1876. 1877. Total value of merchandise.....$609,720,139 $645,785,076 SAVINGS BANKS AND POSTAL SAVINGS INSTITUTIONS. [Compiled from a History of Savings Banks by Emerson W. Keyes, and from official documents.] SAVINGS BANKS were originally institutions devised by philanthropists for safely investing small sums saved from the wages of labor, and paying interest on the same, and returning the principal at short notice. The purpose of a Savings Bank is thus in the highest degree laudable, conducing, as it does, to habits of economy and thrift, and to that wise provision for the future which belongs to man in the best state of civilization. The fact that these institutions, founded for the benefit and profit of the poor man, have been sometimes so mismanaged as to become the means of robbing instead of enriching him, ought not to discredit the system itself, or those prudently managed Savings Banks which conform to all the laws of safety as well as of honesty in their conduct. The Savings Bank is of very recent origin. The earliest scheme of the modern Savings Bank ever proposed was made by Jeremy Bentham, in 1787, who put forth the idea of "frugal banks," to be instituted and managed by the government, as a part of its system for the care of the poor. His plan failed of adoption by Parliament. In 1803, Malthus advocated a system of county banks to encourage the saving of small sums. In 1806, Patrick Colquhoun drew up a bill which was offered in Parliament for a "fund and insurance office," for investing the funds of the poor. This was to be in fact a national Savings Bank, but it was too early in the field for success. Meanwhile, private benevolence founded the first actual Savings Bank in 1801, Mrs. Priscilla Wakefield, of Tottenham, receiving deposits from women and children only, which was soon followed by others of the same class, purely local institutions. Dr. Henry Duncan, of Ruthwell, Scotland, organized the first complete Savings Bank in his own parish in 1810. Its success was marked and decisive; and Dr. Duncan has even been called the father of Savings Banks. These institutions kept on growing until they were encouraged and regulated by Act of Parliament. All of the private or trustees' Savings Banks in Great Britain are required to invest their deposits in 3 per cent government annuities, and the trustees are prohibited by law from deriving any profit from the operations of the banks. The interest paid depositors is limited to £3 08. 10d. per cent. as a maximum, and in practice varies from this limit, fixed by law, to as low a rate as £2 10s. per cent. The savings of the rich are kept out of these banks by another limitation, fixing the maximum deposits on one account at £30 a year, or 150 pounds in all, and prohibiting depositors from keeping accounts in more than one Savings Bank. The British Post-Office Savings Banks were first established in 1863. Certain post-offices throughout the kingdom are designated to receive deposits of not less than one shilling, for transmission to the central office in London. The same limitations as to amount are made as indicated in the case of Savings Banks under trustees. The moneys thus received are invested in the public funds, and depositors of one pound, or upward, receive interest at the rate of 21 per cent per annum. The depositor may apply to any Post-Office Savings Bank in the kingdom to withdraw his money, which he must be paid with interest, in ten days at farthest after his demand. Starting with 301 Postal Savings Banks in England in 1863, the system has since extended over Ireland and Scotland, and the number of Postal Savings Banks was in 1873, 5448, having accounts with 1,702,374 depositors, who have on deposit an aggregate of £26,996,550. The proportion of depositors to the whole population was 1 in 19. Average amount to credit of each depositor was £15 178. The competition of Post-Office Savings Banks had the effect to diminish for several years the deposits of independent Savings Banks, managed by trustees, but the latter have recently recovered, aggregating in 1876 deposits to the amount of £43,283,570, while the PostOffice Savings Banks have deposits to the amount of £26,966,550. In the United States, the first Savings Bank was started in Philadelphia in 1816. Others went into operation in New York, Boston, Baltimore, and many New England towns, during the three following years. State legislatures were quick to recognize their benefits, and to throw around them the sanctions