejudice of the former.
The Manufactu,rers' Savings Bank of Troy has
exhibited a gradually diminishing line of deposits,
from $129,669 in 1861 to $22,714 in 1867. Presuming that this indicated a voluntary winding up of the
affairs of the institution, this Savings Bank was
marked " closing" in the last annual report from this
Department. On inquiry, however, I find that the
trustees have no intention of relinquishing their franchise, but true to their instincts as directors of the
Manufacturers' National Bank, which all of them are,
depositors are advised to make their de:posits directly
in the National Bank, and take a certificate bearing
interest. In this way one of the half per cents of government tax is saved that would have to be paid if the
deposit was first made in the Savings Bank, and by
the Savings Bank made in the National. If only this
financial acuteness could be secured in the interest of
the Savings Bank, it could not fail to be a most prosperous institution !
The depositors knowing no distinction between
what should be the security of a Savings Bank and
the security of a deposit bank, which indeed in this,
as in some other instances, is a distinction quite without a difference, and being assured, besides, that in
this way they get the added security of the liability
of the stockholders of the National Bank, are easily
persuaded to make their deposit in the form proposed.
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Other banks in that city do the same thing, but not
to the same demoralizing extent. Can the impolicy of
a relation that admits of such results, as even a remote
possibility, require further illustration or enforcement~
The system that permits such practices is wrong,
because 1t destroys the essential and vital distinction
between Savings Banks and other banks, which consists in the secure and reliable investments of the
former, removed from all the hazards of business misfortunes that attend the latter.
It is wrong, in that it makes the prosperity of the
Savings Bank subordinate to the prosperity of the
bank of deposit.
It is wrong, in that it gives countenance and support to the error, too prevalent in the community, that
savings and other banks are necessarily exposed to the
same hazards, and that the commercial or financial
crisis that destroys the integrity of the latter must, in
the same degree, impair the security of the former,
whereby such crises do reach and affect, with frenzied
apprehensions, the depositors in Savings Banks, to
their own detriment and that of the institutions which
they patronize.
And, to state a paradox, it i,s wrong because if it i,s
right, then the whole theory of Savings Banks, as a
peculiar institution, is false and unfounded, and banks
of discount can be made to serve every purpose
equally well
It is no answer to these objections to point to the
high character of the deposit banks that thus direct
the operations and control the destinies of Savings
Banks. Other banks of standing equally high, and
having the confidence of the community in full as
great a degree, have come to grief within our recollection. There was nothing in their history, condition
or circumstances, :rrior to their failure, that would not
, have justified their connection with the affairs of a
Savings Bank as intimate and responsible as that
enjoyed by any deposit bank to-day.
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msTORY OF SAVINGS BANKS.
The boasted additional security derived from the
personal liability of stockholders is purely visionary.
Are A, B and C more responsible than the government
of the United States, or of the State of New York, or
even than the city, county or town of which their
wealth is but an insi~ifi.cant fraction i Their posses•
sions in houses and lands may pass from their grasp,
and creditors receive no benefit from them under their
new proprietorshiJ?, but these properties will continue
to pay taxes, and m this way maintain the credit of
the State or municipality to which they belong.
And as a final consideration, if more can be needed,
these banks of discount are now for the most part
foreign corporations, over whose operations the State
can exercise no control. They have possession of the
books and records of the Savings Banks whose agents
they are ; they receive and disburse the deposits ;
they incur and pay expenses; and the State is powerless but by their grace and favor to exercise any scrutiny over their proceedings. I have in my intercourse
received only courtesy from the officers of these institutions; but contrast the meagreness of the details
which they report under the statement of Cash Transactions, hereafter given, with the fullness of the same
from institutions that are free from these "entangling
alliances," for confirmation of this view, that the more
intimate the connection between Savings Banks and
banks of discount, the further removed are the former
from the protection, supervision and care of State
authority.
•
That Savings Banks can be conducted with safety
and success upon an absolutely free and independent
basis, using banks of disc(?unt only in their legitimate
sphere, as the public use them, as depositories for
funds which they may require in the daily operations
of business, is demonstrated by the sound and pros·
perous condition of these institutions in Newburgh,
Poughkeepsie, Hudson, Oswego, Yonkers, Southold
and other localities that might be named; not to men•
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tion those in Utica, Syracuse, Rochester and Buffalo,
that still more perfectly exemplify this position.
Most of these were organized pnor to 1857, and successfully passed the ordeal of that trying year. H in
these towns of limited population, Savings Banks can·
be made strong, successful and prosperous, without
leaning upon a bank of discount for support, surely
they require no such adventitious aid elsewhere. And
not only <k> they survive and prosper, but, judged by
any true and proper standard applicable to Savings
Banks, they: are stronger and rrwre successful than any
of the institutions which subsist under tbe vulturous
protection of National Banks !
EX0EPl'IONS NOTED.
The two exceptions noted as to the constituency of
the boards of trustees, are the Institution for Savings
of Merchants' Clerks, incorporated in 1848, and the
reople's Safe Deposit and Savings Institution at
Syracuse, incorporated in 1868. 'fhe special features
that distinguish the organization of the former will be
found in connection with the history and statistics of
that institution ; and a full exposition of the character
of the latter organization will be found in Senate Document No. 39, vol. 3, 1869, and some further account of
it will also be found in the chapter on Savings Bank
failures. Suffice it to say here, that this latter was the
first charter that ostensibly combined a moneyed corporation, having capital stock, and a Savings Bank.
Such form of organization is not uncommon in other
States, but m New York is exceptional, being limited
to this institution.
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HISTORY OF SAVINGS BANKS,
CHAPTER XXXIV.
OF INVF.STMENTS : 1819 TO 1846.
We come now to a consideration of how the discretion of trustees, in regard to the disposition of the
funds committed to their keeping, has been controlled
by legislative action. This subject embraces the whole
theory and policy of investments.
The policy contemplated in the institution of Savings Banks in this State was that of absolute and
unquestioned security to depositors, with such profits
only as should be compatible with that primary condition. Doubtless, the necessities or exigencies to
which Savings Banks might ~e exposed, were not and
could not, at that time, be anticipated and provided
for. The first act of incorporation, there£ore, whose
history we have already given in detail, authorized investments to be made in "stock created and issued
under and by virtue of any law of the United States
or of this State, and in no other way." The following
' year, however, 1820, the charter was amended by
authorizing the trustees to loan moneys to the corporation of the city of New York; but the Albany Sav•
ings Bank, incorporated that year, was restricted in its
investments to stocks of the United States and of this
State, and the same limitation was applied to the Troy
Savings Bank, incorporated in 1823.
In 1827 the powers of the trustees of the Bank for
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Savings, in regard to investments, were still further
enlarged, by authorizing them to invest in the public I
stock of the State of Ohio, or in the stock of the city
of New York. The latter was hardly an enlargement
of the power previously conceded, which authorized
loans to be made to the corporation of New York. So
far as the character of the investment is concerned, in
the matter of security, there was no change, but the
form in which the investment might be made was
adapted to give greater freedom of action to the
trustees, and to enable them to secure advantages from
the state of the money market, denied to them under
the original form of investment. But the admission
of the stock of another State, as an authorized investment, was a new feature, and why the stock of the
State of Ohio was selected as the exceptional investment does not appear from the record. Probably the
action was taken upon petition or application in some
form of the trustees of the Bank for Savings, who were
incited thereto by negotiations for the sale to them of
Ohio stocks on advantageous terms. But, whatever
may have been the incitement, the legislature by this
act first opened the door to investments outside of our
own State.
At the same session, however, the charter of the
Albany Savings Bank was amended so as to authorize .
the trustees to invest moneys "in the stoclc of any or '., ./
either of the BANKS in the cities of Albany or Troy," :
or to loan moneys to the corporation of Albany. The l
latter provision does not differ in principle from that
already recognized in authorizing loans to be made to
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HISTORY OF SAVINGS BANKS.
the corporation of New York; it merely applied the
principle to another institution, and extended the
range of its operation so as to embrace the· city in
which that institution was established, thus increasing
its power of local usefulness.
But the authority to invest in the stock of banks
was an entirely new feature, and was not only exceptional then, but, most fortunately, continues so to this
day. Whether the trustees ever availed themselves of
this extension of their powers, does not appear; but
they might have done so with most disastrous conse/ quences to their trust, as the subsequent career of some
1
'banks in the city of Albany sufficiently attests.
It is noteworthy, however, that the charter of
the Brooklyn Savings Bank, incorporated the same
year, 1827, embraces none of these more liberal provisions concerning investments that were then finding
favor, but restricted the trustees to investing in stocks
of this State, or of the United States.
In 1829, however, the Brooklyn Savings Bank
secured an amendment to the charter, authorizing investments in "Brooklyn village stock I" and also in
stocks of the city of New York, and loans to be made
directly to. the corporation of either New York or
Brooklyn.
In the same year the Seamen's Bank for Savings
was incorporated, with authority to invest in the stocks
of the United States, or of this State, or of the States
of Pennsylvania and Ohio, as also in the stocks of the
city of New York. These provisions only enlarged
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those already existing, by admitting for investment
stocks of the State of Pennsylvania.
In 1830, "An act for the relief of the Bank for Sav- ·
ings, in the city of New York," was passed, by which
their powers in regard to investments were enlarged,
so as to embrace the stock or securities of any State in
the Union, and loans "to the Public School Society of
New Y or~ on satisfactory real security ; " and they
were also authorized to make temporary deposits in any
of the incorporated banks in the said city, and to
receive interest thereon at such rates, not exceeding
that all(?wed by law, as should be agreed upon.
This, as will be seen, was a very considerable departure from the policy that had hitherto prevailed, and
the action appears to have been influenced by two considerations. First, the unexpected success of the Bank
for Savings, resulting in an accumulation of more than
two millions of dollars, made it difficult in those times
to make profitable investments within the narrow range
to which they had been confined by law. At the same
time, this success, and the annual reports of the condition of their funds and investments, had demonstrated that the trustees had most worthily secured the
confidence of the community for prudence and fidelity
in the discharge of their trust, ~nd hence it was
inferred that they might with safety be invested with
a wider discretion than, at the outset, it would have
been deemed prudent to confer. In the legislative
documents of that year, 1830, I find the report of the
committee on banking, to whom was referred the application of this bank for an enlargement of its powers in
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HISTORY OF BA.VINOS BA.NKB.
regard io investments, which fully confirms my conjecture as to the considerations influencing this favorable action. Among other things was the fact, that
United States stocks had matured and been paid off,
leaving the bank with a large accumulation of funds
on hand, seeking investment within a very narrow
range. The committee note particularly the success
of the institution, its benevolent objects, and the
fidelity and skill that had characterized its management. The power to make loans upon " satisfactory
real security," thus leaving the discretion as to the
ratio of the loan to the value of the security, wholly
with the board of trustees, doubtless was a dangerous
precedent to establish, and one which, as we shall see
hereafter, was not incorporated into the general policy
of the State concerning Savings Banks. But from this
time forth, the security of bond and mortgage became,
under established restrictions only exceptionally departed from, a permanent feature of Savings Bank
investments.
·
It is noticeable that we find in the foregoing amend•
ment the first authority for using banks of discount
as depositories for the moneys of Savings Banks
awaiting investment, or held in reserve for the current
business of the in&titution. What they had done previously to this authorization, whether they had kept
their moneys in safes or vaults of their own, or depos·
ited them in banks of discount merely for safe-keeping, does not appear, but it is probable that the latter
was the more common practice. But this salutary
provision enabled them to make the deposit under the
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sanction of law, and to derive some profit, however
small, from what must at times have been an embarrassing accumulation of idle capital
In the charter of the Poughkeepsie Savings Bank,
incorporated in 1831, investments were authorized in
the stock of the United States, of the State of New
York, or of any of the States, or in loans on " bond
and mortgage on real estate of double the value of the
sum loaned." This last provision, which has now
become a distinguishing feature in Savings Bank charters, appears for the first time in this act. Later
charters, as we shall find, sometimes imposed other
and further limitations, as to the amount to be thus
loaned to any one individual, and, in respect to the
locality, as to the county where the Savings Bank waa ·
located or to one adjoining, but the limitation of the
ratio of the loan to the value of the security, here
declared, became an established feature in the policy
of legislation.
But even this had its erratic exceptions, as, at the
same session, there was incorporated the "Rochester
Savings Bank, in the village of Rochester," which was
authorized to loan moneys " upon bond and mortgage
as the board of managers may deem amply sufficient."
The charter of the Poughkeepsie Savings Bank further recognized the new feature in the charter of the
Bank for Savings, of allowing deposits in incorporated
banks with interest, but by the terms of the charter
they were restricted to banks in Poughkeepsie. In
1832 this privilege was still further extended to this
institution by an amendment of the charter authoriz.
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IDSTORY 0.1!' SAVINGS BANKS.
ing these deposits to be made with the New York
Life Insurance and Trust Company, or with any incorporated bank in the city of New York.
In 1832, the Brooklyn Savings Bank received
authority from the legislature to loan moneys upon
bond and mortgage on real estate worth double the
amount loaned, and the Seamen's Bank for Savings
was authorized to invest in the stocks of any State in
the Union, and to make temporary deposits in any
incorporated banks of the city. From this time the
authority to make such deposits may be regarded as
an established feature of the Savings Bank system, and
only the modifications or limitations of this general
power will be noted.
The Greenwich Savings Bank, incorporated in 1833,
had conceded to it authority to invest in the public
stocks of Pennsylvania and Ohio, and to loan money
to the Public School Society of New York, on satisfactory real security, herein copying from the amended
charter of the Bank for Savings.
The Schenectady Savings Bank, incorporated in
1834, was also authoiized to invest in the stocks of any
State, or to make loans on bond and mortgage, but the
real estate was required to be of double the value of
the loan, exclusive of buildings, a feature that characterized many subsequent charters, hut not with any
degree of uniformity. It seems to have been introduced or excluded entirely according to the caprice of
the projectors of the institution seeking incorporation.
As a further illustration of the capricious character
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of legislation in regard to loans upon bond and mortgage, it may be noted here, that the Bowery Savings
Bank, incorporated in this year, 1834, like others preceding it, was authorized to loan moneys to the Public
School Society of New York on satisfactory real
security "worth thi1·ty per cent m.ore than the amount
loaned thereon I" The following year it received
authority, generally, to make loans on bond and mortgage in New York and Brooklyn, to half the value of
the property given as security, herein copying from an
amendment, made the previous year, to the charter of
the Seamen's Bank for Savings.
In 1836 the powers of the Greenwich Savings Bank
were enlarged so as to authorize loans upon bond and
mortgage on real estate in the city of New York,
worth double the amount loaned, exclusive of buildings, and at the same session, tqe Bank for Savings
was authorized to make similar loans upon real estate
worth at least fifty per cent more than the sum loaned,
that is, to an amount equal to two-thirds the value of
the security. The capricious character of special legislation is herein conspicuously illustrated.
In 1839, the Savings Bank of Utica was incorporated, with powers of investment similar to those
already granted to other institutions, including that
to invest in the stocks of the city of Utica, and to
make temporary deposits in the incorporated banks of
that city, and the powers of the Troy Savings Bank
were enlarged so as to embrace investments in the
stocks of the city of Troy.
In 1840, the Albany Savings Bank was authorized
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HISTORY OF SAVINGS BA.NKB.
to invest in the stocks of the cities of Albany or New
York, and to make loans secured by bond and mortgage on real estate in the city worth fifty per cent
more than the amount loaned, or in the State, outside
the city, worth double the amount, exclusive of buildmgs.
In 1841, an amendment was made to the charter of
the Greenwich Savings Bank, extending its powers of
investment, but not to a degree equal to that already
enjoyed by other institutions. Besides other powers
conferred, it was authorized to male loans upon bond
and mortgage secured by real estate in the city of New
York worth double the amount loaned, provided the
improvements thereon should be insured, and the
policy duly assigned to the bank This feature iii
noticeable, from the fact of its being the first recognition of a form of collateral security which became
thereafter very common, though not uniform in its application to loans upon bond and mortgage. Doubtless, the practice to require the assignment of a policy
of insurance, where the property mortgaged as security
consisted in part of buildings, was very general,
though I have no assurance of it beyond my own convictions, founded upon the evident prudence with
which the affairs of these institutions were conducted;
but this was the first instance, I believe, in which the
obligation to take such security was imposed by the
legislature, and it prepared the way for similar requisitions in subsequent charters and amendments.
A common feature of Savings Bank charters, down
to 1842, prohibited the trustees from investing in any
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secwities, or from making any loans other than those
specifically named. These, we have seen, in their application to the several institutions then incorporated,
embraced the stocks of this State and of the United
States, and in a few cases the stocks of any of the
States, the stocks of the cities of New York, Brooklyn,
Albany, Troy and Utica, loans upon bond and mortgage under various forms of limitation, and deposits
in incorporated banks, drawing interest.
In 1842, the Utica Savings Bank was authorized, by
an amendment of its charter, to make loans upon personal securities, provided the aggregate of such loans
should not exceed five thousand dollars, and provided
further, that any such loan should ·receive the consent
of a majority of the whole board of trustees.
Thus limited, the provision was not a dangerous one
in itself, but it was the inception of a new and dangerous principle, a departure from the policy hitherto
rigidly enforced of accepting no secwities which did
not rest upon the broad foundations of public credit
and public faith.
And this brings us directly to the inception of a
feature of Savings Bank policy which has grown with
the growth and strengthened with the strength of that
system, until it hids fair to be one of its most conspicuous, as I believe it to be one of its most dangerous,
characteristics.
Thus far the course of legislation concerning investments has been illustrated by reference to the charters
of Savings Banks, and the amendments thereto from
time to time. This method bas been pursued for
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IDSTORY OF BAVINOS BANKS.
purposes of convenience only, and not with a view to
present the special features of each particular charter,
any further than these would most easily serve the
general purpose of illustrating the course of legislation in the matter referred to. The features of each
particular charter, as they existed in January, 1868,
will be found, by those interested in noting them, in
the appendix: to the Special Report already referred
to, pages 238 to 838.
The further development of legislative policy concerning investments will be indicated generally without citation to the particular institution to which the
legislation illustrating it was applied, and, of course,
with no purpose to disparage those institutions whose
charters are amenable to the charge of looseness of construction, or of dangerous license in respect to the
powers conferred. The very first instance which we
shall have to record is a standing protest against
imputing to_ the management of the institution any
participation in the imprudence which characterized
the legislation concerning it. As before stated, we are
not now considering these institutions upon their individual merits, as disclosed in the prudence or imprudence of their management; these must be sought in
the statement of their assets, and in their general condition as found in the annual reports from the Bank
Department. We are now concerned with them only
as their charters illustrate the spirit ·and tone of legislation in providing safeguards for the depositors by
the restrictions impose<l upon investments.
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NEW YORK ! INVESTMENTS : POLIOY OF 1846.
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CHAPTER XXXV.
INVESTMENTS; A NEW POINT OF DEPARTURE.
The year 1846 may, in this regard, be said to have
marked a new era in legislation in this direction. We
have noted how guarded in the main had been the
provisions concerning investment.~ hitherto. In this
year, however, a Savings Bank was incorporated whose
charter, after autho1izing investments in the stocks of
this State and of the United States, "or in such other
manner as is authorized by this act," and after some
other provisions common and essential to all charters,
proceeds as follows:
"No moneys deposited in the said institution shall
be invested, except in the securities or stocks mentioned
in this section, in opposition to the vote of any trustee; but by the consent and approbation of all the
trustees present, at a regular meeting, amounts, not
exceeding one thousand dollars to any one individual,
may be loaned on unincumbered real estate, worth,
exclusive of buildings thereon, at least double the
amount to be secured thereby." And it is further provided, that " it shall be the duty of the trustees of
said corporation to in vest, as soon as practicable, in
public stocks, or public securities, or m bonds and
mortgaO'es, as provided for in this act, all sums
receive~ by them beyond an available fund of not
exceedin~ fifty thousand dollars, which they may keep
to meet tbe current payments of said corporation, and
which may by them he kept in deposit, on interest or
otherwise, in such available form as the trustees may
direct."
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HISTORY OF SAVINGS BANKS.
Let us examine the bearing and effect of these provisions separately. At first view, the former appears
to be no more than an awkward form of conferring
upon the trustees the power to make loans upon real
estate, which had not been provided for in the previous part of the act, relating to investments. I have no
doubt that this was the sole intent of the committee
that considered, and of the legislature that enacted the
measure, and perhaps also of the corporatora who
drafted the bill Certainly, nothing in the policy of
the trustees would indicate that they conceived it to
have any wider scope, for a more solid and substantial
class of investments is nowhere to be found than that
of this same institution to-day. But we are considering legislation, not management; powers, not their
exercise ; precedents, and the dangers to which a system is exposed by those of a doubtful character. In
this view let us analyze this provision.
Under the fictitious guise of abridging the powers
of the board of tmstees, it in fact enlarges them. As
the trustees derive their powers wholly from the
charter, it follows that without this clause they would
have no authority, not even with a unanirrwus vote, to
invest the moneys deposited with them in any other
securities than those mentioned. The absence of
power is in itself a negative upon the exercise of
power. To superadd to this a further conditional
negative, that they shall exercise this power which
they have not, only when such exercise is unanimously
approved, is to incorporate a double negative into the
provisions concerning powers, and with the wellI
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known grammatical effect in such cases, to establish
an affirmative. True, it is a conditional affirmative ;
but it not the less affirms the right to invest in any
securities whatever, provided only these have the
approval of the entire board acting upon the question.
