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42D
SENATE.
CONGRESS,
Mrs. Doo.
No. 88.
3d Session.
R EP0RT
OtI' Till'
COMPTROLLER OF THE CURRENCY
P:
I'<>
'The condition oqf the w(riw/.s bin't')s of the .Distric t ofColtmbia.
Fll.'rl
l'.{V,
.'5, 187:l.- 1,,f, rred to tlhe Comllillnitteot
printed.
()'TIC'
ol
F
i:n', and olr,h11l'o
to
II
TREASAIIYD'
1)EPA1R1'TMNT,
(01' COMPTI'OLLE,1I 01 TIlE
CUIRREN(Y,
Wash/ington, February 21, 1873.
SI!.: Tlthe et of January 20, 1873, lathiorized tile Comptroller of tho
Currency to Imake an examination of banks organized in the District of
Columbia under acts of Congress, and to report to Congress the results
of such examination. Iinediately upl)on the passage of this act, Charles
examiner of New York City, was directed
A. Meigs, esq., national-bank
to make an examination of all associations not organized under the provisions of the national-currency act, an(l I herewith transmit copies of
his reports, which have just been completed, as follows:
Report of examination of tle Freedmenl's Savilngs and Trust Colmpany.
Report of examination of the Washington City Savings Bank.
Report of examination of the Germain American Savings Bank.
FR11EE!)MIiN'S SAVIN(S ANI) TRI'lST' COMP'ANY.
The Freedmien's Savings and Trust Comlpany 'was incorporated by act
apl))roved MaIrchI (, 186;5. Section 5 of tliis act authorized the investment
of the funds of depositors " in the stocks, bonds, aud Treasury notes, and
other securities of tile United States." Section 6 provides " that it shall
be the duty of the trustees of the corporation to invest as soon as practicable in the securitie named in the next preceding section (section 5) all
sums received by them beyond an available fund not exceeding one-third
ot the total amount of deposits with the corporation, at the discretion of
the trustees, which available funds may be kept by the trustees to meet
current expenses of the corporation, and imay by them be left on deposit
at interest or otherwise, or in such available form as the trustees may
direct." An amendment to the act was passed May 6, 1870, which
authorized the loaning of one-half' of the deposits "in bonds or notes
secured by mortgage on real estate in double the value of the loan," and
2
SAVINGS BANKS OF THE DISTRICT OF COLUMBIA.
also authorized the corporation " to hold and improve tie real estate
now owned by it il the city of Washington, to wit: the west half of lot
No. 3, all of lots 4, 5, 6, and 7, and the south half of lot No. 8, in square
221, as laid out andi recorded in the orginal plat or plan of said city:
that said cpo)oration shall not use the principal of ally
provided,made
with it for the purpose of such improvement."
deposits
different branches have been established in the different
'Thirty-three
cities of the Union, although there is no express authority for the
organization of such branches in the act under which the institution
was organized, and ldeposits to the amount of $165,374.38 have been
invested in lots and buildings occupied by these branches. A large
building has also been erected in the city of Washington, at portion of'
which is occupied by the bank, which, together with the lot upon which
the building is erected, and the lots adjoining, has cost $313,218.26.
Tle following is a statement of the assets and liabilities of the Freedmen's Savings and Trust Company on January 18, 1873:
(Cash in hands of lmrent bank ......................................
$24, 422 05
.............
Cash iln ll(nds of First Natioinal 1lnlk, Washington...
93, 032 r25
:2y9. 8(14 32
Cash in hIUUds of branches .....................................
Cashl in trausitil ............................ ..................
45; 555r 00
Short-date remittances iln I)ank for collection.....................
'a2, 4361/ 68
United States bonds-various-alt par .............................
718, 050 (O
:4, 175 63
City securities .................................
Sundry Wasington
claims against the Ioard of rlpulic works .............
°0, 000 00
Approved
Loans secured by real estate, nearly all ill tho District of Columbia,
for periods of ten days to two years .........................
1, 794,478 05
Loans on approved claitins on the board of public( works ............
189, 000 00
Loans on chattel mortgage ................
.........................
37, 000 00
Loans on stocks, Ionds(l, and personal security
'250, (653 40
Loans at branches ...............................................
'259, 358 40
................
313, 218 2(6
Real estate and buildings on Pennsylvania avenueio
Real estate oln Tenth street, bought in on foreclosure
2,804 50
Real estate and buildings at branches ..............................
165, 374 38
100, 380 00
Premiumi on United States bonds, at 114 per cent .................
on
......................
................
..........................................
77, 929 66
Totai .......................................................
Liabilities:
Amount due depositors
...................
Amount of (c1sh borrowed. .....................................
Amount of interest due. ...........................................
4,483,732 58
Accrued interest
loans
...........
Total........
Surplus
.
.................
.............
..............
..............
..
.....................
.................
...
$4,008,642 34
460,000 00
8,000 00
4,476,642 34
7,090 24
Fiomn this statement it will be seen that tlhe total amount of deposits
at that date was $4,008,642.34. The bills payable were $460,000. The
bank holds $718,050 of United States bonds, a portion of which have
been pledged as collateral security for its bills payable. The bank also
lolds VWashington City securities and claims against the board of public works .amounting to $54,175.63. Its loans upon real estate, chiefly in
the city of Washington, amount to $1,79t,478.05. Loans have also been
Inside upon vouchers of the board of public works amounting to
$37,000; and upon other collateral
$189,000; upon chattelto mortgage,
and personal security the amount of $250,653.40. The security for
loans ulponrreal estate is generally estimated to be good for the amount
of the loan ; but a large portion of these loans have been made upon
to twice the value of tle loan, as required by law.
security not equalthat
the loans upon vouchers of the board of public
It is claimed
3
SAVINGS BANKS OF TlE DISTRICT OF COLUMBIA.
works, upon chattel mortgage, and upon personal security are author.
ized by section 6 of the act above quoted. Many of the securities upon
which these loans are made are believed to be worth the amount of the
loan. The value of other securities is not known, and other additional
loans seem to have been made upon the security of promissory notes
rather than upon the collateral security held by the bank.
