HISTORY 
 
 OF THE 
 
 assachusetts Savings Banks. 
 
 BY 
 
 WILLIAM WOODWARD. 
 
 “ It is the duty of rulers to make it easy for the people to do right, 
 and difficult to do wrong.”— Gladstone. 
 
 Reprinted from the BANKER’S MAGAZINE of New York. 
 
 NEW YORK: 
 
 HOMANS PUBLISHING COMPANY. 
 

 
MASSACHUSETTS SAVINGS BANKS. 
 
 <<lt is the dut y of rulers to make it easy for the people to do 
 right and difficult to do wrong. ** — Gladstone . 
 
 T is a fact, well-nigh universal, that those institutions and 
 organizations which have blessed humanity most widely have 
 been the immediate outgrowth of conditions of practical necessity 
 on the part of the common people. Unable, by virtue of limited 
 resources, to do for themselves that which the common weal has 
 imperatively demanded, the interests and needs of the masses have 
 always, and rightfully, been cared for and supplied either by the 
 philanthropy of individuals or by legislative decree. Hence, this 
 fact in mind, it is the occasion of no surprise to find, upon 
 investigation, that the Institution for Savings had its origin in the 
 purpose, on the part of benevolent individuals, to encourage habits 
 of frugality and thrift among the poor and indigent, in this and 
 other countries. 
 
 This idea, from its inception, has been so largely and gradually 
 a development from a remote and but vaguely defined principle, 
 th?t it is somewhat difficult to indicate just how and when and 
 where it first saw the light. It is known, however, that among 
 the other excellent things suggested by Daniel Defoe was the pro¬ 
 priety of providing for and encouraging small savings among the 
 common people. This was in 1697. Nearly a century later we find 
 that this idea had been embodied more or less distinctly in certain 
 institutions in Brunswick (1765), Hamburg (1778), Oldenburg (1786) 
 Loire (1790), Basel (1792), Geneva (1794), and Kiel in Holstein 
 (179 )• Regarding these institutions, Mr. Lewins, in his “History 
 of Banks for Savings in Great Britain and Ireland,” remarks • 
 
 “ That, from the best investigation I have been able to make, the 
 institutions in question were something very different from savings 
 banks as English people understand them, dealing, as they did, in 
 
 p2.\ 
 
 \ 
 
4 HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 business more like the sale of deferred annuities. The institution 
 at Hamburg simply took the spare cash of servants and handi¬ 
 craftsmen, and granted annuities on the members arriving at a 
 certain age. No withdrawal of money was allowed." 
 
 It is Jeremy Bentham who is credited with having revived the 
 theory of Defoe in Great Britain, when, in 1797, he suggested what 
 was known as the Frugality Bank. His plans were actually put 
 in practical operation, in 1799, by Rev. Joseph Smith, of Wendover, 
 who volunteered to receive from his parishioners any deposits of 
 money which they might choose to make with him during the 
 summer, the same to be returned, if desired, at Christmas, with 
 the addition of one-third the amount, as a bounty upon the frugality 
 of the depositor. 
 
 In 1798, a Mrs. Priscilla Wakefield established a “Friendly Society 
 for the Benefit of Women and Children,” at Tottenham. This 
 appears to have been, also, an institution for the granting of 
 annuities; but, in 1801, it united with this original purpose a “fund 
 for loans and a bank for savings.” In 1804, this institution was 
 formally organized as a bank for savings. 
 
 Waiving the matter of the special claims to priority preferred 
 by the adherents of any of the persons mentioned in connection 
 with the founding of these early institutions for savings as being 
 unimportant in this connection, we feel obliged to mention the 
 name of Rev. Henry Duncan, minister at Ruthwell, Dumfrieshire, 
 Scotland, as deserving special prominence in this early history. For, 
 not only is he known as the founder of the first savings bank in 
 Scotland, in 1810, but he accomplished more than any other 
 individual, by making known throughout Great Britain the practical 
 value of the system, and by reducing his theories to a simple 
 working basis. He published various papers on the subject, and 
 gave his personal services in organizing similar institutions in 
 Scotland and England. His was the first self-sustaining bank; and 
 it was used as a model for similar institutions for a considerable 
 period. 
 