It establishes, as a precedent, the delegation of full
discretion to the board of trustees, instead, as heretofore, of controlling that discretion by clear and well
defined if not always wise and consistent limitations.
It substitutes the judgment of a quorum of the board,
when unanimously expressed, for that of the legislature. And the danger is, that the precedent once
established, the restrictions by which it is guarded
will in time be ~·elaxed, and the dissent of two or three
be made the condition upon which the investment in
miscellaneous securities shall be denied. How fully
these apprehensions are realized in subsequent legislation we will leave for that future legislation to reveal.
But let us note, more particularly than we have
done, the insidious form of this provision. Mter thus
declaring a practical affirmative in the exercise of a
power to which no opposition shall be expressed, it
proceeds in the use of a direct affirmative to point out
a special investment other than those named in the
first part of the section, which investment it authorizes
to be made with the consent of all the trustees present
at a regular meeting.
The impression conveyed by this connection of the
two clauses is, upon the first hasty glance at the
language, that the latter is designed, exclusively, to
limit and define the application of the former. I do not
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IlISTORY OF SAVINOS BANKS.
doubt that such was the c.onviction of committees that
examined and recommended, and of the members of
the legislature that supported, the bill But while
such, doubtless, was the intent of the legislature, in so
far as the attention of that body was directed to the
language of the act, I am free to say that to my mind
it clearly will not bear that restricted though salutary
construction. The first clause is marked by no limitations except the lack of opposition to the free exerci:-e
of the power which it confers; the second clause,
besides requiring this unanimity of concurrence,
imposes other limitations upon the character of the
investment therein authorized. This clause does, therefore, limit and define the action of the former, but only
concerning the single matter of loans upon bond and
mortgage. Concerning these, the provision is surely
quite guarded enough ; so guarded, indeed, that no
Savings Bank could possibly derive any advantage
from its exercise. And this is one of the insidious
features of this provision. Attention being attracted
to the extreme safeguards against an abuse of discretion in the matter of loans upon bond and mortgage,
it is by this device diverted from observing the very
wit'e range of discretion in regard to other investme.ots by which this carefully guarded exercise of
power is introduced.
I am not by any means certain that whoever drafted
this bill had in view this construction of its powers.
If it was prepared under the direction of the trustees,
as I have said already, nothing certainly in the history
of its management would justify the assumption that
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391
unusual powers were soug~t by them to be secured.
But the precedent was established in this charter, and
we shall see how, in the future, it was accepted and
followed.
We pass on to consider the second new feature of
this bill, by_ which the trustees are authorized to keep
an
AVAILABLE FUND
of fifty thousand dollars in deposit, on interest or
otherwise, in such available form as they may direct.
This is the :first appearance in the legislation concerning Savings Banks of the term "available fund."
The term is an appropriate one when appropriately
applied, nor can it be said that it is otherwise than
approp1iate in the present instance. Fifty thousand
dollars for a Savings Bank with $500,000 or more of
deposits is not a large sum to keep in reserve for current payments and for the exigencies of unusual drafts.
But the provision, in the form in which it is here
found, is objectionable on two grounds. First, the
limitation is to a fixed sum. It may be too much or
not enough, according to circumstances, a principal
element in which would be the total amount of deposits held by the institution. For a deposit of $100/.)00
it would be too great a proportion ; for a deposit of
$1,000,000 it might be quite too small a proportion.
But for either, there it remains, arbitrary, :fixed, inflexible. A more rational way of determining the amount
which might thus be held uninvested for the daily
business of the bank, and to meet unusual demands,
would be to make it a percentage of the whole amount
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HISTORY OF SAVINOS BANKS.
of deposits, provided, of course, the percentage were
not fixed too high. This provision was found to be
inadequate in this very instance, and when the deposits had accumulated to nearly $1,000,000, finding this
arbitrary limit irksome and embarrassing, an amendment to the charter was secured, making this reserve
or available fund fifteen per cent of the total amount
of its deposits, a provision far more rational and consisfont than the previous one.
But the more objectionable feature of the provision,
and the one which, as a precedent, was too generally
accepted and acted upon, is that which gives to the
trustees full discretion to keep it in such available
form as the trustees may direct. Hitherto the
authority to keep funds temporarily on deposit in
banks had served all the purposes-of Savings Banks
in regard to the reserve necessary for the exigencies of
their business. I believe it was an evil day for these
institutions when, for this security for such reserve,
there was substituted the "discretion of the trustees,"
and '.' such available form as they should direct." At
least one failure of a Savings Bank, and heavy losses
sustained by another,* are directly traceable to this
pernicious "discretion," here for the first time recognized and authorized by law.
And yet this bill, which marked the point of depart,.
ure from some of the most conservative and salutary
restraints upon these institutions, was the subject of
an elaborate report. by the committee to whom it was
• Which loRMfl sustained by that" other" have oulmlnated In dlautrouafallur9
alooe these paaes were written.
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referred, in which they deprecate the extreme laxity
then prevailing in the laws relating to these institutions, and take occasion to say "that the bill which
they have the honor to submit for the consideration of
the house is much more acceptable than the existing
charters of this class of corporations, and contains
many additional guards against the fraud or misconduct of its officers, which might be profitably applied
to other institutions."
These "guards against fraud, etc.," consisted in
requiring the consent of the county judge or treasurer
or city recorder, in addition to a vote of eight trustees
in a quorum of ten, for the "sale, pledge or transfer
of any securities belonging to the institution;" also,
in requiring the approval of the county treasurer of
the election of a trustee; subjecting trustees to removal
by a majority of the common council of the city, and
the institution to examination annually by a committee appointed by the board of supervisors for that
purpose.
These restrictions were, doubtless, all very well
meant, but some of them must be very embarrassing,
or else have degenerated into such mere formality as
to have lost all value as a safeguard against fraud.
The report, however, contains many valuable suggestions, and is an interesting feature in the history of
legislation concerning Savings Banks, if in no other
view than that of revealing the fact that the subject
was at times thoughtfully and earnestly, if not always
wisely considered, and hence as a feature or incident
affecting the development of a legislative policy, its
insertion here is deemed desirable and appropriate.
50
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HISTORY OF SA VINOS BANKS,
Report of the committee on banks and irurwrance com,,
panies, on tlw applioati,on8 for &vingt1 Banks at
Buffalo and Roclwsf-er i.. also on, the general, hill on
tlie subject of Savings .J:Janks.
IN
ASSEMBLY,
}
Felm.w,ry 6, 1846.
Mr. S. Lawrence, from the committee on banks and
insurance companies, to whom were referred numerous
petitions of citizens of Buffalo, for an act to incorporate the Buffalo Savings Institute; also, the petition of
the citizens of Rochester for an act incorporating a
Savings Bank of that city; also the bill entitled, "An
act to authorize the establisment of Savings Banks,"
reported to the house, in 1845, by Mr. Crosby, and referred to the committee, by resolution, on the 16th of
January last, reports,
That, on examining the documents of both branches
of the legislature for the last year, the committee find
reports from banks of this description, showing the
amount of deposits held in the month of January,
1845, to be $8,603,538.*
The amount now held by these banks has probably
risen to more than ten millions of dollars.
The reports of these banks show that a very large
proportion of this large amount of funds is owned by
mechanics, laborers, widows and orphans, who have
resorted to them as safe depositones for the small
sums which they have been enabled, from time to
time, to lay by from their wages.
These institutions appear to have been well conducted and succes8ful in their operations, and, as yet,
have faithfully discharged the duties imposed upon
them by their several charters. They have been found
useful in our large commercial cities, by affording these
• It will be seen that this dllfers from the amount inven by me In a subeequent
table, which dll!erence may be explained by supposfng that the committee Included 118 <klposlts the total reported 1L886t& The Poughkeepsie Bavln1111 Bank,
with $ln,OOO, Is omitted by them, and the Schenectady Is estimated 136,000 too hlsh.
The llicures In our table, $11,6~7~. may, therefore, be accepted u more nearly oor•
rect tlian the above.
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different clasess a safe depository for their earnings,
and at the same time secunng to them a reasonable
and fair income on such deposits.
The committee, on examining the charters of these
incorporations, were surprised to find that great want
of care was manifested on the part of the legislature
which granted them.
Some of them do not even contain any provision or
authority to enable the managers or trustees to require
security from the officers of the hank for the faithful
performance of their several duties; and all are without any provision requiring the trustees or managers
to give any security whatever to the public, or to the
de~ositors.
fhe only guarantee the public now have against
loss by fraud and defalcation is the high character and
stan<l.mg of these several boards of tmstees.
This, it is true, thus far, has as yet been found suffi.
cieut, so far as all the banks of this kind now existing
are concerned ; but it does not follow that this guar•
antee will always be found a sufficient protection.
The history of banking incorporations has demonstrate«l that human nature is not proof against the
powerful temptations which are presented in the management of these institutions.
It will not be denied that more men of high standing and unimpeachable character have been co1rupted
and led astray by the temptation presented through
banking corporations than any other branch of business of the same extent in our country; and the consequences have been more disastrous, accompanied
with more suffering and distress, than in any other department of the business operations of the country of
the like extent.
When a commercial house happens to fail or become
bankrupt, the creditors are generally, to a great extent
at least, persons who are not materially injured by the
operation; but when a bank explodes, it spreads ruin
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and distress in every direction; a large proportion of
the creditors are those who are least able to bear the
loss.
It may be said that there is no analogy between the
cases of failure alluded to and the banks before us;
that the managers or trustees cannot dispose of or
control the funds of the depositors.
A moment's examination will show that this is an
erroneous view of the subject; all these banks are
authorized to invest in stocks, and bonds and mortgages upon real estate, either of which are convertible
at all times into cash.
In some of these charters one.third of the trustees,
with the president or vice-president, constitute a
quomm for the transaction of business. In others less
than half the number of trustees, with the president,
constitute a quorum.
The committee have not been able to find any barriers in the way of those having the control of these
banks from following in the footsteps of defaulters and
swindlers in other moneyed corporations; certainly
there is nothing to prevent these few persons
converting every dollar's worth of property belonging
to the bank into funds that can be divided among
themselves; and they could easily manage to be in
Europe or Asia before they would even be suspected.
When the fact is announced, that in a single hank
of this class in the city of New Y 01·k near five millions of dollars are held by so frail a tenure, the com,mittee think the public will be surprised, and will call
for some additional securities from those having these
banks in charge. If nothing more is required, they
should be subjected to a more rigid accountability;
the trustees and officers should be required to take and
subscribe an oath, to be filed with the Comptroller,
faithfully and honestly to discharge the duties imposed
by their charter. They should be prohibited from
making any transfer of stock, or of bonds and mortgages, without the concun-ence at least of two-thirds
from
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of all the trustees. They should be subjected to the
visitation and in&I?ection of the Comptroller, or some
officer to be designated by him, whenever he shall
think proper. In these views the committee all con·
cur, and some of them believe that the managers ought
to be required to execute to the people a joint and
several bond for the faithful performance of all the
requisitions of the charter; said bond to be filed in
the Comptroller's office. It may be said that these
managers get nothing for their services, and therefore
they ought not to be liable.
·
This fact can never change in the slightest degree
the moral obligation resting upon the corporation, and
upon every membel" of it, to discharge to the utmost
extent the liability incun·ed.
This circumstance, the committee believe, instead of
sustaining the argument of non-accountability, proves
the reverse. It is well known that where men get
nothing for their services, they are sure to become careless in their supervision of such matters, and the in•
evitable consey_uence must be, to leave the control of
the bank in the hands of the few, who can easily
a1Tange its affairs to suit their own purposes.
As yet the public have not suffered from any mismanagement on the :p~rt of these corporations; but it
is not because there 1s not abundant means within the
reach of those several boards of managers to defraud
the depositors of every dollar invested.
· This enormous sum, in the aggregate, held by these
several banks may now be perfectly safe. The committee indulge the hope that it is so, but the question
is, will it remain soi
The duty of the Legislature is to protect the public
against any possible loss by means of these ideal creatures of the law, called corporations.
Take the application before us for illustration. The
board of managers named in the bill for the Savings
Bank of Buffalo are all men of high standing and
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HISTO~Y OF SAVINGS BANKS.
unimpeachable character, and would probably discharge the duties intrusted to them with fidelity ; but
it must be recollected that they cannot long control its
affairs. The corporation lives forever, and contains
within its charter the power of perpetuating its own
existence.
Sup_eose, in the lapse of time, a generation should
arise like the celebrated Benjamin Rathbun and his
cotemporaries, and get the control of the bank asked
for, would they hesitate to pocket the funds~ Certainly not.
Men who could defraud the people, as was done in
that city but a few years since, through the agency of
corporations, would not hesitate to rob the widow and
the orphan through one of these charters, had they
control of it.
The exhibition we have had in that city and elsewhere, by means of bank corporations, the committee
think should prove a warning to the Legislature on
the subject of creating these creatures of the law
which, in so many instances, have proved recreant to
their duty, and inflicted such extensive injuries upon
the country.
These remarks are not prompted by any hostility to
moneyed incorporations. The committee freely admit,
to a certain extent, their utility and usefulness, and
they a.re not disposed to recommend any measures
which will embarrass the proper action of those now
in existence; but they do not entertain a doubt that
the great latitude heretofore given to corporations has
tended to lead them astray, which, to a certain extent,
has turned public opinion against them. Had they,
from the commencement, been surrow1ded with proper
restrictions and guards, we should not have had the
failures which have occurred and corporations would
have been in much better repute than they now are.
In granting these charters, the Legislature should
have been quite as cautious and careful as they wouM
have been had they known the applicants were, what
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too many have proved themselves to have been, without the requisite integrity to shield the public from
harm.*
The committee believe that some additional restrictions are called for in relation to the existing banks of
this kind, and have directed their chairman to ask
leave to introduce a bill entitled "An act for the better regulation of Savin~ Banks."
The committee are disposed to favor the application
of the petitioners from Buffalo, for a Savings Bank in
that city. The population and business, present and
prospective, of that flourishing and important commercial city, would seem to justify the location of such an
institution at that point, and the committee have
instructed their chairman to report by bill on this
application. The committee take this occasion to say,
that the bill which they have the honor to submit for
the consideration of the house is much more acceptable than the existing charters of this class of corporations, and contains many additional guards against the
fraud or misconduct of its officers, which might be
profitably applied to other institutions. ·
The comllllttee are not satisfied that a second bank
of this character is necessary at Rochester. This conclusion is drawn from the fact that the one now doing
business there is not a very large concern, as appears
by their last reports.
These banks should not be unnecessarily multiplied.
The committee have examined the bill introduced
at the last session of the le~islature, by Mr. Crosby,
entitled " An act to authorize the establishment of
Savings Banks," which was referred to this committee
by resolution of the house, on the 16th of January
•Thia aasumes that by surroundln,r a charter with prohibitions, desl,rned ae
eare,ruard.., Its administration may with safety and propriety be committed to
men de~tltut.e of l11te,rrlty I The reader will not fall to note other logical lncon•i•teocles In the course of the report\ nor Its ,reneral carelesa ·and slovenly style.
w., du not ln•ert It as aicreel1111 with ail ltsconclnslona, but In part aaao historical
exhibit of the statue of lel{lslatlve lntelllirence at that period.
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HISTORY OF SA VINOS BANXS.
last, and are of the opinion that such a law ought not
to pass at this time.*
From the digression into which we have been led
by the introduction of the foregoing report, let us
return to the precedent in legislation established by
the act under consideration, of allowing an available
fund to be kept, at the discretion of the trustees, in
such available form as they should direct. The reports
of the Bank Department, particularly of late years,
are full of protests against this unwise and dangerous
power, and to these the reader is referred for a more
full exposition of the abuses to which the provision is
liable.
We are now prepared to observe the progress of
legislation under the guidance of the precedents above
considered.
•This alluRlon la to an ell'ort. to enact a ireneral law for t.be Incorporation of
SavlnKS Banks to which reference will be made hereafter.
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CHAPTER XXXVI
INVESTMENTS; LEGISLATION UNDER THE FOREGOING PRECIWENTS.
The legislation of 1847 was confined to an amendment of the charter mentioned in the last chapter,
enlarging the discretion in the matter of loans upon
bond and mortgage, as it ought to have been known
would have to be done to make the power available at
all, practically ; renewing the unlimited discretion as
to the disposition to be made of the available fund,
excepting that it should not be employed in discounting commercial or business paper, and increasing the
amount to $100,000, whenever the deposits with the
institution should exceed $400,000. A general act
was also passed, rendered necessary by the change in
the banking system of the State, whereby deposits were
authorized to be made with any banking association
as well as with incorporated banks.
The legislation of 1848 was characterized by the
incorporation of- three Savings Banks in the city of
New York, to no one of which was granted any of
the extraordinary discretionary powers already commented upon. The securities in which investments
were authorized were of the same class as had already
been sanctioned by precedent and experience, and
deposits were authorized to be made in the banks of
51
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HISTORY OF SAVINOS BANKS.
the city, though in two of the charters the amount of
these was limited, in the one to $40,000 and in the
other to $20,000, while in the third, there was no funi.
tation, a fact which in it.Belf illustrates the capriciousness of legislation upon this subject.
In 1849 we find the "available fund" in "available
form" again moving the legislation in regard to Savings Banks, limited, however, in one case to the modest
sum of $25,000, and in another extended to "one-third
of the total amount of deposits with said institution."
By this it will be seen that one-third of the entire
deposits was made subject to the absolute discretion
of the trustees, and from this time forth this became
a characteristic provision in Savings Bank charters ; a
recognized feature of the Savings Bank system of this
State. It did not appear in every charter, being sometimes limited to one-fourth, sometimes to one-fifth, and
sometimes to a definite sum, but the prevailing proportion was one-third, and in all cases where found, the
form in which it should be kept was subject to the
absolute discretion of the trustees. That "form" has
commonly assumed the shape of call loans, secured
by collaterals. The character of these bas varied with
the supposed exigencies of the institution in respect
to its income, or with the prudence and sagacity of
the trustees. The trustees of many institutions set
their faces inflexibly against the acceptance of any
thing as a collateral, in which they are not authorized
to invest permanently, and where this is done, of
course, the dangers arising from this "form " of the use
of the funds are almost, if not quite, wholly overcome ;
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NEW YORK : INVESTMENTS; AFTER 1846.
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though I have not yet been brought to look upon call
loans, even with gold as a collateral, except as a mere
temporary expedient, with any considerable degree of
satisfaction. Solid investments, which the bank can
call its own, subject to no monetary fluctuations as regards the income to be derived from them, giving rise
to no questions concerning the legality of their conversion into money when the occasion 1·equires, are the
characteristics of all well managed and, under every
emergency, unquestionably safe institutions.
In this same year, 1849, the legislature for the first
time discarded favoritism, or the claims of locality in
the matter of investments in city stocks, by granting,
in one of its acts of incorporation, power to invest in
the stocks of miy city in this State ; and in the same
charter was the '' double negative " provision previously
considered, whereby any investment could be made
that had the approval of all the trustees present at
any meeting.
The authority to invest in the stocks or bonds of any
city in this State became thereafter so common, though
not altogether uniform a feature in Savings Bank charters, as to require no further special mention, and the
same may be said of the "one-third" "available fund "
clause, and of the provision justifying any investments
having the unanimous approval of any meeting. The
modification by enlargement, of the latter power, by
making it available against the opposition of as many
as two trustees, will be noted presently.
In 1860 several acts of incorporation were passed
by the legislature, one of which was modeled after
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HISTORY
o~·
SA \"'TXGS BANKS.
the earlier fonns, and contained none. of the modern
loopholes for miscellaneous investments, but this was
amended the following year by the introduction of
the one-third available clause; and the others embraced
more or less of these unguarded features. In one,
besides the direct authority to invest in the stocks of
any city in the State now so common a feature in
charters, the discretion was enlarged by permitting the
trustees to invest in the stocks of any village in this
State.
The legislature of 1851 was distinguished by the
incorporation of a larger number of Savings Banks
than in any preceding year, in all of which the liberal
features which we have characterized prevailed. In
this year the provision concerning investments that
might be made, by the unanimous action of the board
at any meeting, was modified in several charters, so as
to require the opposition of three trustees instead of
but one, to defeat otherwise unauthorized investments,
though with singular inconsistency some of these still
required unanimous consent to authorize loans upon
bond and mortgage.
The legislation of 1852 was characterized by no
distinguishing features. Three Savings Banks were
incorporated, with the provisions concerning investments then applicable to most of these institutions.
It will be remembered that those now specifically
named and recognized were the stocks of this State,
of the United States, sometimes of other States, and
of any city in this State, and in bond and mortgage,
with varying limitations.
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So far as these indicate the intent and purpose of
the legislature, they were conservative and salutary.
The provisions upon which we have commented, under
which a wider discretion concerning investments and
loans is claimed, and in many instances exercised, are
so far exceptional in their character, and are commonly
expressed in such terms, and are found in such connection with more restricted requirements, that we
may well believe the legislature was ignorant of their
real purport and of the construction to which they
were liable.
In 1853, besides the incorporation of several Savings Banks, generally with the usual powers conferred
upon such institutions, we find the first general act
regulating the investment of their funds. I denominate this a general act, though restricted in its operation to the Savings Banks of New York and Kings
counties, because these were then, as they are now, so
large a representation in the Savings Bank system of
the State and because the provisions were applicable
generally to so large a number of institutions, and
not specifically by direct amendment of the charter of
each.