Only a small portion of these investment can be considered "available" for tile purpose of raising money in the market to meet the unexcalls of dlepositors, and it is believed that it was not tile intenpected
tion of the act of incorporation to authorize investments of this character.
The officers an( trustees of the institution have violated tle act
under which it was organized by establishing branches in the different
cities of the Union by purchasing real estate, and erecting buildings,
by loaning money upon real estate of less than one-half of the value
of the loan, by loaning money 1upon collateral security not immediately
available for the )payment of deposits, and by borrowing money.
The rate of interest offered to depositors for some time past has been
six per cent., and it is believed that the undesirable loans held by the
bank have been made, to a largeextent, from tile desire of the trustees to
invest as speedlily as possible the funds of depositors at high rates of
interest. Section 6 of the act under which tile bank was organized
should be amended so as to prevent investments leing made except
upon0 securities of well-known marketable values. The branches of the
bank, if they are to be continued should also be authorized by act of
ol' interest to be offered to depositors should
Congress, and tli, rateand
the bank required to accumulate a surplus
also be limited by law,
to provide against future losses. The act under which the institution
was organized was evidently (irawnl without sufficient consideration,
and it is suggested that .a new organization act be paIsed and the present law repealed. With proper legislation and necessary restrictions
the bank would be able to correct the mistakes already Imade, to retrieve
its present andr prospective losses, and be enabled to continue a business
of great usefulness to the class of depositors for whose benefit the institution was organized.
WASHINGTON CITY SAVINGS BANK.
City Savings Banlk was authorized under the special
8, 1864. Thle following is a statement of
passed March
Congressliabilities
on January 29, 1873:
its assets and
The Washington
act of
Resources:
Cash in the office......
$61, 219 21
Cash with Jay Cooke & Co., New York ..............................
:31, 4 73
Cash with Hawes & Macy, New York ...............................
95:l 42
3:, 986
80
Cash with Hawes & Macy, gold account, New York ...................
..
Cash with Lockwood & Co., New York............ .................
1,040 15
719 00
Cash with National Currency Bunk, New York ........................
Cash with City National lBak, Baltimore ............................
4,583 97
Cash with Hooper, Reese & Co .................,..........
:, 486 24
Cash with Union National Bantk, I'hilaellhi........................
1,37 23
Cash with Union lBanking Cormpany, hllilalellhia ................... . 2, 560 '2
JUnited States )bonds, variolu p1arl......................... ........ 2. , 950 0
Loans on United States bonds .........................
15, 000 0(
Loan on real estate security ......
176, '20 92
.........................
-.
Loan on stocks, bonds, personal securities .........18,271 89)
Investments in Northern Pacitic Rtilroiud 7-,3,f bonds 10,000 at par
, 903: 9(0
Investments in Central l'acific Railroad U per cent. gold bonds. $i0,000
at par
..20...................
~O0,576 '2.
InVestments in Union Pacific Railroad 6 per cent. gold bonds, $35,000 at
..................
...............
.........
.........
..............
......
par
..............................................................
1,911
4
SAVINGS BANKS OF TIlE DISTRICT OF COLUMBIA.
Investments in Orange and Alexandria Railroad 7 per cent. bonds.....
Investments in City of Saint Louis 6 per cent. bonds, $1,000............
Investments in Washington City 6 per cent 10-year bonds
in Washington City 710f 5 and 3 year bonds
InvestnWlits
Investments in Washington City Market 10 per cont. bonds ............
later stock, &c..........................
City paving
Christian Association 6 per cent. stocks
Young Men'sscrip,
Land-warrants, 4,093 acres ..........................................
Corporation claims audited, 10 per cent ..............................
Corporation claims, sewers, pIaing, &c ..............................
Real estate taken fior (ebt .................... ....................
00
$1,000
878 84
34,100
.............
..
600 00
..................
, 040 67
16, 720 03
33,794 00
3,150
00
432 05
:17, 794 32
12,780 35
11,886 66
....................................................
Revenue-stamps
account
...........................
Exchange
Expense account.............. 3..............
Sundlry book-accounts
Total resources(
s
......
............
............
.
...........
................
.................
.....
...................
..
........
.
00
57, 650 00
16,900 00
7,643 88
...............
1,061, 442
Lial)ilities:
Aimomunt duo depositors .................. ................. $1, 000, 197
Amount certificates deposit.
.(.. ..... .........................
11, ;12
Interest account ................................... ......
3,177
...........
1, 455
SI11ldl'y icollt ..............................
1, 061,442
96
97
47
12
4()
96
The lunsiless of the bank has been conducted tfor sonic years past by
Mr. John A. Ruti, who is the treasurer, and only responsible person
connected with the association. No other person or persons have any
tinalncial interest in the institution. The business is conducted as a
private banking-house without any regard whatever to the special act
under which it was organized. I recommendd, therefore, at the charter
1e(repealed, to take effect at such future time as Congrless may direct.
(GEIMAN ANMEIICAN SAVINGS BANK.
to
'The (;(erma Amnerican Savings Bank was authorized under '"An act
provide for tlhe creation of' colrporatiols in tlie District of Columbia,
by general law," approved May 5, 1870(; a subsequent act, approved
June 17,,
1870, lrovidlig that savings banks may be organized within
the district t of' Columbia under tihe provisions of section four of thel act
above quoted. It coimmetnced business on November 0, 1872.
