# Popular Science Monthly/Volume 19/September 1881/Editor's Table

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THE LESSONS OF THE BOSTON "LADIES' DEPOSIT."
The "Atlantic Monthly" did well in publishing in its July issue two articles on the "Ladies' Deposit," a fraudulent banking concern in Boston, of which so much was said last year. One of these articles, by Mr. Henry A. Clapp, gives a history of the scheme, and is evidently written with care and with good knowledge of the facts. The other paper is by Miss Mary Abigail Dodge, who had some experience with the institution, and she presents the feminine side of the case. As the excitement of the affair is now passed away, and we have the main facts fairly before us, it seems proper to look a little into the lessons it teaches; and to do this it will be desirable to recall briefly its leading features. In this we follow the statements of Mr. Clapp.
By whomsoever planned, the scheme of the "Ladies' Deposit" was carried out by a woman named Howe, and she was undoubtedly its master-spirit. The revelations at the sequel show her to have been a vulgar female impostor, a clairvoyant, and fortune-telling adventuress, who had run a long career of petty crime in New England. She first married a half-breed negro, or Indian, named Solomon, who is now living in Rhode Island. They lived together some thirteen years, but the marriage was void on account of the law against the union of persons of different colors. She next married a man named Lane, or Chase, Mr. Solomon being a diligent promoter of the second union. Lane is said to have died at sea, when she married Florimund L. Howe, a house-painter and dancing-master, who is her present husband. The pair adventured ​about the country for several years, getting a miserable living in precarious ways, and the woman's conduct was at times so "queer" that in 1867 she was sent to the State Lunatic Asylum in Taunton, where she remained two years. In 1875 she was caught in the perpetration of an elaborate set of frauds and sent to Jail, but got out before the expiration of her time through a technical mistake in her indictment.
She is represented as illiterate and in many ways very ignorant, but "she has always been a keen observer, a quick learner, and a shrewd student of human nature. It would be more nearly correct to call her unmoral than immoral; for from her extreme youth she appeared to have a serious constitutional difficulty in discerning the difference between right and wrong, between her own property and her neighbors'. All her thieving has been marked by a grand air of unconsciousness, rather than by eager, covetous greed. Her disposition seems to be somewhat good-natured and generous, and to show a kind of native bonhomie, and at the height of her prosperity as a 'banker' she became very popular with a certain set which was especially rich in mesmerists, fortunetellers, and female physicians of the irregular sort." She has "abundant cunning," "a great natural gift of utterance," "a singularly plausible manner," and to her other accomplishments it must be added that "she is one of the most exuberant, spontaneous, imaginative, and unnecessary liars that ever breathed."
This woman at length planted herself down in Boston as a "banker." When she began, or how she began, is involved in mystery. Her scheme seems to have been copied in its main features from that of a Bavarian swindler—an ex-actress named Adele Spitzeder—"which was operated in Munich from 1869 to 1872, and by which the Bavarians were cheated out of millions of dollars. . . . Both opened banks of deposit, promised preposterous returns of interest, and successfully invited loans of money from the public. Neither had any pecuniary capital or offered any security, the sole and sufficient reliance of each being upon her own impudence and the combined cupidity and credulity of her customers. Each made friends by playing the Lady Bountiful upon occasion, had a mixed party of gulls and knaves committed to her cause, drew herself out of poverty and into luxurious comfort by means of her bank, ended her career in prison, and left assets enough behind her to pay her creditors a dividend of about five per cent." It is significant that the astounding Bavarian fraud had run its course and exploded, and was reported ail over the world seven years before the successful repetition of the experiment was made in Boston.