The language of the first clause of this act is not
only ungrammatical, but is so obscure as to leave a
doubt as to its real intent. It is as follows:
" It shall be lawful for the several Savings Banks
and Institutions for Savinf in the city and county of
New York and county o Kings, now chartered or
which may be hereafter chartered, in addition to the
powers granted by their respective acts of incorporation, to loan the moneys which they have received or
shall hereafter receive on deposit, or the accumulations
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msTORY OF SAVINOS BANKS.
thereof, on or pwrchase of any stock or securities for
the redemption or payment of which the faith of any
State in the Union shall be pledged, or in the public
debt or stock of any incorporated city, county or town
in this State which shall have been authorized by the
Legislature of this State to issue such stock; provided
that the cash value of such stock or securities shall, at
the time of making such investments, be at or above
its par value ; and such loans, so made, shall not
exceed in amount ninety per cent of the par value of
such stock or securities."
I have indicated by italics the ambiguous phraseology of this section. The banks are authorized to
"'loan moneys on or pwrcliase of" any of the securities
mentioned. It would seem that it was the intention
to authorize these securities both for investment and as
collateral for loans. But the requirement that for the
former purposes they should be at par in the market,
which was plainly intended, rendered the act of little
service in extending the powers of Savings Banks, and
deprived them of any advantage resulting from a temporary depression in the market for even the best
securities. They might thus purchase United States
fives at 110, but could not purchase them at 90. This
would seem to have been enacted in the interest of the
borrower rather than of the Savings Banks.
But that to which it is our purpose more especially
to direct attention is not the terms upon which these
investments were authorized, but the new class of
securities hereby admitted for investment upon any
terms. These are the bonds of counties and of towns
in this State, which here for the first time receive
recognition in that relation from the Legislature.
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~n several acts of incorporation passed this year, a
new feature was also introduced, which thereafter
became quite common in Savings Bank charters, and
was, not unlikely, suggested by, or gave suggestion to,
the provision in the general act already noted.
Hitherto Savings Bank charters had never specifi.
cally authorized loans to be made upon any other
security than real estate, this being naturally and properly regarded in the light of an investment, having
permanence, and investing the bank with absolute
ownership and power of disposition of the collateral
(bonds and mortgages) given to secure the loan. We
have seen, however, that under the wide discretion
conferred by the available fund clause, first introduced
in 1846, loans on call became permissible. But the
specific language of Savings Bank charters continued
still to limit the use of moneys to "investing," etc.
In this year, however, the clause which hitherto
defined the object of the corporation to be to receive
and to invest moneys, etc., was in several charters
modified so as to read to invest in or to k>an upon, etc.,
thus giving to the corporation the choice between permanent investments and temporary loans. Whatever
may be thought of the wisdom and expediency of this
authorized departure from the original policy of investment, it was not without some compensating advantages. It defined the class of securities which should
be accepted for loans, instead of leaving these to the
discretion of the trustees under the guise of an "available fund," kept in " available form," and it rendered
superfluous the provision for an available fund, which
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HISTORY OF SA VINOS BANKS.
was accordingly omitted from charters which thus provided in general terms for loans upon the securities
authorized for investment.
SUBSEQUENT LEGISLATION.
From this time there was no material change in the
policy of legislation concerning the investments of
Savings Banks.
Though county and town bonds had been recognized
by the act of 1853, its operation was limited, as we
have seen, to the Savings Banks in New York and
Kings counties. The first specific authorization to a
Savings Bank, in its charter, to invest in the bonds of
a county, was granted in 1857, but this was confined
to the bonds of the county in which the institution
was located. This precedent was followed in many
cases thereafter, in one or two the privilege being
extended so as to embrace the bonds of one or more
neighboring counties. Town bonds were first specially
authorized by charter in 1863, but were limited to the
bonds of the town in which the bank was located.
In this year also (1863) a general act was passed,
authorizing Savings Banks to loan tlieir /11,nils on the
bonds of counties and cities in this State, provided
that provision was made in the act authorizing the
issue, for the payment of such bonds by tax. This
was, however, only extending the provisions of the act
of l 85~, in this respect, to Savings Banks outside of
New York and Kings counties. In 1864 Savings
Banks were authorized to make loans to counties, to
be secured by their bonds, issued in pursuance of law,
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409
which was but the extension of another feature of the
act of 1S53, to banks heretofore excluded from it.
Both theRe acts received their incitement from the
large amount of bonds then being issued by counties
for the purpose of raising money to pay bounties to
vC>lunteers for the war.
Since this time, bonds of counties have become a
marked feature of the authorized investments for Savings Banks, and still more recently, town bonds have
in some instances been authorized. The latter, however, have not been admitted without very considerable opposition in the legislature, and specific charter
authority to invest in them must still be regarded as
exceptional. But in 1869, a general act for the bonding of towns in aid of the construction of railroads,
provided that Savings Banks might invest in them.
Since that period there has been no material change
in the policy of the State concerning Savings Bank
investments, until the enactment of the General Savings Bank law in 1875.
DEPOSITS IN BANKS.
In order not to break the connection of events concerning investments, and loans as a substitute for investments, we did not stop to consider the action of the
legislature concerning the deposits that might be made
by Savings Banks after the general a~thority conferred
by chapter 478, Laws of 1847, to deposit in any of the
banking associations of this State, as well as in incorporated banks.
The act of 1853, which we have already cited, in
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HISTORY OF SA VINOS BANKS.
section 2, limited the amount that any Savings Bank
should deposit in any bank or association, to ten per
cent of the capital stock paid in of such bank, provided further, that such amount should not exceed
twenty per cent of all the deposits held by such Savings Bank. The principle recognized in this provision
is wise and salutary ; whether the best proportions of
capital and deposits are selected for its exemplification we will not stop to discuss. This section was in
1858 amended, most unwisely, in my judgment, by
limiting the amount that might be kept in any one
bank to $100,000. I should remark, however, that by
the act of 1853 the amount of deposits authorized by
section 2 might be exceeded, by requiring and
receiving from the depository such securities, in amount
equa., to the excess, as the law required to be deposited
as security for circulating notes. I presume this provision never became operative, however, in practice.
Another provision of the act of 1853, worthy of
notice as illustrating the disposition of the legislature
to carefully guard the depositors of Savings Banks
against loss, was one making the deposits of Savings
Banks in banks of circulation a first lien upon the
assets, in the event of failure, after making up any
deficiency in the sale of the securities to redeem their
circulating notes. This provision is now, however, of
little practical value, since so few of the banks in this
State are organized under its laws, or are subject to its
authority in the matter of their liquidation; and
besides, it has been adjudicated, that a State bank,
upon being thrown into bankruptcy, is to have its
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assets distributed according to the provisions of the
bankrupt act, and which does not recognize this statutory preference. And this brings us to the act of
legislation concerning deposits in bank, which, in 1865,
authorized deposits to be made in national banks, a
measure rendered necessary by the very general conversion of State into national banks, under the new
financial and monetary regime precipitated by the
war.
The act of 1871, already cited under other topics,
provided, also, that any part of the available fund of
any Savings Bank might be deposited in any duly
organized bank or trust company, but further provided that the bank or trust company, in which the
deposits were made, should be designated by a vote
of a majority of all the trustees, exclusive of s1....:h as
were directors in any bank or trust company in which
it would be lawful to ~ake such deposits - a restriction more severe, we believe, than was contemplated and which, if regarded, must have been very annoying
in some institutions. The amount of deposits in any
one bank·or trust company was limited to twenty per
cent of its capital; also to ten per cent of the deposits
of the Savings Bank making the same.
DEPOSITS IN TRUST COMPANIES.
It only remains in this connection to consider the
action of the legislature in 1854, in the enactment of
the following: "It shall be lawful for any Savings Bank
or Institution for Savings to make temporary deposits
in any trust company incorporated under the laws of
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HISTORY OF BAVINOS BANKS.
this State, and authorized by the supreme court to
receive and hold trust funds, and subject to examination by said court."
It will be observed thatthie provision·containsnone
of the restrictions imposed by the act of 1853, concerning deposits in banks of circulation. The reason
for this is set ,forth in the following report of the committee on banks in the Assembly, upon the bill in
question, which appears to have first passed the Senate
with these restrictive clauses inserted. The report
says:
"Your committee deem it unnecessary that the section making the deposit of moneys in trust companies
conformable to the act of 1853, relative to Savings
Banks, be inserted in the bill, as the amount of capita~
namely, one million of dollars, of the trust companies
actually paid in and invested, would, in the judgment
of your committee, be a sufficient safeguard for the
security of the deposits made with them. But in addition to this, all moneys deposited with the trust companies are, by their charters, required to be invested
in the sarne manner as are the funds deposited in the
Savings Banks, and would therefore be equally safe ·i f
invested tlwough the trust com:eanies, as if they were
invested by the Savings Banke rn which they are first
deposited. Your committee could, therefore, see no
good reason why the restriction inserted in the Senate
bili should be permitted- to remain therein, more
especially, as the effect of it would be to defeat the
object of the bill, which your committee deem a good
one, and would therefore recommend the' passage of
the bill as amended."
The first portion of the argument of the committee
I regard as fallacious, and the latter as conclusive and
unanswerable. The fact that trust companies are now
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even mo-,·e restricted in the range of their investments
than Savings Banks, would seem to mark them as
peculiarly safe as depositories for the moneys which
Savings Banks must keep in reserve for the exigencies
of their business, and, as a rule, the interest allowed
by them on balances is fully equal to that allowed by
banks of discount. When added to this, is the fact
that they are•subject to the laws of our own State, and
amenable to its authority, subject to the supervision of
its officers, and have a deposit of $100,000 with the
Superintendent of the Bank Department, as an additional protection to depositors, it would seem that the
selection of these as depositories by Savings Banks, in
preference to foreign corporations, with no local responsibility, would become general if not universal.
The strongest claim which, in my judgment, they present to public favor is, the restriction imposed by their
respective charters upon the investment of their funds,
whereby the hazards attending the discounting of
business paper are never encountered. If there w_ere
superadded to this, the provision in the act of 1853,
making the deposit of Savings Banks a first lien upon
their assets in case of failure, and a mandatory requirement that the Superintendent of the Banking Department should annually examine their affairs and report
thereon, I should regard their security as depositories
as nearly perfect as it is possible to make any merely
human institution; and without these latter safeguards, they still possess certain decided advantages
over others that are authorized.
Since the foregoing passages were written, the re-
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strictions upon trust companies in respect to their
loans and investments have been very considerably
relaxed ; and the suggestions herein made of preferring
Savings Bank deposits made in trust companies, and
of subjecting trust companies to examination by the
Superintendent of the Bank Department, have been
incorporated into the legislation affecting these institutions.
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CHAPTER XXXVII.
OF DIVIDENDS TO DEPOSITORS.
The original theory of the Legislature concerning
dividends to be paid to depositors was, that the entire
profits of the institution should be divided ratably
among them, and a provision to this effect was inserted
in the first charter, and has been inserted in nearly the
same terms in every charter since that time, down to
the very latest.
But this general provision was first modified in 1831,
by an amendment, probably at the solicitation of the
bank securing it, authorizing a difference of one per
cent in the rate to be paid to depositors of $500 and
under, and to those of over $500 ; the smaller deposits
receiving the higher rate. In subsequent years this
authority was conceded to other institutions, and by
the act of 1853, section 5, was made imperative upon
the Savin~s Banks in New York and Kings counties,
though it is not certain, from the language, that this
provision was not confined to Savings Banks that
should thereafter be incorporated. It was commonly
so construed by the institutions in operation at the
time of the passage of the act, and only such institutions conformed to the requirement as were favorable
to the policy indicated by it; and institutions " incorporated thereafter " regarded the later provisions of
their respective charters as of higher authority to them
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than this general act. So that this provision in the
act of 1853 has ever been practically inoperative. In
fact, the whole subject of the regulation of dividends
to depositors, except the general one of assuring to
them the profits after payment of expenses, has been
controlled, in the main, by the views and wishes of the
trustees of each institution, who have secured from the
Legislature such provisions in this respect as they .
desired.
Our views of the proper designation of the profits
of Savings Banks allowed to depositors, have been
expressed ante, p. 134. Still, so commonly is the term
interest employed that we unconsciously, at times, fall
into that form of expression, and the terms interest
and dividends are also found interchangeably in the
statutes. The use of the term interest in this relation
was probably derived from the practice of many institutions, in late years, of agreeing to pay a certain rate
without reference to the earnings or profits, which
practice savors more of the characteristics of interest
than of dividends. But in our judgment the pra,ctu:e
is wrong, being in derogation of the fundamental
principle upon which Savings Banks are instituted.
There is nothing in the theory of Savings Banks to
justify it ; on the contrary, every thing in their theory
and constitution is opposed to it.
During a discussion in the New York Legislature,
the question arose as to the proper term by which to
designate the profits declared to depositors. Some
advocated "interest," others "dividends," as the proper
term to employ, the former being the prevailing notion.
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The entire discussion threw very little light upon the
subject, but did •serve to reveal the prevailing ignorance amongst the members concerning the nature and
characteristics of Savings Banks. One senator, who,
from his connection with a leading Savings Bank in
the State as an officer therein for many years, might
naturally lay claim to a better undel'Standing of the
subject than his associates, proposed to make a distinction between the profits regularly distributed, semiannually, and the extra allowance made at irregular
and longer intt-'rvals. The former he would call
interest, the latter, dividends. But his distinction was
founded upon the same erroneous conception of the
character of the regular division of profits which we
have already characterized, and was derived, as above
explained, from the custom in his own bank, of agreeing in advance to pay a certain defined rate per cent.
There is no difference in the essential character of a
regular and of an extra division of the profits or earnings of a Savings Bank, that should justify the application to one of the term interest, and to the other
the term dividend. They are produced in precisely
the same way, and have precisely the same relation to
the deposits and to the depositor. Where it is true that
tl1e one bas been agreed upon and promised in advance,
it has heen in violation of true Savings Bank principles, and it may be in violation, as it is certainly in
excess, of the authority conferred by law. It is an
agreement that could not be enforced against the corporation, if by any means it were to turn out that the
a.greed rate could not be paid without trenching upon
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the deposits. The liability in such case would be
individual, falling upon the trustees personally, and
not upon the deposits of which they are only the
guardians, and which they have no authority whatever
to pledge to the payment of dividends declared but
not earned!
In short, we repeat what we said before, that the
division of Savings Bauk profits, whether regular or
extra, partakes of all the characteristics of dividends,
and none of the characteristics of interest.
The whole question of dividends was quite fully
considered in the Special Report on Savings Banks,
and as showing the phases of the subject, as the same
has been presented to and considered by the Legislature of New York, we will here insert the views of
the dividend question there presented.
Extract from Special Report on &IJl'.nqs Banks, 1S68,
pp. 118-128.
OF DIVIDENDS.
As upon almost every other subject of importance
connected with Savings Banks, so in regard to this, it
will be seen that the law is various.
The more common provision is expressed in the
various charters with a great degree of uniformity in
the following words: .
"It shall be the duty of tn1stees to regulate the
rate of interest (dividends) to be allowed to aepositors,
so that they shall receive, as nearly as may be, a ratable proportion of all the profits of the corporation,
after deducting all necessary expenses."
A few charters authorize a rate of interest one per
cent greater on deposits of $500 and under, than on
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those above that amount ; a less number makes such
a classification of rates imperative.
Two authorize a classification of rates, having regard
to the time the principal sum has been on deposit;
while a few leave the whole question to the discretion
of trustees.
The act of 1853, to which reference has so frequently
been made, and which applies to Savings Banks in
New York and Kings counties only, in the sixth
section provides, concerning all Savings Banks thereafter to be incorporated, "that the rate of interest on
all deposits of $500 and under, shall be one per cent
per annum greater than shall be allowed on any sum
exceeding $500."
But the -institutions incorporated since the passage
of the act have very generally disregarded this requirement, either by authority of special provisions in their
charters, inconsistent with the requirement, or because
the inconvenience of submission has more terrors for
them than the possible consequences of a violation of
the law.
Others, and generally the older institutions in New
York and Brooklyn ( the onl7 part of Kings county
in which there are any Savmgs Banks), make this
classification in the rates of dividends paid, on their
own motion, as a matter of policy, tending to the encouragement of the foor and humble, whose accumulations must be smal , and to discourage large deposits,
from those who are able to seek other investments, and
for whose benefit Savings Banks were not instituted.
These are uniformly quite emphatic in their expres~ion
of opinion that the provision is a salutary one, and
should be enforced.
Nothing is clearer than that as a mandatory provision it should be uniform. If any institution is to be
required to classify its rate of dividends upon the
basis under consideration, then all sl1ould be. The
real question is whether such a provision should be
mandatory or only permissive, or whether, indeed, such
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a classification of rates should not be prohibited, and
a uniformity of rate upon all sums be absolutely required.
Few I think would go to this length in the enforcement of uniformity, those favoring uniformity being
content that the question should be left to the discretion of the trustees.
But the distinction between making such a provision
mandatory, and leaving it permissive, is radical, and
one concerning which a very earnest sentiment is entertained and expressed on either side.
The grounds upon which such a provision is favored,
have been stated above. To repeat, they are in brief:
1. To encourage small depositors whom Savings
Banks were instituted exclusively to assist and benefit.
2. To discourage the accumulation of large deposits
from those who are presumed to be competent to make
their own investments.
The high regard which I entertain for the character
and worth of those gentlemen who earnestly advocate
the enforcement of this provision, their sincerity, their
disinterestedness, the careful thought which I know
they have given to the subject, and the experience in
the practical workings of Savings Banks which they
have enjoyed, all combine to entitle their opinions to
a careful and candid consideration. In such a spirit,
and with the sole purpose in view of arriving at a conclusion the nearest ri,ght, just, safe and salutary, let us
examine this question from their standpoint.
First, as to the encouragement of small depositors.
I think a fallacy has unconsciously wrouiht itself
into this proposition. It seems to be assumed that the
encouragement is found in the distinction between
rates, and not in the rates themselves. Put in form,
it would involve an absurdity like the following:
"The Savings Bank that pays five per cent to depo:iitors of $500, and but four per cent to depositors of
larger amounts, thereby encourages the smaller depositors more than the Savings Bank that pays six per
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421
cent to all depositors." Unquestionably this is not
the form that it was intended the proposition should
take, but the facts before us and which must be made
a part of the argument upon this question, compel the
proposition to assume that form. What are the facts?
'l'hat with a single exception the highest rate of dividends paid last year by any Savings Bank that had
classified rates, was six per cent, while the Savings
Banks that had a uniform rate for all depositors gene•
rally paid six :per cent. Thus, under either policy, the
smaller depositors received six per cent. Wherein
then were they the more "encouraged " by the one
than by the nthed Obviously, the policy of different
rates possesses no peculiar features of encouragement
to any class, unless this be found in the selfish gratification of having received more than somebody else,
which is our repudiated proposition over again. If,
therefore, there is in reality no superior attraction to
the small depositors, in the policy of classified rates,
as the facts of the case seem conclusively to establish,
then the argument for a compulsory enforcement of
such classification, upon this ground, is deprived of all
force.
The ·argument to have weight must be predicated
upon conditions like this ; out of an ascertained
amount of profits to be divided, a uniform rate of but
so much per cent to each depositor can be allowed,
while with a classified rate, confining that per cent to
depositors of over $500, one per cent more can be allowed
to depositors of $500 or under. The argument is good
if these conditions exist, and not otherwise. The
practical action of these institutions as detailed above
would seem to show tha:t these conditions are, to si~y
the least, unusual. I have, besides, an illustration
directly in point in the case of the South Brooklyn
Savings Bank, which for sixteen years had, under a
by-law, enforced classified rates of d1vidends, upon the
basis which we are now considering. Durmg the
present year they have adopted the policy of uniform
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dividends, on the ground in the first :r,lace, that an
arhitary limitation of $500 was too easily evaded by
the depositor, who would open different accounts in
the same institution, in trust for wife, children or
friends ; and secondly, that the institution could as
well pay six per cent on all, as five per cent on those
of over $500, and six per cent on those of but $500 or
less, and they exhibit this calculation in support of
that view. The dividends credited to depositors for
the year 1866, at five and six per cent, amounted to
$84,522.99. It would have required but $4,769.14
more, to have made them uniformly six per cent.
It seems to me that this single instance sufficiently
illustrates the impolicy of an enforced regulation of
this kind. Here, such a law would compel the institution to withold from depositors what it had, and
could afford to give, in order simply to note a class
distinction between the poor labeled 1500, and those
of afff,uence labeled $501, or upwards! Nothing is
thereby added to the gains of the p<>or, but something
material is taken from the earnmgs of the others.
And among the latter may be a widow, whose only
sup_port, besides her own labors, is $1,000 in the
Savmgs Bank. The ten dollars which her deposit has
eanied, and of which she is thus deprived, would go
far to furnish her winter's coal or bread.
I by no means contend for an enforced uniformity ;
I would in this matter leave each institution free to
act according to the conditions by which it mall find
itself surrounded.
The second consideration of the undue encouragement given to depositors of large sums to make use of
Savings Banks for other than their original purpose.
I regard as being fully answered in the discussion of
the limitation of the amount of deposits· to be received
from one individual.* The Savings Bank cannot, as a
rule, become attractive to depositors of independent
•Bee dlaou&11l00 oftbetoplca, LDIITATION or DBP08IT8, post.
