The Online Library of Liberty

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• A History of Banking In Great Britain;
• Chapter I.: Banking In England.
• Section I.: A Record of Beginnings.
• Section II.: Foundation of the Bank of England.
• Section III.: An Era of National Development.
• Section IV.: State of the Irish Currency.
• Section V.: Failure of Currency Reform—inflation and Reaction.
• Section VI.: The Committee On Banking of 1840.
• Section VII.: On the Bank Acts of 1844 and 1845.
• Section VIII.: Commercial Crises.
• Section IX.: Monetary Panics.
• Section X.: General Conclusion.
• Chapter II.: Banking In Scotland.
• Chapter III.: The Theory and Mechanism of Banking.
• Chapter IV.: Definitions of Economic Terms.
• Chapter V.: The Theory of Value.
• Section I.
• Section II.
• Section III.
• Chapter VI.: The Theory of Credit.
• Section I.
• Section II.
• Banking In Russia.
• Chapter I.: The Early Stages of Money and Credit.
• Section I.: Prefatory.
• Section II.: Introduction of Paper Money.
• Section III.: Financial Reconstruction Under Alexander II. And the Founding of the State Bank.
• Chapter II.: Methods and Operations of the State Bank.
• Chapter III.: Banking Vicissitudes From 1862 to 1875.
• Chapter IV.: The Eastern War Period.
• Chapter V.: Private Banks.
• Chapter VI.: The Bourse.
• Chapter VII.: The Precious Metals.
• Chapter VIII.: Foreign Exchanges.
• Chapter IX.: The Debt and Finances of Russia.
• History of Savings-banks In the United States.
• I.
• II.
• III.
• IV.
• V.

III.

METHODS OF OPERATING IN DIFFERENT STATES.

The method of operating savings-banks is not the same in all the States where they exist. In some they take the form of a society, with power to add to their membership, and with perpetual succession, a certain number of members are yearly chosen by ballot to act as managers; these managers elect their own officers, make rules and by-laws, and alter or rescind them at pleasure. In others the corporators are a limited number, and are themselves trustees, with power to fill vacancies, and are responsible for the management to State authority, to which they report for publication at regular intervals. In some they do business under special charters, in others under general laws to which every institution in the States conforms. This last system is growing in favor, as supervision is simplified so that superintendents or commissioners familiar with the one law can easily determine if investments have been made in prohibited securities or in too great amounts on permissible ones. The laws in the six New England States in relation to savings-banks are very similar, although in some banks the managers are more conservative in their practice than in others. All invest to some extent in United States bonds, in bonds and mortgages on real estate, in national or State bank stocks, State, county, city, town, or village bonds, loans on personal security, in railroad bonds, and some in railroad stocks.

In addition to the investments permitted by the laws of the State of New York, there are permitted to savings-banks, under the laws of the States of Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and New Jersey, investments in the county bonds of other States; and New Hampshire, Vermont, and Rhode Island permit bonds and mortgages in the Western States. Maine permits bonds and mortgages beyond its own boundaries only, in the cities of the State of New Hampshire. Maine, New Hampshire, Vermont, Rhode Island, Connecticut, New Jersey, Pennsylvania permit investment in bank and trust company stocks; Maine, New Hampshire, Massachusetts, Rhode Island, Connecticut, New Jersey, Pennsylvania, and Ohio in railroad stocks and bonds; Maine, New Hampshire, and Rhode Island in the stock of water companies; New Hampshire, Rhode Island, and New Jersey in gas company stocks; Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut in promissory notes; Connecticut allows investment in bonds and mortgages in four States outside its own jurisdiction; the State of Maryland allows savings-bank funds to be invested in stocks and bonds and mortgages without specifying exactly their character or location.

The limitation on deposits in Maine is $2000, and in Massachusetts the largest amount on deposit permitted to any one account is $1600. In no other State except New York is there any limitation placed upon the amount of deposits. In one savings-bank in Rhode Island there is one deposit amounting to $169,000, which, however, constitutes a fund intended for philanthropic purposes.

DIVIDENDS AND TAXATION.

The limit of dividends allowed in the State of Maine is 5 per cent.; in Vermont, 4½ per cent.; in Massachusetts, 5 per cent., and in the others there is no limit set up. The annual dividends paid in the year 1894 averaged, in Maine, 3.86 per cent.; in New Hampshire, 3.51 per cent.; in Vermont, 3.95 per cent.; in Massachusetts, 4.06 per cent.; in Rhode Island, 4 per cent.; in Connecticut, 3.86 per cent.; in New York, 3.53 per cent., and in New Jersey, 2.86 per cent.

Deposits in savings-banks are taxed, in Maine, seven-eighths of one per cent.; New Hampshire, one per cent.; Vermont, three-fourths of one per cent.; Massachusetts, one-fourth of one per cent.; Rhode Island, one-fourth of one per cent.; Connecticut, one-fourth of one per cent., and in the other States deposits are untaxed.

In Massachusetts the laws really forbid deposits above $1000, but allow interest to accumulate to the amount of $600 additional, making a total of $1600, the largest possible amount held in one account.

The official reports for 1894 show that the number of savings-banks in eleven Eastern and Middle States was 626, and the number of depositors 4,296,133. The average to each depositor was $367.39; the total amount of deposits was $1,578,352,728.00; and the total assets were $1,733,227,013.00; showing the surplus of assets over liabilities, $149,073,165.00.

The following statement of number of depositors and amount of deposits in the Eastern and Middle States and Ohio is compiled from the latest official reports for 1894:

The following statement of number of depositors and amount of deposits in the United States in 1894 and 1895, respectively, is taken from the Statistical Abstract issued by the Treasury Bureau of Statistics:†

[† ] This Treasury report includes not only all the savings-banks which the Author has taken into consideration, but also the savings-banks of the West and South; which are organized with capital, have stockholders, take any amount on deposit, and invest the funds in many instances as the directors please. Those institutions are not to be classed with the true savings-banks of the Eastern and Middle States, which have no capital, and whose assets and surplus are held for the benefit of depositors only.