General stattmenc t !of the Ger;man American Savings Balnk of 1lr(shington
City, Februlary 3, 1873.
Assets:
.................. $13,650 00
I'lited State
Sts Ion1 .
Washington City 7.30 bonds .........4....... ..0..................... 4, 100 00
ILoans on r eal estate.............. ......................... ...
19, 637 48
Loans on personal security, stocks, &. ..................................3. 349 9r
l)emand-loans oln 'iiitd(l States bonds,:iand bank stock
11,000 01
account,
7, 497 3)
furniture,
expenses, &
Prolminnl
(C nsh in the office ...................................................... 20,681 79
Cash in National Metropolitan, Washington............................
5,702 45
(!ash in German American Bank, New York ............................ 15,491 45
359 12
(';ush in other banks, Baltimore ........................................
Total resources ....................
...........................
28, 469 57
,iabilities :
stock paid ill .....................
$15,000 00
Capital
business ( losits
56, 357 77
56, 019 32
Ordinary
deposits,
savings.
interest anld exchl ge ............................1........
1,092 48
128,469 57
.................
................
..............................
.............................
......................................
..
.................
..................................
......
...........
SAVIN(GS BANKS OF TIlE I)ISTRICT' OF COLUMBIA.
5
The nominal cal)ital of this association is $50,000, only $15,000 ol
which has been plaid iln. It has deposits to tile amountoof 112,000, due
to three hundred alnd fifty-six different depositors. The business seems
to have been carefully (and p)rudenltly managed for tlhe three months
since its organization, and is conducted for the profit anll benefit oftihe
share-holders. Two or tree certificates have been filed in the office of
the register of deeds of the District of Columbia, as provided by the
general incorporation act, for the purI)ose of' perfecting tlle organization of similar associations. It was not originally intended that savings
banks should be organized under the general incorporation act, and it
does not contain tile l)roper provisions required for tile organization of'
such institutions. Savings banks should be establisheCd anld managed
wholly for tlie benefit of (lelositolrs; lland if such institutions are lpermitted to be o organized alnd to conduct business ullller this act of Congress,
ill Cmpletitiol with each other ulpolin nominal capital, will authority
to ofl'er liigll rates of interest upl)ol current accounts, as well as upon
saIvings depositss, tile final result will be tile loss of the funds of tlie deby illvestmenlts in loans 11,oll) 1ouibtfuil securities.
positol's
I recoilmmendII thllt tile portion of tle act of Junell 17, 1870, autllorizilng
the organtizaitioll of siLailnls banks under tile general i lcorporationl act
be re)peale(l. Tlhe recon liell(ndIltioll of tile repeal of all laws ill references
to saving's balnks ill the D)istrict of Columblia, and the passage, of a gen(rall law req(lifini
eqg
freqllent publlication oft' reports, andll other necessary
restrictions conlitalilled ill Ily ai11nul report, is rel)eated.
''lie '.Nti nal Savinllgs Blatik of Wlashillgtonl avillg' beell examlllined
(lrigl' tle past yeal', it as not consideire(l lecessa'ry to Ill;ke alladditioiill (ex0amilaiatimol at the Ipr'esoent time.
The 1BMnk of' WaVslinglltoll wavs charl:ercd by Congress by act approved
Feblruaryl ,15, 1S11, wiliicl act 11l1s been subsequently amendedil by tile
following acts: Act of' May 4, 18210; March 2, 1821; February 9, 1836;
July 2, 1830(; May 31, 1838; July 3, 1840; August 25, 1841. Tile charter' expired July 4, 1814, silnle( wxii(ch time its business has been con(lucte(l by a board of trustees, under tlhe same name and title, which
trustees were elected at a general meeting of share-liolders held June 29,
184-4. Vacancies ill the board of trustees w\ere subsequently fille(l by
two of tlie surviving trustees, 1)y virtue of a decree in equity, No. 1461,
dated IFebruary 2, 186(!, lma(le by the supreme court of tlle District of
(olumbia. Tlie examiner
lcalle(l ullon tlhe ollicers of this association for
tile )purll)ose of imakinllg a1 examilailltion, bult was illtf'oriiced tlht tlle busi11ess Iwas coll(nducted(l as1 1r'ivat( bilankilg-10house. Accordingly no exam1iniation lv'was made, blut;, at my request, tile Solicitor of tile Trelasi'ry is
tile ditfiierent acts of Conlgretss ill r'relfrence to this institution,
examining
ill o(rer to asce(rtaill wh]ethlerl ol not its bl)sill.ss is being cond(Ilcted
un111der authority of these acts.
I l;have
t or
l thie oiol
r be, ver'rlesplC('tflllly,
1JO11N IJAY KNOX-,
lio01. SC'lUY;l! C(l,lFAX,
l''csNi(cltf of the &'a('lr.
('Comptro!ll'r.
VAs'Nll'ro.(N C(''IT',
ecb'Tu(y »,, 1873.
(witl yo(ir instructions I have just completed all
Sir1 : [i a((col'tl.nce
examination of tlhe affairs of the. 1 (ree(dminl's Sallvings and Trust Com)any" of this city, 1an( rsl)e(spectully Ireporlt ,Is follows:
G;
SAVINGS BANKS OF TIlE DISTRICT OF COLUMBIA.
On the i27th January, 1865, Ihe following gentlemen met at tile Natiional AmericIa Exchange1 Balk, New York, and after listening to the
remarks of the Rev. John W\atson Alvord, who Ilhad, during the late
warl, entered S savannah, G rg, i, simultaneously with (Gleneral Sliermall s arm1y111, became inspector of schools and finances, under General 0.