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means, so long as the ordinary dividends are less than
the legal rate of interest. The insecurity attending
deposits of considerable amounts, I would provide
against, by proper safeguards, as indicated in that discussion, and having done that, the more free for all
cla._qses the access is made to Savings Banks, the greater
will be their proi;.perity, and the greater will be the
benefits they confer upon those in whose special interest they were primarily instituted.
But it by no means follows that the trustees of
Savin~ Bai1ks should be left to the exercise of an
unlimited - discretion in the matter of dividends.
Whatever policy or practice in regard to dividends, as
in regard to any thing else, is calculated to impair the
perfect security of depositors, or to operate injuriously
to the system, or to work injustice to any individual
·or class of depositors, should be prohibited. Thus it
seems to me the dictate of the commonest prudence,
that no dividends should be declared in advance of
ascertained profits.
It is customary for many Savings Banks to advertise
that they will pay a given rate of interest. How do
they know that they will be able to pay such a rate ?
They may have been able to pay that amount in
previous years, and they nwi.t/ be able to pay it again,
or they may not. Let them•refer to their past record
as an earnest of fntm·e probabilities, but give no
pledges upon the contingency of future profits.
Doubtless, as a rule, the older institutions, with
large surplus, might do this and not forfeit their
pledge, but even these would do better to adhere to
the principle of not dividing what they have not
earned. But it is commonly the newer institutions
that make the greatest parade of promises, and, of
course, for the purpose of attracting deposits.
Even upon the organization of banks their trustees
not unfrequently advertise that they will pay the
highest rate of interest. Of course they will struggle
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HISTORY OF SA VINOS BANKS.
to do this. but what are the probabilities that they can
<lo this out of fairly earned p1·ofit.<J !
Let them do their best, and when their profits are
assured, declare their dividend.
Doubtless the impulse is strong with a new Savin~
Bank to hold out inducements equal to those of older
institutions. But how can th'ey do it with no resour.
ces? The older Savings Banks have a surplus, the
profits on which enable them to make greater divi•
dends to depositors than they could do otherwise.
Take, for instance, the Bowery Savings Bank ; the
interest on its surplus, at seven per cent, is nearly one
per cent on the whole amount due its depositors; and
as there is always a large amount of deposits that are
not entitled to dividends, it is doubtless fully one per
cent on the deposits that are so entitled. If, therefore, the Bowery can only declare an average dividend
of six per cent, one per cent of which is earned from
a surplus that receives no dividend, how can the bank
that organized, say on the first of May, and on the first
of January has $200,000 deposits, declare dividends of
six per cent, all of which must be on the profits of the
$200,000? True, they do not have to declare dividends on the whole $200,000, but only on such portion of it as has been in the bank for not less than
three or four months. But it is equally true that they
have not profits from the whole $200,000. Some has
been kept on hand for daily transactions, some in the
bank at four per cent to meet immediate demands;
and for the balance we cannot assume certainly a larger
per cent of profit than is enjoyed by older institutions.
With these disadvantages 1t does not seem possible
that any Savings Bank can, during the first year, nor,
indeed, during the first five years of its existence, pay
dividends equal to older institutions, without, first,
anticipating profits; or second, investing in douhtf ul
securities at larger than average ~rofit; or third, leaving no 1·eserve for surplus. I anticipate an answer to
these suggestions, that if new banks in the ilWlledinte
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NEW YORK: DIVIDENDS.
nei~hborhood of old institutions donotdeclare as high
dividends, they cannot secure the deposits. They
cannot, of course, expect, by the mere fact of proximity, to withdraw depositors from the old institutions; and if they cannot, it is because no new Savin~s
Bank was needed for the accommodation of the pubhc.
If a community or neighborhood have no Savings
Bank facilities sufficiently attractive to induce depos·
its, the offer of such facilities will stimulate deposits.
If it has such already they do not require any thing
further. ·
The organization of new institutions should proceed
wholly upon the theory of the wants of a community.
These wants should be such as a moderate suggestion
of profits at first will stimulate to action. All proper
inducements should be employed to stimulate the
habit of saving, but safety, with small profits, must be
the leading idea of Savings Banks, and especially in
their early history. If th1s will not secure deposits,
it is because the facilities of older organizations are
more attractive, or because tliat community is not ripe
for the experiment. But this aspect of our subject
has been elsewhere fully discussed.
A sound principle of finance, allied to the last discussed, but far more vital, is that no dividend shall be
paid or credited except out of profits actually earned.
It might seem that a principle so obvious could require
no enforcement from argument or from the law. But
the fact that three Savings Banks did last year report
dividends in excess of their profits from interest
received, making no allowance for expenses, is conclusive that the obviousness of the principle has not prevented its being disregarded.
The State has not found it beneath its dignity to
enforce this principle by salutary provisions of law
concerning banks of issue, whose directors are prohibited from' declaring dividends except from profits;
are not the depositors in Savings Banks entitled to
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HISTORY OF SAVINOS BANKS.
equal consideration with those who have capital to
invest in banking enterprises 1
Such a prohibition concerning Savings Banks would
not only be salutary in its restraint upon practices
dangerous to their integrity, l,ut would tend to check
the disposition to establish new institutions in locali-.
ties where Savings Bank facilities are already sufficiently provided. Indeed such a provision alone,
rigidly enforced, would effectually remove all dangers
that threaten our system from the reckless multiplication of these institutions.
There is com,iderable diversity in the practice of
Savings Banks concerning dividends, in other respects
than those named. They are generally surposed to
declare dividends semi-annually, and most o them on
the first of January and July in each year, a few at
other periods.
Most institutions declare dividends only on ·moneys
that have been on deposit for three months prior to
the dividend; thus moneys deposited on the first of
July and withdrawn on the 30th of December would
be entitled to no dividend ; while a deposit made on
the 1st of October, and remaining until the 1st of
January, would be so entitled.
Dividends are estimated by these institutions only
for full periods of three months, that is, a deposit
·made in August and remaining until January 1st would
be entitled to a dividend for only three months, the
time from August to 1st of October not being estimated. Some only declare dividends on S11ms deposited for full six months.
Other institutions allow deposits to become entitled
to dividends from the first of the calendar month after
the same are made, and to the first of the calendar
month in which the same are withdrawn, while others
allow the dividend to commence from the first of the
month subsequent to the deposit, but declare it on
none that have been withdrawn prior to the day for
which the dividend is declared. The practical opera-
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tion of these two methods would be, that under the
first, a sum on deposit during any entire calendar
month would receive its proportionate rate of dividend
for that time, while under the second, a sum to be
entitled to a dividend from the first of the month subsequent to its being deposited, must remain on deposit
until the next dividend is declared.
These are matters which the Legislature has heretofore left to the discretion of trustees, and I do not
know that any interference or control of this discretion
is desirable. Some of these practices seem liable to
the charge of discriminating unjustly against short
term deposits; but it is the long term deposits that
earn the interest, and the security afforded is quite
sufficient repa;f!llent for a deposit of only one or two
months. Besides, it is a part of the policy to encourage not simply deposit.<J of savings but their acaumul,a.
tion; and this cannot be affected without some extra
inducement to keep the deposit undisturbed.
I should be apprehensive, too, that to allow dividends on deposits for a month, when it is well known
that for such period they can earn little or nothing for
t.be institution, was undertaking more than could be
done with due re~ard to safety, to say nothing of the
injustice to depositors for a longer term, whose money
alone really earns the interest that is thus divided.
Still, if the trustees are restricted to making dividends
out of earnings, and required to reserve something for
surplus, the danger from over doing will be substantially averted.
'fhere is, however, a ractice now becoming quite
common in the cities o New York and Brooklyn,
which I regard as unsafe for the institution, and unjust
to the larger portion of the depositors.
· This is to offer, at the beginning of each quarter, to
allow dividends from the first of the month on the
<leposits made on or before the twentieth.
If the suggestion should be made that no Savings
Bank will do this unless it can a.fford to do so, and
1
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that it is the best judge of what it can afford to do, I
reply:
Ffrst. That we have evidence that under pressure
Savings Banks will do that which they cannot afford
to do, as where they pay more in dividends than they
receive from investments; and,
Second. If a Savings Bank can afford to pay more
than six per cent on a deposit for two months and ten
days, then it can afford to pay more than six per cent
on deposits that have remamed for at least three
months, and helped to earn the higher rate. It is
unjust to the depositors for the longer time, that their
earnings should be taken to enhance the profits of the
short term depositors.
But aside from the injustice wrought by this practice, it is opposed to sound policy. Let us illustrate
its natural effects.
Seeing the offer, A, on the 20th of April, withdraws
from his usual balance of $7,000 or $10,000, in a bank
of issue, $5,000, which he deposits in the Savings
Bank. On the 1st of July he withdraws it, together
with $75 dividend, earned in 72 days, while B, who
deposited $5,000 on the 1st of April, gets no more.
That is, A realizes on his investment at the rate of
over seven and a half per cent per annum, while B,
whose deposit has earned more for the institution than
A's, realizes hut six per cent. If the Savings Bank
can thus afford to pay A seven and a half per cent, it
is only because it does afford to deprive B of his just
due.
But A is worldly wise, and withdraws his deposit
to u1:1e in Wall street, or to loan on call, until the next
quarter preceding dividend day shall offer him a
further opportunity to make seven and a half per cent
out of B's earnings.
The deposits which are secured by this system of
bonuses are of little value to the institutions that offer
them ; they are short lived, and cannot, in my opinion,
as a rule, earn nearly as much as they receive.
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The tendency of this practice must indeed be to
destroy the real character and purpose of Savings
Banks as incentives to industry and economy, and to
convert them into financial drawing-rooms, where
scheming men of the world, rapacious birds of prey,
may repose for a time, while resting their pinions for
some higher flight into the realms of stock fancy.
It is true that about the first of January and July,
in each year, it is customary for Savings Banks to
allow a few days of grace for depositors. Receipts,
from various sources, fall due about this time, but do
not come to hand until after the first of the month;
and to lose a quarter's interest for one or two days of
unavoidable delay, seems a hardship. I would provide for say five days' grace at such periods, and
believe that this is the best that can be done consistently with justice to al1, an<l safety to the institutions
themselves.
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CHAPTER XXXVIII.
OF SURPLUS.
Allied to this question of interest to depositors, is
that of surplus, which has now become a marked feature of general as well as of special legislation.
We have seen that the original idea of a Savings
Bank was the accumulation of small sums, the scant
savings of the poor, securely invested in the stocks of
this State or of the general government, yielding to
the Savings Bank, an income, it was presumed, not
exceeding six per cent, which income, after deducting
the necessary expenses of clerk hire, rents, etc., would
leave certain net profits, all of which were to be
divided ratably among the depositors. This theory,
of course, excluded all idea of any accumulation of
profits for any purpose. But a few years served to
demonstrate the expediency of allowing a surplus to
accumulate, with which to provide against a loss to
depositors, resulting from a forced conversion of securities into cash at a time when the market value of
stocks might be depreciated below par or cost. Of
course, such accumulation could only be made by
refraining from dividing the whole amount of net
profits each year, as interest to be credited to depositors, retaining some small percentage as a reserve to
meet the contingencies in business above referred to.
This policy first received legislative recognition in
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NEW YORK: SURPLUS.
1831, through an amendment to the charter of the
Bank for Savings, in the following terms : "The board
of trustees of the Bank for Savings, in the city of
New York, are hereby authorized to accumulate grad.
ually, and bold invested, a surplus fund not exceeding
three per cent on the amount of deposits, to the end
that in case of a reduction in the market price of the
public stocks and securities, held or to be held by the
said bank, below the par value thereof, any loss to the
depositors by reason of such reduction may be prevented or made goo<l by means of the said fund."
Amendments in similar terms were made to the
charters of other Savings Banks the following year,
and in 1836, the charter of the Bank for Savings was
further amended by enlarging the surplus that might
thus be accumulated to ten per cent, and in 1839 the
provision for accumulating a surplus fund of ten per
cent was applied to all Savings Banks by a general
act.
The charters of many Savings Banks, thereafter
incorporated, made provision for the accumulation of
a specific amount, commonly twenty-five thousand
dollars, by requiring all the profits above that amount
to be divided among the depositors. But ten per cent
may be regarded as practically authorized to all, under
the general act of 1839, though in a few special
charters, as high as twenty per cent is allowed.
The aspects of this question of surplus, as presented
for the consideration of the legislature in the Special
Report, to which we have had and shall have such frequent occasion to refer, were as follows :
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HISTORY OF SAVINOS BANKS.
&tract from Special, Report on &vings Banks, 1868.
pp. 58-60.
SURPLUS AS AN ELEMENT OF SAFETY.
In previous pages of this report, the surplus of
Savings Banks has been considered as a sign of their
prosperity. It is proper in this connection to consider
this surplus as an indispensable element of strength
and safety.
If a Savings Bank were subject to no contingencies
in its business, if it were possible to protect every
institution from any possible loss, no surplus would be
required. But this we have shown and know to be
impracticable. The profoundest wisdom, the most
penetratin&' sagacity, the most consummate financial
skill, is vam to place any one of these institutions
upon a basis of absolute exemption from loss. These
qualities, with strict integrity and conscientious care,
may greatly diminish the chances of misfortune, but
cannot eliminate them altogether. It must needs he
that, sooner or later, sli~ht or heavy losses will come.
A bank of issue in which savings deposits are kept
may fail, a claim for insurance may be successfully
resisted, skillful burglars may get access to the <'.ash,
investments must sometimes be made at a premium
that only return par on the day of redemption, or
securities must sometimes be converted at a discount
to meet unexpected emergencies. In these and many
other ways, which we need not enumerate, Savings
Banks are exposed to perils which all cannot be so
fortunate as to escape. We can only guard against
needless exposure to these perils, and provide a mean~
whereby the severity of the misfortune, when it comes,
shall be greatly mitigated ; means that will enable the
institution 'to sustain its losses without impairin~ its
ability to meet in full the demands of every depositor.
But this can only be done bl the accumulation of a
surplus of assets over all liabilities for the purpose of
meeting such contingencies. In no other way can per•
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feet security ~ainst loss be assured to the depositor.
In this way 1t can be assured ; and yet, strangely
enough, the provisions of .the statutes in regard to
this surplus, upon which the security of the depositor
so greatly depends, are only permissive. If any thing
connected with the management of Savings Banks
should be obligatory, this should be. li in any thing
the discretion of trustees should be controlled by law,
this upon which so much depends should surely be
thus controlled.
No Savings Bank should be permitted to declare
more than five per cent dividends until it has accumulated a surplus of at least five per cent of its assets.
With regard to Savings Banks to be organized hereafter, such a provision is practicable, and would have
the salutary effect of checking the mania for or~aniz.
ing these institutions in localities already sufficiently
accommodated. To make such a requirement of Savings Banks already organized might lead to conse•
· quences not only perilous to their own integrity, but
embarrassing to kindred institutions. Concerning
these it will be better to leave them at liberty to
declare such dividends as they can, from actual earnin~s, after paying necessary expenses, and putting
aside one-half per cent per annum to account of
surplus.
The amount of gross surplus which Savings Banks
should be authorized to accumulate presents a question upon which honest opinions may differ. The
weight of opinion so far as it has been expressed by
Savmgs Bank officers, in answer to my inquiries,
favors from fifteen to twenty per cent. With five per
cent as a minimum, I regard fifteen fer cent as a safe
and sufficient maximum on a basis o the par value of
securities. If the market price of securities is to be
taken as the measure of value, twenty per cent of
surplus would not be excessive.
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HISTORY OF SAVINGS BANKS.
There is no possible danger to be apprehended from
the accumulation of surplus. Every thing in that
direction, even to excess, favors safety. Practically no
injustice is wrought by such an accumulation. The primary idea of a Savings Bank is a place of safety for
the deposit of savings. Whatever promotes safety
promotes the first and chief object of those who resort
to these institutions.
There is no injustice wrought toward any one of
them, then, if each year a portion of the profits realized, is reserved for security, instead of being divided
and added to the personal deposit of each. True, we
may assume, that if he shall withdraw his deposit, he
will have less if such reserve is made than if it shall
have been allotted to him as a dividend, and hence the
reserve will inure to the advantage of depositors who remain, and of future depositors, rather than to his
own. That is a condition which he himself precipitates,
by withdrawing his deposit, and for which the policy
of reserving a surplus is not responsible, that policy
being designed as much to benefit him as others.
Without such a policy, the security of his whole
deposit is impaired. The incidental fact that this wise
provision for his security may, by his own act, inure
to the benefit of others more than to his own, cannot
change the essential wisdom or beneficence of the
policy in question.
Nor is this aspect of the question changed by the
fact that the withdrawal of a. deposit may be the result
of necessity rather than choice. That is always a misfortune. But it is a misfortune against which it is simply
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impossible to provide. To say that he should receive
8pecial consideration where his deposit is withdrawn
from necessity and not from choice, is, if the logic of
this doctrine be pushed to its utmost limits, to say,
that he should still participate in the benefits of the
institution, because of his misfortune. Every one
will repudiate the principle expressed in this bold
form.
If we have -then established the doctrine, that the
accumulation of surplus works no injustice to any
one, that it promotes security, without which Savings
Banks are no longer what they profess to be, that all
danger to these institutions comes from the policy of
no surplus, or small surplus, and no danger attends
the largest possible accumulation, then we might
"Safely leave to managers the largest liberty concerning
the largest possible surplus.
In 1870 the legislature was seized with one of its
periodical spasms concerning the peril ultimately to
befall the State, if not the whole country, from the
accumulations in the Savings Banks, and was moved to
an effort to prevent the absorption of all the capital
of the State in these institutions, by taking possession
of this surplus on behalf of the State ! In view of
this menace against the property of the Savings Banks
system, the subject received consideration in the report
of the superintendent, concerning Savings Banks, in
that year, being the first report made by the Hon. D.
C. Howell, who had recently been .appointed to that
position. The following is the text of so much of his
report as relates to this subject:
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HISTORY OF SAVINOS BANKS•
.&tract from Savings. Bank Report, 1870.
SURPLUS MONEYS OF SAVINOS BANKS.
Concerning these, as also concerning what are called
" unclaimed deposits," of which we shall treat presently, there exists a very ~eneral popular misapprehension, which, in the mterest of those vitally
concerned, I deem it most desirable to correct. To
this end I solicit the attention of your honorable body
to the following facts :
1. The first charter-1819-and all subsequent
charters of Savings Banks in this State, contain substantially the following provision, to wit: "That it
shall be the duty of the trustees to regulate the rate
of interest to depositors, so that they shall receive a
ratable proportion of all the profits, after deducting
therefrom all necessary expenses authorized by this act
to be incurred."
'
It is evident that under this provision, standing
alone and unqualified, no Savings Bank could accumulate any surplus, as all the profits or earnings, after
payin~ expenses, are required to be paid or credited to
depositors.
2. A few years of experience in conducting these
institutions demonstrated the propriety, and indeed
the necessity, of makin~ some provision to secure
depositors against loss ansing from a depreciation in
the value of the securities, in which, under the law,
their moneys had been invested ; accordingly, in 1831,
the first act was passed, authorizing a SaVIngs Bank
to accumulate a small surplus to meet any loss thus
occasioned, or rather to prevent any loss to deposit.
ors from this cause; and in 1839, a general act was
passed authorizing all Savings Banks to accumulate a
surplus for this _Purpose, of not exceeding ten per cent
of their deposits. Thus, a Savings Bank whose
accounts with its depositors showed a liability amount.
ing to one million of dollars, might have assets
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amounting to one million one hundred thousand
dollars. 13y this means an average depreciation of
eleven per cent in the value of all the assets held by
such Savings Bank, would still enable it to pay its
depositors in full.
8. The wisdom of this salutary provision has never,
to my knowledge, been seriously questioned ; not only
has no depositor-the party chiefly interested-ever
raised his voice against it, but, on the contrary, the
assurance of perfect security thus imparted has perhaps done more than any one thing to inspire confidence in these institutions, and has contributed to their
wonderful success.
4. Besides the strength to the institutions and the
security to depositors which the v.ossession of a surplus of assets in excess of its liabilities imparts, it is
obvious, further, that an institution thus provided can
pay a higher rate of interest to its depositors than
another having no such endowment. Thus, if the
average earnings or profits of a Savings Bank derived
from its investment or assets are, in the two cases
above SU(>posed, six per cent respectively, the Savings
Bank which has the surplus will receive $6,000 more
of income to divide as interest to depositors than the
one with no surplus.
6. It is obvious, upon inspection, that the original
provision requiring all the profits, after deducting
expenses, to be diVIded among the depositors is still in
full force, except as modified by the authority subsequently conferred, to accumulate gradually and hold
for · the purposes mentioned this surplus of ten per
cent. It follows, therefore, that whenever this limit of
ten per cent of surplus is reached, this accumulation
must cease ; and thereafter, all the net profits of the
institution will, under the .operation of that ori~nal
provision, have to be divided among the depositors.
Instances could be cited of Savings Banks that have
increased their rate of interest to depositors upon
reaching the limit of surplus authorized.
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HISTORY OF SA VINOS BANKS.
· 6. The whole question may be summed up as follows :
1st. The authorization of a surplus to secure depositors against loss is a wise and salutary provision, with
which the parties most concerned. are well satisfied ;
and as this surplus is an accumulation from their
moneys, and inures exclusively to their benefit, the legislature and the outside public generally ought to be
satisfied.
2d. Concerning the ratio of such surplus to deposits,
ten per cent has been found, after an experience of
thirty years, to be as nearly just, safe and equitable as
any that could be named.