The main trick of Mrs. Howe was, however, a shrewd improvement upon the Bavarian method. For while Frãulein Spitzeder took deposits from everybody who would make them—high and low, rich and poor, male and female—Mrs. Howe artfully restricted the benefits of her institution to women, and to those, moreover, of small means. No woman owning a house could make a deposit, and no deposits were received less than two hundred dollars, nor more than one thousand dollars. Interest at the rate of eight per cent, per month was paid every three months—that is, twenty-four per cent, quarterly—and the payment was in advance. To the question how it was possible to pay such large interest, the reply was, "We never disclose the methods by which we do business"; "we do not solicit"; "you need not deposit unless you wish"; "we never give references." But, notwithstanding this, it was stated that the "Ladies' Deposit" is a charitable institution for the benefit of single ladies, old and young, of small means, and it was obscurely intimated that the money was intrusted to the ​Boston agency for this charitable use by a rich "Quaker Aid Society" of Virginia. Mrs. Howe refused to tell how the funds thus derived were invested, because, as she craftily said, "she was afraid of the displeasure of her superior officers." Yet, thoroughly baseless as was the project which could give no open account of itself, and utterly absurd as were its promises, it nevertheless had a rushing success. Each new depositor had to be introduced by a previous depositor. There was a great show of strictness in inquiring into their fitness. The first depositors, when they had got their enormous interest, reported it to their friends, and the craze spread rapidly among the Boston women to avail themselves of the speculation. That they were the recipients of a charity made no difference. The bank would have nothing to do with men, and constantly encouraged the idea that women were abundantly capable of transacting their own business without masculine advice. And so money poured in by the thousands. The big interest was paid out of the influx, and if a depositor wanted her money back she could have it any day but Sunday, and with it she got the curt notice that she need not apply again. The result was that the "miserable old rogue," with her "swindling savings-bank," in the course of a few months drew from the pockets of ten or twelve hundred New England women no less than half a million dollars. The "Boston Advertiser" at length attacked the concern vigorously, and it collapsed in three weeks. A few of the earlier depositors received their large interest, and got out also with their principal; but when the scheme was pushed into insolvency there remained only five per cent, of their investments for some eight hundred depositors.
As was natural, the women who had walked into this trap and lost their money were roundly denounced for their credulity and business incapacity. Miss Dodge resents this charge in her usual spirited way, launches profuse invectives upon the men who broke up the fraud, and, while not excusing Mrs. Howe, defends her sex from the assaults of masculine "insolence, ignorance, and stupidity." She proposes to show that "the history of the Ladies' Deposit does not demonstrate the credulity of women, the immorality of women, or the educational or political incapacity of women." If not successful in proving these positions, she, at any rate, shuts the mouth of her masculine critics by showing that men too are abundantly imposed upon and cheated, and are therefore credulous and stupid as well as the women.
The subject is here widened, and our chief interest in the affair relates to this aspect of it. What are the conditions that made this transaction possible? What are the causes that led to it and which lead to other kindred results? The particular event has passed away, and in itself is of but little moment; but what sort of a tree is that which bears such fruit? The state of mind that produced it still continues, and we may expect the same things to be done again and again, with only a change of names, forms, and tactics. That which has just now had a conspicuous feminine expression is by no means wholly an affair of sex, but is a common phenomenon. The Ladies' Deposit was in fact but a drop in the bucket compared with the omnipresent impostures and cheats of all grades and qualities which are transacted everywhere. What is the condition of mind which leads to them?
We state nothing new in saying that such impostures as Howe's bank prove a widespread deficiency in mental cultivation. It has been urged that there is a gross want of instruction in our schools in the elementary principles of economics, a knowledge of which would serve as a protection in emergencies of ​this kind. Undoubtedly more of political economy in our common-school education would be useful, but it must be remembered that our swindles are by no means limited to the financial sort, while the public mind is probably more alert in this direction than in any other. To rectify the evil by the application of special knowledge would require scores of new subjects to be introduced into our public-school curriculum. Besides, had political economy been taught in the New England schools as other things are there taught, we are not sure that it would have made much difference with the chances of Mrs. Howe's banking adventure. The difficulty was not so much a lack of knowledge on this particular subject as a lack of that mental preparation which would qualify for meeting the whole class of impositions of which the Ladies' Deposit was but a single example.
The Boston women were undoubtedly cheated through their credulity, and this state of mind was palpably exemplified by a thousand of them. But the same state of mind is exhibited by many other thousands of both men and women all over the country; and it is this which has to be met by education before any efficient protection can be gained against its mischievous results. Credulity is easy belief, and the correction of it is, of course, hardness of belief. The credulous person is careless of evidence, and is, therefore, readily duped; the only remedy for this is doubt, distrust, an appreciation of the importance of evidence, and a trained capacity to judge of it. It is necessary that this state of suspicion and questioning become a habit of the mind, and the sifting of evidence in practical affairs a distinct branch of mental cultivation. To escape the evil effects of credulity it is needful that disbelief as an attitude of mind be encouraged as a virtue. The resistance to evidence must be active and vigorous until it is proved to be not spurious and illusive, but sound and valid. Our current culture is here profoundly at fault. Literary education, as such, does not favor this habit of mind; scientific education properly pursued leads to it necessarily. Literature flourished in its highest forms in the ages of credulity, while modern science only arose with the growth of the spirit of doubt. Training in the methods of scientific study seems, therefore, to us, the only adequate remedy for that laxity of thinking and dull credulity of the popular mind in which widespread deceptions and impostures have their origin.
