Savings Banks

Through educational publicity special forms of accounts intended to stimulate regular savings, promotion of savings for specific ob jects such as the purchase of a home, making of investments or the accumulation of funds for life insurance, have been developed, showing marked ingenuity in enlarging the use of the savings bank. Stock Savings Banks.—Stock Savings Banks are organized for the purpose of making profit for their owners and are con ducted by boards of directors selected by the stockholders. These banks generally exist in States where mutual savings banks have not been established. In certain cases they perform a savings bank business exclusively. In other cases the savings department is conducted as a part of the general operation of a commercial bank. These banks are organized and carried on in certain States under the general banking laws, in others under special laws regulating the operation of a savings bank.

School Savings.

The school savings bank is an imported idea brought to the United States by John H. Thiry, a savings bank official of Long Island city, and was modelled after those of France, Belgium and Germany. As a trustee of the public schools of Long Island city, Thiry found no difficulty in gaining the consent of his fellow trustees to try the experiment in those schools. From that experiment which proved successful the school savings bank idea spread until it received the general en dorsement of educators as well as bankers. It has been legalized in numerous States and in the principal individual States school savings have assumed impressive proportions. There are several plans of operating a school savings bank but they are alike in that they are subsidiary to a savings or other bank in which money collected from the children is ultimately deposited. The essential idea is that each child should be dealt with as an indi vidual depositor, with the customary evidence of his or her status as such, as, for example, the possession of a pass book in which his or her transactions with the bank are recorded. Children taught to save in school savings banks become users of savings banks after school years. In June 1928 there were in the United States 13,835 schools with savings plans; 3,980,237 children were reported participating in them with deposits of $26,005,138.04 and net savings of Postal Savings System.—Under a board of trustees consist ing of the postmaster general, the secretary of the Treasury and the attorney general, acting ex officio, the U.S. Government since 1910 has maintained postal savings depository offices. Accounts as low as $1.00 may be opened by persons over ten years of age. Interest at 2% per annum is allowed and is credited once a year. Individual balances may not exceed $2,500. Deposits in sums of $20 or multiples thereof may be converted by the depositor into U.S. Government bonds bearing interest at 24%. At the close of

the fiscal year 1928, there were 6,683 depositories in operation; was on deposit to the credit of 412,250 depositors with an average balance per depositor of $369.06.

The system is self-supporting showing a profit of $618,602.32 in 1928.

Postal savings banks, being backed by the pledged credit of the U.S. Government, were intended to encourage thrift, supple menting the activity of banking institutions. It was expected that they would keep in the country part of the money previously sent abroad on international money orders, bring hoarded money into circulation, and offer facilities to the timid and fearful in times of financial stress.

For the first 171 years of its operation the postal savings sys tem received on deposit $1,586,498,397, of which $1,252,326,472 had been repaid. The depression with its bank closures and slump in stocks greatly increased the popularity of postal savings. They mounted to the high total of $788,000,000 on June 3o, 1933, de clining only to $452,000,000 by Dec. 31, (H. BRU.) .ance.—Two classes of savings banks exist, namely, the sses d'Epargne Ordinaires," or private institutions, and the ie Nationale or Caisse d'Epargne Postale, this being the state Lgs bank administered by the Post Office. As is shown by following table, the major part of the nation's savings is sited in the private banks. The table also shows the post-war :ases in nominal savings, and their actual decrease when ced to gold values. Figures are in millions of francs (franc = The net result is a fall in the gold value of French savings bank deposits from 5,829 millions at the end of 1913 to 3,258 millions at the end of 1926. This bears out the general theory enunciated in the first section of this article.

The results for 1926 illustrate, in striking fashion, the extent of the blow dealt to thrift by a depreciating currency. It will be remembered that, at the opening of the year, the franc stood at 3.7o cents, or 130 francs to the pound, and then fell steadily until, in July, it fell as low as 2.03 cents, or 240 francs to the pound. In July alone it fell from 2.67 to 2.03 cents, or by 24%. The result was that this month witnessed a sudden rush on the part of the public to withdraw their savings, and in this month the Caisse Nationale lost 133.7 million francs, and the Caisses Ordinaires lost 53 millions. The run on the latter institutions continued into August, possibly because of the time that elapses between a de positor giving notice of withdrawal and the actual withdrawal, and in the first ten days of that month as many as 88 millions were withdrawn. By September, the financial situation was in hand, and confidence was restored. The result was a steady increase in deposits.