3d. Apprehensions sug~ested in some quarters lest
this surplus should some trme exceed the deposits, and
eventually absorb the entire personal property of the
State, may be allayed by considerin~ that there is no
authority-exce_Pt in one or two special charters which
fix a higher limit-under which a sum exceeding ten
per cent of the deposit can be accumulated.
And, finally, any action of the legislature interfering
with or reducing the amount of this surplus is
directly opposed to the interests of depositors, by impairing their security and lessening the amount from
which their profits are derived, and cannot fail to
operate most unfavorably upon these institutions
themselves, whose derositors, becoming restless or
alarmed by legislative mterference, will withdraw their
deposits.
Whether in deference to the views of Superintendent Howell, as above expressed, or to other influences,
we are unable to say, but the proposed assault upon
the integrity of the Savings Bank system of the State,
failed to be consummated.
The subject of surplus in this aspect of its incitement to the rapacity of legislators, will be fw-ther considered in connection with the topic of unclaimed
·
deposits.
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INDEX TO VOLUME L
EXPLANATORY NOTE.
The following comprises a series of Indexes within a general Index, in
which latter the topie11 are introduced generally, and in alphabetical order,.:....
and in the former or Sub-Indexes, specially and more fully under the
respective States to which ihey relate-these being found in the regular
alphabetical arrangement of the General Topics. Thus, CONNECTICUT
will be found under" C," VERMONT under" V,'' etc.
The topics pertaining to each State follow in alphabetical ordtor after
the name of the State is introduced. The names of particular Savings
Banks will be found only under the Statea in which tht1y are located,
alphabetically arranged, under the sub-title SAVINGS B.utKs, etc., for each
State treated of in the volume. The namea of Sa..-ings Banks are abbreviated herein so far as compatible with their perfect identification.
A.
Albany:
Bank stock authorized for investment ... •••••••••••• 377
City stock authorized for investment • • • • . • • • • • • • • • • • 377
Available Fund :
(See this title under "NEW YORK.")
B.
Banks of Discount, relation to of Savings Banks in following States: ·
Maine, 227, 231, 235 ; Massachusetts, 48, 64-66, 83, 84;
New York, 361-375, 379, 401, 410, 411; Vermont, 281.
Bank stocks authorized for investment:
Connecticut, 123, 124, 127; Massachusetts, 48; New
York, 377; Rhode Island, 171, 172; Vermont, 274.
Prohibited in Connecticut.•.•••.•••••••.••••••••••• 124
Benevolent and charitable institutions:
Incorporated in New York from 1786 to 1817, list of, 31-34
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INDEX.
Bentham, Jeremy, advocat-Rs Frugality Banks, 1797........
Berne and Hamburgh, claims of, to origin of Savings
Banks ...•••••••..••••••.•.•••••••••••••.••••••• 15,
Borrowing funds of Savings Banks by corporators, trustees,
or officers, in following States:
Connecticut, 128, 137; Maine, 234, 235 ; Massachusetts,
49, 51, 67; New Hampshire, 210; New York (see Vol
II); Rhode Island, 180; Vermont, 284.
Boston, first Savings Bank in United States incorporated
in ••••.••..•••••.••••••••••••••••••..•.•.•.•. ••• 38,
~uilding Associations in Connecticut . • • • • • ••..••..••
17
16
39
139
C.
Charitable Societies. (See "Benevolent and Charitable Institutions:")
"Christian Disciple," notice in, of project for Savings Bank
in Massachusetts.................................... 38
Clinton, Gov. De Witt, messages of . . • • • • . . • . • . • • • . • 323, 341
Colquhoun, Patrick:
Claims of, to origin of Savings Banks on practical plan,
19; extracts from correspondence of, with Thomas Eddy
of New York, 20, 21, 307 ; author of Mr. Whitbread's
bill, Parliament, 1807, 21, 22.
Condition of the country prior to establishment of Savings
Banks, 25; public efforts to afford relief, 26-28; charitable
societies organized for same purpose, list of, 31-34.
CONNECTICUT-TOPICS CONSIDERED as follows:
Bank Commissioners authorized to visit and examine Savings Banks, 141,146; extracts from reports of, 141,
143, 146-154.
Bank stocks for investment ••••.•.••••••..• 123, 124,
Bills, notes, etc., prohibited ..••...•.•••...•.••• 129,
Borrowing funds by corporators . • . . . . . • • • . • . • • • 128,
Building Associations ......................... 139,
City stocks, investment in .••••.•••...•.••• 126, 127,
City stocks prohibited . • • • • . • • • • . . • • • • • • • • • • • • • . • • •
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130
137
140
131
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INDEX.
CONNECTIOUT-ToPics, etc.-Oontinued.
Comparative statements:
Deposits and open accounts, 1846-1874 ••••••.•••
Investments, 1846-1874 .........................
Compensation of officers. .. . • . • • • .. • • • • • • • • • • • • 136,
Corporators, powers of, etc ..•.•.•••..••...•...• 120,
prohibited from borrowing Savings Bank funds, 128,
162
163
137
121
137
Deposits:
Comparative statement of, 1846-1874 .•...•.•.••. 162
Limitation of, 132, 133 ; withdrawal of, 139; in
banks of discount, 128; decrease of, in 1865, 150;
rapid increase of, 1872, causes for, 153.
Dividends, provisions of law concerning ..•.••••• 134, 135
Recommendations concerning .•••.....••••• 151, 153
Examination of Savings Banks by Bank Commissioners
authorized •••••.• •• .•••••••••••••••••••.••• 141, 146
General law concerning Savings Banks, 1843. . • . • . • • • 124
Amended 1847 and 1851. ...................... 125
Inception of Savings Banks in the State . . • • • • • • • . • • • 118
Incorporation of .Savings Banks:
Grounds of opposition to, 119; order of, to 1848,
119; effort to check increase of, 121, 122.
Increase of Savings Banks, check upon .•••••.••• 121, 122
Inconsi1:1tency of legislation ...•••••••.•..•.••••• 124-126
Interest:
Receivable on Loans. (See" Dividends.")
To depositors . • • • . . . . . • • • . . . • . . . • • • • • • • • • 137, 138
Investments .•••••••••••••••••••••••••.•••.•.• 122-131
Comparison of, 1846-1874. . • • • • • • • • . . . • . • • • • • • • 163
Inconsistent provisions concerning, 124-126; character of, in 1864, 149; do. in 1866, 151.
Legislation, course and character of .•••.••.••••• 118-140
Inconsistencies of ......................... 124-126
Limitation of deposits ......................... 132, 133
Loans instead of investments first provided for,122;
limited except on mortgages, 124; rate of interest
:receivable on, 137, 138.
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INDBX.
CO NNECTIOUT-ToPICB, etc. - Continued.
Mortgages:
Provisions concernmg investment in ... 123, 124, 125,
127, 128, 130
Notice:
Of petition for incorporation to be given. . • • • • • • • 121
Of meetings of corporators. • • • • . • • • . • • • • .. • • • • • 122
Officers, compensation of . • • • • • .. .. .. .. . • . • • • .. 136, 137
Organization, form of • . .. .. • • • • • • • . . . • .. .. • .. • 120, 121
Penalty for violation of law . . . • • • • • . . . . . • • • . • • • • . • • 137
Personal security for loans .•••••••• 125, 126, 127, 147, 154
Progress of Savings Bank system:
Tables showing. • • . • • • • • • • • • • • • • • • . • • • . • • • 162-165
Railroad stocks and bonds, investment in, prohibited, 129, 130
Real estate, purchase of, provisions concerning. • • • . • • • 129
Loans on security of. (See "Mortgages.")
Removal of Savings Banks ......................... 122
Reports and supervision ........ .. ...... . ....... 141-154
(See "Bank Commissioners.'')
SAVINGS BANKS, Notices and Statistics of the following:
BRIDGEPORT:
Incorporated. . . • • • . • • • • • • • . • • • . • • • . . • • • • • 119
Charter privileges . . • • • . • • . • • . • . • • • • • • • • • • • 126
Condition, 1846-1874, compared •...•.•••.•.• 162
COLLINSVILLE:
Charter privileges • . • • • • • • • • • • • • • • • • • • • • • • • 126
O0NNECTIOUT, NEW HAVRN:
Statistics to 1874 .•••••...•••••.•.••••••••• 157
CROMWELL DIKE:
Statistics to 1874 .••••••••••.•••••••••••••• 160
DEEP RIVER:
Statistics to 1874.. • • • • • • • • • • • • • • • • • • • • • • . • 156
DERBY:
Incorporated .................•..••......•. 119
Oharter privileges ••••••.•••••••••••••• 124, 125
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INDEX.
CONNECTICUT- SAVIN GS
DDlE, HARTFORD :
BANKS,
/
et.c. - Continued.
Statistics to 1874 .......................... 159
DIME, NORWICH:
Statistics to 1874 .•.••••••••••••••••••.•••• U:i9
GROTON:
Statistics to 1874...... .. .. . • • • • • . • • • • . • • • 157
MECHANICS, HARTFORD:
Statistics to 1874 ••••••••••..•••..•••••.•• • 158
MIDDLETOWN:
Incorporated. . . . . • • • • . . • • . • • . • • • • . • • • • • • • 119
Condition, 1846-1874, compared . • • • . • . • . • • • 162
MooDus:
Statistics to 1874 . ......... . ............... 159
NEW BRITAIN:
Statistics to 1874 .• • •••.•••.••• . ..•.•••. • •• 158
NEW HAVEN:
Incorporated .•••••••••.••..•••. .• .••••.•.• 119
Condition,1846-1874, compared •••.••••..••• 162
NEW LoNDON:
Incorporated . .••••.•••• • ••...•..•••••••••• 119
Charter privileges. . . • • . . • . • . • .. . . • • • • • • . • • • 124
Condition, 1846-1874, compared ..••.•••••••. 162
NORWALK:
Charter privileges . • • • • • • • • . • • • . • • • • • • • • • • 121
N ORWJCH SOCIETY:
Incorporated .•••••••.••..•••.•••••.•••.••• 119
Charter privileges ..••••.•.•.• • •.•.••••• 124, 125
Condition, 1846-1874, compared . • . • . • . • . . • • 162
OPERATIVES', NEW HA VEN:
Charter privileges • . • • • • • • • . • • • • • • • • • • • . • • . 130
Not organized . • • • • • • • • • • • • . . • • . • . • • • • • • • • . 131
PLAINFIELD:
Incorporated • . • • • • • • • • • • • • • • • • • • • • • • • • • . • 119
Condition, 1846-1874, compared • • • • • • • • • • • • 162
Closed ......•.. . ..... . ...... ·. . . . • . . . . . . . . 119
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INDEX.
CONNECTICUT-SAVINOS BANKS, et.c. - Oontinued.
SALISBURY:
Incorporated • • • • • • • • • • • • • • • . • • . • • • • • • • • • •
SAVINGS, OF NEW HAVEN:
Incorporated, not organized • • • • • • • • • • • • • • • •
Oharter privileges • • • • • • • • • • • • • • • • • • • • • • • • •
Succeeded by New Haven ••••••••••••••••.•
SOCIETY FOB SA. VINOS, HARTFORD:
Incorporated • • • • • . • • • • • • • • • • • • • • • • • • • 118,
Opposition to ..•••..••••••••••.•...•••.•.•
Charter privileges • • • • • • • • • • . • • • • • • • • • 118,
Statistics to 1874 .•••.••.••••••.•••••••••••
Condition, 1846-1874, compared . • • • • • • • • • • •
119
119
123
119
119
119
129
155
162
STAFFORD:
Statistics to 1874 •••••••••••••••••••••••••• 161
STAFFORDVlLLB:
Failure of. . . . . . . . . . . . . . . . . . . . . . . • . . . . . • . . 154TOLLAND:
Incorporated • . • • • • • • • • • • • • • • • . • • • • • • • • • • • 119
Condition, 1846-1874, compared .........•.. 162
WATERBURY:
Estimate concerning.. . • . • • • • • • • • • • • • • • . • • • 145
WESTPORT:
Statistics to 1874.. • • • • . • • • • • • • • • • • • • • • • • • • 157
WILLIMANTIC:
Incorporated . . . . . . . . . . . . . . . • . . . . . . . . • . . 119
Statistics to 1874 .•.•••••••.•••.•.•••• ~ •••• 156
Condition, 1846-1874, compared • • . • • • • • • • . • 162
WINDSOR LOCKS:
Statistics to 1874 •••••••••••••••••••••••••• 160
WOODBURY:
Statistics to 1874 .•.••••••••••••••••••••••• 160
School district bonds, investment in. • • • • • • • • • • • • . • • • • • 130
Special privileges . • • • • • • • • • • • . • • • • • • • . • • • • • • • • • • • . • • . 152
State stocks, investment in. .•••••.••••••• 123, 126, 127, 130
Prohibited . . . . • . • . . . • . . • • . . . . . . . . . . . . . . . . . . . . . . . . 12-f
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INDEX.
OONNECTIOUT-ToPics, etc. - Continued.
Statistics of growth and progress•....•.•.•••••.••• 155-165
Supervision and reports ..•••.•••••••••••••••••.••• 141-154
(See also " Bank Commissioners.")
Surplus . . .••••.•••.•••..••.•••.••••••••••• 131, 132, 152
Recommended ••••••••••• • •.•• •••.••••••.••• 151, 153
Tables:
Comparative condition, 1846-1874.. . . • . • . . • • • • . • • . 162
Comparison of investments, 1846-1874 . • • • . . • • • . • • 163
General progress from 1846 to 1874 •.•••••...• 164, 165
Taxation of Savings Banks .•••.•••••.• • ..•••.•.• 135, 136
Taxes paid by Savings Banks ............ ·......... 149, 154
United States stocks, investment in •..••• 123, 126, 127, 130
Vacancies in board of corporators for neglect of duty. . • • 121
D.
Deposits. (See title " Deposits," under several States.)
Discount, Banks of:
Relation of Savings Banks to. (See" Banks of Discount.")
Dividends :
Use of term, preferred to interest ••..•••.•••.•.•••.. 134
In Connecticut ........ .. ... . ........ 134, 135, 151, 153
In Maine. . • . . • • • • . • . • • • 230, 232, 234, 235, 252, 253, 256
In Massachusetts .••. . ••••••••• 40, 41, 49, 52, 62, 67, 68
In New Hampshire •.•••••••••••••••••.••••••• 198, 201
In New York. .................... . ....... , .... 415-429
In Rhode Island ............................... 176-178
(See also title "Dividends," under several States.)
Duncan, Rev. Henry:
Founder of Savings Banks in Scotland. . • • • • • . • • • . • . • 18
Labors of in behalf of Savings Banks . • • • . • • • . • • • . • • • 19
E.
Eddy, Thomas, of New York:
Instituted action for Bank for Savings. . . . . . . . . . . . . . . 307
Correspondence with Patrick Colquhoun•.. 20, 21, 807-309
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446
INDEX.
Engs, P. W.:
Notice of . . • • . . • • . . . • . . . • . . . • . • • . . . . . . . . . • . . • . . . . 316
Statement of, concerning Bank for Savings ....... 31S--321
Evening Post:
Account in, of first meeting in New York to organize a
Savings Bank . . . . . . • • . . • . • . . • . • . . . . . . . • . . . . . . • • 308
F.
Formation and growth of institutions ...........•...•. 1, 2
Free School Society of New York incorporated . . . . . . • . • . • 31
G.
General laws relating to Savings Banks in following States:
Connecticut •...•. • ••...•.•.•.•••.•.......... 124, 125
Maine....•.•••....•••.••.•.•.•••.•••.... 233-236, 244
Massachusetts •.••.•.•...•.•.•.•••........ 46-68, 85-89
New Hampshire•..••.•.•.......•.....•.......• 207-210
New York ..••••.•••.•••.••• 399,405,406, 408-413, 419
(See also Vol. II.)
Rhode Island. • . • • . . . . . • • • . • . • . . . . . • • • . . . • • • • • . . . . 172
Vermont ....••.•.•••••.•.••..•.•.....•••.... 275-284
(See also titles "General Laws" and "Course of Legislation," under several States.)
Great Britain :
Origin of Savings Banks in .•••....•..........•.. 16-18
Mr. Whitbread's bill to establish Savings Banks . . . . . . 21
Claims of Patrick Colquhoun to authorship of the
measure. • . • • • • • . • • • . . . • • • • • • • • • . • . . . • • • . • • • 20-22
Recognition of Savings Banks by Parliament, 1817... 23
Post-office Savings Banks established 1861 . . . . . . . . • • 24
Scotland, Savings Banks established in, 1810......... 18
Griscom, John:
Identified with movement for Savings Banks in New
York ..•••••••.•••.•••.•••.•••...• 315, 319, 320, 321
Growth of institutions .••••••.•••••••.•••...••••• . •.• I, 2
H.
Ham burgh and Berne:
Claim of, to origin of Savings Banks •.••••••••••• 15, 16
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447
INDEX.
I.
Incorporation of Savings Banks:
Order of, in different States ... , ..•..•.........•.•••
Connecticut, 119; Maine, 228; Massachusetts, 43, 44;
New Hampshire, 203; New York (see Vol. II);
Rhode Island, 166-169; Vermont (see statistics of
each institution, 287-299).
Institutions:
Formation and growth of ...•.•.•.••....•..•..... 1, 2
Interest: (See "Dividends.")
Rate of, receivable for loans in Connecticut .....• 137, 138
Interest and Savings Bank:
Efforts t.o establish, in New York, 1817.. . • . • . • • • . . . . 314
Renewed in 1818. . . • • . . • • • • • • • . • . . • • • . . • • • . • . • 326
Petition for •..•••.•••••••••••••••...•..•.•..• 327-330
Proceedings of legislature on ....•.•...•..•. 314, 330, 331
Investments: Provisions of law concerning, in the several Sta.tea.
Connecticut .•.•••• , •••...•••••••.••.. , ••.••• 122-131
Maine ••••.•••.•.••.••• : • • • . • • . • . • . • . . • . 230, 234, 236
Massachusetts .•••.•••..•.•••••••• 42, 48, 52, 57, 85, 86
New Hampshire .•••••••..••.•••.•.••••• : . • • • • • • . . 207
New York .•••.•••.•••.••..•••••• , ••••.••..... 376-414
Rhode Island . • • • • • . • • • • • . • . • . • • • • • • • . . . . . . . . 171, 172
Vermont ...•...••.••..••..••...•.•..••....•. 273, 284
(See also title" Investments," under the several States.)
L.
Legislation.
(See title " Legislation," etc., under several States.)
Legislature of New York:
Proceedings of, on first Savings Bank bill, 1817 .. 310, 312
On second Savings Bank bill, 1819 .......... 333, 340
On Albany Savings Bank bill, 1820 ....•.... 351, 352
On bill to incorporate Interest and Savings Bank,
314, 330, 831
Le wins' History of Savings Banks:
References to and citations from ••••••.•••••••.••• 15-17
Limitation of amount of deposits.
(See this title, also title "Deposits," under several States.)
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448
INDEX.
M.
MAINE-TOPICS CONSIDERED as follows:
Bank Commissioners:
Portland Savings Bank made subject to examination by .••• . .• •..••• • • •• • • • .• .• . •••.......• 231
Savings Banks generally made subject to examination by ..••.••••.. • ...•...... .. . • •.. ••. .• .• 232
Succeeded by examiners of Savings Banks. . . . . • • • 233
First report of.. . . . • • • . . • • • ••.• . ..••.•... 237-243
Abstract and summary of subsequent reports, 244-256
Paine, Hon. A. W., first examiner of Savings Banks, 250
Banks of Discount :
Connection of Savings Banks with ...•.•.•.. 227, 231
Prohibited from holding themselves forth as Savings Banks .·••• • • • ••.••• •••••• • . •.•.••••.. .• 235
Borrowing funds :
Trustees and officers prohibited from. • . . . . • . 234, 235
Comparative statements:
Deposits and open accounts, 1855 and 1874 ...... 264
Investments, 1855 and 1874 .•.•...•.•••.•••..•• 266
Compensation of trustees .•...••••.•••• . .• • ...•... • 236
Corporators, powers and duties of. • • • • • • • • • • 230, 233, 234
Deposits:
Amount of, at different periods ...•• 228, 229, 248, 264
(See also" Reports of Bank Commissioners," ;t44, 256.)
Comparative statement of, 1855-1874. . . . • • • • • • • • 264
Of married women and minors . . • . • . . • • . . . • . • . • 235
Decrease of, in 1865. . . . . . • • • . • • • . • • . • • . • • • • • • • 24~
Withdrawal of, recommendation concerning. . . • • • 255
Dividends:
Provisions of law concerning. . . . . . • 230, 232, 234, 235
Recommendations concerning. • • • • • 252, 253, 255, 256
Examination of Savings Banks:
Portland made subject to . • . . . • • . . • . . . • . . • • . • . • 231
Generally required by Bank Commissioners, etc. • • 232
Trustees required to make • •••• • •.•. • •• • • .• 234, 235
First report of, by Bank Commissioners ••••• 237-243
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449
INDEX.
MAINE- TOPICS, etc. - Continued.
General law concerning Savings Banks:
Recommended, 1856 • • . . • • • • . . • • • • . • • • • • • • • • . . • 244
Enactment and summary of . . . . . • . . . . . . . . . 233-236
Inception of Savings Banks in .......•••.......•.••. 225
Incorporation of Savings Banks, order of ....•......•• 228
Interest. (See "Dividends.")