0. io\\ward, anld tafte'rwalrd' general l superintendent of schools for freedmien throughout all the. States lately in rebellio)l, I1measures were at
once ardol)ted to found tihe 'ree(dmlen's Savings and Trust Company, for
the charter of which a bill was then )pending iln Congress, and was
passed March 3 1805:
Present: Peter Cooper, William C. Bryant, Iirami Barney, Charles
Collins, Thomals Denny, Walter S. Gritlith, William Allen, Abralham
11. Gratves, A. S. hatch,
It.
Baldwin, A. S. Barnes,S Cdwell,
Walteri S. Iatchl, E. A. lambert, WV. (. Lambert, Rloe Lockwood, R.
1[. M11anning, It..
op)es, It.1I. Wallace, George Whipple, Albert
Alvo1rd.
Jolmn
W.
WVdodru'ff,
AWilliam A. Boothl, esq., of New York, was the first president, anld J.
'VW. Alvord the correslpollding secretary, \\'o ws a utlorized to openly
branciles throughout tihe Southern States.
April 4, 1865, opened an police in Ne w York. June 3, 1865), opened
1n office ill Xorfolkl, Virginlia. July 1I,l18(5, theiLfirst (leposit twas re.
ceive(l at the Wa\shlington branch office.
In 1867 the parent bank removed to ArW1ashington City, corner NineteenCth street, an(ld Pennsylvania avenue, and December 7, 1871, again
removed to thle present location on Presidelit Square, 'Pellsylvalnia aven!ie.
Tlhe degree of A.. Ar. w1s conferred upon the Rev. J. A'X. Alvord by
Yale College, 1and hie is now the president of tlhe instittitti, having devoted himself to its service from its inception.
Theyl have an inspector and assistant, whose duty it is to examine fre(luitly the lpareni t institution and all the branches, with no other duties.
The branches receive deposits, remit to the parent bank less an
amtoimit suficient to meet ordinary fluctuations in their deposits, draw
drafts on other branches, mainly for the accommodation of depositors,
and generally for tlhe reason that there are no national banks ill tlhe
laces where such drafts are required by tle business community. This
portion of their busillesis is ai matter of very small l)lroit, amlld is mainly
incidental to tlie main question of getting depOosits.
As national banks are established this bill-drawing is miaiaily confined
to tlranslers of funds required by tile ldeositols.
'Thle braniicles1have hliad autithority in5isom cases to timlke local loilans or
tempora-ry investments of funds, but this system was ;abandoned iln October, 1872, and all loans or investments arI no'w )passed u1l)On by the
parent b1)ank, with a few trilling ex;epltions.
As tlie magnitude of the deposits will warrant, this power will pass
to local boards of, trustees wloclan b)e initrusted withll tlis vitall power.
Tlie only braniee(s that dra w anIy allliouint of domllestic exchange, at a
profit, are at ,Jacklson ville, Beauifort, South Carolina, Natce1t ,1z and
.
Vicksburgh.
7
SAVINGS BANKS OF TIHE DISTRICT OF COLUMBIA.
Tlhe Shreveport, Louisiana, branch draws only for the postmaster at
that place.
The branches have local loans .at this time as follows:
Moemphis, Tennessee, $19,983.16, on county warrants, trust-deeds of
real estate, &c.
Vicksburgh, Mississislli, $25,909 on city bonds,( State anld city waarrants, real estate, &c.
Now O(rleans, $3,250 o1n iUnite(l State bonds
s
and (ciy bonds.
Jalcksonville, Florida, $55,749).11 on city real estate, personal,&, .
1califtort, South Carolilna, $153,058.60 on various securities.
The branches own the lot and building in which they are (loing businIess as follows:
.. $;1 ,000 00
ilhavlrltstonl, Soithi Carolina, lhots.,land lot .............
house and lot
20.., 0100 00
Vichslurghti, MisiSsisippi,house
.........................
and lot ....... .
.I aksolvilln, 'lorida,
39, 000 00
.............
'.27,479 70
Nashville, Tennessee, house and lot
1Cha1 talloga, Tennessee, lot
1,200 00
'I'all ahal ssee, Florida, lot
4, 578 08
...........................
luot ..............
MmItlllhi, 'Tlless,,
6, 517 25
J lt imorel, Maryland, hotiso titl loti .............. ...................... 16,,642 04
ialtimoilre, Matryland, house and lot, bought in on pre-loans
2,500 00
Il lufi)ort, Southi
oullse andl lot
,000 00
Caiolinla,
lt (d, fixtlurls tit .brat'liches cost two years algo--no (liiiirg.'s
.I'rllllilurie,
sflls,
si c11 l' (l n to ti s ct it ....... ...... .........
.....................
1, 457 31
165,'374 38
19 500 00
TI'(l olic0 r.s'( stiimatc ol' lil'sCiit v\ilnsi.... ......................
Tlie \\asliington branch llas what are called
;l business " or Inercaiftile accounts to the extent of about 8$.50,000 of credit balances scattered
amllongl three hundred depositors, on a small percentage of which interest at tlie rate oft4 per cent. is allowed. Many of these accounts are
tllose oft" 'eedmelll " who are otherwise depositors with the baInk, and
arise i this way:
tA. borrows $500 on his house and lot to pay debts: tlle $500 is placed
to his credit among these "1 business" accounts, a11d hle checks it out Iat
lhis convenience, often covering a space of several months.
Of about 70,000 del)ositors now having open accounts with the bank
aind brancll es, from 8t) to )90 per cent. are " frced(neln."'
The amounts now onl deposit with tile various branches are as bfollo ,s:
of Colmnlllbi .......
, 956 52
Washington, D)istrict
Nort Carolina .....................................
41, 059 12
Willingto, Mimssissi
147, 027 94
Vick.sbnrgll
p i ............ ....... ...........................
...............
.....
