Savings Banks

Savings Banks (Fr. caisses d'epargne; Ger. Sparkassen), institutions for the purpose of receiving small deposits of money and investing them for the benefit of the depositors at compound interest. They originated in the latter part of the 18th century - a period marked by a great advance in the organization of provident habits in general (see Friendly Societies). They seem, however, to have been first suggested by Daniel Defoe in 1697. The earliest institution of the kind in Europe was one established at Brunswick in 1765; it was followed in 1778 by that of Hamburg, which still exists, in 1786 by one at Oldenburg, in 1790 by one at Loire, in 1792 by that of Basel, in 1794 by one at Geneva, which had but a short existence, and in 1796 by one at Kiel in Holstein. In Great Britain, in 1797, Jeremy Bentham revived Defoe's suggestion under the name of "Frugality Banks," and in 1799 the Rev. Joseph Smith put it in action at Wendover. This was followed in r80r by the addition of a savings bank to the friendly society which Mrs Priscilla Wakefield had established in 1798. Savings banks were shortly after established in London, Bath, Ruthwell in Dumfriesshire by the Rev. H. Duncan (1774-1846), Edinburgh, Kelso, Hawick, Southampton and many other places. By 1817 they had become numerous enough to claim the attention of the legislature, and many acts of parliament were passed from time to time for the management of these institutions in Great Britain, culminating in the establishment on a very broad basis of the Post Office savings banks (see Post And Postal Service). The promotion of thrift, at the end of the 18th century an experiment by a few far-seeing individuals, was by the 10th century almost universally adopted, and was regarded practically as an adjunct to the institutions of every civilized community. Friendly societies, co-operative societies, trade societies and other agencies are all based on this same principle.

The progress of savings banks and the large amount that the deposits have now reached are evidence of the general fitness of the organization for its purpose. So far as regards trustee savings banks, the provisions of the acts of 1817 are still to a great extent the same as those by which they are now regulated, though the law has been frequently amended in matters of detail. The acts relating to trustee savings banks are referred to as the Trustee Savings Banks Acts 1863 to 1904, a title given by s. 16 (2) of the act of 1904. They comprise the Trustee Savings Banks Act 1863 (26 & 27 Vict. c. 87), the Trustee Savings Banks Act 1887 (50 & 51 Vict. c. 47) and so much of the following acts as ap p lies to trustee savings banks: the Post Office Savings Bank Act 1863, the Savings Banks Act 1880, the Savings Banks Act 1887, the Savings Banks Act 1891, the Savings Banks Act 1893, and the Savings Banks Act 1904.

The main feature is the requirement that the whole of the funds should be invested with the government through the Commissioners for the Reduction of the National Debt. The local management of the banks has been left entirely to the trustees, who are precluded from receiving any remuneration for their services or making any profit. They are, however, required to furnish the commissioners with periodical returns of their transactions. This blending of private management with state control has had many advantages in knitting together class and class. A new savings bank requires for its establishment the consent of the National Debt Commissioners and the certificate of the registrar of friendly societies to its rules.

The legislation of 1817, among other inducements to thrift, offered that of a bounty to the savings bank depositor in the shape of a rate of interest in excess of that given to the ordinary public creditor, or - which is the same thing - in excess of that which could be earned by the investment of the deposits in the purchase of government stock. The interest offered in the first instance was 3d. per day, or £4, I Is. 3d. % per annum; and that rate continued to be granted until the passing of the Act of 1828 (9 Geo. IV. c. 92). That act reduced the rate of interest allowed to the trustees of savings banks to 22d. per day, or £3, 16s. old. per annum, and prohibited them from allowing more to their depositors than lid. per day, or £3, 8s. 54d. per annum, requiring them to pay the surplus, if any, into a separate fund held by the National Debt Commissioners, but bearing no interest. In 1844 the interest to trustees was further reduced to 2d. per day, or £3, 5s. %, the maximum to be allowed to depositors being fixed at £3, os. iod. In 1880 the interest to trustees was reduced to £3, and that to depositors to £2, 15s. and again in 1888 to £2, 15s. and £2, Kos. respectively.

The result of the bonus on thrift offered by the earlier statutes was a loss to the state, which ought to have been made good by an annual vote. Between 1817 and 1828 the difference between the interest credited and that earned amounted to £744,363; and this led to the reduction in the rate of interest effected by the act of the latter year. The deficiency, instead of being paid off, was allowed still to accumulate, and as the price of stock rose and the deposits increased fresh deficiencies arose, so that by 1844 the deficiency, which would have been II millions by the mere accumulation of interest on the previous £744,363, had become £3,179,930. The reduction of interest in 1844 was about enough to make the fund self-supporting, though savings banks are always liable to loss from the fact that deposits are in excess when the funds are high and withdrawals when they are low; but the past deficiency was still allowed to accumulate, although in 1863 nearly 2 millions was voted by parliament to make good part of the deficiency; from 1876 income deficiency was met annually as it arose, while in 1880 there was created to meet the capital deficiency a terminable annuity to expire in 1908, but which by the act of 1904 was extended to 1917.