Investments:
Comparison of, 1855-1874 ...................... 266
Provisions of general law concerning.. • . . . . • 234, 236
Provisions of earlier charters . . . . • . . . . . . . . . • . • . • 230
lA·gislation, course and character of ..•••.....••. 230-236
Loans:
To trustees and officers prohibited . . . • . . . . . • 234-235
Not to be made on security of names alone ....... 234
This prohibition violated ....................... 255
Mortgage:
Property held under, to be insured . . . . . • • • • • • . . • 234
Organization:
Form of . . . . . . . . . . . • • . . . . • . • . . . . • . • • • . • . . 230-233
Order of . . . • . . • . • . . . . . . • • . . • • . • . . . . . . . . . • . . . . 228
Paine, Hon. A. W.:
First Bank examiner . . . . . • . • . • . . • • . . . . • • • • . . . . 250
Fi rat report of . . • • . • . • .. . . . . . • . . • . • • • • . . • • 250-252
Second report of . . . . . • • . . . . . • • . . . . . . . • . . . • 252-253
Penalty:
Por using funds by officers ..................... 235
Personal security for loans prohibited • . . . . . . . . . • . . . . 234
Progress of Savings Banks ....•.......•.......• 227-229
Tables showing. . . . • • • . • • • . . . • . . . . . . • . 264, 266, 267
Hailroud securities:
Investments in, restricted . • . . . . . . . . . . . . . . . . . . . . 236
Reports, abstracts of............................ 237-256
SA VINOS BANKS, Notices, Reports and Statistics of
the following:
AUGUSTA:
First report, 1855 • . • • • • • • • • • • • . • • • . • . • . • • • 237
Depoai ts, 1862 . . • . . . • . • • . • • • . • . . . • . • • • • • • • 24 7
Statistics to 1874.. .. .. • • • • . • • • • • • • • • • .. • • 257
57
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450
INDEX.
MAINE-SAVINGS BANKS, et.c.-Continued.
B-'.NGOR:
First report, 1855. • • • • . • • • • • • • . • • • • • • • • • . •
Deposits, 1862 ••••••••••••••.•.•••...• • •••
BATH:
First report, 1855 . • • • • . • • • . • . • • • • • • • • • • • • •
Deposits, 1862 •••••••••••••••••••••••••••
Statistics to 1874 ••••••••••.•••••••••••••• :
BIDDEFORD. • • . • • • • • . • • • • • • • . • • • • • • • . • • • • • • • • • • •
First report, 1855. • • • • • • • • • • • • • • • • • • . • • • • •
Deposits, 1862 . • • • • • • • . . • • • • • • • • • • . • • • • • •
238
247
238
247
258
227
239
247
BRUNSWICK:
Deposits, 1862.... • • • • • • • • • • • • • • • • • • • • • • • • 24?
CALAIS:
Deposits, 1862 •.• • • • • • • • • • • • • • • • • • • • • • • • • • • 248
Statistics to 1874 .••••••• • ••• • ••••••••••••• 258
GARDINER .............................. . .......
226
Required to pay 5 per cent interest. . • • • • . • • . 230
First report, 1855 ••••••••••• : • • • • • • • • • • • • • 239
Deposits, 1862 • • • • • • • • • • • • • • • • . • • • • • • • . . . • 248
GOBJUK:
Statistics to 1874 •.•••• • ••••••••••••••••••• 259
BALLoWELL :
First report, 1855 . • • • • • • • • . • • • • • • • • • • • • • • • 240
Deposits, 1862 • • • • . • • • • • • • • • • • • • • • • • • • • • • • 248
LBWIBTON • • • • • . • • • • • • • • • • • • • • • • • • • . • • • • • • • • • • •
Deposits, 1862 . • • • • • • • • • • • • . • • . • • • • • • • • • . •
Statistics to 1874 .•.•••••••••••••••••••••••
LEWISTON FALLS . • • • • . . . • . . • • • • . • • • • • • • • • • • . • • •
First report, 1855. • • • • . . • • • • • • • • • • • • • • 240,
MAINE (PORTLAND FIVE CENTS):
Deposits, 1862 • • • • • • • • • • • • • • • • • • • • • • • • . • . .
Statistics to 1874 ..•••••••• • •••••••••••.•..
227
258
259
227
241
248
259
NEWPORT:
Statistics to 1874.. • • . • • • • • • • • • • • • • • • • • • • • • 260
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INDEX.
MAINE -
SA VINOS BANKS,
etc. -Continued.
PORTLAND:
Incorporated 1819, and failed 1838; sncceeded
by present of same name, 1852 •••••••.••• 225
First report, 1855 . . • • • . . . • . • • • • • • • . • • • • • • • 241
Deposits, 1862 • • • • . • • • . • • • • • • • • • • • • • • • • • • • 248
Statistics and sketch . • . • • • . • • • • • • • • • • • 260-262
Subject to examination . • • • . • • • • • • • • • • • . • • • 231
227-232
First report, 1855 • • • •• • • • • . . • • • • • • • • • • • • • • 242
Deposits, 1862 .•••.•••••••.••••••• ; ••••••• 248
RANDALL ••••••••••••••••••••••••••••••••••
226
First report, 1855.... • • . • • • • • • • • • • • • • • • • . • 242
Deposits, 1862 .••....•.••••••••••••••••••• 248
SACO AND BIDDEFORD • • • • • • . • • • • • • • • • • • • • • • • • • •
SoLON:
Statistics to 1874 .•..••••.••••••••••••••••• 263
227
First report, 1855 . . . • • • • . • . . • . • • • • . • • • • • • • 243
Deposits, 1862. • • • • • • • . • • • . • • • • • • • . • • • • • • • 248
SOUTH BERW~CK. • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
WEST WATERVILLE:
Statistics to 1874 ••••••••..••••• ·••••••••••• 263
YORK COUNTY FIVE CENTS:
Deposits, 1862 .•••...•••.•...•••••••.•.•.• 248
Statistics of growth and progress ..••.•.•.•••.•.••• 257-267
Surplus, provisions of law concerning. . . • . • • • . • • • • • . . . . 234
Recommeu<lation of .....•.•..•••••••••••.•••• 252-253
Tables, comparative condit.ion, 1855-1874 ..••...•••.•.• 264
Comparison of investments, 1855-1874 ..•...•.. 266
General progress from 1855 to 1874 •.•••..•. 267, 2G8
Taxation. . . . . . • . . • • . • • . . . . . . • . . . . . • . . • • . • • • . • • . . . . . 235
Malthus proposes county banks, England, 1803.... . ...... 18
Married women and minors, deposits of:
(See title" Deposits" under the several States.)
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462
INDEX.
MASSACHUSETTS-TOPICS CONSIDERED as follows:
Bank Commissioners:
Appointed with power to examine Savings Banks,
1838.. ......... . • . • • • • • . • • • . • . • . . . • • • • • . . . . 55
First report of, 1838............ . .. . ... .. .. .. . . 56
Report of, 1861, with full exposition of condition
and workings of the system at that date ...••.. 69-84
Abolished, 1843. . • . • . • • • • • • • • . . • . . • • • • • • • . • . • 58
Revived, 1851 . • • • • . . . • . . . • . • . • . . • • • • • • . • . • . • • • 61
Succeeded by Savings Bank Commissioner, 1866. . 85
Banks of Discount :
Relations of Savings Banks to, discussed, 64-66, 83, 84
Investment in stock of.... . ... . • . • . . . • . . . . . . • • 48
Deposits authorized to be made in . . . . • . . • . • • . . • 48
Borrowing funds, by trustees, not prohibited in early
charters . . • • . • • • . . . . • • • . . . • . . . . . . . • . • . • • . . . 42
By officers and members of investing committees
prohibited .• . ..••.•••••.•..••••....•• 49, 51, 67
Charters of Savings Banks, provisions of. . .... .. . . . • 42
" Christian Disciple," Boston, notice of meeting to
organize first Savings Bank . • • • . . . • . • • • . • . . . . . • 38
Comparative statements:
Deposits and open accounts, 1834-1873 . •.• • • ,110, 111
Investments, 1834-1873.. . • . . . • . • . . . • • • . . . . . • . . 112
Deposits :
Comparison, 1834-1873 ...•.... . •..••.•••.• 110, 111
Limitation of ....•• • ••.. . . . ..• . .••.••••• .• 48, 51
Of minors secured. . . • • • • • • . . • • . • • • . • • • • • • • . . . . 63
In Banks of discount.... . ...... . ...... . ... • • • • 48
Dividends:
In Boston Provident Institution ....• . ••• • ... 40, 41
Provisions of law concerning ..•••. • ...•.. 49, 52, 68
Proposal to regulate. . • . . • . . . . • . . • • . . • • . • • • . • • • 62
Limitation of, to earnings.. . ........... . • .. • • . • 68
General Savings Bank Act. (See " Legislation.")
Inception of Savings Banks..•.•• • ••• • ••.• . ••••••• 38--40
Interest. (See "Dividends.")
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458
INDEX.
MASSACHUSETTS - TOPICS, etc. - Continued.
Incorporation of Savings Banks:
Order of, to 1834. . . • • • . • . • • • • • • • • . • • • • • . . . 43, 44
Under general act, form of..................... 51
Increase of Savings Banks .. .. .. .. .. .. .. .. • • .. • . 63, 68
Investments:
Character of, in 1838 . • . • • • • . . • . • • • . . • • • • • • . • . • 57
Comparison of, 1834-1873 ..•••••••.•••.•.• 110, 111
Discretion concerning, under charters • . • • • • • . . . • 42
Provieione of general law concerning, 48, 52, 57, 85, 86
Legie1ation, general course of:
Under chartflre prior to 1834 •• . •••• • .•.••• • ••• 40-45
General Savings Bank act of 1834 ..••.. •• •..••• 46-54
Form of incorporation under, 51; occasion for,
46 ; provisions of, summarized, 51-54; subjection of chartered inetitutione to, 59; text
of. •••.•.•..•. . •.•••••..••.•• . ••••.••• 47-50
l4'rom 1838 to 1872 .................... 55,68,85-89
Concerning eupervieion and reports, 55, 58
61, 85, 86; investments, 57, 85; reports
through Secretary of State, 58 ; taxation
of Savings banks, 60, 61, 62, 85; dividends,
62, 67, 68; loans, 87; unclaimed deposits.. 86
Loans:
To officers and members of investigating committees prohibited . .••.•••••. • . • .• . ••...•• 49, 51, 67
Authorized by law .•••. •• •••.• .•• • 42, 48, 49, 52, 57
Discussion concerning in reports . •••..•• 65-67, 79-81
On mortgage .•.• •• . ••••• • •·••• , ••••. • ••..•• 48, 52
On personal security • • • • • • • • • • • • • • • • • • • • • • 49, 52
Act to prevent favoritism in making .. ••••• ••. • 87-88
Minors, deposits of, secured to them........... . .. . .. 63
Mortgage, loans on •••••.•. • •••••••..•.• ••• ••• •• 48, 52
Officers prohibited from borrowing funds . •.. •• 49, 51, 67
Order of incorporation of Savings Banks ......... 43, 44
Organization, form of, 42; order of •.•••• •••••••• 43, 44
Penalty for making Joane contrary to law.... . . . . . . . . 88
Personal security, Joane on ....•••.•••• •••• ••.•.• 49, 52
Private corporations: investment in stock of....... . . 63
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454
INDEX.
MASSACHUSETTS - TOPICS, etc. - Continued.
Railroad securities, loans upon, and investments in, 57, 85
Real estate:
Power to purchase, granted to Boston Provident
Savings Institution . . . . . • . . . . . • • • . .•...• 42, 62
Reports of Sal'ings Banks:
First report in 1838 . . • . • . • . . • • • • • • . • . • . . . . . • • • 56
Report in 1861 .•......•..••.......•••..•.... 69-84
(See also "Bank Commissioners.")
Returns of Savings Banks :
To whom made, and what to contain, 49, 50, 58, 60
62, 86
Wherein defective, 53, 76; Secretary of State to
prepare abstracts thereof, 50 .•.•••.•••.•••••.•
(See also "Bank Commi88ioners.")
SAVINGS BAN KB, Notices and Statistics of the following:
BARNSTABLE :
Incorporated 1829. . • • . . . • • • • . . • • . . . • . • . • . • 44
BOSTON FIVE CENTS :
Sketch and statistics of ...••••••...••••. 101-103
DEDHAK:
Incorporated 1831. . • • • . • • • . . • • . . • • . • • • . • • • 44
F AIRHA.VEN :
Incorporated 1832. • • • • • • • • • • • • . • • • . • . . . • . • 44
FA.LL RIVER:
Incorporated 1828 . . . • . . • • . . • • . • . • . • . • . • . • 44
GLOUCESTER:
Incorporated 1831, failed . . • • • • . • . • . . • . . . • • 44
HALLOWELL:
Incorporated 1820. . . . • • • . • . • . • . • • • . • • • • • • • 43
HAVERHILL:
Incorporated 1828. . • • • • • • • . . • . • • • • • • • • • • • • 44
LoWELL:
Incorporated lt-29 • • • • • • . • . • • • • • • • • • • • • • • 44
LYNN:
Incorporated 1826 • • • • . • • • . • • • . . • • . • • • . • • • 43
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455
INDEX.
MASSACHUSETTS- SA VINOS BANKS, etc.- Continued.
MUNSON:
Statistics to 1874 ••••••••••••••••• ·.••••••• 10'7
NANTUCKET:
Statistics to 1874 . • • • • • • • • • • • • • • • • • • • • • • • .
97
NATICK FIVE CENTS:
Statistics to 1874 .................... 103, 104
NEW BEDFORD:
Incorporated 1825. . • • • • • • • • • • • • • • • • • • • • • • • 43
Statistics to 1874 ........................ 91-93
NEWBURYPORT:
/
Incorporated 1820 •••••••••••••••••• : • • • • • 43
NEWTON:
Incorporated 1831 • • • • • • • • • • • • • • • • • • • • • • • • 44
NORTH AVENUE, CAMBRIDGE:
Statistics to 1874 ......................... 108
NORTH BROOKFIELD :
Statistics to 1874 • • . • • • • • • • • • . • • • • • • • • • • • • 100
WORCESTEB:
Statistics to 1874 .. .. • • .. • • .. • • • • • • .. • • .. • 104:
PEOPLE'S,
PLYHOUTH:
Incorporated 1828 • • • • • • • • • • . • • • • • . • • • • • • • 44
PLYHOUTB FivE CENTS:
Statistics to 1874 • • • • • • • • • • • • • • • • • • • • • • • • • 100
PORTLAND:
Incorporated 1819 • • • • • • • • • • • • • • • • • • • • • • • • 43
PROVIDENT, BOSTON:
Incorporated 1816 •.•••••••••.•••.••••••• 39-43
Notice of meeting. • • . • • • • • . • • • • • • • • • • • • • • • 38
First Savings Bank act in the world......... 39
Organized and opened.. • • • • .. • .. • .. • • .. • .. 40
Course and progress. •••••••••••.••••••• 40, 41
Power to purchase real estate. • • • • • • • • • • • • • • 42
Contests effect of general act .•••••••.••• 159, 66
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456
INDEX.
MASSACHUSETTS - SA VINOS BANKS, etc. - Continued.
PROVIDBNT, TAUNTON:
.Incorporated 1827............. • • • • • • • • . • • • 43
Failed • . . • • • • • • • • . • • • . • • • . • . • . • • • • • • • • • • • 44
ROXBURY:
Incorporated 1825 • • • • . • .. • • • • . • • • . • • • . • • •
43
SALE.II:
incorporated 1818 •...•••••••.•••••.•.••• 41-43
Provisions of charter .•••.•••...•••••••.• 41-43
Statistics to 1874. . • . . • • • . • . . • • . . • • . . . • 90, 91
SALISBURY AND AMESBURY:
Incorporated 1828•.•••..••.•••.•••..••••• ~
44:
SAVINGS BANK FOR, BOSTON:
Incorporated 1833, changed to Suffolk. . . . . • • 44
SPRINGFIELD:
Incorporated 1827......... • . • • . • . . • . • • . . • . 43
Sketch and statistics ................... 93, 96
SEA.IIEN,
SOUTH WEYMOUTH:
Statistics to 1874 . . • • • . . • • . . . • . . • • . . . • . . • • 106
STONEBA)[ FIVE CENTS:
Statistics to 1874 • • • . • • . • . . . . • . • • • . • . • • • • • 103
SUFFOLK:
Changed from Savings Bank for Seamen. • • •
44:
TAUNTON:
Statistics to 1874 . . . • • . • • • . . . • . . • • .. • • . • • • 106
UXBRIDGE:
Statistics to 1874 • • • • • • • • • • • • • . • . • • • • • • • • • 107
WAREHAM:
Statistics to 1874 . . • • • • .. • . • . • . • • • • • • • . • ..
98
WARREN:
Incorporated 1829 . • • • • • • • • • • • . • • • . • • • • . • • 44:
WEBSTER FIVE CENTS:
Statistics to 1874 ......................... 106
WEST BOSTON:
Statistics to 1874 . • • • • • • • • • • • • • • • • • • • . . • • • 105
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INDEX.
MASSACHUSETTS - SAVINGS BANKS, etc. - Continued.
WEYMOUTH AND BRAINTREE:
Incorporated 1832.........................
44
WORCESTER COUNTY :
Incorporated 1828 • • . • • • • • • • • • • • • • . . • • • • • • 44
Statistics to 1874 ...................... 96, 97
WORCESTER FIVE CENTS :
Statistics to 1874 ....................... 98-100
Statistics of growth and progress of Savings Bank
system, Tables showing ......... . ............. 110-116
Supervision. . • . • . . . • . • • . 49, 50, 53, 55, 58, 60, 61, 85, 86
(See also " Bank Commissioners.")
Tables:
Comparative condition, 1834-1873 . . • • . • . . • • 110, 111
Comparison of investments, 1834-1873. • • • • • • • • • • 112
General progress from 1834 to 1874 ...••.•.• 114, 115
Same in periods of five years .................... 116
Taxation .•......••.•.••••••.••••••.....•••.... 60, 62
Report of Legislative Committee on. . • . • • . . • . . . . 61
Rate of, imposed.......................... . • • 85
Unclaimed deposits, provisions of law concerning .. 86, 87
Mechanics' Society of Albany . • .. • • .. • • . . . • .. • • . • • • • .. • 30
Mechanics and Tradesmen's Society of New York......... 29
Messages of Gov. De Witt Clinton ..••...•••••••.•• : 323, 341
Minors, deposits of.
(See title "Deposits" under several States.)
N.
NEW HAMPSHIRE -TOPICS CONSIDERED as follows:
Bank Commissioners:
Examination of Savings Banks by:
Authorized and required . . . • . • • . • • • • • • • . . • • 204
First report of........................ 211-220
Character of early examinations by .•.•••.••• 205, 213
Defective returns made by.. .. . • .. • • • • • .. . • • .. .. 206
Bonds required of officers .......................... 210
58
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INDEX.
NEW HAMPSHIRE-ToP1cs, etc.-Continued.
Borrowing funds by trustees and officers:
Not prohibited in early charters .••••.• • •.•••.•.• 209
Prohibited after 1870 •••••••••••• • • . • • •• • •• • ••• 210
Comparative statements:
Deposits and open accounts, 1849-1874 . . • • • . • • • 220
Investments, 1849-1874 •••••••• • ••••••••••••.• 221
Compensation of officers • . . • • • • • • • • • . • • • • • . . • • 208, 209
Deposits:
Comparison of, 1849-1874 ••••••.•••.•••.••• • ••• 220
Limitation of, in Portsmouth Savings Bank. • . . • • 201
Dividends:
Rate of, in Portsmouth Savings Bank ••••••• 198, 199
Examination of -Savings Banks:
By trustees, required •.•••• ••• ••.•.•.••• . ..•.•.• 205
By Bank Commissioners .••.••..•••••••••••.•••
(See•' Bank Commissioners.")
Funds, use of, by trustees and officers ••• • • ; • • • • • 209, 210
Inception of Savings Banks in.. • • . . . • • • . . • . . . • . 195-197
Incorporation, order of. • • • • • • • • . • • • • • • • . • • • • • • • • • . • 203
Investments:
Provision of General Statutes concerning . • • • . . • • 207
Comparison ot 1849-1874 .••••••••••••• . •••.••• 221
See also reports of Bank Commissioners, 1849. • 211-220
Legislation, course and character of.. • • • • • • • • • • • • 204-210
Concerning:
Supervision, etc., 204, 205 ; organization, 206 ;
investments, 207; taxation and compensation to officers, 208, 209 ; use of funds by
-trustees, 209 ; bonds of offiCP.rs, 210.
Loans, provision of General Statute concerning. • • • • • • 207
Officers of Savings Banks:
Trustees required to make examination ••• • •••••• 205
C,ompensation of ••.•••••••.•••••••..• • •• : • 208, 209
Use of funds by. • • • • • . • . • . • • • • • • • • • • . • • • 209, 210
Bonds to be given by treasurers ••••• •• ••••••••• • 210
Order of incorporation of Savings Banks •• • ••• • ••••• 203
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NEW HAMPSH IRE-TOP ICS, etc. - Continued .