But science also greatly helps us here in the things it teaches. It familiarizes the mind with the conception of an order in human life, the invincible operation of cause and effect in social affairs, and the laws of proportion between actions and consequences to which all persons are subject. That there are natural laws in society which work out their inevitable results is a lesson that requires to be learned as well by the individual as by the state; and scientific education alone can familiarize the minds of the young with this vital truth.
Here our literary education fails. It does not reach, and expound, and enforce this class of ideas. It is so thoroughly verbal and critical in form and spirit as actually to arrest the mind on its way to the study of things. In this way absorption in literature becomes a barrier to science, which, by its nature, must deal directly with facts and principles. Science merely addressed to the apprehension, and lodged in the memory like literary acquisitions, is not true science; and little would be gained by introducing social science into our schools, to be pursued there in the manner of other studies. Literary culture, as it predominates in our educational institutions, neither prepares the mind to deal intelligently with questions of evidence nor does it imbue it with right conceptions of social order ​and the laws of human relation, and it, therefore, affords but little protection against those vagaries and extravagances of belief which have their root in credulity.
Miss Dodge's apology for the women, in the "Atlantic," is a good illustration of this. Keen, brilliant, thoroughly cultivated as she is, she does not seem for a, moment to recognize that the first duty of every woman introduced to Howe's bank was to demand and insist upon the clear evidence of its validity. She does not seem to consider that intelligence or judgment of facts had any function in the affair. Promises certainly extravagant were made, and stories certainly improbable were told, and they were all swallowed without a serious question, but Miss Dodge can see no credulity in it! The notion that the concern was a grand charity appeared so possible, so probable, and so noble, that the poor women were justified in investing in it without any of those precautions that are dictated by universal experience in these matters. Indeed, Miss Dodge seems to think that Howe's bank is a kind of ideal type of beneficence on which this miserable world might well be remodeled. In the good time coming we are entitled to expect boundless largess, and a thundering rate of interest for everybody. She says: "If there had been a great charity at the basis, I do not see how any wiser mode of distribution could have been framed. In view of the inexpressible relief which was afforded in the dozen or so cases of which I learned in the course of the discussion, I feel a thrill of regret whenever I remember that there was nothing in it."
As a matter of probability, that is of evidence as a basis of action, Miss Dodge thinks that eight per cent, a month is not half so incredible or absurd as the working of the present order of nature. With God's government of the world at a paltry six or seven per cent, annually she seems disgusted, declaring, "In regard to general probability I candidly avow that no originality and no magnitude of charity is so incredible as that the Omnipotent Creator of the world should let things go on as they are."
Miss Dodge reasons that the women were excusable for patronizing Mrs. Howe's bank with its magnificent promises because people do actually get benefactions often princely in aU sorts of irregular and improbable ways. Dr. Cullis's Home for Consumptives in the heart of Boston, professedly supported by prayer alone, and the Woman's Faith Home for Incurables, in Brooklyn, supported also as is said by faith and prayer, are thought worth referring to, and she adds, "If Christ could fish up money out of the sea wherewithal to pay his taxes, and if he said, 'He that believeth on me, the works that I do shall he do also, and greater works than these shall he do,' why should it seem a. thing incredible that he should pluck from the pockets of the rich a hundred-fold or ninety-sixfold the slender means of the deserving poor?"