The offer of a bonus on thrift was of necessity accompanied by provisions to guard against its being used by others than the classes it was intended to encourage. This was done by limiting the amount that each depositor should be permitted to pay in. The limit has been varied from time to time, but by the Savings Banks. Act 1891, s. I I (I), the maximum amount standing in the name of any depositor must not exceed £200, nor must interest be allowed on any sum in excess of that amount. By the act of 1893 the maximum deposit in any one year must not exceed £50, but a depositor may, not more than once, replace the amount of any withdrawal made in one entire sum in the course of a year. The replacement may be effected in one or more sums.

When a person comes with his first deposit to a savings bank he is required to sign a declaration, setting forth his name, address and occupation, that he desires to become a depositor on his own account, and that he has no money in any other savings bank.' If this declaration be not true, the deposits are liable to be forfeited; but it is to be feared that few depositors take the trouble to read what they are signing, or think much about the meaning of it. If the depositor cannot write, the actuary of the savings bank will usually ask him a few questions, such as his age, mother's maiden name, &c., which may tend to identify him, or defeat any attempt to personate him for the purpose of withdrawal.

Among the benefits conferred by the legislature upon depositors in savings banks has been that of exemption from the jurisdiction of the ordinary courts of law in cases of dispute with the trustees. By the Acts of 1817 disputes were to be settled by arbitration. By that of 1828 the barrister appointed to certify the rules of the savings banks was made umpire in case of difference of opinion between the arbitrators. By that of 1844 the arbitrators were abolished, and an original and final jurisdiction was conferred upon the barrister. By an Act of 1876 the functions of the barrister in this respect were conferred upon the registrar of friendly societies. This in effect made no change in the law, for the offices of barrister and registrar had been always held by the same persons. As early as 1832 it was determined in the case of Crisp v. Bunbury (8 Bing. 394) that the effect of these enactments is to oust the jurisdiction of all the superior courts of law and equity (see also Cardiff S.B. v. Aberdare District of Oddfellows, F. S. Rept., 1887, pt. A., p. 70). This jurisdiction has been highly beneficial to depositors in savings banks. The costs of the award are limited by treasury warrant to a few shillings, never exceeding £1. The procedure is simple and elastic, and the results are satisfactory. The central office, acting as registrar, determines law and fact, and adjusts all the equities of each case. Reference to the index to the registrar's decisions appended to the chief registrar's annual reports will show that many interesting questions of law have had to be determined with regard to so small a matter as the ownership of a savings bank deposit.

Many of the old trustee savings banks which were put on a systematic basis in 1817, have been absorbed by the Post Office, but while the total amount of their deposits increases, the number of their depositors remains about the same. In 1863 there were 622 of these banks carrying on operations with 1,558,000 depositors, and deposits amounting to £40,563,000. In 1889 the number of banks had decreased to 380, with 1,500,000 depositors, and £45,000,000 of deposits; while in 1905 they had still further decreased in number to 224, but the depositors had increased to 1,730,331, and their deposits to £5 2 ,7 2 3,435. The reason for this is that the smaller trustee savings banks, open often only once a week for a short time, cannot give such facilities as the Post Office, which is open every day Further than this, owing to the break-up of the Cardiff bank in 1886, and other smaller irregularities, a select committee of the House of Commons was appointed to inquire into these banks. By the recommendations of this committee, an independent and permanent inspection committee was appointed, which has carried on its work of inspection ever since, and reports annually to parliament. This action has rather tended to merge the smaller trustee savings banks in the Post Office. At the same time the large banks continue to do a great business, and have become in many ways similar to ordinary joint stock banks, affording to persons of smaller means daily facilities for saving.

Those who have studied the habits of thrift among the people have usually come to the conclusion that its development depends largely on the ready facilities which exist for its exercise. To this fact may perhaps be attributed the efforts that have been made in various directions for establishing some means of saving close to the places where wages are paid. To carry out this 1 By the Post Office Savings Bank (Public Trustee) Act 1908, the regulations as to declaration by a depositor and the prohibition of a depositor having more than one account do not apply to the public trustee.

idea, some of the large railway corporations have obtained powers in special acts of parliament to establish savings banks for those in their employment. The success of these banks has been great, though it has varied much, and it is difficult to trace any general rule of progress. Thirteen such institutions return their operations to the Registrar of Friendly Societies. The total amount held was, by the return for 1905, £5,5 1 3, 20 7 in 60,427 accounts. In these banks the interest paid, as well as the deposits, are really guaranteed by the whole assets of the companies. Further, in order to encourage thrift among their employes, the companies have formally agreed and bound themselves, by the provisions of their special acts, that the rate of interest paid shall be higher than can be obtained in the open market on the same security.