Organizati on, form of ...· .......... .......... ....... 206
Personal security, loans upon. • . • . . • . • • • . • • • . • • • . . . . 207
Private corporations, notes of, receivable for loans .... 207
Railroad securities, investmen t in, authoriz ed......... 207
Reports:
Of Bank Commissioners, 1849 . . . . . • • . • • . • • • 211-220
No specific form of, required until 1869 .•••.•...• 205
Details required by act of 1869 .......... ....... 205
Wherein requireme nt was defective ...•••.••• .••• 206
SA VINOS BANKS, Notices and Statistics of the following:
CHESHIRE PROVIDENT:
First report, 1849 . . • • • . • • • . • • • • • • • • • • • • . • 214
Incorporat ion . . • . • • • . • • • . • • • • • • • • • . • • • • • 203
Statistics, 1874 .•..••••.• ••.•••••• .••••.••. 220
CONNECTICUT RIVER :
First report, 1849 • . • • • . • • • • • . • . • • . . • • • . • • . 215
Statistics, 1874 .•••••.•.• ••••••.•. _. •••••••. 220
COUNTY OF STRAFFORD:
First report, 1849 • . • • • • • • • • • • • . • • • . • • • . • • • 217
Report, 1872. . . • • • • • • . • • • • • . • • • • • . • • • • • . . 218
Statistics, 1874 .•••.••••• ••.••.•••• .••••••• 220
MANCHESTER:
First report, 1849 . . • • • • • • • . • • • • • • • • • • • • • • . 212
Statistics, 1874 . . . • • • • • . • • • • • • . • • • . • • • • • • . 220
MEREDITH BRIDGE:
First report, 1849 . • • • • . • • • • • • • • • • • • • • • • • • • 220
Statistics, 1874.. . • • • • • • • • • • • • • • • • • . • • . . • • • 220
NEW HA11PSHIRE, CONCORD:
First report, 1849 • • • • • . • • • • • • • • • • • . • • • • • • • 216
Statistics, 1874 .••••••••• ••.••••••• •••••••• 220
NEW MARKET:
First report, 1849. • • • • • • • • • • • • • • • • • • • • • • • • 213
Statistics, 187 4. • • • • • . • . • . • . • • • • • . • • • • • . . • • 220
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INDEX.
NEW HAMPSHIRE - SAVINGS BANKS, etc.- Continued.
PORTSMOUTH:
Historical sketch .••••••••••••••••••••• 19~203
First report, 1849. • • • • . • • • • • • • • • • • • • • • • • • • 211
Famous deposit in .................... 200, 212
Statistics, 1874 • • • • • • • • • • • • • • • • • • • • • • • • • • t20
So:u:ERSWORTH:
First report, 1849 ......................... 219
Statistics, 1874. • • • • • • • • • • • • • • • • • • • • • • • . • • • 220
SULLIVAN:
First report, 1849 ................ ; ... 214, 216
Statistics, 1874 ............................ 220
Supervision, first provided for, 1847 .•.•.•.••••••••••• 204
(See also " Bank Commissioners.")
Tables:
Comparative condition, 1849-1874 ••.••••••••••• 220
Comparison of investments, 1849-1874 • • • • • . . • • • 221
General progress from 1848 to 1874 ...•..••• 223, 224
Taxation, provisions concerning • • • • . • • • . • . • . • • . . . • • 208
Trustees, prohibited from using funds . • • . • • • • • • • . • • • 210
Examination by . . . • • • • • • • • . . . • • • • • . • • . • • • . • • • 205
NEW YORK -TOPICS CONSIDERED as follows:
Albany city stock for investment .•.•.•.•.••....••••• 377
Albany and Troy Bank stocks for investment. . . • • • • • • 377
Assembly of New York Legislature :
Proceedings of, on first Savings Bank bill 1817, 310--312
Reply of, to message of Gov. Clinton, 1818 ••••••• 325
Available Fund :
First charter containing provision for, 1846 •••••• 387
Discussion concerning •.•••..•• . •••..••.••• 391, 392
Forms which it assumed in subsequent charters .• 402
That of loans on miscellaneous securities noted
and discussed . . • • • • . • • • . • • • . • • • • . • • 402, 403
Banks of Discount; relation of Savings Banks to, 361-375
Prejudice against, used to defeat first Savings
Bank bill . . • . • • • • • • • • • • • • • • • • • • . • • • • • • • . • • • 313
Directors of, not to be trustees .•••..•••••••••••• 361
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INDEX.
NEW YORK-ToPICS, etc.-Continued.
Relation of, discussed in Special Report .•.•.• 363-375
Office of each institution defined ..••...••.. 363-366
Objections to Banks of Discount paying interest .. 366
Forms of appropriating Savings Bank by ..•.• 368-371
Rival interests, illustrations of .............. 371--.372
Intimacy of relation unnecessary ...........• 374, 375
Banks stocks, Albany and Troy, authorized for
investment .................................. 377
Deposits in, first authorized .. .. . . .. . . .. . .. • . .. • 379
Banking associations authorized as depositories ... 401
Limitation of deposits in .•...........•.... 410, 411
Deposits of Savings Banks preferred ....•.•••.... 410
National Banks authorized as depositories .......• 411
Impracticable prohibition on deposits in. . • . • • . • . 411
Bonds and mortgages :
First .an thorized for investment 1830 . . . . . • • . . . . • 379
Capricious legislation concerning . . . . . . . . . . . 381, 383
Clinton, Gov. De Witt:
Extract from message of, 1818..........•.. 323, 324
Reply of Assembly and Joint Committee ..••... 325
Extract from message of, concerning Bank for
Savings. . . . . • • . . • . . . . . . . • . • . . . . . . . . . • . . . . . 341
County Bonds. (See "Town and County Bonds.")
Dawn of philanthropic effort in New York, Chapter
XXVIII . . • . • • • . . • . . • . • • • • •••..•....••.•.. 307-314
Deposits:
Limitation of, in Banks of Discount .•••...• 410, 4ll
Authorized in Banks of Discount. ..••• 379, 401, 411
Authorized in Trust companies ......•.......•.• 411
(For Deposits in Savings Banks, " See Vol. II.")
Dividends:
Theory of legislature concerning, 415; distinction
between large and small deposits in respect to,
discussed, 415, 419-423 ; terms dividend and
interest considered (134), 416-418; discussion of
the subject in Special Report, 1868 (extract),
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INDEX.
NEW YORK -ToPios, etc. - Continued.
418-429 ; provisions of law concerning, 418-419 ;
promising an agreed rate in advance, 423-425;
should not be in excess of profits, 425, 426 ;
mode or basis of making dividends, 4:26, 427 ; allowing dividends for longer time than moneys
have been on deposit, 4:27-429 ••••••••••••••••
Enge, P. W.: Notice RI1d statement of •.......... 316-321
General law for Savings Banks:
Report of Assembly Committee, concerning, 1846, 399
Act of 1853, text and comments •.••..•••.••. 405-407
This topic considered more at large in second volume.
Griscom, John:
Prominence of, in organization of Bank for Savings,
308, 315, 319, 320, 321
History of Savings Banks in New York, 1870:
Relations of, to present work. • • • . • • • . • • • • • 304, 305
Insurance, as collateral to bond and mortgage, first required, 1841. . . . . . . . . . . . . . . . . . . . . • . . . . . . . . . . . . . . 384
Interest. (See "Dividends.")
Interest and Savings Bank:
A form of side issue ... . ................... 313, 326
Petitions for, 1817-1818 .••• • •• • •••••••••••• 314, 327
Action on, 1817 ..•••••.•.•.••• . .••••••••·• ••••• 314
Report of Senate Committee on, 1818 •••.••• 330, 331
Bill to incorporate, brought in . ..•.•.••••.••.•. • 331
Failure of bill to pass . . . • • . • . . • • • • . . • . . • • . • • . . 331
Investments, Chapters XXXIV, XXXV, XXXVI, pp.
376-414, viz. :
Albany city stocks, 377; Albany and Troy Bank
stocks, 377; Bonds and mortgages first authorized,
1830, 379 ; Brooklyn village stock, 378 ; Capricious
provisions concerning bonds and mortgages, 383;
County bonds first authorized by charter, 1857, 408;
County and town bonds admitted by act of 1853,
405-406; Deposits in banks of discount and trust
companies, (see title" Deposits"); Loans, (see title
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INDEX.
NEW YORK-TOPICS, etc.-Continued.
"Loans" ) ; Miscellaneous securities admitted un~
der ambiguous language of charters, 387-392; New
York city stocks, 350,376; New York State stocks,
376; Ohio State stocks, 377; Pennsylvania State
stocks, 378; Personal security for loans, first admitted, 1842, 385; Precedent of 1846, effects of concerning inveHtments considered, 387-400; Public School
Society of New York, loans to, 379; Restraint on
investments of Bank for Savings under original
charter, 350; Stocks or bonds of villages admitted,
1850, 404; St.ocks of cities in the State generally.,
admitted 1849, 403; Stocks of any State first admitted, 379; Town bonds first authorized by charter, 1863, 408 ; Authorized generally, 409; Troy
city stocks, 383; United States stocks, 376.
Legislation, course and character of, concerning:
1. Organization. . . . . . . . . • . . • • . • . . . . . . . • • • 354-375
2. Investments and Loans .•.•••.•.••••••••• 376-409
3. Deposits in banks ....•••.••..••.••••.••• 409-414
4. Dividends •..••..•.•...•.••.••••..••.••• 415-429
5. Surplus ..•...•••••..•.•••.•.... . ••..••• 430-438
(See also titles" Organization, form-of,"" Investments,"
"Loans," " Deposits," "Dividends," "Surplus.")
Legislature :
Proceedings of, on first Savings Bank bill,
1817 ....•...••.••••••.•..••..•...·• . . . . . 310-.'312
Proceedings of, on second Savings Bank bill,
1819 ..•.••••.••••••.....•.............. 334-340
Proceedings of, on petition to incorporate "Interest
Bank" ...•.•••.••..•••••••.......••... 314, 330
Loans:
Ou personal security, exceptional instance of ... .. 385
U n<ler available fund clause ....••••...•.....••. 402
Provisions of act of 1853 concerning. • • • • • • • 405-407
Objection to ...•••.•••.•.••.••••••••••.•••...• 403
To municipalities. (See "Investments.")
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INDEX.
NEW YORK-TOPICS, etc. -Continued.
On security of real estate. (See "Bonde and mortgages.")
Meetings, to organize first Savings Bank, 308, 309, 315, 318
Memorials. (See "Petitions and memorials.")
Messages of Gov. De Witt CJinton, 1818, 1820 •••• 323, 3U
National Banks:
Competition of, with Savings Banks .••••••• 368, 374
Constituted depositories of Savings Banks • • • . . •• 411
New York and Kings counties:
Limitation to, of general act of 1853 . •.• • ••• 405, 408
Obstacles to success of first Savings Bank bi11 •••• 312, 313
Order and plan of New York section set forth . • • 305, 306
Organization, form and incidents of ..•...• .• • ••• 354--375
Number of trustees:
Considerations affecting. • • • . • • • • • • • • • • • 354--359
Po1itical influences . .. .. .. . .. • .. .. .. • • 356, 357
Number constituting quorum •.. • .•...•.• • • 359, 360
Ineligibility as trustees, grounds of:
1. Trustees in another Savings Bank •••• . •.• 361
2. Directors in bank where deposits are
kept . . • . . • • • • • • • • • • • • • • • . • • • . • . • 361, 362 ·
Discussion of (2) in Special Report (extract) 363-375
Exceptional forms of organization . • • • • • . . • • . • . • 375
Personal security authorized as collateral, 1842 .• •• •• • 385
Petitions and memorials:
Memorial of Roberi Bowne and others for incorporation of a Savings Bank in the city of New York,
1817, 310; Petition of Mr. Wi11et for incorporation
of New York Interest Bank, 1817, 314; Petition of
W. North and others for same, 1818, 327; Mem~
rial of Mr. Clarkson on beha1f of Society for Prevention of Pauperism for incorporation of Savings
Bank read in Assembly, 1819, 333; Petition of
Bank for Savings, for enlargement of powers in
ma.king investments, 1820, 350 ; Petition of William Jamesand othersforSavings Bank in Albany,
1820 ...•• . .....••••.••••••••..••• ••••••..•••• 351
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INDEX.
NEW YORK - 'l'oprns, etc.-Oontinued.
Preparation of New York section of this work:
Superior facilities for.. • • . • . • • • . . . • • • • • . • • . . • • . 303
Private banks, competition of Savings Banks with, 366, 367
Quorum. (See" Organization," etc.)
Report.a, selections and extract.a from the following:
Assembly Committee:
On memorial for Savings Bank, 1817.. • • 310, 3ll
On first bill to incorporate Savings Bank, 1817, 312
On memorial of Society for Prevention of Pauperism, for Savings Bank, 1819 •••••••••.• 333
On petition to incorporate Albany Sayings
Bank, 1820. . . • • • • • • • • • • • • • • . • • • • • • • • • • • 351
On petition of Bank for Savings for an amendment of charter, 1830 • • • • • • • • • • • • • • • . • • • 379
On petitions for Savings Banks in '.Rochester
and Buffalo and on subject of a general law
for incorporation of Savings Banke, 1846 •.• 394
DiecuBBion of last foregoing report. . . • 392, 393
On making Trust Companies authorized depositories of Savings Banke, 1854. • • • • . . • . • • • 412
Discussion of last foregoing report . . • 412, 413
Bank for Savings, first report to Legislature, 1820. • 342
Financial report of same . . . • • • • • . • • . .. . . 349
Committee of Society for Prevention of Pauperism
appointed to prepare a constitution and address, 319
Senate Committee:
On petition to incorporate New York Interest
Bank, 1818 . • • • • • • • • • • • • • • • • • • • • • • • 330, 331
Special Report on Savings Banks, 1868:
On Savings Banks and Banks of Discount, 363-375
On dividends. . • • . • . • • . • • • • • . • . . • • . • • . 418-429
On surplus .•..•.•.•..••••••••••••.••. 432, 433
Superintendent of Bank Department, 1870:
On appropriation of surplus by the State, 436-438
59
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INDEX.
NEW YORK-Continued.
SA VIN GS BANKS, Notices, Sketches and Statistics of the
following:
ALBANY:
Petition for, 1820, report of committee on, bill to
incorporate brought in, 351 ; Bill passed, 352;
Investment.a authorized ..•••.••• 376, 377, 383, 384
BANK FOR SAVINGS, NEW YoRK:
Action to establish, incited by Thomas Eddy,
307 ; First meeting to consider, 308; Organization effected, November 29, 1816, 308,309; Subsequent meetings, 309; Memorial praying for incorporation of, 310; Report of Assembly Committee on, 310, 311 ; Bill to incorporate brought
in, 311 ; Reference of, to Select Committee, proceedings upon and failure of, 312; Reorganization
of, through Society for the Prevention of Pauperism, December 16, 1817, 318; Report of committee of this society, 319; Resolution to establish Savings Bank, 320; Memorial of, praying for
incorporation of Savings Bank, read in Assembly
and referred, 1819, and report of committee on,
333; Bill to incorporate brought in, 334; Proceedings of Legislature thereon, 334-340; Bill to
incorporate, approved, 340; Message of Gov. Clinton concerning. 341 ; First report of, to Legislature, 342-347, 349; Petition of, for amendment of
charter, 350.
Authorized to deposit funds in banks of discount, 379
Authorized to accumulate surplus first, three and
then ten per cent ..•.•••.•.•.••..•••.•••.••• 431
Engs, P. W.:
Statement concerning establishment of .•• 318-321
Griscom, John :
Motion of, to establish Savings Bank, 308, 315, 320
Appointed chairman of committee to prepare
constitution of Society for Prevention of
Pau})8rism . . . . . . . . . . . . . . . • • . . • • . . . . . . . . 319
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INDEX.
NEW YORK - SAVINGS BANKS, etc. - Continued.
Report of. • . • . . • • • . • • . • • • • • • • • • . • . • • . 319, 320
Investments authorized •••.••••••• 350, 376, 377, 379
Warner, Andrew:
Memorandum concerning establishment of, 307-310
BOWERY:
Investments authorized ...................... 383
BROOKLYN:
.
Investments authorized .••••••••••••••••• 318, 382
fiUFFALO:
Report of committee favorable to incorporation
of, 399; Extract from charter of, 387; Discussion of features of charter, 388-393 ; Available
fund clause of, 391, 392 ; Power of trustees over
investments, 388-390; Precedent established by
charter of, 400; Amendment to charter of, 1847, 401
YORK:
Investments authorized •••••.•• ; .••• 382, 383, 384
GBEBNWICH, NEW
INSTITUTION FOR SAVINGS OF MERCHANTS' CLERKS:
Exceptional form of organization of... . ••.•.• 375
PEOPLE'S SAFE DEPOSIT AND SAVINGS INSTITUTION:
Exceptional form of organization of ••. • •••.••• 375
POUGHKEEPSIE:
Investments authorized . • . • . • • • • • . . • • • • . • . • . • 381
Deposits permitted in New York Insurance and
Trust Company. . . . . . • . . • • . • . • . . . • . . • • • • • • 382
SCHENECTADY:
Investments authorized .•..••.•••••.••••••••• 382
SEAMEN'S, NEW YORK:
Investments authorized .•.••••••••••••••••••• 378
TROY:
Investments authorized ••••••••••.••••••• 376, 383
UTICA:
Investments authorized ...................... 383
Personal security for loans permitted • • • • • • • • • 385
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INDEX.
NEW YORK -TOPIOB, etc. - Oontinued.
Surplus, discussion of generally, Chap. XXXVIII, 430-438
Original theory of Savings Banks failed to provide
for, 430; First received legislative sanction in
1831, 431 ; General provision authorizing ten
per cent, in 1839, 431; Discussion of in Special Report on Savings Banks, 1868 (extract), 432,
433; Policy of, considered, 434, 435 ; Movement of
-Le~slature to appropriate, 435 ; Report of Bank
Superintendent concerning, (extract) •..••.••• 436-438
Town and Oounty bonds :
First authorized in 1853 by general act, applicable
to New York and Kings counties only, 405,406;
County bonds first authorized by charter in 1857,
and town bonds in 1863. • • • • • • • • • • • • • • • • • • • • • • • 408
Trust Oompanies:
Authorized as depositories of Savings Banks in
1854, 411 ; Report or Assembly Committee on, 412;
Discussion concerning foregoing report and subj~t-matter of title .......•.•••...•...•.••• 412,
Trustees. (See "Organization," etc.)
Warner, Andrew. (See " Bank for Savings.")
New York Oity stocks, investment in ••••••••••••.•••.•..•
New York Free School Society, incorporated 1805.........
. New York Society for the Prevention of Pauperism, 318, 320,
New York State stocks, investment in ...•••..•••.•••..••
o.
414
376
31
333
376
Officers.
Bonds of, Ne.w Hampshire : . • • • . • • • . . • • . . . • . . • • • • . . 210
Oompensation of, New Hampshire . . . . . . . . . • . . . • • • • • 208
Prohibited from usiirg funds. (See title "Borrowing
Funds.")
(See title "Officers," etc., under VERMONT.)
Ohio state stocks. (See NEW YORK "Investment&")
Order and plan of the work set forth, Chap. IV. • . • • • • • • 36-8'1
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INDEX.
Organization, form and incidents of, in:
Connecticut .. ......... . .........•............ 120, 121
Maine . . . . . . . . . . . . . . . . . . . . . • . . • . . . . . . . . . . . . . . 230-233
Massachusetts . . . . . . . . . . . . . . . . . . . . . . . . . • . . . . . . . . . . 42
New Hampshire . . . • • • . • • • . • • • • • • • • • • • • • • • • • • • . • • • 206
New York ..•.•••.•• • ••.•••••.••••••••••••••• 354, 876
Rhode Island ........ . ... . ..................... 169-171
P.
Pennsylvania stat.e stocks.
(See NEW YORK "Investments.'')
Petitions and memorials.
(See this title under" NEW YORK.")
Philanthropy, efforts of, anterior to Savings Banks . ...... 26-34
Poverty, degrees, conditions and relations of. • • • • • • • • • • • 4-14
Public School Society of New York:
Loans to, by Sa"fings Banks, authorized ..••••••••••• 379
Public workshops, scheme to establish................... 80
R.
Report& imd Returns.
(See these titles under several States.)
RHODE .ISLAND -ToPrns CoNSIDEBBD, as follows:
Auditor. (See "State Auditor.")
Bank commissioners, powers of, and their exercise • • • •
Bank stock, investment in, permitted .•••.•••.••• 171,
Bills, notes, etc., Savings Banks authorized to discount,
Borrowing funds by trustees prohibited • • • • • • • • • • • • • •
By-laws. (See "Rules and Regulations.")
City and town notes or bonds, investment in, permitted,
176
172
172
180
172
Comparative statements:
Deposits and open accounts, 1848-1873 •••••••• • • 190
Investments, 1848-1873.. • • . .. • .. .. .. .. .. • • • • .. 191
Oorporators prohibited from borrowing funds ••••••••• 180
(See, also, " Organization," eto.)
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INDEX.
RHODE ISLAND-ToP1cs, etc. - Oontinued.
