The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1881-06-28
The Ladies' Deposit.
Some Facts about that Notorious Institu-
ton.
Henry A. Clapp in July Atlantic.l

The trick, it Is to be noted, is not new one,
but has been played successfully at least once
within the past twenty-five years in each of the
countries of France, Italy and Bavaria. Its
latest European form, the "Dachau bank Of
an ex-actress, Adele Spitzeder, which was op-
Grated in Munich from 1869 to 1872, and by
which the BaYarians were cheated out of mil
lions OF dollars, Is intrinsioAry tno 1nter-
esting of these swindles, and is specially so to
US because it had SO many points in common
with the Ladies' Deposit of Boston. No one,
indeed, who has studied the stories Of the two
together can doubt that in some way or other,
directly or indirectly, Fraulein Spitzeder's
plan was the inspiration and model Of Mrs.
Howe's. Both opened banks of deposit, prom
ised preposterous returns of interest, and sue
cessfully invited loans of money from the pub
lie. Neither had any pecuniary capital, or Of
fered any security, the sole and sufficient reli-
ance of each being upon her own impudence
and the combined cupidity aud credulity of
her customers. Each made friends by playing
the Lady Bountiful upon occasion, had
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 divi-
dend of about i've per cent. The absolute es-
sentials to long-continued success, as each
swindler knew, were the prompt payment of
the ridiculous rate of stipulated interest, and
the prompt punishment in a depositor of any
want of faith by return of her principal and
naughty refusal ever to resume business rela-
tions with her. This latter operation, a very
shrewd kind Of moral "bulldozing," Mrs.
Howe and her assistants used to perform
magnifcently and with great effect. Each
counted upon avery rare withdrawal of prin-
cipal so long as the extraordinary interest was
paid and the customers confidence mistaken.
Many persons-and the writer admits to being
one-at first found little difficulty in under
standing how such concern could pay twen-
ty-four per cent month quarterly in advance,
even for couple of years, without investing
its funds or receiving help from without But
the explanation is really quite simple; when
once the popular faith begins to be established
in such bank, the principal flows in for some
time in an ever-increasing stream, and for
some time there is more than enough money
always on hand to meet the current demand
for interest and leave the operator handsome
margin for silks, jewelry, hot-house flowers,
and all the other proper, living expenses-al-
though, of course, at every moment the con-
Germ is in fact utterly insolvent & In the case
OF the Ladses' Deposit some of the figures al
ready given illustrate this well enough; the
number of depositors in 1880 was five times as
great as in 1879, and the receipts from the first
quarter OF the former year were therefore far
more than enough by themselves to meet all
the demands for interest then accruing on de-
posits of 1S79 to take care of the usual small
withdrawal OF principal, and to give Mrs.
for comfort To keep such concern alive
there must be a like increase Of deposits upon
a geometric ratio all the time, and such rate
of advance cannot possibly be maintained for
many years. The longer the thing lasts the
wider is the circle of its final disaster and in
| justice, and the duty, therefore of every hon.
est man, whatever the duty of honest wom-
an may be, is to destroy such an en-
terprise as soon as 1t is unearthed Mrs. Howe
quite surpassed Miss SpitZeder in scrupulous
obedience to the spirit of their common
scheme. The latter sometimes though rarely,
to be sure-made investments of her deposited
funds; the former never did such thing, ex-
cepting once, when she lent a few hundred
dollars to a furniture dealer: and her Ladies'
Deposit had not single cent of "iRconae." in
the bankers sense of that word. Mrs. Howe,
in fact, carried on her business in all its
branches with appropriately Spartan simplici-
ty. She took her depositors' money; kept it in
the drawers of a chifoniere in the business par
lor by day, as Mrs. Gould has often said, car
ried it off in baskets at night, and put it some
where-probably under her bed-for safe keep
ing; paid out interest and principal from it
when there were calls for such Disbursements
bought her own house and land and furniture
and fixtures with it; and always treated it en-
tirely as her own,-which, indeed, in an i'm
portant sense, it was. For this sort Of bank
| ing none of the frippery of modern masculine
bookkeeping was needed, and none was used;
the accounts Of a Fiji Island tish-dealer could
not have been kept more simply than those OF
Mrs. Howe, the tBoston Financial agent" and
Miss Crandall, who testified in court that she
did not know the difference between a day.
book and a ledger, was the very woman to
serve as her chief clerk. In audacity the Ger
man operator sometimes surpassed her Ameri-
can imitator, but in cunning the latter abso-
lutely excelled. Mrs. Howe-or whoever elab-
grated the original conception of her bank
recognized the decided superiority in
sensibility and inquisitiveness OF the aver
age Bostonan over the average Bava-
rian, and her operations were conducted es-
pecially at first, with an almost exquisite tact.
The air of reserve and coyness with which the
management enveloped itself acted like magic
upon the credulity of the ordinary uneducated
woman. Miss Susan Smith went to the La
dies Deposit with her two hundred dollars in
her pocket, a little timorous, somewhat dubi-
GUS, rather incredulous. To her surprise, she