Other efforts have been made to establish savings banks at factories, to be open at the time wages are paid. One great difficulty, however, has been the objection many of those employed have to their employers knowing of their savings, and their fear lest it may affect their rate of pay. To get over this objection the plan has been tried of employing an outside agency to hold the savings bank. This has not been much more successful, as the suspicion that accounts may be looked at by employers is difficult to overcome. It is found that the most successful savings banks are those which are carried on as a business, where the transactions are so numerous that the individual feels that his own private account is not likely to become known.

Another class of savings bank which of late years has developed considerably, is the penny bank. These banks have a twofold object: one to provide facilities for putting by ex tremely small sums for those whose means are very y y limited, and the other to attract children in their earliest years so as to train them to habits of thrift and the realization of the importance and use of even quite small savings. Some form of penny bank now exists in nearly every district, and indeed in nearly every parish. No returns have been collected, but it may be safely said that there are tens of thousands in operation. Many of these penny banks are feeders to the Post Office, which gives them special advantages to invest in that institution. Not only is the gross amount of money thus taken large, but (what is more important) the habit of thrift and of husbanding resources is being taught to the young in all parts of the United Kingdom. This has been one cause of the large extension of the Post Office savings bank itself, and has no doubt led to considerable change in the habits of the people. In a few cases successful efforts have been made to establish permanently these penny banks on a commercial basis, as in the case of the Yorkshire Penny Bank, which has 858 branches, nearly 50o,000 depositors and deposits of nearly £16,000,000; and the National Penny Bank, which has 13 branches in London, most of them open from 9 in the morning till 9 at night, with 1 55,7 68 depositors, and over £2,000,000 in deposits. The establishment of penny banks in schools has been carried on for many years, and it is difficult to exaggerate the useful work they have done in inculcating habits of thrift in the children, and in adding depositors to the Post Office savings banks when the children start in life. In England and Wales there are over 7000 of these savings banks held in the various elementary schools inspected by the Education Department. The London County Council has done much to promote this movement by instituting penny banks in its various schools. Although the financial result is not large, the educational effect of these banks is considerable. It has been found that many children open accounts 4t outside penny banks in preference to going to those carried on at their own schools, but it is probable that the idea of so doing is often suggested by the school savings bank.

With a view of bringing the savings bank still nearer the door of the people, efforts have been made to establish collecting savings banks. In these the collector calls at fixed periods for the deposits. This scheme has grown out of the investigations of a committee of the Charity Organization Society, and is based on the idea, which undoubtedly is the fact, that many people will make contributions when the money is called for, who will not take the trouble to walk a few yards themselves to make the same deposit. That this is so is proved most conclusively by the Post Office life insurance experience, a branch of the Post Office which is scarcely used by the people, while at the same time collecting life insurance companies (which of course must charge a considerable extra premium for collecting) do business to the extent of millions. In most of these banks no interest is given, but facilities and encouragements are afforded for the transfer of each individual account to the Post Office as soon as it is large enough to earn interest.

Closely allied, though essentially different, are the very numerous sharing-out clubs which may be called temporary savings banks. These nearly all take a weekly subscription from their members, and, should any member die, his representative receives a certain sum, the balance left being divided at Christmas equally among the survivors, in proportion to the weekly subscriptions. Some of these clubs are registered, and at a rough estimate they number about 900, with some 120,000 members. The unregistered are, however, much more numerous, though no official information is to be had of them, and it is certain that hundreds of thousands of pounds are divided in this way each Christmas.

The attempt to induce sailors and soldiers to exercise habits of thrift by the establishments of naval savings banks under the act of 1866, and military savings banks under the act of 1859, should be mentioned. The amount in the naval savings bank is generally about f300,000. As might be expected the amount does not grow. This is accounted for by the fact that the depositors leave the service and draw out their savings. About £200,000 a year, however, goes in and out of the naval banks, and £80,000 in the army banks. This sum represents a good deal of self-denial, when the margin within which it is possible to save among sailors and soldiers is considered.