These are side-considerations for her religious critics, but Miss Dodge thinks that politics teaches the same lesson. She says, "No one can live long and intimately in political circles without being prepared for any development whatever of generosity and magnanimity," Most true! and alike in Howe's bank and in politics we are not to inquire too curiously into the sources of the generosity. It was the pride of Tweed that betook splendid care of his friends, and the magnanimities of political circles are too generally in proportion as politicians are thieves—they are proverbially generous with the public money! But, even where politicians are not thieves, their circles are full of bounties in the shape of offices and patronage that come as chance advantages to the undeserving, like lottery-prizes ​and runs of luck at the gaming-table. In this aspect of its influence the school of politics is thoroughly demoralizing. Nothing is better calculated to subvert all manliness and independence of character than the habit, now become so general in this country, of making politics a business, and depending upon the bounties of government as if it were a kind of earthly providence. It is in the wise order of things that people shall depend upon their own efforts, and prosper through the virtues of industry, frugality, and self-denial. There will be misfortune, and there is a function for discriminating charity; but no teaching is more unwholesome than that which encourages people to count upon the generosity of the rich, government, favor, or something to turn up. Miss Dodge's view of life does not correspond to the realities of life, and is, therefore, a bad preparation for the experiences of life. Quite other views must prevail before we shall see the last of such pitiable experiments as that of the Ladies' Deposit.
STATE EDUCATION.
We last year republished an article by Sir Auberon Herbert, questioning on various grounds the policy of state education. We received several answers to it of various merit, and still more various logic, but they all agreed upon one thing—that state education is indispensable to the preservation of the republic.
We print this month an answer to Mr. Herbert, which is as able as any that have reached us, and has a kind of tacit authority as coming from a public official engaged in the special work of organizing and consolidating a state school system. The writer, Mr. Charles S. Bryant, is Secretary of the High School Board of the State of Minnesota, which is charged with the duty of prescribing and adjusting the courses of study to be pursued in a concatenated or unified system of state schools, from the primary to the university. Mr. Bryant is an advocate of state education in its most comprehensive form, and he also maintains that the right of the state to take charge of this great work is necessary to its self-preservation.
We are abundantly told that this is, to all intents and purposes, a settled question; that government education is nothing less than manifest destiny, and the most foregone of all American conclusions. And we have just here already one of the fruits of the experiment—the borrowing of the political method of buncombe and bullying to force the acceptance of a desired measure, and stave off criticism as a matter of no account. But it is necessary that the subject should be freely discussed, and the more necessary that the principles involved should be thoroughly canvassed, and the objections to the policy fully pointed out, because of the great popularity of the policy and the disposition to push it to its utmost extremes. The question is no longer of the expediency of giving state aid for the primary instruction of the children of the indigent classes who claim to need assistance; but it is whether the government shall undertake this work in all its grades, and take the property of the people to make this whole service a gratuity.
The advocates of government education are given to representing it as an issue between state education and no education at all; and the opponents of the measure are often stigmatized as being in favor of illiteracy and ignorance. But this is a profound mistake. State education is intelligently and earnestly opposed in the highest interest of education. The intervention of the state is resisted because it can not do in the best manner what it undertakes to do—because education by authority and political machinery must fall to a lower standard than that which ​has been attained by former methods. Mr. Bryant argues for the state compulsory system as against the voluntary system, but the great advancements of civilization have been incontestably made by private enterprise, and spontaneous coöperation among the members of the community, and with these things the state has only meddled to hinder. The state originates nothing; its highest office is simply to secure the conditions under which the voluntary combinations of individuals for desirable objects shall have the fullest and freest play. Nor is the progress of education any exception to this law. The work of originating and extending knowledge, and of diffusing it by the formation of schools, the organization of societies, the institution of academies, and the establishment of colleges, has always been mainly done by the individual forces of society working under voluntary coöperation and independent of government. Besides, all the tendencies of modern progress are to give larger scope to private enterprise, and to relinquish to the people prerogatives that formerly belonged to government. It is now proposed to contradict this law of advancement by surrendering to the state the whole duty of directing the mental development of its citizens. Mr. Bryant maintains that the right of state control in the matter of educaion is a necessary consequence of state sovereignty, and he argues that, in the course of political development, the family is superseded, the state assuming the parental functions. He says: "The child passes, in any organized society, through all the grades in the related social state. In the same order, also, government passes on, until it rests in the control of sovereignty, the state. And the right of the state to the custody and control of the citizen is as complete as the right of the parent to the control of the infant child. These are only the natural laws belonging to the several relations in the growth of society in all artificial conditions, under all governments. State control, therefore, comes into rightful exercise of authority over the education of every human being entitled to the privileges and protection of government. The particular age at which state* authority may rightfully interfere in this relation is a matter of state policy and sovereign discretion."
