The New York herald., 1877-08-30
Robberies OF the People by Saw.
ings BAnks-The True Remedy.

ton at Chicago, the largest In that city ana
the State of Illinois, is the latest addition
to the long list Of similar wrecks which are
scattered along the history Of the last four
or five years. New York has had its full
share, but they are confined to no part of
the country. 1t would be unjust to de-
nounce savings banks in the mass, for many
of them are solvent and we'll managed but
the security of depositors depends on
the honesty of their officers and not
on any safeguards thrown around
them by law. The classes who trust
their hard earnings to these institutions are
not competent judges Of their soundness,
and so'the law and its appointed officers un-
dertnke to judge for them; but bitter expe-
rienco proves that this is a frail and delu-
sive security. The poor who put their saw
ings in these institutions take their chances
in what is no better than lottery; they are
as unable to distinguish between safe and
insolvent banks as they are to judge which
will prove the lucky and which the unlucky
numbers in lottery tickets.
We suppose it might be possible for gov
ernment regulation and supervision to rem
der deposits safe; but this has not been
done and we see no likelihood that it will
be done. If there was ever an instance in
which it might have been expected it was
that Of the we'll known Freedman's Savings
Bank, organized to encourage thrift in the
newly emancipated negroes. But the poor
blacks, the wards Of the nation, in whose
protection and prosperity Congress at that
time professed a lively interest, were as
egregiously swindled out Of their savings rs
white laborers have been by institutions or
ganized under State laws There must be
some strong inherent difficulties in insuring
legal protection to depositors when savings
banks in different States, as we'll as the
one created by federal authority, turn out to
be masked engines of fraud to delude and
cheat the coniding poor. We have recently
had protructed trial in this State Of q
bank superintendent under whose official
eyes and with whose official knowledge this
kind Of robbery was committed with impu-
nifty on an extensive scale, and this recreant
officer escaped with a mere removal, accom-
panied with q whitewashing apology remov-
ing every mputation Of bad intentions or
wilful neglect of duty. What confidence
can be felt in savings banks when officers
charged to know their condition and pro-
tect the public are held excusable, in their
motives at least, after they have looked on
and seen depositors plundered?
There is an efficient practical remedy for
this state OF things, but it does not lie in
new State laws for regulating savings banks.
L. is difficult to frame laws in which fraud
and cunning will not find some loophole.
The true remedy is that which was adopted
in England some sixteen years since, and is
operating SO admirably that it COM
mands universal approval in that coun-
try. We of course refer to the law,
carried through Parliament by Mr..
Gladstone in 1861, establishing savings
banks in connection with the Post Office.
That excellent law, which has proved so
successful and so beneficial, grew out Of a
state Of things similar to that which now
exists in this country, and described as fol-
lows by the authority from which we take
the facts:-'' ''Betw cen lS49 and 1867 the
great frauds and defalcations in these banks
had tendency to destroy the confidence Of |
the people in their stability. As early as
1906 Mr. Whitbread had proposed the es-
tablishment of savings banks in con-
Mt meeting of the Social Science Asso-
citation, a paper was read on the subject
by Mr.. Skies of the Huddersfield Ban king
Company, which attracted the attention Of
the Postmaster General and others, and
finally n plan, to great extent based on
Mr.. Skies suggestions, was matured by
George Chetwynd and Frank I. Scudmore,
with the cooperation of Sir Rowland HILL"
A bill embodying this plan was the one car
ried through Parliament by Mr.. Glad
stone.
The success of this plan in England is so
perfect and has been SO fully tested by ex-
perience that it deserves attention in this
country, when we SO urgently need o rem
edy for the same state of things which led
to its adoption. 1t grew into favor with the
working classes somewhat slowly. At the
end of the second year after the passage of
only FL ,694, 724. At the end of 1873 it had
risen to E27, 745, ,422. and the amount depos-
tied constantly increases from year to year,
although the rate of interest allowed is only
two and one-half per cent, while the ordi-
nary savings banks pay three and one
quarter per cent, the feeling of absolute
security causing three millions of depositors
(the number was 2,917 sos in 1879 to prefer
depositing in the Post Office at lower inter-
est. One of the effects of so entirely trust
worthy u rival is to keep the savings banks
of England on O sound basis lest they should
lose all their depostors.
The HERALD advocated the adoption of the
Post Office system in this country many
years ago, while the English experiment
was in its infancy. The reasons for its adon