The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1849-05-24
Savings Banks-surpius Funds.

will probably reach that port to-day or tomorrow
Savings Banks-surpius Funds.
If there is anything more than another which
charscerzes mankind of the present age, it Is the
broad expansive spirit ofhumanity and benevolence
which is abroad, seeking to cover with Its healing
wings the untutored savage of the Indian islands
the widow AID the fatherless at home-the poor
and needy of all climes colors, sects and creeds.
This spirit finds exercise in establishing missions.
benevolent institutions, humane associations,
savings banks, public baths, wash houses, and an
infinite variety of other organizations, all having
the same object in view-the amelioration and ele-
vaton of the great family of man.
But if to prove us the imperfection of every
thing of human invention, even when directed
towards the most laudable ends, evil accompanies
such benevolent institutions have referred to,
either from mlsapplied sympathy, in the case Of
abolnionism, and ant-capital-p unishmentism, by
want Of sagacty and forethought in forming them,
or from defects inherent in them, but not foreseen
at the time of their organization which, If fore
seen, could not be prevented
1t is about twenty-five years since few benevo-
lent and humane individuals co-operated with each
other in institung banks for savings-in which
the industrious mechanic or artizan might deposit
which he might have on hand after a months
work, as a provision for the support of his family
in the event of sickness or unemployment over
taking him. The establishment of those excellent
institutions gave a stimulus to industry and eco
nomy, and from that time to the present, thousands
and millions of dollars have been deposited in their
vaults by the laboring and mechanical portion of
the community.
Thus it will be seen that the object contemplated
by the founders Of those savings banks has been
gained, and great benefits have been conferred by
them on the working classes, not only by safely
keeping their surplus earnings, but in allowing them
interest on their deposites, which, account of
their smalness and oftentimes insignifcance,
would not attract the attention of capitalists. The
interest allowed by those Institutions is five per
cent, the difference between that and the legal rate
Of per cent being reserved for expenses clerk
hire, rent, &c. As those institutions, however,
grew IN favor with the people, 1t was found that
the difference of two per cent existing between the
rate given depositors and that at which the banks
loaned their deposites, which is the legal interest
of seven per cent, was more than sufficient to pay
all expenses of conducting the business. The con-
sequence is, that large surplus fund has accrued
an the vaults of almost every institution of this kind
IN the city, to which there is no legal ownership
These large sums in fact belong to no person not
to the depositors, for they received the rate of in
ferest tacitly agreed upon when they made their
deposites nor to the directors, for their services
are gratuitous. One institution of this kind in New
York has a surplus of over half million of dollars,
which is regularly invested, and is accommodating
from year 10 year, by the interest accruing upon it
al seven per cent. Another has surplus of thirty
thousand although it Is but Of comparatively recent
origin. The deposltes in one savings bank exceed
1hree millions Of dollars, which is invested at seven
per cent per annum and for which but five per cent
isgiven to the depostors. The difference beween
the two rates. reduced to figures, is sixty thousand
dollars-much more than is suficientto pay all the
expenses of conducting the business As the
balance, in reality belongs to person, it is added
to the surplus, and thus an immense sum Is accu-
mulating, which will become larger every year,
until, fsomething be not done TO prevent it, fund
Of gigantic size will remain without owners
We desire to call the attention of the public and
our State legislators to this extraordinary state of
things. If these accumulaons are allowed to pro-
coed, one institution alone in this city WILL at the
end of half century from this time, probably pos
sess surplus fund ofthis description to the amount
OF fifteen or twenty millions of dollars, disposable
In any way, the directors for the time being may
direct. system such as this is, tending as it
does, to the aggomeraon of vast fund and
moneyed influence fearful to contemplate. should.
by all means, be discounenanced at as early dav
as possible. Such tremendous fund in th, hands
of unprincipled men, if such should bv chance oot
control of it, would exercise most pern;c;ous IN.
fuence in the community, and in time would exert
power superior TO even that of the Legislature
Itself In few years, those institutions would he IN
position TO dictate what the of interest should
be, what men should be accommodated with loans.
and which denied; for corporations of every kind
are notorious for not possessing souls, and gene
rally lean as interest or favoritism dictates.
We have much more to say on this subject, but
nave not space, to-day, for the remarks which we
would like to make in addition to the above. 1t is
clear, from what wei have stated, that there is a
silent tut steady and certain influence at work,
which threatens TO create in our midst gigantic
moneyed influence, potent for evil and which, If not
destroyed, may, in time, work most disastrous con-
sequences How to prevent it, IS the question. We
know OF no means except legislative interference,
ny declaring that at the end of every fixed period,
all such surplus, except sufficient to cover contin.
gent losses, shall be paid into the State treasury;
or a refusal to renew the charters of the savings
banks now in existence, except in a modified
form, so as to prevent the accumulation of those
large surplus funds These large surplus funds
may be prevented from further accumulation bv
amending the charters of the institutions holdlpg
them. II the Legislature amended them so as 70
make II obligatory on the banks to give six per
cett to drpOsjtois, instead OF five, great share
81 'he moneys which now go 10 ieoko the sarplus
DGn.d he di-l oscd ct.