The immigrant banker is often called upon to perform many other services. Not infrequently as saloon keeper or licensed labor agent he secures work for his patrons, and as grocer keeps them supplied with provisions. Even when not actually a labor bureau, the banker's place of business is in a number of instances practically a labor headquarters, where the idle men congregate and where agents or contractors in need of laborers come to secure them. In forwarding mail, in writing letters for the illiterate, and in many other ways, the banker performs necessary and efficient service. He cashes pay checks, and acts as interpreter, intermediary, and, in some cases, legal adviser. As notary public he prepares legal documents for his patrons and assists them in the disposition or management of their property. The immigrant banker does not, of course, extend such accommodations without compensation. Even if there is not immediate remuneration, such services lead to ultimate gain. By the methods described the banker obtains a distinct hold over his "clients," as they are usually termed, and is in a position to turn their needs to his own advantage.

CLASSIFICATION OF IMMIGRANT BANKS.

Early in this investigation it became evident that there were radical differences in the character of the immigrant banks themselves. These differences admit of a classification-depending somewhat on the extent to which the banks considered are removed from comparison with American private banks-as regards (1) business methods, (2) authorization, security, and financial responsibility, (3) degree of predominance given the banking business. By these factors are determined three classes of immigrant banks as follows:

I. State and incorporated banks or highly organized private institutions thoroughly responsible and operated in a regular manner almost exclusively as banks. There are comparatively few of these institutions.

II. Privately owned steamship agencies, labor agencies, and realestate offices which masquerade under the name of bank, but which are not legally authorized as such. To this class should be added groceries and saloons in which the banking functions are clearly defined as apart from other business. The majority of the banks investigated are of this class.

III. Banks which may or may not be known as such, but in which the functions of caring for deposits and receiving money for transmission abroad are extended more as an accommodation or as incidental to the main business of the concern. Saloon keepers, grocers, boarding bosses, barbers, and men engaged in similar occupations, usually conduct this class of banks. This is the largest, as it also is the most irresponsible, class. It is undoubtedly the hardest class to regulate, as it is the one about which it is the most difficult to obtain accurate information.

OWNERSHIP AND CAPITALIZATION.

It is one of the striking features of immigrant banks that they are almost without exception unincorporated. It is no less noteworthy that, although privately, they are also individually, owned. In 87 out

of 110 banks examined, the proprietor of the concern was found to be the sole owner. Nineteen were partnerships. Only 4 were corporations. The term " & Co." and others of a corporate nature frequently appear in the names of the establishments, but are meaningless in a majority of cases as far as indicating any distribution of ownership. They are used in the belief that they add a certain dignity to the firm. The banks are almost always locally owned, although occasionally, where there is an extended system, the owner may live elsewhere. There is little of the interdependence that might be expected of a banking business of this character. In every center of alien population there is very keen competition among the banks conducted by men of the different immigrant races. Far from being united in a community of interest, a spirit of acrimonious rivalry is prevalent, a rivalry which is often evidenced by invective and denunciation. Although the connection with New York in one way is very intimate, there is no close alliance through ownership. It is believed that not more than a dozen of the immigrant banks of New York City have branches in the interior.

Equally significant with the lack of incorporation and the prevalence of individual ownership is the fact that these concerns seldom represent any investment on the part of the proprietor. It is generally recognized that to embark in such a venture requires no capital. Of the 116 institutions reported upon, only 6 were capitalized, and in 2 of these the ascribed capital was not a sum paid in, but a fund accruing from the profits of the business. In this relation, special attention is called to those grocers, saloon keepers, and other business men who fence off a portion of their store and call it a bank, and who advertise themselves extensively as bankers. Among these, as a general thing, there is a very poor conception of the financial responsibility involved in such an undertaking. The proprietor feels free to invest the funds of the bank in his own interests rather than in those of the bank, and the result is that in case of the bank's failure these personal investments constitute substantially the only capital or fund against which levy can be made. As far as its relation to the State is concerned, therefore, the bank loses its identity as an institution in the personal activities of a proprietor, who is, for the most part, legally and financially irresponsible.