...............
......
...............
..
...
.................
......
.......................................
...............
..................................
'
.......
,
........................
ssc , Florilda ....................
.
56
''Tllatl
,,593
Stint Louis, Missol ri .................... ............................
........... ..7
......................
Shireveport, lOt isitna
Georgia...1..............................49.......
Savannall,
..................
ltichmnond, Virginia
..
..
Ratleigh, NorthPCarolina ..........................
hliladelphia, 1eninylvallna .....................................
Norfolk,
Virginia
New York .................
................................
New Orleans, Lonisiaual ..
.................................
New Berne, North Carolinal ..................................... .
Nashvill, Tennessee .....................
Natche Mississippi ................................................
....................................
MIontgoinery, Alabama
Mobile, Alabal a ....................................................
Tennessee. ................................................
Memphis,
Macon, Georgia.
Ceo rg..
...
Macon,
............................
Lynchburgh,
Virginia ........ ........................................
Louisville, Kentcky
Little
Arkansas
.........
.............
...
..........
..............
.
..........
.
...............................
......
........
.....
......
......
....
.....................................
........
.
Rock,
.....
...
...............................................
7 , 172 88
7,195 66
145,971 78
02
1(3,194
64
2, 176 51
101, 647
126,148 15
412, 978 25
223,115 94
58, 482 16
110,026 18
54,698 53
25,486 :34
905 06
100, 617
82
145, 87
4:3,999
43,999 67
17, 624 19
138, 659 83
21,605 90
8
SAVINGS BANKS OF THE IDISTRICT OF COLUMBIA.
.................
83
.... ............................
Lexington, Kentucky
$:8, 350
Florida .............
107, 056 02
Jacksonville,
.....................
.... ..............
Columbia, Tennessee
18, 490 7
44, 681 66
Iunntsvllle, Alabama .4............................................
............
........
Columbus, Missippli ...................
15, 332 60
Charleston, South Carolinal
.24,770 15
66,714 15
Beaufort, South Carolina ...................6....
Baltimore, MIaryland ...........................................
80, 18; 49
94,645 19
Augusta, (eorgia ................................................
24, 452 66
Atlanl ta, (corgi:
25, 21 01
Alexandria, Virginia; .........................................
Total deposits
4, 08, 642 :34
..............................
.
...........
..
..........................................
.............
....
..
....................................................
......
.................................................
As the banking-house antd lots in \Vashington City is an important
item of their assets, 1 submit the following description of same:
Front on Pennsylvania avenue, or President Square, 187 feet, by 136
feet on Fiftcen-land-a--half street, and contains 23,132 squarely feet of
land. Thle building is 62 feet on Pennsyllvania avenue by 111 feet in
al)ove grade of
depth; four stories andl MIansard
roof, or fifth story;
"
of
front
Seneca"7
the remainder of brick,
avenue; fire-proof;
freestone, of
built with reference to being ultimately capable forming a part of a
large hotel that will cover tlhe entire lprol)erty, andl iln an elegant all(
substantial manner.
The bank and the Washington brailch occupy one-half of tile ground
floor only, and the balance is now leased at an annual rental of' $21,500,
anI(l that portion nlow so occupied would command an annual rental of
about $4,500 ; or, say, anannual rental for tle whole p)loperty of $26,000.
About two-thirds of tile land is iimplroved, and tlle location is o0ne of
tlie most valuable and conimandin in the city of' Washingiton, rapidly
advancing in value.
Thle ]alnd an(d buildings at thl ine
e
branches are of a character
adapted to the business, are based upon an1 unusual line of deposits,
seem to have been judiciously adapted to tlie best interests of tlhe instito be improving in mnarket.value.
tion, and are said
on real estate or other securities ,are placed beftor
loans
Application
fore tile finance committee, and( are passed upon by them.
Examinations of real estate offered as security for loans, as to its estiImated value, are made by the executive ofliccrs in person, and are very
frequently followed by written opinions of real-estate agents conversant
with market-values, such as Messrs. Kilbourn & Latttai, Fitch & Fox,
&C.
Up to a very recent )el'iod tlhe institution was subject to a constant
the immediate profits on the deposits, as a, necessary
outlay, fiar beyond
of
cost of tlhe establishment of branches, &c., and it is
the
consequence
at the present time onlly so flar establislhed as to begin to show a1profit
on
tlie business.
Temporary loans of money were lprocurled by the institution during
the runlupon them of October and iNovember last, secured by a pledge
of their United States l)onds, 'currency sixes, " to the amount of
$460,000, in preference to selling said or other securities or disturbing
loans in the " available fund " drawing interest at tlie rate of .10 per
cent., and the wisdom of this measure is justified by the recent large
advance in tlie market value of these securities.
They have paid of' $160,000 of said loans since January 18, 1873, tlie
date of tiis examination, and the amount now unpaid, February 4, 1873,
is $300,000.
Tlhe eayleilt of the $160,000 was the resultof a ra)id increase in
SAVINGS BANKS OF THE DISTRICT OF COLUMBIA.
9
their deposit line, and tlhe conversion of other available matter into
cash.
The first twenty days of Janluary, 1873, show 1an increase to the
amount of about $90,000.
There is a deficiency in the accounts of the Beaufort, South Carolina,
branch to the amount of about $16,400, which is now in course of investigation by the inspector.
Improvements in the manner of keeping tlhe records are being adopted,
which when completed will enable them to compare favorably il this
respect with some of the oldest established financial institutions among
uIS.
Tlhe question of the establishmentof "branches" does not seem to have
been provided for by the charter, while the spirit of the cllarter, whicli
seems to have been intended to bring bout the moral elevation of tle
treedman, four millions in number, would seem to imply tlhe necessity
of such anl arrangement in order to reach him where he lives; and in no
other way could this intention have been carried out, and such appears
to have been the views of tile gentlemen who founded the institution,
and they number among them some of tje first philanthropists and
business men of our nation.