Here, again, the law of progress is misread. Nothing is more certain than that it has resulted in cutting down state sovereignty to make room for individual rights. Man's development has ever been an acquirement of rights against the state, and, in all political advancement, the state has consequently become less and less, and the citizen more and more. The progress of civil liberty has been from the beginning a wresting of power from despotic state sovereignty. Men fought early and desperately for the right of life—that is, that they should not have their heads cut off at the caprice of a sovereign will. They wrung from the state the right of the individual ownership of property. They reduced the functions of the state when it repressed free speech for its own sovereign purposes. They stripped the state of its power of determining what religion it thinks best for the community, and thus secured the rights of conscience. In all these things, and in many more, government has been restrained and hampered in its tyrannical meddlings, and the people have correspondingly gained in liberty. The state has always assumed that it knew more about what was good for the people than they knew themselves. What we call liberty is nothing more than the right of the people to be their own judges, and to manage their own concerns in the way that seems best for the promotion of their own interests. But Mr. Bryant interprets state sovereignty in a way that dissolves all individual rights. If the state may interfere at its ​"sovereign discretion" to extirpate the family in the matter of education, if it may take away a child as soon as it is ready for the Kindergarten, and dictate the whole course of its cultivation, stamping its character with a view to state objects, what else may it not do, and what becomes of the vaunted freedom of the citizen? The doctrine belongs to despotism, and was first and fitly practiced in Prussia as a means of shaping subjects to the uses of kingly power.
And now what is the state that claims such prerogatives in virtue of its sovereignty, and proposes to take the education of the whole community into its own hands? Divested of the glamour that surrounds this venerable abstraction, that which remains of actual reality is simply a lot of men got together to carry on the practical work of government. The state lives in the life of its representatives. It exists only as embodied in its officials. Certain men are chosen to make, repeal, and execute the laws, and these are the state. The state can do whatever they can do; the state is whatever they are. But we are not yet down to the naked reality. The community is divided into two great political parties, and the one that beats by numbers at election takes the government. Successful office-seekers, therefore, constitute the state. Those who succeed in partisan politics are those who cultivate the art of partisan politics. What these arts are, and what is the general quality of those who win by them, we need not say. But it is notorious that men of intelligence, integrity, and character are not successful partisans. It is the intriguers, the wire-pullers, and the crafty, unscrupulous managers in caucus and convention that win, and these men form the state. We do not exaggerate: witness the last Legislature of our own State. Humiliating as it may be to our patriotic pride, every candid person knows it to be a fact that an election under our representative system, with its inevitable caucus and convention machinery, is simply a winnowing out of superior men and the choice of the worst to take the offices of state.
We need not dilate upon the consequences; they are known and read of all men, and the lesson they teach has been freely drawn. If any worthy or meritorious thing is to be done, the significant exclamation is, "In Heaven's name keep it out of politics!" Such, indeed, is the growing disgust with political doings that it is now quixotically proposed to take even office-holding out of politics. And, yet, there are those who would intrust our politicians—ignorant, self-seeking, unscrupulous, and corrupt as the great mass of them are—with the whole work of education in society. Who is so senseless as to look for educational progress in such a condition of things? The system will be turned to the purposes of demagogism as surely as effect follows cause. The management of institutions of learning will become an art of getting state appropriations. The educational system will become rigid in proportion to the extent and complexity of its gradations, and will resist all improvement. Teachers, inspectors, superintendents, become office-holders and stipendiaries under the Government, and all animated with the common purpose of getting their salaries increased. Education, as a function of the states, must become a branch of mercenary politics. And this system, by its vicious growth, and its prestige of authority, and the boundless means at its command, must rival and overcome and extinguish all that private and voluntary interest in the work of education to which we are indebted for the past achievements in this important field of effort. Good may come from state education, but it will not be unmixed good, and it is at least an open question whether the evils of the system, where it is fully ​carried out, will not be far greater in the long-run than its benefits.
The many American friends of Mr. Herbert Spencer will be pleased to learn that he contemplates visiting this country next year. He has long wished to do so, but has been deterred from seriously thinking about it by the state of his health, which forbade the venture of an Atlantic voyage. But he is now so much better that this difficulty is removed, and he hopes to come over some time next summer.