Deposits:
Comparative statement of, 1848-1873. • . • . • . • . . . • 190
Of married women, first law to protect, in this State, 180
Of minors... . . • • • . . • • . • • • . • • • . • • • . . • • • ••.••• 181
Limitation of, in Pawtucket institution, removed .• 168
In banks of discount, authorized. • . • • . • • . . • • . • . • 172
Limitations generally, of individuals, or in the aggregate .••••.•.•••.••••.•.•••• . .......••.• 178, 179
Withdrawal of. • • • . • • • . • • • . • • • . . . • . . • • . • • • . • • • 179
Dividends:
Provisions concerning, in law and practice ... 176-178
Examination not provided for . • . • . • . • • . . . • • . • • • • • • • 175
General Savings Bank law ......•....•...•.....••• 172
Incorporation, order of • . • • • . • • • • • • • • . . • . . . .••• 166-169
Investments:
Early charters vested discretion in trustees. . • . • • • 171
General law to regulate. 1858 ....•••...•...••••• 172
Oomparison of, 1848-1873 . •• • .• . .••••••.••••••. 191
Loans:
To trustees prohibited • • • • • . • • • • • • • . • • . . • • • . • . • 180
On personal, corporate, or municipal security. . • . • 172
Married women and minors:
Deposits of, protected . . • • • • . • • • • • • . • • • . . • • 180, 181
Organization, form of .• .. • •••••••••.•••.••• •••• 169-171
Penalty for loaning money to trustees . • • . • • • . • • • • • • • 180
Personal security for loans . . . • • . • • • . • • • • • • • . • . • . • . • 172
Progress of Savings Bank system, Tables showing .. 190-194
Private corporations, securities of, authorized. . . . • . • • • 172
Reports and supervision. • • • . • • • • • • • . • . • . • • • . • . . 173-176
Returns:
First required 1848, by resolution . . • • • • • • • • • • • • • 173
First returns given in full ..••••.•••••••.••• 187-190
Required by act of legislature, 1849; what to contain .....•••••••••• . ....•.•.•.. . •••.••• 174, 175
To whom made after 1856 .•.•••...•.••• • ••• 175, 176
Rules and regulations:
Incorporated in charters of some institutions • . • • • 176
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INDEX.
RHODE ISLAND- Continued.
SAVINGS BANKS, Notices and Statistics of the following:
BRISTOL:
Incorporated 1819 ...••...•.••.••••.•••••••
Failed to organize. . • • • . . • • . • • • • • • • • • • • • • • •
Re-incorporated 1841. . . . • • . . • • . . • • . • • • • • • •
Estimate of condition, 1848 . • • • • • • • . • • • • • • •
Comparison, 1848-1873. . . • • • • • • • • • . • • • • • • •
166
166
166
190
190
FRANKLIN, PAWTUCKET:
Statistics to 1874 .....•...•.•••...••.•• •• •• 186
HOPKINTON, WYOMING:
Statistics to 1874 .......................... 186
NEWPORT:
Incorporated 1819 ..•.•. •• •••••.••••••• • ••• 166
Condition, 184~. . . . • . • . . . . • • • • . • • • • • • • • • • • 188
"
1873 ....................... 167-190
Comparison, 1848-1873 . • • • . • • • . . • • • • • • • • • • 190
PASCOAG:
Brief mention of . • ...•••.•••••• ••••• •••••• 186
PAWTUCKET:
Incorporated 1828. • • • • . . • • • • • • • • • • • • • • • • • •
Organized 1836 . . . . • • • . • • • . • . • • • • • . • • • • • • •
Condition, 1848 ...........................
Comparison, 1848-1873 .. .. . .. • . • .. .. .. .. ..
168
168
189
190
PEOPLE'S, PROVIDENCE:
Statistics to 1874 ...•••...•.••••••••••••••• 186
PRODUCERS', WOONSOCKET:
Statistics to 1874. . • . • • • • • • . • • • • • • • •. • • • • • • • 186
PROVIDENCE:
Incorporated 1819. • • • • • • • • . • • • • • • • • • • • • • • •
Condition, 1848. . • . . . • • • • • • . . • • • • • . • • • • • • •
"
1873. . • . • . • • • • • • • • • • • • • • • • • • • • •
Comparison, 1848-1873 ••••.•••••••••••••••
Statistics, 1846 to 1874............. . ... . . . .
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187
167
190
183
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4'12
INDEX.
RHODE ISLAND- SAVINOS
BANKS,
etc.- Continued.
WA.BREN 8EAJCEN'S FRIEND :
Incorporated 1832; charitable features .....•. 168
Condition, 1848. . . • • • • . . • • . • • • • • • • • • • • . • • • 189
WABWIOK:
Incorporated 1845 .........................
Condition, 1848 ..•.....•.•.•.•.•.•.•..••••
"
1873 .... ,. ....................
Comparison, 1848-1873 ••••.••...•....•••••
169
188
190
190
WIOKPOBD:
Statistics to 1874 .......................... 185
W00:NBOOKET:
Incorporated 1845. . . .. .. • • • • .. . • . • • • .. . .. •
Condition, 1848. . • . . . • • • • • • • • • . • • • • • . • • • • •
"
1873 •.•...•••.••••••••.••.. 184,
Comparison, 1848-1874 ••••••••.•••••.•.•••
169
189
190
190
Secretary of State:
Returns to be made to and published by. . . • • • . • • • 175
State Auditor:
Returns made to, since 1858 .................... 175
Surplus. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • . . . • . . . . 181
Tables:
Comparative condition, 1848-1873 •• • •••••••••••
Comparison of invE>.stments, 1848-1873 ..........
General progress .......................... 193,
Taxation ..•.•.•.•..•.... .- ....•••....•.•.•.•...•.•
Trustees prohibited from borrowing funds ••••••••.•••
190
191
194
181
180
Withdrawal of deposits.
(See "Deposits.")
s.
Savage, Jam.es :
Concerts measures for establishing Savings Bank in
BostA>n . • • • • • • • • • . . • • • • • • . • • • • . • • • • • • • • • • • • • • 88
Name appears as one of the corporators.............. 89
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INDEX.
Savings Banks :
Theory of, in needs of the social state.............. 1-14
Inception of, in England ...••.•••.•.•.•••.••••••• 15-18
Inception of, in Scotland........................... 18
Recognition of, by Parliament.1817 • . . . • . • • . . • • • . . . . 23
Conditions of society necessitating .....•.•••.•••.•. ~ 25
Inception of, in several states:
(See titles "Inception," etc., under respective states.)
Efforts of philanthropy antecedent to .•...•..••...• 26-34
(For individual Savings Banks, see title "SAVINOS
BANKS," etc., under each State.)
Scotland:
Establishment of Savings Banks in.. . . . • • • • • • . • • . • • • 18
Smith, Rev. Joseph:
Gives form to the Savings Bank idea .•..••...•...• 16, 17
Societies, Chalitable and Benevolent, instituted prior to establishment of Savings Banks in New York .•..••.• 81-34
Statistics, tables or.
(See title "Tables," under the several States, except New
York, for which see Vol II.)
Stooks of any State :
Jnvesments in. (See title "Investments" under the
several States.)
Supervision.
(See titles "Supervision and Reports," " Examination,"
"Bank Commissioners," under the several States.)
Surplus, in following States:
Connecticut . • . • • • . • • • . • . • . • • • . ••...•..••...• 131, 132
Maine . .•....•............................ 234, 252, 253
New York .................................... 430-438
T.
Tables of statistics.
(See title "Tables" under the several States, except
New York, for which see VoL II.)
Tammany Society :
Incorporated as a charitable association, 1805......... 31
60
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INDEX.
Taxation of Savings Banks in the several States:
Connecticut ...................... 135, 136, 149, 150, 154
Maine . . . • . • . • . • • . • • • • . • . . . . . . . . . .....•...•..•• 235
Massachusetts ...•••••••.•.•.•...•.•......••.... 61, 85
New Hampshire .•••.•••••.•••••..•...••...•.....• 208
New York, see Vol II.
Rhode Island..... . . . . . . . • . . . . . . . . . . . . . . . . . . . . . . . . 181
Vermont . . . . . . . • . • . • . . . . . . • • . . . . . . . . . . . . . . . . . . . . 283
Theory of Savings Banks .............................. 1-14
Troy:
Bank stock authorized for investment ..•••.•...•••• 377
City stock authorized for investment . . . • . . • • . . • • • • • • 377
Trustees:
Under CONNEOTICUT and MAINE, see title "Corporators." Under MASSACHUSETTS, see titles
"Organization," etc., and "General Savings Bank
Act." Under NEW HAMPSHIRE, see titles "Borrowing Funds," "Examination" and" Organization."
Under NEW YORK, see title" Organization;" see,
also, Vol. II. Under RHODE ISLAND, see titles
" Corporators" and " Organization." Under VERMONT, see title'' Trustees."
u.
Unclaimed deposits:
In Massachusetts... . ••••.•.....•..••.•••••.•.• 86, 87
In New York, see Vol. IL
United States stocks.
(See title "Investments," under States of CONNECTICUT, NEW YORK, RHODE ISLAND and VERMONT.)
v.
VERMONT- TOPICS CoNSIDRRED as follows:
Auditor of Accounts:
.
Duty and power of, concerning reports •.....• 276-278
Character of returns made by. . . . . . . .. .. . . .. • • • • 278
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INDEX.
VERMONT-ToPics, etc. -Continued.
Bank Commissioner:
First authorized to examine savings banks upon application by depositors, 1847 .. . •.. • ...... . ••.• 276
Authorized to examine at his own discretion, 1851, 276
Required to examine and report, 1853 ... . ..• 276, 278
Discharge by, of duty imposed .. • •••.......•.•.• 278
First report of (extract) ........ . ........... . ... 279
Subsequent reports, reference to .. • •..•.•.•.. 280-282
Office of, abolished 1867.. • • . . . . . • . • . • . . • . . • • • 278
Banks of discount:
Trustees and officers in Savings BankR prohibited
from holding position in .... . .....••• . ..•.•.• 281
Investment in stock of, authorizP.d. .•••...•...••• 274
Borrowing funds of Savings Banks:
Trustees and officers prohibited from . • . . . . . • . . • . 284
Comparison with New Hampshire in respect to:
1. Area ....... . ............ . ........ . .... . ... 268
2. Population . . . • • . . • . . • . • . . • • . . • . . • . • . • . • . . . . 269
3. Concentration of population•..•• • .•••. . • • . .. • 269
4. Character of industries .. • ••.•••.. ••• .. • 270, 271
Comparative statement concerning investments .•.. . . • 301
Collaterals for Loans • . • . . • • • • . . • . • . . . . . • . . . • . • . • • • 302
Conditions affecting development of Savings Banks in,
268-272
Deposits:
Exceeding 1250, subject to taxation .•.•••.•.••••• 283
or married women and minors protected. . • • • • . • • 283
Examination :
First provided for conditionally, 1847; authorized
generally at discretion of commissioner, 1851 ;
required, 1853.. • • • . • • • • . • • • • • • . . • . • . • • . . • • • . 276
Incorporation, order of. See Statistics of each Institution . . • • • • • • • • • • • • • • • • • • • . • . . . • • • . . . • . • • • 287-299
Investments:
General discretion concerning, in early charters . .. 273
In real estate, limitation of............. . ....... 284
Restriction imposed upon, 1867 .. .. . . .... . ..•••• 274
United States stocks ....................... . ... 214
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INDEX.
VERMONT-TOPICS, et.c.-Oontinued.
Legislation, C0111'8e and character of, concerning:
1. Investments, 273, 274, 284; 2. Reports from
Savings Banke, 275 ; 3. Items to be embraced in
Reports, 275; 4. Examination by Bank Commissioner, 276; 5. Duty of Auditor in relation to
reports, 277, 278; 6. Officers of Savings Banks,
281, 283: 284 ; "/. Incorporation of Trnet and
Savings Institutions, 284; 8. Taxation, 283.
Loans:
To officers and trust.ees, prohibit.ed. . . • . . . . . • • • . . 2s.
On mortgage of real estate. . • • • • • • • . . . • . . . • . • • • 27~
Other collateral security for. • . • . . . . . • . . . • • • 274, 302
Mortgages.
(See "Loans.,,)
Officers of Savings Banks:
Prohibited from being Officers in Banks of Discount .. ................................ 281, 283
Prohibited from borrowing funds .•••••••...•.••. :t84
Personal security for Loans .•••••••••••.•••.••• 274, 302
Progress of the system, Tables showing:
1. Of each Savings Bank .•.••....•..••••.•• 287-299
2. In the aggregate from year to year. . . • . . • • . • • • 300
3. In character of Investments . . • • • . . . • . • • • • • • . 301
Railroad Securities :
Investment in and Loans upon . • • • • • . • . . • • • • • • • 302
Real Estate :
Limitations to purchase of . . • • • • • • . • • • • • • • • . • . • 2s.
Beporta:
First required to be made to Auditor of Accounts,
1849.. . . • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • . . 275
Form and substance of, defined 1851. • • • • • • • • • • • 276
Of examinations by Bank Commissioner: to be
made to Auditor of Accounts .•..••••••.• 276, 278
Oharacter of Bank Commissioner's reports con-
sidered . . . . . . . . . . . . . • . • . • • . . . . . . • • . • . . . . 278-282
Extract from first report • • • • • • • • • • • • • • • • • . • • • • • 279
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INDEX.
VERMONT- Continued.
SA VINOS BANKS, N oticea and Statistics concerning the
following:
BELLOWS FALLS:
Reported 1850 .•.•••••.••••.•,••••••••••••• 277
Statistics, 1848 to 1856 . • • • • • • • • • • • • • • • . • • • 289
BETHEL:
Statistics, 1854 to 1874 . • • • • • • • • • • • • • • • . • . • 295
BLACK RIVER:
Reported 1850, not 1851.. • • • • • • • • • • • • • • • • . .
Statistics, 1848 to 1854 • • • • • • • • • • • • . • • • • • • •
Fai.lore of . . . • . . . . . • • . . . • • . • . . . . . • . . . . . . . .
BRANDON:
Statistics, 1854 to 1860. • • • • . • • • • • • • • • • • . • • •
277
292
292
294
BRATTLEBORO: ,
Statistics, 1871, 1872. . • • • • • • • • • • • • • • • • • • • • • 298
BURLINGTON:
Statistics, 1855 to 1874•.••••••••••••••••••• 288
CASTLETON:
Statistics, 1854 to 1860..... • • • • • • • • . • • • • • • • 297
MIDDLEBURY :
Failure of. . . . . . . . . . . . . . . . . . . . . . . . . . . • . . . . 298
MONTPELIER:
Not organized; provisions of charter •••••••• 274.
NORTHFIELD:
Statistics, 1870 to 1874..... • • • • • • • • . • • • • • • • 298
OTrAUQUEOHEE:
Statistics, 1848 to 1874..... • • • • • • • • • • • • • • • • 291
PASBUMSIC:
Statistics, 1853 to 1874..... • • • • • • • • • • • • • • • • 294.
RUTLAND:
Statistics, 1852 to 1874. •••••••••••••••••••·• 293
SPRINGFIELD:
Statistics, 1854 to 1874. . • • • • • • • • • • • • • • • • • • • 296
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INDEX.
VERMONT-SAVINGS BANKS, etc.-Continued.
VERMONT:
Changed from Windham Provident ••••••••• 187
WIL11INGTON :
Statistics, 1854 to 1874..... • • • • . . . • . . • • • • • • 296
WINDHAM COUNTY:
Statistics, 1854 to 1874 . • . • • • • .. • • • . • . • • • • • 295
WINDHAM PROVIDENT:
First Savings Bank incorporated in the State.
Provisions of Charter. • . • • • . • . • . • . • . . .. . • ..
Made first report, in 1851 ..................
Statistics, 1847 to 1874.....................
Changed to Vermont . . . . • • . • • . . • • .. .. • • • • •
WINDSOR:
Statistics, 1852 to 1874... • ................
273
273
277
287
287
290
WINOOSKI:
Statistics, 1872 to 1874. • • • • . . . . • • • • • • • • • • • • 299
Statistics, tables of :
1. Of each Savings Bank ................... 287-299
2. Of general progress from 1847 to 1874 ••••.••. 300
Supervision. (See titles "Auditor of Accounts,"" Bank
Commissioner" and "Reports.")
Tables:
1. Of each Savings Bank ................... 287-299
2. Of general progress from 1848 to 1874 •..••..• 300
3. Of investments, 1854 and 1874 .....•..••....• 301
Taxation:
Of deposits exceeding $250 . . • . • . . . • • • • • • • • . • • • • 283
Trnstees and officers of Sa,ings Banks:
Prohibited from ooing officers in banks of discount, 281
"
" using funds ..••.••••..•..•••••• 284
Trost companies supersede Savings Banks.. . • . . • • • • • • 284
United States stocks, investment in ...........•..•.. 274
w.
Wakefield, Mrs. Priscilla:
Gives embodiment to Savings Bank idea, 1799... • • • • . 16
Warner, Andrew .......•...........•.•.....•.•.... 307-810
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HISTORY OF SAVINGS BANKS.
SYNOPSIS OF CONTENTS OP VOL.
II.
The second volume of this work will resume the consideration of topics
interrupted by the close of Vol. I, opening with a continuation of the
eighth section-" Savings Banke in the State of New York."
PART
II. - "CounsE OF LEGISLATION AND OF OFFICIAL DlSCUBSION."
The topics considered in this part of the work are the following :
Limitation of deposits : 1. In the Aggregate ; 2. Of Individuals.
Compensation of Trustees.
Borrowing Savings Bank Funds by Trustees or Officers.
Concerning Reports.
Supervision, Examination, etc.
Dormant, Inactive (or Unclaimed) Deposits.
This topic, which has come to be a source of constant agitation, and of
menace to the Integrity of the Savings Bank system in some of the
States, particularly in New York, is quite exhaustively treated.
Savings Bank Geaeral Law :
a
Herein the course of effort to enact General Law for the incorporation, regulation, management and supervision of Savings Banks in
the State of New York is I-raced from its inception, in 1846, until its
final consummation under constitutional requirement in 1875.
Taxation of Savings Banke.
Miscellaneous Topics, viz. : Banke of Discount with Savings Bank Functions ; Multiplication of Savings Banke; Deposits of Minors and Married Women; Conclusion.
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SYNOPSIS OF CONTENTS: VOL. IL
PART IIL-8TATI8TIC8 01' SAVINGS
BAM][ Pl\ooBB18.
Thia comprises t.hree aerlee of tablee, aa follows:
FuurrSBBIEB:
Carries the BtatistiCB of each Savings Bank in the State of New York,
concerning generally, the number of accounts opened, clOBed and
remaining open, and concerning the amounts depoeited, withdrawn,
remaining on deposit and interest or dividends credited, in each
from its organization to 1868.
SketcheB of Savings Banks are
introduced.
SECOND SBJUBB:
Commences with the totals of the foregoing for each Savings Bank
and carries the items forward for each year to 1874. Thus the two
aeries cover the first fifty and five ye&rB of the operations of Savings
Banks in this State.
TBIBD 8ERIB8:
Sums up the totals of each Savings Bank into a grand aggregate of the
work accomplished during the above period. Another table gives
the like aggregates chronologically from 1819 to 1874. Other 81Cp1&natory and comparative tableB complete the aeries and conclude the
eighth aection.
Thereafter follow in their order other sections, giving in such detail aa the
reeources at command will permit, accounts of Savings Banks in New
Jersey, in Pennsylvania-where they had their inception in this country; in Maryland, where they were early introduced ; in Virginia, of
which there is very little to be said; in California, where they have
had a wonderful development; and in other States from which any
record or reliable information could be procured.
The disastrous experiment of the National Government in introducing, fOBtering and regulating a Savings Bank business receives appropriate
consideration.
GBRBBA.L TOPICS.
A general review and summary of the development and condition of the
Savings Bank interest in the country at large aa derived from the preceding account of the same in the aeveral States, 1B preaented.
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SYNOPSIS OF CONTENTS:
481
VOL. D.
GBKBBAL ToPI08-( Oontiniud.)
A. chapter ls devoted to a consideration of the proportion in numbers and
amountll, respectively of the depoeite of leu than $50(), 1888 than $1,000,
and of larger amount.II, embracing a table which presents aome unique
and interesting featurea.
Savings Bankll in time of Panic.
Savings Bank Book-keeping.
Savings Banks in the Future, with the problema to which their development therein gives rise.
Savings Bank Investments-considered with reference, not only to the
question of security, but alao in their relation to conditions of the public welfare.
Savings Banks as an Element in our 8oclal, Industrial and Financial
Eoonomy.
Savings Bank Failures:
Incidents, Conditions, Causee.
Prevention, Responsibility of the State concerning, etc., etc.
Savings Bank Incidents, in IllUBtration of their Benefits.
Other Subjects of vital interest to Savings Banke follow in due course.
In the Appendix are the charters of the early Savings Banks, with other
documente, record.a and matters of interest.
OF THP.
fuN IVE RSI
~C'
,.,,,.
'- ,~F'O!\
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THE SAFEGUARD COMPANY .
......
Savings Bank Blank Books,
PR.XN'TXN'G-,
-AND-
STATIONERY SUPPLIES.
Soon after the SAFEOUARD was established in 1873, it becallle apparent
th:it a department connected therewith to manufacture only Savings Bank
Blank Books would receive a liberal patronage at once, because we
kno,w tl1t: wants of these Institutions, and by doing only one class of work,
could furnish it ,n()T'e satisfact<>111, at a leas price, and, in caae of emergency,
in leas time, than stationers doing a promiscuous business. The opening of
this department demonstrated the facts as stated. Later we added
PRINTING, LITHOGRAPHING, ENGRAVING
And General Stationery Supplies required by Savings Banks.
Prl,ce Lists for Supplies and Estimates on Manufactured Work furnished on application.
Orders receive prompt and faithful attention
THE SAFEGUARD OOMPANY,
4~ Broad Street,
'-/ NEW YORK.
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