The question of tile improvement of their lands in WVashington City
seems to be clearly a violation of their charter, and is submitted without
further comment.
The funds of the institution are loaned iln sulms of O50 to $50,000, and
these loans are widely spread as to location and diversified as to character. Thl majority of the security for the loans upon real estate is
located in the )istrict of Columbia.
Many of tlh loans are of a character that should not appear uponftile
records of a savings bank, and will finally result iln s,1om loss to tlhe
institution, but the probable amount of such ultimate loss it is very difficult to determine at this time.
A more full inquiry as to values in certain cases is now in l)rocess, tih
result of which will be communicated in due course.
The business of the institution has risen so rapidly from the most
trifling deposits of $1 to $5, gathered up by the executive officers from
the hands of the freed men all over tile Southerin States, at personal interviews during many tours throughout the South made for the )purpose of
calling their attention to the question of savings, to its present proportions of $4,000,000, tlat errors of judgment have occurred in investments which are not likely to be repeated, with the light of past experience to guide them in the future.
The executive officers are, in my opinion, men of the most undoulbted
of character, devoted to the best interests of the institution,
integrity for
working small compensations, and have educated themselves to the
practical knowledge of the business of a savings bank to a degree that
promises a prosperous future for the institution.
'I would respectfully suggest the repeal of all the present l:ws under
which savings banks of the District of Columbia are now doing busiif not directly, of such wide deness, and which admit by inference,
in
of
from
line
the
partures
safety tIle pursuit of undue profit in the use
of the sacred funds committed to their charge as have passed under my
observation in my present examination of all the savings banks of the
city of Washington.
Then enact a " general savings-bank act" which shall define very clearly
the character of the property oni which such banks shall advance money,
limiting them sharply to loans or investments in United States securities;
10
SAVINGS BANKS OF THE DISTRICT OF COLUMBIA.
real estate of double the amount of loans; State, city, town, and county
bonds, having reference more to safety than profit; such frequent and
full reports to Congress or the Comptroller of the Currency of their actual conditionl-examinations, annually at least, by experts-as shall tend
to check all departures from a sound legitimate business career, and
such wise liberality and encouragement to this "Freedmen's Savings
and Trust Company " as shall tend to perpetuate an institution which
has already done so much to elevate and educate the freedmen.
One result of the working of this last-named institution, of incalculable importance to the future welfare of our country, has already ap-
peared.
In hundreds of cases the freedmen, through tlhe influence of this institution, have been taught habits of thrift, which have resulted in their
becoming the owners of small patches of land, and it is needless to describe the elevation of the man which this simple fact at once produces.
Tlhe destinies of any nation are safe in the hands of a people who are
the owners of the soil.
I submit. herewith a detailed schedule of thle assets and liabilltics, of
loans and investments, of cash and deposits at all the branches;
A list of all salaries for year 1872;
A list of all other expenses for year 1872;
A list of all funds in transit;
A copy of the charter and by-laws-s, and sundry documents relative to
the business of the branches.
All of which is respectfully submitted.
CUAS. A. MEIG(S,
National-Banlk Examiiner of CNew lork.
lion. JOIN JAY KNOX,
Comlptroller of the Currelcy, lWashlington City.
Clssific'ation of as'.'/.. f
tef'lI'r'F (l/lfn'.' Sarhing aid 'T'rut Company, January 1S, 187:1.
Assets:
Cash in hands of parent ak ......--...............................
8,)4, 422 05
Cash in hands of First National Bank, Washillnton ..................
93, 032 25
Cash in hands of branches
329, 864 32
Cash in transit .............. ...............................
45,555 00
Short-date remittances in bank for collection ........................
28, 436 68
United States bonds, various, at par ............' ....
718, 050 00
securities
:14, 175 63
Sundry Washington
City
claims against board of public works .. ..-................
20,000 00
Approved
Loans secured by real estate, nearly all in tlie District of Columibia, for
1,794,478 05
periods of ten days to two years
Loans on approved claims on board of public works
189,000 00
Loans on chattel mortgage
:17,000 00
Loans on stocks, bonds, lan(d personal security .......................
250, 653 40
Loans at branches ..................................................
259, 358 40
Real estate and buildings on Pennsylvania avenue
...................
313, 218 26
Real estate on T'onth street bought in on foreclosure
2,804 50
Real estate and buildings at branches ................................
165,374 38
Premiuni on United States bonds at 114 per cent......................
100,380 00
Accrued interest on loans ...........................................
77,929 66
....................................
...........
...................................
...................................
...................
.........
..........
......
..................
..................
Total ................. ............................... 4,48:,732 58
Liabilities:
Amount due depositors
642 :34
$4,008, 000
Amount of cash borrowed ..........4..............
00
460,
Amount of interest due .................................
8, 000 00
4,476,642 34
7,090 24
Surplus .......................................................
...............................
SAVINGS BANKS OF THE DISTRICT OF COILUMBIA.
11
WASINGcTON, February 5, 1873.
Sin : Itaccordance with your instructions, I have examined the
affairs of tile German Americanl Savings Bank, of Washington City,
and respectfully report as follows:
This institution was established under acts of Congress of May 5, 1870,
and of June 17, 1870, to which I beg to refer. They commenced business November 6, 1872, and now have a deposit line of $112,000 due to
three hundred and fifty- six different depositors. Their nominal capital
is $50,000, of wlich $15,000 has been paid in ill cash, and provision made
for the payment of the balance on or before the 24th Seltember, 1874.