Closely allied to savings banks are a number of societies which need only be briefly referred to here. The largest of them are building societies under the Act of 1874, which are a very popular form of saving, especially in certain localities. The contributions to the shares of these societies, which are paid by instalments, differ but little from the periodical payments into savings banks; and although the money is not so readily repaid, notice and other forms having to be gone through, large numbers of persons pay in and draw out money, and receive the interest on the shares in much the same way as they do on deposits in savings banks without any idea of building or buying houses. In 1906 the receipts were £43,219,548 in the United Kingdom, and the accumulated capital more than £70,000,000, with a membership of 612,424. The action of industrial and provident societies regulated under the act of parliament of 1893, must also be mentioned with reference to that part of their business which is closely allied to savings banks. These societies are divided into three classes: - (a) ordinary co-operative societies; (b) societies for carrying on various businesses, including loan and banking; (c) land and building societies. Most of these societies, indirectly or directly, act as savings banks, and have had considerable influence in the growth of thrift in the United Kingdom. (See Friendly Societies.) In the co-operative societies the sales in 1905 amounted to more than £71,000,000, and the profits to over £5,000,000. These profits are divided in different ways among the members, and they form a saving fund of large dimensions. The societies for carrying on various businesses, such as working men's clubs, loan and banking organizations, registered under the 1893 act, numbered 286, with total receipts £2,020,569. These are not rapidly increasing, but they must be included as one exhibition of the savings of the people, and they are practically used as savings banks. The land and building societies under the act of 1893 are not the same as those above referred to, though their action as regards savings is similar. They are not under the act of 1874, but carry on a trade or business, including dealings of any kind in land. Their operations are slightly increasing. They received £336,424 from subscriptions and other sources, according to a return of 1905, and the value of the land and mortgages was £982,900. Two other classes of institutions should be referred to, the friendly and trade societies, which exist for special purposes, namely, to make provision in sickness, for death, for a want of employment, and to a limited extent for old age. They differ essentially from savings banks, as the subscriptions are parted with and cannot be withdrawn. But as the subscriptions are for certain definite needs, almost certain to be required by each member, which but for those societies would have to be provided for by direct savings in banks, they must be mentioned in treating of the subject as a whole. The amount held by the friendly societies is estimated at £5 0 ,459, 060, subscribed by 1 3,97 8 ,79 0 members.

It was once stated with truth that the national debt was held by a very small proportion of the population; but this is not so now. The various agencies which may be described as savings banks in different forms hold over £200,000,000, which is a considerable share of the national debt of Great Britain.

State.	1900-1901.	1905-1906.
	£ s. d.	£ s. d.
N. S. Wales.. .	8 0 3	to o 8
Victoria. .	8 o 6	10 6 io
Queensland. .	7 15 2	8 7 6
South Australia. .	10 10 0	13 15 0
West Australia	8 I I 3	9193
Tasmania .	5 16 9	8 8 4

British Colonies

In New South Wales there are both state and trustee institutions for savings purposes The Government Savings Bank was established in 1871 and the Savings Bank of New South Wales in 1832. In both, sums of one shilling and any multiple of that amount may be deposited. The Government Savings Bank does not allow interest on the excess of deposits exceeding £300 except in the case of charitable institutions, friendly societies and trade unions, while the Savings Bank of New South Wales does not allow interest on the excess of deposits over the sum of £200 made by any one individual, but allows the interest on the full deposit in the case of charitable institutions, or a legally established friendly or other society. The rate of interest in the Government Savings Bank is 3%, and in the Savings Bank of New South Wales 32%. The following table shows the growth of depositors and deposits: - The Savings Bank of New South Wales was originally administered by nine trustees, one of whom was vice-president, but by an act of 1902 the number may be extended up to eighteen. The funds of the institution, unlike those of the Government Savings Bank, can be applied to investments of a general nature, such as mortgages, government and municipal securities, &c. Victoria and South Australia have not developed the postal system, but show the largest amount per head of population of deposits. In trustee savings banks in Victoria the number of depositors in1900-1901was 393,026, in1905-1906466,752; the amount of deposits in the same years £9,662,006 and £11,764,179, showing an average amount per depositor of £24, us. 8d. and £25, 4s. id. In South Australia the total number of depositors in savings banks in1900-1901was 126,032, of this number 111,537 were depositors in trustee savings banks, having an amount of deposits standing to their credit of £3,782,575 out of a total of £3,795,631. The average amount per depositor was £30, 2s. 4d. In1905-1906there were 152,487 depositors with a total amount of deposits of £4,766,907, giving an average amount per head of £31, 5s. 3d. On the other hand, Queensland and West Australia rely almost exclusively on the post office system. In Queensland there were 81,025 depositors in 1900-1901, and 88,026 in 1905-1906. Deposits amounted to £3,896,170 in1900-1901and to £4,142,791 in 1905-1906, giving an average per depositor of £48, Is. 9d. and £47, Is. 3d. respectively. In Western Australia in1900-1901there were 39,318 depositors and in1905-190663,573. The deposits amounted to £1,618,359 in1900-1901and to £2,316,161 in 1905-1906, giving an average per depositor of £41, 3s. 3d. and £36, Ss. 8d. In Tasmania the amount of deposits (including those of two joint stock companies) was in1900-1901£1,009,097 and in1905-1906£ 1 ,33 2 ,54 6. The depositors numbered 42,509 and 50,731, giving an average per depositor of £23, 14s. 9d. and £26, 5s. 4d. The following table shows deposits per head of population: - In New Zealand there were in1900-1901212,436 post office depositors with an amount standing to their credit of £6,350,013 and in 1905-1906 276,066 depositors with deposits of £8,662,023. There are five savings banks in New Zealand not connected with the post office; in these the total amount standing to the credit of depositors in 1905-1906 was £1,111,931.

