The San Francisco call., 1896-01-11
Managers Say They Are Aston
iShed at the Evidences of
Prosperity.
NEW DEP0sITORs COME DAILY
Despite Reduced Dividends the Savings
Banks Are Doing More Busi-
ness Than Ever.
"There is a general atmosphere OF pros

There is general atmosphere OF pros
perity and content among the masses of
the people. Never in my experience as a
banker bave we received so much money
and paid out so little comparatively at the
first of the year as at present"
Such was the pleasing comment upon
the local financial situation at the open
ing of 1886, given by Robert J. Tobin,
secretary of the Hibernia Bank, yesterday
A similar prospect was presented by
managers of other savings banks. show
ing, after all, that in spite of the reduction
of dividends to 81 and per cent money
has been pouring into the banks with a
new and altogether unprecedented in
crease in volume and that the only infer
ence under these conditions can be that
San Francisco has entered upon a reign of
prosperity and plenty.
Among those people who gave finance
any attention it was quite generally con-
ceded that the reduction of rates of interest
on savings-bank deposits would cause de-
positors to withdraw their money and seek
more profitable investments elsewhere.
Such, indeed, was the conclusion reached
by many real estate brokers and not few
banking men. But theories have not been
sustained by facts in this instance, for the
savings banks were never more prosperous,
nor in all probability did they ever con-
duct business on more conservative
basis.
In any line of investment the burden
some tax imposed this year would be
serious obstacle for the small capitalist or
the thrifty wage-earner to meet. Whether
IN real estate dealing or in the purchase of
securities-bonds, mortgages, etc.-the tax
of 2.25 per cent would face him, and with
that amount deducted from the interest in
most cases a bare margin over the new
rate of savings bank dividends would be
possible, while very frequently the net in
come would fall below the interest offered
by the banks.
So the people of small means have stood
by the savings banks, and in the new
order OF things-the growth OF prosperity
and content mentioned by Mr.. Tobin-
thousands of wage-earners and others with
small incomes are once again finding
themselves in circumstances conducive to
laying aside money in various sums with
the savings banks.
Lowell White. secretary of the San Fran
cisco Savings Union, reviewed the situa-
ton With the air OF q man verv well salts
fed with the world in general and pros
poets for his institution in particular
The increase of small depostors has
been greater since the first of the year than
for long time past" said he. There has
been disinclination on their part to in
vest and rapid increase in the number OF
deposltors, showing there is no distress
among the working people
I'VE never had such a rapid increase as
since January l, 1896, as to the opening of
new accounts. When dividends IN the
years 1882 to 1895 were the same as now
declared the savings banks maintained a
steady gain.
The reduction of interest will not give
man money unless he has it, and the
small depositors cannot buy property, al
though the property may yield good re-
turns. Then, very few people buy property
IN depressed market, but in a rising mar
ket. The reduction of interest NAV have
the effect OF turning attention to real es-
tate purchases. That will come later when
they think of it.
$50 far there has been no withdrawal OF
deposits incident to decrease of dividends.
nor has there been any failure to deposit,
In these latter Gays people don't hoard
money; 1t must be somewhere, and the
savings banks are the custodians of mod
crate means without much respect to rate
OF dividends. By and by the large deposi-
tors may be expected to consider the ques-
ton OF withdrawing money and investing
IN real estate, or otherwise; but there GER
talnly will be nothing spasmodic about it,
and 1t is not at all likely that the aggre-
gate deposits of savings banks in this City
will at any time be reduced.
The man buying property may with
draw money from tie saving bank, and
the chances are that that same bank or
some other bank will get back this money
at once
1T is mistake to suppose that money
in the savings banks is locked MP, for that
money is actually in circulation, though
nominally in bank. Money out of the
bank or In safe repositories or elsewhere
Is in effect boarded and its use is lost to
the public. a diminution of depositors in
the aggregate instead of helping real
estate would be the worst disaster that
could betaI 1t, as comparatively few pur-
chaseS are made for cash, a loan from
savings banks being made in a majority
OF cases of purchase.
In periods OF depression returns for use
of money are small The savings banks
can handle money of depositors at % cents
on 500 dollars, exclusive of taxes, taking
the chances of loss. No individual with
less than $780, 600 capital can handle his
own money 50 cheaply. Hence it is that
money will remain in the banks. however
small may be the dividend, for mouey so
deposited will yield better returns than
when handled by the owner"
MIR. White concluded by stating that in
the six days OF this month on which banks
were open 1872 new accounts had been
opened with his bank - an average of
thirty-two day.
1--WE began paying dividends on Janu-
ary2, said Robert J. Tobln OF the Hibernia
Bank, land since then the bank has taken
in more money than was paid out This
is a really remarkable showing for the be-
ginning of the year, when dividends are
paid. Business is increasing with unpre-
cedented rapidity, and has been during the
past year at the rate of $50 new accounts a
month.
''It is an unusual condition of affairs.
Never in my experience did we receive so
much money and pay out so little as at
the present time. Now, this is a season of
closing accounts, but we have been open
ing accounts at the rate of ten 10 twenty
day IN excess of those that are closed.
though as rule there are more accounts
closed In the first ten days OF this month
and OF July than in any other months of
the year. The inference is, the masses of
the people are well off. There is general
atmosphere of prosperity and content
among the people.
"Our interest is better paid now than
ever it was There have haan No Fo-ooIo.