The Toledo chronicle. [volume] (Toledo, Tama County, Iowa) 1873-1924, 1877-09-20

! :
OF New York, read q paper on "Savinp
Banks" In tracing the history of thes
beneficent Institutions he said that tb
first suggestion, published in England 4
1877, came from Jeremy. Bentham, who's
plan fot the filanageffieft If palljjerS n
cluded 4 system foTf what the wfitef cafe,
frngality banks" AiilohQ Tie firsf &
ii9gtlrddhcsa igl atths iasa In ptact!se Mis- Mis-
Priscilla Wakefield, Superintendent of
Friendly Society for the Benefit O
Women and Children" in 1901. In 1917
when the first act of Parliament on tn,
subject was passed, there were nearly on,
hundred private societies In England, Ire
land and Wales, which received and In
vested the savings Of the iaboritg Door
In 1915, several beHetoient Eentttn,at O
Massachusetts,, applying to the Legislature
for sayings-bahk tharef, used the fol
lowing language: 1t Is not BIZ the aims
of the WEALTHY that the GOOD 0f the lower
classes can be generally pfomots11. By
Sncil donations announcement is far oft.
effective benefactor ia the poor who On.
courages them In habits Of industry, so.
briefly and frhgaiity.'' These are the
ideas tipcn which The sarlS savingr bahks
in this COUNTRY were conducted by theil
founders. In some States the managers
were governed by their own prudence only
in the investment of the tftist finds; in
others they we're limited by law to the best
classes of securities, specified in tneil
charters. While the number and amount
of deposits was small in the aggregate
little difficulty was experienced in invest
ing the money safely and wisely, but when
the system became more popular, as It did
when good management ard It's fruits
were exhibited, the deposits increased Sc
rapidly that Trustees, who were before
limited, were authorized to invest the
funds. not only in bonds and mortgages,
United States and State stocks, but in
bonds of counties, cities, towns and vii
lages of the States in which the banks
were located, and In some quarters, nota.
bly, in New England, authority, was given
TO invest In first mortgage bonds Of fail-
roads chartered by the State in which the
banks were located, and in the stock of
their State or National Banks. Loans on
these securities in New England banks
now amount to $5S ,O00, 900, or 13 per cent.
of the total assets, Vermont being the
largest, or 90 per cent. In the New En-
gland States, except Massachusetts and
Rhode Island, railroad stocks, as well as
bonds, are allowed to be held by the saw
ings banks. The result of such invest
ment is shown in shrinkage OF assets
and reduction of dividends.
The speculative mania following the
war speedily reached the savings banks.
Spectators saw in them new field, and,
with friends in the Legislature, il was
easy to have them created. In this State,
where seventy four were in operation in
1862, by 1875 they had increased to l. ,S75.
In Massachusetts there were ninety.two
in 1862, and in 1875, 1S0 reported. In
the City of New \ crk, twenty one were in
existence in 1862, and in 1874, forty-four
were doing business. OF these last, all
had special charters, the provisions of the
most of which might be termed "liberal''
that is, the Trustees were at liberty to do
many things in an agreeable way for the
parties in interest. Expensive offices were
hired and fitted up with the funds first de-
posted high rates of interest were prom
iseu and paid out of the deposits when
necessary to make up deficiencies; ex-
travagant salaries were given from the be-
5;n..;-s +@ IN .-s and r1prke narficular-
ly to the former; loans were made on un-
productive as well as improved real estate
for large part of the purchase money,
and to such an extent was this carried on,
both in MassaILceetts and New York.
that it is quite safe TO say that the specu-
lative price which this class of property
reached down to 1870 was largely due to
the facilities offered by savings banks and
insurance companies. In Massachusetts,,
these loans rose, between 1865 and 1876,
from SID, 200 900 to $121 900, 900, while
the total deposits for tine same period rose
from $50, 100000 to $243, 900, 900, show
ing an increase in the proportion OF de-
posits invested in mortgages from one
quarter to one-half, and, at the end OF
eleven years, the mortgage loans were
more than double the entire deposits OF
the first period. In 1868, the banks OF
that State held about $25, ,0O0, 900 in United
States bonds; in 1876 they held less than
$12, 900 900. Out of total deposit in the
six New England states of $438, 600, 600,
more than one half, or $228, ,000, 900, is in
vested in mortgages, Connecticut having
the largest amount, or 6S per cent. OF the
total assets. New Jersey has 40 per cent.
invested in similar manner. Some Of
the New England States invest in second
as well as in first mortgages. In New
York State, mortgage loans rose, between
1865 and 1876, from $23, 13S, 900 to $116,.
t54 600, while the deposits increased from
Sill, ,737, 600 to 1916, ,677 900. In New
York, also, the savings banks show bet
ter condition as to United States stocks
for, in 1871, they had $48, 800, 900, and, in
1876, $S1, $50 900, being % per cent. o1
their assets. One bank alone in New
York City, having added about Sc, ,00O, ,O0(
to its assets, owns more than $l5, ,OO0,O
of these securities, or more than half the
amount of its deposits.
The extravagant amounts OF money
srent in fine buildings, simply for offices
in which to carry on the business OF saw
ings banks, is in some cases an outrage or
the system; it is not only unwise and un
Just, but the example taught to the clas!
of people these institutions were designed
to benefit is unqualifedly bad; instead o.
teaching enonomy and thrift, which mus
be the rule Of every proper savings banh
deposition, they learn, on seeing the paia
tial architecture of the exterior, the sump
tuous and high priced furniture and TX
lures, that the custodians of their fund!
have no proper ideas of economy in ex
penditures which should govern those who
invest the money of others. The value O.
q banking house that had cost moderate
amount could be readily obtained in cas-
of forced sale; but for one that had cos
$500, 900, probably not more than one
third could be got; the loss OF $400, ,OUO z
q bank having liabilities of say $11 600,
600, would be a serious one to the depoe
itors, being three quarters OF years IN
terest at the present legal rate paid by say
ines banks in New York, or 81 per cent
on the total amount of deposit. The item
of salaries is also one deserving consider
alton. With the exception of the Execu
tive, who devotes the principal part o
his time to the institution, attending T.
the internal management, and who, IL
connection with the Secretary or Treas
urer. should have charge of the securities
no other Trustee should receive any pal
or profit for his services; every Othe
should be willing to devote all the TIM
needed to perform the labor incumbent Of
him without hope of pecuniary reward
and solely with desire to do a benefcen
work in the interest OF those who have no
tne 8Dlilty VI Tic OppOituuitJ y. uOnS
for themselves. Trustees do violence t
their trust, who, in q bank having les
than $4,000, 600 deposits, authorize tn
payment of nearly $4,000 per annum T
single officer, or who pay $22, 600 pc
annuIn to two officers in bank having
less than &11, 900, 900 deposits Sucl
salaries, under such conditions, cannot b
too severely condemned.
Mr.. Townsend closed his paper by q
account Of system Of savings banks II
public schools introduced In Belgium AMI
France with the promise OF great success
as educating the rising generation u
habits of thrift and self-respect.
King Lanfrey I.
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