 It should here be observed that these early institutions were 
 purely voluntary in their nature, having neither Government recog¬ 
 nition nor control. They were dependent for support and for credit 
 upon the public confidence in the management; and it is but just 
 to say that the confidence thus bestowed was rarely abused. 
 
 The first savings bank in Great Britain authorized by Parliament 
 was by act of that body passed August, 1817. 
 
 Inception in United States. 
 
 The foregoing history of the early development of the institu¬ 
 tion for savings in Europe, and especially in Great Britain, has been 
 considered necessary to an intelligent understanding and appreciation 
 of its beginnings in this country. 
 
HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 5 
 
 The outcome of the War for Independence, while in many ways 
 advantageous to the people, was, in certain respects, disastrous to 
 their immediate interests. It left them poor in means and unsettled 
 in habits and principles. Wages were low and prices were propor¬ 
 tionately high. The law of self-preservation seemed to actuate and 
 control individuals in their mutual intercourse and relations. The 
 elements of thrift were not a common possession among the masses. 
 It was to meet and to provide for such conditions that the highest 
 intellectual resources of legislators and philanthropists were called 
 into action. 
 
 To this end it was attempted to regulate wages by establishing 
 by law a minimum price for the same. Failing in this, a similar 
 endeavor was made to fix the limit beyond which prices should 
 not rise for the necessaries of life. The omnipotence of the law 
 of demand and supply seems not to have been recognized in any 
 of these abortive attempts to ameliorate the condition of the com¬ 
 mon people. Later, and with the sanction of the laws of the States, 
 lotteries were commonly established for purposes of revenue for 
 public and charitable enterprises. But, in all such endeavors, the 
 snake was only scorched, not killed. It still remained for some 
 enterprising and far-sighted person or persons to inaugurate such 
 a system of practical beneficence as would, slowly it may be, but 
 none the less surely, educate the people up to such a condition 
 of self-help as would, in the end, provide a satisfactory solution 
 of the troublesome enigma. 
 
 From this time on, the progress of the idea of providing for 
 and encouraging the savings of the common people was quite rapid, 
 and coincident with the similar agitation in Europe. Here, as 
 there, many local and voluntary associations came into being having 
 this idea more or less distinctly defined in their articles of asso¬ 
 ciation. It took but a brief period to demonstrate the practicability 
 of the embodied principles of the system, although it was equally 
 evident that other and more effectual methods would be necessary 
 to place such principles on a basis of permanency. 
 
 Beginnings in Massachusetts. 
 
 The agitation grew apace in Massachusetts. Foremost among the 
 Colonies to recognize the common necessities, and to contribute 
 her proportion toward the support of every enterprise affecting the 
 well-being of the whole people, Massachusetts did not wait for a 
 leader, when, acting in her sovereign sphere as a State, she could 
 contribute anything toward the betterment of her own citizens. 
 Hence, it was simply in keeping with all her antecedents that 
 Massachusetts should lead the movement in favor of the establish¬ 
 ment of Institutions for Savings. Not only was the first of such 
 institutions under legal enactment in the United States founded in 
 
6 
 
 HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 Boston, but the Act of December 13, 1816, is, so far as known, 
 the first public act of legislation in the world investing such insti¬ 
 tutions with the protection of law. 
 
 The Hon. James Savage, of Boston, has credit for having taken 
 the first active measures looking toward the founding of a Bank 
 for Savings in Massachusetts. The first public announcement of 
 the proposed plan was made in the December number of The 
 Christian Disciple , a religious paper published at the time in Boston. 
 As announced, the purpose was: “For the security and improve¬ 
 ment of the savings of persons in humble life.” 
 
 That those who had the matter in charge were very much in 
 earnest, is evident from the fact that, on the thirteenth day of the 
 very month on which the first announcement was made, the act of 
 authorization was approved by the Legislature. Forty-eight names 
 appear in the original list of trustees of the institution—names 
 that have a familiar appearance to one acquainted with the annals 
 of Boston during that period. 
 