	Post Office.		Government (other than Post Office).
Year.		Amount		Amount
		standing to		standing to
	Depositors.	Credit of	Depositors.	Credit of
		Depositors.		Depositors.
	No.	Dollars.	No.	Dollars.
1895	120,628	26,805,542	54,932	17,644,956
1900	1 5 0 ,9 8 7	37,507,456	45,773	15,642,267
1905	16 5,5 18	45,367,761	48,165	16,649,136

Canada

In Canada post office savings banks were established in 1867, but government savings banks, under the management of the Finance Department, had been established in the maritime provinces some years previously. The Canadian government is pursuing the policy of transferring the accounts from the savings banks under the control of the Finance Department to the Post Office Department, the transfer taking place as the position of superintendent of each place becomes vacant. In both kinds of savings banks a deposit must not be less than $I or exceed $1000 in any one year; nor must the total amount in deposit exceed $3000. There are 961 branches of the post office savings bank and 23 offices of the government savings bank. The following table shows the number of depositors and amount of deposits: - In addition to the post office and government savings banks there are special savings banks, such as the Caisse d'economie of Quebec and Montreal City and District Savings Banks. The chartered banks also have savings branches, but they do not make a separate return to the government of the amounts on deposit in these branches. In India, the Straits Settlements, Orange River Colony, Transvaal, Gold Coast, Sierra Leone and the Bahamas the savings banks are under the post office; in Mauritius, Seychelles, Basutoland, Falkland Islands, Natal, St Helena, Southern Nigeria, Newfoundland, St Lucia, St Vincent, Turks and Caicos Islands, Jamaica, Barbados, Grenada, St Christopher, Nevis, Antigua, Montserrat, Dominica, Virgin Islands, Bermuda, British Honduras, Cyprus, Trinidad, Tobago, Gibraltar and Malta there are government savings banks; in Gambia, treasury savings banks; in Ceylon and British Guiana there are both government and post office savings banks, while in the Cape of Good Hope, in addition to the post office savings banks, there are private savings banks, but their business is small.

France

In France the first savings bank was instituted in Paris by royal ordinance in 1818. It was quickly imitated in all the principal departments. Some of those so started were independent undertakings, but several were founded on the initiative of municipal councils, three (Nancy, Metz, Avignon) being attached to monts-depiete. These communal savings banks are now the rule and private banks the exception. They are regulated by a law of 1835, amended in several particulars by later legislation. They are created by decree of the president on the advice of the council of state, and at the initiative of the municipal council. Their administration is in the hands of a council consisting of the mayor of the commune and its directors, none of whom receive remuneration for their services. The funds of these institutions are, with the exception of a certain amount allowed to be retained for independent investment, handed over to the Caisse des depots et consignations (created in 1816 for the administration of the investment of private funds). Interest of 34% is allowed by the Caisse des depots, but out of that the savings banks retain from 4 to a % for administrative expenses and the providing of a reserve fund. Both in the private and the post office savings banks the maximum amount standing in the name of a depositor must not exceed 1500 fr.

Year.	Number of Banks including Branches.	N u mber of Depositors.	Amount of Deposits.	Per Head of Population.
			£	s. d.
18 4 0	430	351,308	7,695,337	4 7
1850	565	565,995	5,396,680	3 2
1860	649	1,218,122	15,090,839	8 8
1870	1 165	2,079,141	25,289,617	13 Io
1880	1405	3,841,104	51,208,107	28 Io
1890	1599	5,761,408	116,468,894	63 5
1900	1845	7,116,462	1 3 0 ,559,773	70 7
1905	2042	7,557,133	1 35, 061 ,74 0	72 2

The following statement shows the progress of private savings banks 1 since 18 35: - Germany. - In Germany the postal savings bank has not been adopted to any extent, but there is an elaborate system of state insurance, which includes life, accident and old-age policies, and to a certain extent even protection against involuntary idleness (see Germany).

See the official publications of the various countries, and J. H. Hamilton, Savings and Savings Institutions (New York, 1902). (G. C. T. B.; T. A. I.) 1 For statistics of the post office savings banks see Post Office.