I consider it to be a remarkably well and carefully managed institution, and its progress has been very rapid during the brief period of its
existence, having been opeiied for business November 6, 1872. Their
loans and investments are of a very safe and conservative character,
although ill several cases they are of such a promiscuous and banking
nature, not provided for in the acts under which they are doing business,
as are more fully referred to in my report upon the ' \Walshington City
Savings Bank," involving the prerogativess of the national bank, such
as discounting promissory notes, and( loaning money upon the pledge
of I)I'Omlisuotlus securities.
This institution is another illustration of the faulty wording of the
acts under which they are doing business, and of the necessity of further
1anld more sharlply-d(efinl(l legislation touching savings banks, having inl
fund; and,
view, first,thetheduemost perftlct ofsecurity of the sacred savings
protection tile rights an1d privilCegs of tie national
secondly,
balll s.
action of tle savings banks, under tile present variouslaws,
Through the
of
has l'risnllol tle part, of tlie national banks, at
jealousy
very muchl
what they consider an undue invasion of their rights and privileges inl
the pursuit of a legitimate banking business, which they are especially
authorized and privileged to conduct; and as a result of tile ilterference of thle savings bank, the natiollal banking act is brought into
contempt amolig business imen, eand the nation is thereby injured in a
vital point.
The poor andll( ignorant classes, having an intuitive idea of the inseand trifling
curity of a, bank as a place of deposit for their hard-earned
and which idea is justified by tile frightful losses which the
savings,
loose system of lankling which has in years last existed in our land
has brought about, in seeking for a safe )lace for these savings, are
struck with tlie splendid signs over tlhe doors of a '" savings bankk" and
blindly intrust' their money to the care of this sacred sign'; and the receivers of these deposits thereby are enabled to accumulate an enormous
cash capital on which to carry on a plromiscuous speculative banking
business, to the great profit of tle individual owners of the savings
the toiling masses,
bank, the possible jeopardy of the sacred savings of whose
event of loss, by failure of the institution
sigir has deand, in the
of
the
character
himn
The
of
his
out
government or admoney.
fiaudeld
ministration that will suffer such things to be is at once brought into
with the masses, who are the power and the glory of all lands.
contempt
I will not apologize for the lengthy remarks I have made upon this
subject, for the reason that the force of the above ideas has been impressed upon me by the state of affairs I find to be existing in theof savings banks of the District of Columbia, by tie frightful abuses the
name of savings bank which have of late been developed in my native
for the reason that an examiner is recity, New York; alnd, finally,
his
in
execution
of
the
(duties, to make such suggestions as the
quired,
12
SAVING(S BANKS OF THE DISTRICT OF COLUMBIA.
practical working of the institution exaimlinled
course of his investigation.
may
occur
to him in the
I submit herewithA general statement of resources and liabilities.
A detailed statement of the loans and cllaracter of tlje collaterals for
all ne.
A detailed statement of the manner and times of paml'lent of subscription to the capital stock, and names of tlhe original subscribers.
A printed copy of certificate of incorporation and by-laws.
All of which is respectfully submitted.
CIIAS, A. MEI(S,
National Bank E,.'aminl er.C C York.
lion. .1011N .AY KNOX,
Comptroller of the (Clurrecy/.
(czrtcral sthacm";li ( ,/ the Gernant .l1 merican(t tS(qcif/./ Bank of W(xtshiugton
C'ity, Fl'cbrtuar]:, 1873.
I nitced States bonlds.....:.
. ......
.....
81:3,(; 50 00
Washington
7 bonds
(10 00
.....
.......................
.11..0............... .
City j':,
Loans on real estateo.....
Loans on personal security, stocks, &c. .........
....................
Delmand-loans on Unitedl Statet s Iondus and bank stock ...................
l'remniuim account, furniture, expenses, &c........ .....................
(Cash in the olic
...................................
Cashl in National Metropolitanll ank1, W\\.Lhington ......5,
Cash in (!erman American 1H:ank, New York
.................
Cash in oller banks, ;Baltilmore
....................
......
.......
................................
.......
..
19, 637
, 349
11, 00)
7, 497
20, (81
48
98
00
:0
79
,702 45
45
, 491
359 1'2
.
...................
'Ita; l resolrcces......................, ............. .......5.....
7
,
Liabilities:
capitall stock paid in...... .................. ...........0...........
Business ldel)osits ........................................ ...........
Ordinary (leposits, savings ............................................
Interest
andl
Total
exchange;
..........................................
............................
Subscriptions
to
.....
..
.........................
15,0010 00
57 77
,
5, 019 3
1, 09 4
5
1'28, 469
57
thr capital stock o/' the Germtan Ar.eric(tl (avi)ngs Bank.
shares at $100 each. 'ivo dollars per share to bo paid ill by
Capital, .)$0,000-500
1, 1872. The remainder shall bo paid in as the trustees shall determine, as
follows:
One-half tihe total capital shall 1e paid in by Septcimber 24, 1873 ; and the remlainder by tile It21l SLeptelmblr, 1874. All payments shall lbel made( in cash to the president
or cashier.
October
First installment paid October 1, 187° ...........................
$2,00
installment paid Novelmber
l, 1872 ................................. 5, 000
Second
Third installlenlt paid l)ecember 5, 17'2...............................
5, 000
Fourth installmentpaid Jalnuary 15, 1873
2,500
....
.
.................
Total
................
paid ill ........................................................ 15, 00
SAVINGS BANKS OF TIlE DISTRICT OF COLUMBIA.
13
iYames of subscribeA's to the capital stock.
R. B. Donaldson
Shares.
..................
lfenryFrane.......................
Christian Ruppert ................
Anton Eberly
William F. Mattiugly ...........
Alfred Schieckling ...............
P.
....................
.
2chaffer........... .....
George
l1itz
....................
