Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-01-19

The wave of speculation which has
swept over the American people during
the last two or three years has caused
economists and other thoughtful peo-
pie to peer into the fund which the
public has saved and to determine
what it amounts to. That 1t is enor-
nous goes without saying. Now that
the end of the year has been passed
and books have been balanced 1t Is
possible to gauge what has happened
Savings have dropped.
The savings bank accounts which in
dividuals laboriously built UP show a
diminution. Doubtless many have been
utterly depleted. while others have
been sliced in order to protect stocks
carried on margin. That speculation
is the cause can scarcely be doubted
because the drop in new savings is CO.
incident with the orgy of speculation
and also with prosperous times and
good employment generally. II there
is any truth In averages, nothing else
Is to be blamed.
The story Of American savings is a
fascinating one. The American Bank
ers' Association has compiled as COM
compile from 1911 onward. In 1911
savings deposits in all banks amounted
to approximately $4,000 00O, 900. In
1929 they amounted to $28, 1000, 600, 900.
Studying these savings year by year,
1t is found that there has been q steady
annual increase, with never a drop
until June, 1929, when Withdrawals,
presumably and almost certainly on
account Of stock market speculation,
broke the chain. Each year has seen
a tremendous increment due to new
loss of 81 100 100000. Thousands OF
persons, certain that the Santa Claus
stock market would continue to drive
its reindeer over their roofs and keep
their stocks rising in value, drew money
| from their accounts in the first place
to buy more in order to lime the twig
that would bring great fortune In
| the second place, when the Autumn
came they drew still more to protect
| the margins on which they were car
rying their precarious investments
Thirdly, many emptied their accounts
| to pay losses to their brokers. So the
story went, and more than q billion
dollars vanished from savings bank
books.
Savings Not Strictly Segregated.
| 1t is dificult to ascertain with alb
solute certainty just what the savings
fund of the American people is. The
accounts in savings banks do not &C
count for the whole of the bank saw
ings, by any means. A great many PEG.
pie, intent upon saving but at the same
time anxious to have every cent of thcil
\ money instantly available, merely de.
post 1t in open checking accounts. The
| interest Is much lower-uSually, in fact
no interest is paid on such accounts
but the money can be withdrawn at AM
time without notice.
Statistics are compiled from the bani
accounts which have definitely beer
designated as savings accounts or tim,
deposits. Any one who knows human
nature knows that such figures are by
no means complete. Patrick Hamilton
in the Midnight Bell, describes bank &C.
counts perhaps better than they evel
have been described before. He observe,
that the depositor does not have q givcr
amount Of money in the bank. He ha!
deposited 1t, to be sure, but it ha
gone into channels of trade and NJ
longer Is there. He merely thinks it Il
there. So, when he draws a checl
against it, all that happens is no dimi
mutton of the money, but diminution o
the thought of how much he has in thu
bank. Contrariwise. money on an ope:
checking account. II one Is determines
to save, is boarded wealth even though