Year.	Government Savings Bank.		Savings Bank of New South Wales.		'Total.
	Number of	Amount of	Number of	Amount of	Number of	Amount of	Average Amount
									Depositors.	Deposits.	Depositors.	Deposits.	Depositors.	Deposits.	per Depositor.
		£		£		£	£ s. d.
1885	57,538	1,471,894	49,977	2,016,656	107,515	3,488,550	32 8 II
18 95	1 3 1 ,7 0 3	4,121,700	71,099	3,951,875	202,802	8,073,575	39 16 2
1900	198,014	6,045,622	84,629	4,855,760	282,643	10,901,382	38 II 5
1905	270,982	8,883,651	101,383	5,545,367	372,365	1 4,4 2 9, 018	38 15 0

There are in the United States four kinds of savings banks: (r) Mutual or Trustee Savings Banks; (2) Stock Savings Banks; (3) Postal Savings Banks; (4) School Savings Banks.

i. Mutual Savings Banks are organized under state laws, and are under the supervision of an officer usually appointed by the governor. They have no capital, and do a strictly investment business. All their earnings go to the depositors, either as dividends, or to a surplus fund, which, in the event of liquidation, also belongs to the depositors. Their management is vested in a board of trustees, a self-perpetuating body who serve without pay, except for specific service such as appraising property. Executive officers and clerks are paid moderate salaries. The proportion of annual expense to each dollar of assets is sometimes less than The rate of interest on deposits usually ranges from 3 to 4%. Depositors have no voice in the management, except as citizens of the state, through their representatives in the state legislature. Nearly all the states limit investments carefully, though a few permit considerable latitude: in New York the deposits in saving banks are considered next to government bonds as safe investments. In that state the deposits in savings banks are exempt from taxation, but a franchise tax of i % annually is imposed upon the surplus. In most other states the deposits are taxed for state purposes. The amount which each person may deposit in any year or half year is sometimes limited by the by-laws, and the total sum to be received from any one depositor is usually limited by state law. Deposits are in practice generally payable on demand, though the banks reserve the right to require notice, generally from sixty to ninety days, and sometimes enforce this right in times of panic. The first savings bank incorporated in the United States was the Provident Institution for Savings, incorporated in Boston in 1816. The oldest in New York is the Bank for Savings, of New York City, incorporated in 1819. The largest deposit of any bank of this kind in the United States, $108,720,523.82, was in 1910 that of the Bowery Savings Bank of New York. Mutual savings banks are confined chiefly to the states in the eastern portion of the country. The only mutual banks outside the north-eastern states were in 1910 three in Ohio, five in Indiana, fourteen in Minnesota, one in West Virginia, one in California and two in Wisconsin.

Though the laws governing mutual banks vary in the different states, the following abstract of the New York Savings Bank Law of 1875, re-enacted in 1892, and subsequently amended, gives the main principles on which they are organized.

Thirteen or more persons may incorporate a savings bank, twothirds of whom shall be residents of the county where the proposed bank is to be situated. When the certificate of organization is filed with the superintendent of banks, who exercises supervision over all banks chartered by the state, he is required to ascertain whether the bank is in fact needed in the community where it is to be organized, and to investigate the character and general fitness of the trustees. The present superintendent of banks requires that the incorporators of a savings bank shall defray personally the expenses of the institution until its earnings are sufficient to meet such expenses, and also return dividends at the rate of not less than 3%. The board of trustees have entire control of the management of the bank. They elect the president and other officers. A trustee who borrows any of the bank's funds, or who becomes a surety for any other borrower, forfeits his office. Bankruptcy or an unsatisfied judgment of ninety days' standing will also void his office. Trustees are not allowed to have any interest in the profits, or to borrow the deposits or funds.

The trustees of any savings bank may invest the moneys deposited therein and the income derived therefrom as follows: (I) In the stocks or bonds or interest-bearing notes or obligations of the United States, or those for which the faith of the United States is pledged, including the bonds of the District of Columbia. (2) In the stock or bonds or interest-bearing obligations of this state. (3) In the stocks or bonds or interest-bearing obligations of any of the United States which has not within ten years defaulted in the payment of any part of any debt authorized by its legislature. (4) In the stocks or bonds of any city, county, town or village, school district bonds and union free school district bonds, issued for school purposes, or in the interest-bearing obligations of any city or county of this state. (5) In the stocks or bonds of a number of specified cities without the state, subject to the condition that if at any time the indebtedness of any of said cities, less its water debts and sinking fund, shall exceed 7% of its valuation for purposes of taxation, its bonds and stocks shall cease to be an authorized investment. (6) In bonds and mortgages on unencumbered real property situated in this state, to the extent of 60% of the value of such property. Not more than 65% of the whole amount of deposits shall be so lent or invested. If the loan is on unimproved and unproductive real property, the amount lent thereon shall not be more than 40% of its actual value. No investment in any bond and mortgage shall be made by any savings bank, except upon the report of a committee of its trustees. (7) Also, by virtue of a law passed by the legislature of 1898: In the first mortgage bonds of any railway corporation of this state, or in the mortgage bonds of any such railway corporation of an issue to retire all prior mortgage debt of such railway corporation, provided the bonds satisfy certain precautionary conditions. Not more than 25% of the assets of any savings banks shall be loaned or invested in railroad bonds. There are other limitations of the amounts to be loaned or invested in the securities of any one railway. Street railway corporations shall not be considered railway corporations within the meaning of this section. An act passed in 1900 permits the investment of deposits in the bonds of certain railways situated in other states. These investments must conform to conditions assuring safety.