and regulations of law. The half-dozen Savings Banks first organized in this country sixty years ago are still in existence, and doing a safe and responsible business. Their management varies in different States, but they are chiefly managed by elective trustees, though in Maryland and Pennsylvania both the mutual and stock systems prevail. The funds of the depositor are invested variously, the best approved securities being stocks of the United States, or of State governments in undoubted credit, the bonds of cities and counties, and mortgages on real estate. The management of Savings Banks has in many cases been far from prudent, resulting in numerous suspensions, either temporary or permanent, of these institutions, chiefly during the last two years. A number of mushroom concerns, which grew up during the inflation era ensuing upon the war of 1861-65, were managed with criminal recklessness of the interests of depositors. Investments in doubtful railway and other bonds, and in over-valued real estate, were made to heavy amounts, and the assets locked up in securities which it was impossible to sell at their pledged value in times of shrinkage. Expenditures were increased to an extravagant amount, and some institutions devoured in salaries and other misappropriations the hard earnings of depositors. More stringent legislation and government inspection are needed as a safeguard against such mismanagement, and for the protection of the community. The absence of State regulation or of any authoritative statistics whatever of Savings Banks in the majority of our States, prevents any full knowledge of their aggregate business. It may be safely stated, however, from the returns which do exist, that the amount of deposits in Savings Banks throughout the United States reaches, if it does not exceed, $1,000,000,000 (one thousand millions), held by about 2,800,000 depositors, while the amount of annual interest, or dividends, paid by Savings Banks exceeds $45,000,000. In the State of New York alone, it is over $16,000,000 per annum. The following table shows the statistics of the Savings Banks in the six New England States and in New York, from 1830 to 1876, inclusive: Growth of the Savings Banks in New England and New York, as shown by their Deposits from 1830 to 1876. $250,000 1840.. $350,000 $2,623,304 1,500,000 5,431,966 1850.. 1851.. 1852.. 1853.. $2,500,000 $200,000 26,012,713 41,699,502 41,422,672 48,194,847 58,178,160 750,000 1,641,543 $199,376 13,660,024 1,495,545 5,466,444 20,832,972 1,776,768 282,217 15,554,089 1,907,233 6,698,158 24,006,599 2,009,617 407,188 18,401,308 2,474,109 8,135,016 27,541,923 2,507,909 704,990 23,370,102 3,308,769 8,883,397 32,824,177 1854.. 3,222,261 901,789 25,936,858 4,104,091 10,006,131 33,453,781 1855.. $867,131 3,341,256 897,407 27,296,217 4,834,312 10,844,933 1856.. 919,571 3,537,363 897,432 30,373,447 5,797,857 12,162,136 1857.. 968,325 3,748,285 875,909 33,015,757 6,079,053 12,562,594 1858.. 968,194 3,588,658 819,650 33,914,972 6,349,621 14,052,181 1859.. 923,397 4,138,822 940,846 39,424,419 7,765,771 16,565,284 1860.. 1,539,257 4,860,024 1,111,532 45,054,236 9,163,760 19,377,670 67,440,397 1861.. 1,708,961 5,590,652 1,231,940 44,785,439 9,282,879 19,983,959 64,083,119 1862.. 1,876,165 5,653,585 1,348,833 50,403,674 9,560,441 23,146,936 76,538,183 1863.. 2,641,476 6,560,308 1,678,261 56,883,828 11,128,713 26,954,802 93,786,384 1864.. 3,672,975 7,661,738 1,952,500 62,557,604 12,815,097 29,142,288 111,737,763 1865. 3,336,828 7,831,335 1,708,531 59,936,482 13,533,062 27,319,013 115,472,566 1866.. 3,946,433 7,857,601 1,589,354 67,732,264 17,751,713 31,224,464 131,769,074 1867.. 5,598,600 10,463,418 1,815,662 80,431,583 21,413,647 36,283,460 151,127,562 1868.. 8,032,246 13,541,534 2,046,321 94,838,336 24,408,635 41,803,681 169,808,678 1869.. 10,839,955 16,379,857 2,601,940 112,119,016 27,067,072 47,904,834 194,360,217 1870.. 16,597,888 18,759,461 2,745,779 135,745,097 30,708,501 55,297,705 230,749,408 1871.. 22,787,802 21,472,120 3,172,525 163,704,077 36,289,703 62,717,814 267,905,826 1872.. 26,151,333 24,700,774 3,836,224 184,797,313 42,583,538 68,523,397 285,286,621 1873.. 29,556,523 29,671,114 4,478,842 202,195,343 46,617,183 70,769,407 285,520,085 1874.. 31,051,963 28,829,376 5,011,831 217,452,120 48,771,501 73,783,802 303,935,649 1875.. 30,757,651 30,214,585 6,004,694 234,974,691 51,311,331 76,875,049 319,260,202 1876.. 32,169,371 29,081,777 8,058,553 240,645,045 50,511,979 78,524,172 316,677,285 |