METHODS OF SECURING BUSINESS.

Briefly summarized, the following are the methods employed by immigrant bankers in securing business.

RUNNERS OR SOLICITORS.

"Runners" and solicitors are sometimes employed. This practice, however, is not common among interior immigrant bankers. Sometimes runners and clerks engaged in the sale of steamship tickets upon a commission basis are employed at the same time to solicit

• The manager of a large immigrant bank in New York City asserted that less than $1,000 was sufficient to start a pretentious bank in that city, but he insisted that at least $1,000 more ought to be converted into foreign currency and placed in the show window, as this was most essential for the purpose of inspiring confidence and attracting business.

and collect money for transmission abroad. The report of the New York state commission declares that there are "probably 5,000 to 6,000, and certainly 3,000 runners or peddlers in New York City who sell tickets outside of offices," and that not only is the rule made by the companies in regard to furnishing tickets to peddlers not enforced, but the practice is actually secretly encouraged by the steamship companies.

ADVERTISEMENT.

It is not difficult to single out the immigrant banks in the foreign sections of most communities. They are made conspicuous among the establishments that surround them by the profuse and extravagant advertisements that adorn their windows, walls, and signboards. All available space is filled with steamship posters, money-changing notices, and many-colored placards, alluring always in the inducements they present.

The part played by the alien press in spreading the propaganda of the immigrant banker is one worthy of serious consideration. In several large cities bankers own and publish newspapers, ostensibly for the purpose of printing matters of interest to immigrant subscribers, but in reality for the purpose of exploiting the business of the proprietor. In one or two instances the oft-repeated advertisements of the latter are the only ones appearing in the issue. Many other newspapers, apparently without direct financial connection with immigrant bankers, are filled with the lavish advertisements of the proprietors of these concerns. Inasmuch as these banks are so numerous and such extensive advertisers, it follows that the publishers of these papers are not inclined to jeopardize this source of income by exposing in their columns the fraudulent practices of such wellpaying patrons. Furthermore, it is charged that many of them do not give due publicity to failures among bankers of this type, particularly those whose advertisements they have carried. What is of more consequence, is the claim that the editors of some papers actively participate in silencing such affairs by offering plausible excuses for the disappearance or misconduct of the banker.

MISREPRESENTATIONS.

Closely allied to advertising are the misleading claims and pretensions put forth by immigrant bankers. Of first consideration is the use of the term "bank" or "banker," and others of a similar nature. Despite prohibitive laws in certain States-notably New York and Missouri the indiscriminate use of the term "bank" by unauthorized individuals was found to be very general. The word is displayed on the windows and signs of the banking houses, and appears on letter heads and circulars, and in newspapers printed in foreign languages. Such terms as "foreign exchange bank," "banking exchange,' "foreign banker," "banking house," etc., in several different languages, are not uncommon. A favorite expression among Italian bankers, probably the most frequent users of such terms, is "Banca Italiana-notaio publico-agente marittimo."

The use by private individuals of high-sounding and impressive titles sometimes only for the purpose of racial designation, but more

often to conceal the owner's real name, or to evade prohibitive statutes-is a natural outgrowth of the freedom in which the business is conducted.

Special attention in this respect is called to the action of the Post-Office Department in allowing immigrants doing a banking business to operate postal substations. It is thought that the connection between the two is calculated to do much harm, inasmuch as there is shown a disposition on the part of certain bankers to use their official position as an asset in attracting patronage for their banks. An Italian banker in New York failed with liabilities of over $275,000. He had operated a postal substation in connection with his bank, and his private" money-order" receipts bore a legend somewhat as follows: "Uffici di Postali e Telegraphos" (postal and telegraph office), which, to the average Italian immigrant, conveys an entirely erroneous meaning. He is more than likely to interpret it to mean that the banker is under the control of the Government, since in Italy postal savings banks are under the control of the minister of posts and telegraphs.