Savings banks in New York are preferred creditors of insolvent state banks and trust companies. In 1901 a law was passed providing for a tax of 1% on the surplus of savings banks, computed on the par value of their securities. On July I, 1910, deposits in the savings banks amounted to $1,526,935,581.84, distributed amongst 2,886,910 depositors; interest credited for the preceding year amounted to $53,828,625.03; expenses for the year 1909 were $5,000,05355 or $2.90 for each $loon of resources. Loans on real estate, secured by bond and mortgage, amounted to $805,053,044.63, and investments in stocks and bonds, market value, $658,872,34885.

Other important items in the assets of these banks are: State bonds, $43,719,11166; city bonds, $305,695,035.71; railroad bonds, $250,346,600. Deposits received for the year 1909 were $390,709,469-44.

United States bonds.. .	$33,353,57612
State, county and municipal bonds. .	685,099,502.18
Railroad bonds	743,425,893'93
Other stocks and bonds, including rail- road and bank stocks	137,653,399'71

According to reports made to the Comptroller of the Currency there were on April 28,1909, a total of 642 Mutual Savings Banks in the United States, with $3,394,926,005 aggregate resources. The loans and mortgages of these banks amounted to $1,590,181,366.19, and their investments to $1,599,532,371, classified as follows: These banks had, on the date named, a surplus fund of $202,065,316.85, and $3,144,584,874 individual deposits. .The Mutual Savings Banks hold more than 22% of the aggregate individual deposits of all the banks in the country.

2. Stock Savings Banks are found in the more purely agricultural parts of the country, the southern, Mississippi Valley and western states, where only a small proportion of people earn wages in manufactures and commerce; suitable investments are not numerous, the benefits of mutual savings banks are not familiar, and the people are unwilling to accept a low rate of interest. In some states having stock banks there are no laws relating to banking, and in others the savings banks carry on their business under the same laws as commercial banks. Several of the states restrict the investments of the stock savings banks. Prior to 1865, when the issue of circulating notes by state banks was suppressed by a prohibitory tax, there was a distinction between state banks and stock savings banks; the former could issue notes, while the latter, as a rule, could not. Stock savings banks are conducted frequently as adjuncts of state and national banks, occupying the same rooms and being under the same management. Many of the national banks chartered by the Federal government maintain "savings departments," though the deposits received in these departments are on the same legal footing as other deposits and are not specially invested. Similar departments are also to be found in many trust companies and state banks of discount.

The law of the state of Iowa is typical of those states where stock banks are under public supervision. A savings bank may be organized by not less than five persons. In towns of ten thousand inhabitants or less it must have a capital of $10,000, and in towns or cities with more than ten thousand inhabitants $50,000. The usual corporate powers are granted. The amount of deposits is limited to twenty times the capital and surplus. The usual provisions for repayments of deposits are made, and in addition the savings banks are given the privilege of requiring sixty days' notice for the withdrawal of savings deposits.

The banks are allowed to invest their funds in the following securities: (1) Stocks, bonds or interest-bearing notes of the United States. (2) Stocksbonds or evidences of debt-bearing interest of the state of Iowa. (3) Stocks, bonds and warrants of any city, town, village or school district, or drainage district, in the state regularly issued, but the investments of any savings bank should not consist of such bonds or warrants to a greater amount than 25% of the assets. (4) Mortgages or debts on unencumbered real estate within the state worth at least twice the amount lent. (5) It is lawful for such banks to discount, purchase, sell and make loans upon personal or public security, except shares of their own capital stock.

