Savings Banks

In addition to holding deposits, both the Post Office and Trustee Savings Banks purchase and sell gilt-edged stocks and shares on behalf of their depositors and collect the interest thereon. The Post Office has also acted with the Bank of England as joint issuers of big Government loans, such as 5% War Loan and Funding Loan, to the investing public, and subsequently as registrar of such loans. Stock issued by the Post Office cannot be sold on the market, but must be sold through the Post Office at the market price of the day. The Post Office is also responsible for the administration of Savings Certificates, and will issue an nuities to and effect life insurance for the public.

Deposits in the Post Office and Trustee Savings Banks and holdings of Savings Certificates are limited to Loo (par value in the case of certificates) for each individual. An exception is that when an ex-service man took his war gratuity in the form of The name savings banks is differently applied in various parts of the United States but the typical savings bank is a mutual cor poration intended to serve as a benevolent institution. In cer tain States savings banks are conducted as profit-making enter prises by stock corporations. In addition to the specialized sav ings banks there are many commercial banks maintaining thrift departments which in their functions are similar to savings banks.

The confusion of name between what are strictly savings banks conducted for profit and general banks bearing the title of savings banks makes it difficult to determine from available statistics the exact amount on deposit in stock savings banks, but the figures as of June 3o, 1928, for 791 stock savings banks were ap proximately $1,561,218,000.

Earlier History.

The savings banks in America were adapted from similar enterprises in Great Britain. Groups of persons, usu ally men of substance and public spirit, secured charters for the purpose of establishing banks for the savings of the poor, the earli est being the Provident Institution for Savings in the Town of Boston, chartered on Dec. 13, 1816. There were in 1928 616 insti tutions whose avowed purpose was to encourage savings, and with out profit to their sponsors. It can no longer be said this appeal is exclusively to the very modestly circumstanced since in New York State as much as $7,500 may be deposited by a single individual and the average amount on deposit per account in that State on June 3o, 1928, was $870.96, and in the United States $739-24.

Institutions originally established to serve a particular class early found it advisable to receive deposits from all corners but it is a matter of comparatively recent development that the sav ings banks seek to serve their depositors with the same business like deference which well-managed commercial undertakings have found it profitable to employ in dealing with customers. Con versely, commercial banks conducting thrift and savings depart ments do so as a rule in a spirit of effective service and with no intention to exploit their depositors.

The Mutual Savings Bank.

The operation of a mutual savings bank is strictly limited by law to the receipt, investment and return of deposits with interest, in addition to minor auxiliary functions performed as services to depositors. The law also strictly limits the type of investment which may be made by such institutions with a view to the greatest possible security of de positors' funds.

The importance of the mutual savings bank in the national economy of the United States is indicated by the fact that ac cording to reports made by the Comptroller of the Currency, on June 3o, 1927, the total deposits in such banks were $8,077, 099,000, and the total depositors 15,337,398. These banks are situated principally in the New England States, middle Atlantic States, New York, Pennsylvania, Delaware, Ohio and Washington, D.C. On Dec. 31,1934 there were $9,908,000,00o in time deposits.

The legal structure and general administrative features of mu tual savings banks in the State of New York may be taken as indicating the mutual type of institution of which savings banks of that State are fairly representative.

Organization.

Specific requirements are laid down by statute governing the incorporation of savings banks. Not only must these requirements be met but approval must be obtained from the official having general supervision over the banking in stitutions in the State. A person is ineligible for election to a board of trustees of a savings bank in New York if by his election a majority of the board shall be members of the boards of com mercial banks, trust companies or national banking associations operating a special interest department, or of a mortgage or title company organized under the banking law or insurance law. From time to time, and now usually every three months, the trustees of the bank declare and credit to the depositors dividends at the rate which under the law may not exceed a maximum percentage of 5%.