...
John
C. E. Prentiss ....................
40
40
40
40
3:0
10
20
4
CasperL.Kneessi ........
Shares.
...........
John Voght...................
Frederick Stutz
..............
Emmert
............
George
L. II. Schneider...................
.....
......
.Charles Walton........ ...........
:30
40
40
40
40
10
otal......................... 500)
4
CITYr, February 5, 1873.
SIR : In accordance with your instructions, I have made an examination of the affairs of Washington City Savings Bank, as of January 29,
1873, and respectfully report as follows:
This institution was formed under a special act of Congress, passed
[March 8, 1864, to which I beg to refer. The charter recites that "it
shall not hold at the same time more than $1,000 of any one depositor,
other than a religious or charitable corporation.' All such sums may
be invested in the stock of any bank incorporated by Congress, or may
be loaned on interest to any such bank, or may be loaned on bonds or
notes, with collateral security of the stock of such banks at not more
than 90 per centumn of its par value, or they may be invested in the
public funds of the United States, of the several States, or loaned on a
pledge of any of said funds, or invested in loans on mortgages of real
estate," &c(., &C.
Section 8 of the act provides for annual reports, with details of the
amounts invested in accordance with above-named provision, and then
goes on to enumerate among the kind of securities so invested in
"' loans on personal secUrities," &c., &c,
This institution was formerly the banking-house of Barron, McKelden
& Co., and more recently Barrofl & Co., bankers and1 brokers, doing a
promiscuous banking and brokerage business, which business was tranlsferred to the books of the new institution under the name of Th6
Washington City Savings Bank, and such business has been since continued by the surviving partner of the house of Barron & Co., Mr. John
A. Ruff, who is to-day the treasurer and only owner of the Washington
City Savings Bank. He informs me that no other person or persons
have
financial interest in the
run
his
WASHINGTON
any
institution, andtthat it is for
sole use and benefit.
The charter provides that no larger sum than $1,000 shall be received
or held at one time from any one depositor. Constant and( daily breaches
of this law appear upon the books of the institution.
The charter provides for the restriction of loans or investments to certain specified securities. Constant and daily breaches of this law appear
upon the books of the institution.
The charter provides for annual reports in which the character of the
securities invested in shall be clearly specified. This provision has not,
been carried out in such annual reports as I have been enabled to
obtain.
The institution is, in fact, a. well-organized and safely, carefully, and
profitably conducted private banking andI brokerage establishment,
under the guise of a savings bank, and would respectfully suggest
that it be required to quit the sacred name under which it is doing busi-
14
SAVINGS BANKS )OF THE I)ISTRI(T 'OF C(OLIMTIIA.
ness and assume a title more in accordance with the character of the
business now being conducted by it.
1 submit a copy of the tri.bnlalance of the bank January 29, 1873;
a classified list of resources; annual report to Congress April 1, 1872.
All of which is respectfully submitted.
CtIAS. A. MEIGS,
National Bank E.varniner, New York.
lilon. .JOHN JAY KNOX,
Comnl)troller of the Currency.
Classification o' loans and
ine'stenlts
Bank.
o(f' the Wl'ashiugton City Sariting
Cash in the office
Ca8sh with Jay Cooke & Co., New York
tHawes & Macy, New York
Cash with
Cash with Hawes & Mancy, gold account, New York..................
Cash with Lockwood & Co., New York ..............................
Cash with the National Currency Bank, New York ....................
Cash with City National Bank, Baltimore ............................
Cash with Hooper, Reese & Co ......................................
Cash with Union National Bank, PIhiladelphia ........................
Cash with Union Banking Company, Philadelphia ....................
United States bonds, various, par
Loans on United States bonds ....................... ........
Loans on real-estate security ..............
Loans on stocks, bonds, personal securities
Investments in Northern Pacific Railroad 71-t per cent. lbonds,$10,000
at par
Investments in Central Pacific Railroad 6 per cent. gold bonds, $20,000
at par
Investments in Union Pacific Railroad 6 per cent. gold bonds, $35,000 at
par ............................................ ..................
Investments in Orange and Alexandria Railroad 7 per cent. bonds ....
Investments in city of Saint Louis 6 per cent. bonds, $1,00 ...........
Washington City 6 per cent 10-year bonds ............................
Washington City 7?a per cent. 5 and 3 year bonds .. .................
Washington Market 10 per cent. bonds ..............................
stock, &c ...................................
City paving scrip, waterAssociation
6 per cent. stock ..................
Young Men's Christianacres
...........................................
Land-warrants, 4,0t3
Corporation claims, audited, 10 per cent..............................
..........................................
.......
..............................
..............................
....................................
......
...........
...........................
........
....
.................................
.................
.....................................................
claims, sewers, paving, &.c..............................
Corporation
Real estate taken for debt ..........................................
Revenue-stanips ................................................
account............
Exchangeaccount
....................................................
Expense
Sundry book-accouuts ............................................
Total resources...............................................
Liabilities:
Amount due depositors.......................................
Amount certificates deposit .........................................
Amount interest account ............................................
Amount
sundry accounts
Total
..................
...........
...
..............
.........................................................
0
;$61,219 21
31,429 73
3,935 42
986 80
1,040 15
719 00
4,583 97
3, 486 24
1,237 23
2), 560 20
2,55,950
00
1,061,442
96
15,000 00
176,260 92
180,271 89
9,903 90
20,576 25
31,911 25
1,000 00
878 84
34, 100 00
57,650 00
16,900 00
7,643 88
600 00
5,040 67
16,720 03
33,794 00
3, 150 00
432 05
:37,794 32
12,780 35
11,886 66
$1,000,197 97
11,612 47
12
33,177
16,455 40
1,061,442 96
@FedFRASER