The use of the term "notary public" demands special consideration. The notary in foreign countries assumes the responsibility of, and undergoes training for, judicial rather than ministerial duties. In the old country the office of notary is recognized as one of great dignity, and the incumbent as a person of learning and authority. The more recently arrived alien does not, therefore, readily appreciate the difference between the notary abroad and the one in this country. The immigrant banker, however, is quick to take notice of this difference and to turn it to his advantage. Almost invariably immigrant bankers are notaries. They advertise this fact extensively, and their countrymen willingly place in them the same confidence that is reposed in notaries abroad.

PERFORMANCE OF ALLIED AND PARTIALLY ACCOMMODATIVE FUNCTIONS.

Immigrant bankers everywhere insist that the accommodations which they have extended to their patrons have been their most effective method of securing business. They emphasize the fact that it is their ability, growing out of their knowledge of languages and conditions, and their willingness to perform for the immigrant necessary services which he could not otherwise obtain, that has brought them their patronage. Great importance must be assigned to the fact that proprietors of these banks fix their business hours to suit the convenience of their patrons. A large part of their business is done at night, after working hours, and on Sundays. One Hebrew banker advertises the fact that his office is open Sundays from 9 a. m. to 1 p. m. Another banker, a Slovak in Pennsylvania, receives deposits on the street on Sundays and late at night. An Italian bank in New York City was found crowded with customers on Sunday morning. All emphasize the fact that deposits will be paid on demand at any time.

BANKING BUSINESS.

The purely banking functions of immigrant institutions consist of deposits, loans, money exchange, and foreign exchange. Other

activities, such as collections, domestic exchange, insurance, and rentals, are carried on by a considerable number of banks, but the first four are the predominant and distinctive banking functions.

DEPOSITS.

It is important to bear in mind that these immigrant banks are rarely savings or commercial institutions. Deposits are usually left for temporary safe-keeping rather than as interest-bearing savings accounts. Such deposits are not subject to check, and there is, therefore, seldom need of clearing arrangements. The receipt of deposits is merely incidental to the main functions of the bank, and is directly contributory to the personal interests of the proprietor. Many socalled bankers do not openly solicit deposits and do not make a practice of receiving them, while others actively seek after deposits as an important part of their business. But whatever the capacity in which the banker receives money, it is essentially a personal one in which he disposes of it. This fact can not be too forcibly impressed. It is particularly worthy of note in view of the preponderance of testimony among these pseudobankers to the effect that, beyond an understanding that deposits are subject to demand at any time, there is no consideration given nor limitation implied as to their use. So far as his depositors are concerned, the immigrant banker is at liberty to use their funds to suit himself. It is solely a matter of trust throughout. This fact would be neither remarkable nor significant were there effective safeguards or obligations; but it is startlingly significant in view of the lack of security afforded, and when it is considered that the condition still exists in spite of the many ruinous violations of the confidence imposed.

The customary informality with which deposits are tendered and received, the passive attitude of depositors as regards the use to which they may be put, and the want of legal and financial responsibility for their safe-keeping, result in a failure to distinguish between the affairs of the bank and those of the banker. Where the latter is the sole owner of the establishment, as was found to be the case in fourfifths of those examined, and finds himself under no restrictions as to the use of funds left with him, he will ordinarily take advantage of that fact to invest them to his own ends without much regard for the solvency of the bank.

The most objectionable use to which deposits are usually put is that of direct investment in the proprietor's own business. Grocers and saloon keepers have admitted that deposits are used freely to meet current bills or are invested outright in the stocks of their concerns.

It is a common practice with immigrant bankers to redeposit the funds with some regular bank. Many bankers are deriving from 2 to 4 per cent interest on thousands of dollars which have been intrusted to them, but on which they make no return.

If deposits are subject to such active demand as to preclude their redeposit by the immigrant banker as a savings account, they may be deposited as a part of his checking account, and in this way may yield a nominal rate of interest. Instances were found where amounts as high as $11,000 were made to yield 2 per cent interest in this way. The immigrant banker, however, is not, as a rule, satisfied with these methods, nor with the rate of interest paid by other banks,