Savings banks are large in vestors in mortgage loans and municipal and railroad bonds. The law as a rule prescribes the character of bonds which may be purchased, but in all States, government, State, city, town, village and school district bonds are legal in vestments. Railroad securities are legal if they conform to the statutory requirements, which for instance in New York are, that the bonds shall be a first mortgage on the property and that the corporation shall have paid at least 4 per cent dividend on all classes of stock for 10 years preceding the investment. The State laws differ as to the detailed requirements, a review of which would be impossible within the limitations of this article. As a rule the bond and mortgage loan is limited to 60 per cent of the appraised value of the property and must be a first mortgage. The proportion of mort gage loans to the total assets is generally stipulated in the law, as for instance in New York, not over 65 per cent of the deposits may be loaned on such security.
Postal Savings Banks.— The postal savings bank is in operation in all large countries ex cepting Germany. The system in this country dates from 25 June 1910. The fundamental idea of the postal savings bank is the receipt by the government through the post-offices of deposits, the payment of which is guaranteed by the government. For detailed description see POSTAL SAVINGS BANKS, article 14.
School Savings Banks.— The school sav ings bank in this country is the result of the work of the late John H. Thiry, a Belgian, who in connection with his work as trustee of the public schools of Long Island City became im pressed with the improvidence of the American children and desired in some way to combat the tendency to spend. As a result the first school savings bank was opened in connection with the public schools of the above named place in the late eighties. Mr. Thiry wrote and traveled extensively in connection with his pet scheme, with the result that other banks were formed in various parts of the country after his original plan. For many years, he was the only statistician in the movement, and annually is sued a report giving the growth of the system. It was not until the matter was taken up by the savings bank section of the American Bankers Association in the year 1911 that the movement reached the aggressive stage, and under the en couragement of the bankers has grown to large proportions.
The Woman's Christian Temperance Union, Young Men's Christian Association and kindred organizations have loaned their support also, the first-mentioned organization being particularly active in spreading the idea. Mrs. S. L. Oberholtzer (q.v.), of Philadelphia, has given much time in promoting the school sav ings bank and has published periodic statistical matter in connection therewith. The school
savings bank is as a rule conducted along one of two lines; (1) Deposits are made through the medium of the teacher who acts as receiv ing agent for the school. Deposits are per mitted as low as one cent, but in some cases stamps are issued for penny deposits until 10 cents has been accumulated on a card. The pupil is given a pass card as a receipt for the deposit. The deposits from each class turned in to the principal and by him deposited in a savings bank to the credit of the school savings bank, or himself as trustee. The laws of several States, notably New York and Massachusetts, have legalized this method of procedure, it being deemed unwise to allow the movement to spread without adequate safe guards as to the disposition of the money re ceived on deposit When the deposits on the pupil's card reach one dollar or more, the amount is transferred to a regular savings bank account in the depository bank, in the pupil's name. Withdrawals from the general fund and from the pupil's individual accounts are permitted, but not encouraged, the signature of the principal and parent being required for statistical and restrictive reasons.
(2) The second method contemplates using the pupils of the higher grades as the active managers of the bank. Some schools have a regularly organized bank, with president, cashier, clerks, etc., who manage the school bank, receive all deposits, keep all records and render proper reports to a supervising head, usually one• of the teachers. One of the most popular plans consists of a duplicate card with amounts printed in multiples of five cents. As deposits are made the cards are placed together and the amount punched out, thus making the two records simultaneously. This plan was de vised by a school principal in Brooklyn and has met with great favor wherever instituted. Large cities like New•York and Chicago have taken up the school savings bank plan, the banks co-operating with the school authorities in pro moting the spread of the movement.
According to recent statistics gathered by the savings bank section of the American Bank ers Association, for the Comptroller of the Currency, there were 280 cities operating the school savings bank in one form or another represented by banks in 1,925 schools, having 928,784 pupils enrolled, of which 398,540 were depositors, having to their credit $1,792,640.10.
Bibliography.— Fisk, I The Modern Bank' (Chap. XXXI, New York 1910); Keyes, His tory of Savings Banks) (New York 1874) ; Kniffin, W. H., Jr., The Savings Bank and Its Practical Work) (New York 1912).