Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-06-01
Americans Save for Rainy Day
BY FREDERIC ]. HASKIN.

Mutual savings banks were originally
founded as philanthropic rather than
money-making organizations. The first
were established in Boston and In
Philadelphia In 1916. The design Of
the founders was to provide workers
with q safe place to keep their saw
ings out Of the hands of persons whose
Judgment in investments and whose
motives were not always of the best.
Bank supervision was not so strict in
1915 as 1t Is today.
Today there are 500 mutual savings
banks in the United States. but they
are concentrated in the Northeastern
section Of the country, There are 1875
out of the sos in Massachusetts alone,
while New York has $50. There are
only 8 on the Pacific Coast and not
one In the South. The mutual banks
are, indeed, mutual and are actually
cooperative societies. One of the most
famous mutual savings banks in the
United States was that headed by the
late Myron T. Herrick. formerly Anbas-
Sador to France. It's very name i'm
piled its character, the Society for
Savings. This bank Is one Of the most
douriShing institutions Of Cleveland,
Ohio.
People Get Saving Habit
A mutual savings bank has no stock.
The depositors themselves own such
banks. The trustees are surrounded by
many legal restrictions and may not
/ participate In the profits. After deduct
ing expenses Of operation, all profits
made from investment Of the depoSitore'
FUNDS are divided among the depositors,
excepting what is set aside as reserve
or surplus. This, Of course, belongs TO
the depositorS, too, and the income
derived from surplus Is added to the
sums distributed to depositors in ratio
TO the amount Of deposits. In case Of
liquidation the entire surplus would be
50 distributed.
Attractive as mutual savings institu-
tons are, their existence has not pre-
vented . tremendous growth in the
savings departments of commercial
banks which promise no division Of
prontS, but merely pay fixed rate Of
deposit interest, ranging as a rule, up
to 4 per cent; in some localities con-
Siderably higher Conservatively and
honestly managed commercial banks
are all safe in these times, save
where great economic disasters overtake
entire communities. Good service rem
dered customers by commercial banks has
attracted large sums in savings deposits
and those Of such banks have grown
with greater rapidity than the accounts
Of mutualS.
Al wi LuuCuAL 8&V1QH8 0AIkS B0OWS0
deposits Of 4S,458, 900 900, while national
banks showed savings deposits of but
81 ,4S0, 100000 and State banks, $1,000
DOC, 900. Between 1911 and 1929 mutual
savings accounts more than doubled, but
savings accounts in national banks In
creased more than five times and such.
accounts in State banks between three
and four times. Trust company accounts
more than quadrupled. It Is interesting
to note that private banks saw their
savings accounts dwindle from $51 ,0OO,.
600 In 1911 to only $33, 900 900 In 1929.
These banks are not under Governments
supervision and there have been numer-'
GUS failures. Private banks have, In
the past, been much patroni1ed by
Immigrant workers. The postal savings
system has taken much Of their bust.
ness and the regulated commercial
banks have also participated.
Savings are not increasing Just now;
indeed, In the last year there have been
Withdrawals. Although in the period
1927-l928 there was q huge gain In all
savings accounts Of $2,322 900, 900, In
1928-29 Withdrawals exceeded new de-
posts with net decline Of $1e5 900 900
resulting. This Is accounted for, 30 far
as the hrst part Of the period Is con.
cerned, by Withdrawals to trade in the
stock market and later for necessities
| imposed by the market fling This
temporary check In climbing savings II
not regarded as representing any den.
mite change in American thrift. Another
year or two Is expected to show new
high levels.