The daily morning journal and courier. [volume] (New Haven, Conn.) 1894-1907, 1896-12-31
SAVINGS BANKS DISCUSSED
EX-SECRETARY FAIROHILD SPEAKS
BEFORE ECONOMIC ASSOCIATION.

Thinks Government Should Encourage
Habit of saving-How Depositors Arc
at Times Thrown Out of Employment
by Their Own Withdrawals Action
Has Depressing Effect on Labor
Baltimore, Dec. 30-Ex-Secretary of
the Treasury Charles S. Fairchild open
ed the morning session Of the third
day of the annual meeting of the AM
erican Economic association. What is
the present direction Of acquisitive in
vestment? What Is the relation Of the
deposits in savings banks to the gem
eral business Of the country?" was the
subject of his address. The ex-secre-
tary said in part:
The magnitude of savings bank de-
posits, exceeding in volume the de-
posits of national, state or private
banks, and their rapid growth, is q
subject worthy of careful consideration.
The merit of the savings bank system
is that it makes it easy to care for
savings, thus inducing savings, which
is OF itself benefit to the people who
save, both pecuniarily and morally. 1t
is further benefit to the community in
that this saving accumulates capital.
Which Is available for general business
purposes. 1t manifestly should be the
policy of the government to encourage
the habit of saving and to make saving
easy.
ON the other hand there are certain
features connected with this particular
form OF investment of savings Which
apparently are not we'll for the COM.
munity. The bulk of our savings banks
nave no capital or stockholders. The
assets all come from depositors and
the accumulation of earnings over and
above the dividends paid. Every de-
positor looks upon his deposit not as an
investment, but as something he can
withdraw at will. In times of financial
disturbance this fact generally in
creases the distress, for soon the de-
positors in savings banks begin to take
alarm and withdraw their deposits.
Consequently, there is a. withdrawal of
FUNDS from all the active business in
stltut1ons. Securities come on the
market when it is not ready to take
them. and thus these funds which have
been SO meri'toriously accumulated and
which have been of considerable bene-
nit to the community become at times
a menace to all business interests.
And then many of the depositors be-
ing the employees of the various busi-
ness enterprises which are crippled by
the financial disturbance, the circle Is
completed, and the fears of the deposit.
ors return to injure the deposftors
themselves by the curtailment or stop-
page of their regular employment. 1t
would therefore seem to be wise for
men to consider whether by some de-
vice saving cannot still be made easy.
and at the same time of the dangers
of which I have spoken be avoided.
The recent growth of mortgage insur-
ance companies and the habit Of Civ
ing shares in large mortgages opens a
way for investment of this character
which would be suitable for all sums.
Building and loan associations, too.
when properly managed, also afford an
investment for savings Of a very good
character"
General discussion followed, partici-
pated in by Professors F. H. Gidings
of Columbia college, Joseph French
johnson, University of Pennsylvania:
G. S. Walker, Massachusetts, Agrdcul-
tural college, and others.