Property acquired by foreclosure of mortgages, &c., may not be held more than ten years. The rate of interest to be paid is left to the discretion of the trustees, and the profits, after the payment of such interest and expenses, go to capital stock. Stockholders are liable to the creditors for double their stock, and such liability continues for six months after the transfer of any stock. Directors receive no compensation. Officers and directors of the bank are required to give the same security for loans that is required of others, and such loans can only be made by the board in the absence of the party applying. The savings banks are prohibited from lending to any individual or firm more than 20% of the capital stock. All savings banks are required to make a quarterly statement to the auditor of the state, giving in detail the statement of condition upon a given day. This statement is made under oath of the officers, and is required to be published. The state auditor is given the power to examine any savings bank at any time, and must make an examination at least once a year; and should the conditions warrant, he is required to report to the attorney-general, who institutes proceedings under the law relating to insolvent corporations. Provision is made for increasing the capital stock by a two-thirds' vote of the existing shares. The corporate existence of the banks is placed at fifty years. Michigan affords a good example of banks doing a commercial and savings bank business under a single organization, but with the savings deposits entirely segregated from other deposits and separately invested. The system has worked successfully and satisfactorily. There has been much discussion among bankers throughout the country in recent years of the propriety of enacting laws specifically providing (a) for the creation of savings departments in national banks, with the segregation of savings deposits, and (b) for the enactment of similar state laws to be applicable to state banks and trust companies maintaining savings departments. Other proposals have been made for a government (or state) guaranty of deposits, and this plan has been adopted in a few of the states.

On April 28, 1909, there were 1061 stock savings banks reporting, with aggregate resources of $ 6 77,7 8 4, 0 99.95. Their capital was $59,506,420, and surplus and undivided profits $38,112,716.60. Individual deposits subject to check, $100,708,410.57; savings deposits, or deposits in interest or savings departments, $366,167,901.61; other deposits, including amount due banks and bankers, $109,911,859.91.

					Average
	Number	Number of		Averag g	Capita per
Year.	of Banks.	Depositors.	Deposits.	due each	in the
				Depositor.	United
					States.
1900	1002	6,107,083	2 ,449,547, 88 5	$401.10	$31.78
1901	1007	6,358,723	2 ,597, 0 94,580	408'30	33.45
1902	1036	6,666,672	2,750, I 77,290	4 12.53	34.89
1903	,078,	7,035,228	2 ,935, 20 4, 8 45	417.21	36.52
1904	1157	7,305,443	3,060,178,611	418.89	37.52
1905	1237	7,696,229	3,261,236,119	4 2 3.74	39.17
1906	1319	8,027,192	3,4 82, 1 37, 1 9 8	433.79	41.13
1907	1415	8,588,811	3, 6 9 0, 0 7 8 ,945	4 2 9.6 4	42.87
1908	1453	8,705,848	3, 660 ,553,945	4 20 '47	41'84
1909'	1703 2	8,831,863	3,7 1 3,4 0 5,7 10	420.45	41.75

Number of Savings Banks in the United States, Number of Depositors, Amount of Savings Deposits, &c., 1900-1909. 1 Population estimated at 88,926,000, June 30, 1909.

Not including 339 state banks and trust companies of Illinois with $204,908,505 savings deposits credited to 641,634 savings depositors. Including Illinois savings deposits and depositors the average due each depositor is $413.60 and average per capita $44'06.

On May 3, 1909, a statement was issued by Wm. Hanhart, Secretary of the Savings Bank Section of the American Bankers Association, showing "actual savings deposits in the savings banks, national banks, Trust Companies and private banks in United States," $5,560,837,016.

3. Postal Savings Banks. - By an act of the Federal Congress, approved June 25, 1910, Postal Savings Banks were first authorized in the United States. The management of these banks is vested in a board of trustees composed of the postmastergeneral, secretary of the treasury, and attorney-general. The board of trustees shall designate such post-offices as it deems proper to be postal savings depository offices. Any person ten years or over may be a depositor; the minimum deposit is one dollar, and not more than $zoo may be deposited by any one person in any one month; the maximum balance to the credit of any depositor (exclusive of interest) shall not exceed $50o. Interest, 2% annually; deposits payable on demand without notice. The deposits in the postal savings depositories, are to be deposited in banks subject to national or state supervision at not less than 21% interest; 65% of the deposits. may be so redeposited in these banks; 30% invested in United States securities, and 5% held as a reserve in the United States treasury. But the 65% fund on deposit with the banks may be withdrawn for investment in bonds or other securities of the United States, but only by direction of the president, and only when, in his judgment, the general welfare and the interests, of the United States so require. At the option of the depositor, deposits may be converted into United States government bonds. In making deposits of the funds in national or state banks, the Federal government requires of those banks security in the form of public bonds or other securities as the board of trustees may prescribe. The faith of the United States is solemnly pledged to the payment of the deposits.

4. School Savings Banks were first established in the United States in 1885 by J. H. Thiry, at Long Island City, New York. On January i, 1910, the system was in use in 1168 schools, distributed throughout 118 cities or villages. Out of 632,665 pupils registered in these schools, 203,458 have saved $5,051,644.60, of which $4,180,948.59 have been withdrawn, leaving a balance of $870,696.01 due depositors. (B. R. *)