 At the time the Provident Institution for Savings opened its 
 doors, the city of Boston had a population of between 35,000 and 
 36,000. The banking capital of the State was $11,475,000, and of 
 the nation $125,000,000. This last fact is significant, as indicating 
 the comparative maturity of the general banking business of the 
 country at the inception of the Institution for Savings. 
 
 First Institution for Savings. 
 
 The Provident Institution for Savings, in the town of Boston, 
 began business in the spring of 1817. It is noticeable that neither 
 in the charter of this institution, nor in the charters of similar 
 organizations granted previous to 1833, does the word “bank” 
 appear in any instance. It is supposed that this distinction was 
 made, and the term “Institution for Savings” employed, for the 
 purpose of avoiding a certain sentiment of antipathy, which, at the 
 time, appeared to be entertained toward the existing “banks” by 
 the common people. 
 
 The trustees of the “ Provident ” promised to divide to its deposit¬ 
 ors one per cent, quarterly, and more if possible. The first divi¬ 
 dend was declared the 1st of the following July, according to 
 agreement. Afterward, until January, 1822, the quarterly dividend 
 was one and one-fourth per cent., at which time the deposits had 
 reached $600,000, and a surplus was held of $6,200. The quarterly 
 dividend was then reduced to one per cent., with the purpose of 
 dividing the reserve every five years by means of an extra divi¬ 
 dend ; such dividend to be apportioned to depositors on the basis 
 of the amount and the time of the deposit. Out of the then 
 existing surplus an extra dividend amounting to $8,000 was paid, 
 according to the above plan, July 1st following. 
 
HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 7 
 
 In 1827, this institution appears to have had $34,000 in reserved 
 profits on a total deposit of $793,000. At this time a second extra 
 dividend was declared. In 1832, the expiration of the second period 
 of five years, the number of depositors was 60,500, and the deposits 
 $1,442,000. The crisis of 1837 entailed such losses on this institu¬ 
 tion, in common with all others, that it was unable to pay its 
 usual extra dividend, although it had paid with commendable 
 regularity the quarterly dividend of one per cent, through the 
 period. 
 
 The losses to these institutions during the crisis of 1837, suffered 
 largely through their investments in bank stock, either directly or 
 where held as collateral for loans, reached, it is estimated, the 
 
 round sum of $275,000. 
 
 Previous to the passage of the general law, in 1834, the institu¬ 
 tions for savings were subject to no legal restrictions save such 
 as were imposed by the terms of their respective charters; and, 
 moreover, they were permitted to institute such laws for their own 
 government as were not contrary to the laws of the common¬ 
 
 wealth. About the ‘ only provision made for the supervision and 
 inspection of these early institutions by the Government was the 
 following, taken from the charter of the New Bedford Bank, and 
 which is repeated in substance in most of the other charters: 
 “ The officers and agents of said institution shall lay a statement 
 of the affairs thereof before any persons appointed by the Legis¬ 
 lature to examine the same, whenever requested so to do, and 
 shall exhibit to them all the books and papers relating thereto, 
 and shall submit to be examined by them the same, under oath. 
 And the Legislature may, at any time, make such further regula¬ 
 tions for the government of said institution as they may deem 
 expedient, and may alter or repeal this act at pleasure.” It is 
 
 very creditable to these institutions that this provision of their 
 
 respective charters was rarely called into effect. 
 
 Between 1816 and 1833 twenty-two charters were granted, fourteen 
 of this number being granted subsequent to 1828. Two other insti¬ 
 tutions were incorporated, but failed to take out charters. The last 
 act of incorporation, prior to the passage of the general laws, was 
 approved in March, 1833. By it the Savings Bank for Freemen, 
 in the city of Boston, came into being. It was at the same ses¬ 
 sion of the General Court that authority was given the Provident 
 Institution to purchase real estate to an amount not exceeding 
 $30,000. 
 
 Order of Bank Charters. 
 
 Inasmuch as those banks chartered previous to the enactment of 
 the general law of 1834 have an interest all their own, by virtue 
 of their priority, it has been considered desirable to name them in 
 
8 
 
 HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 this connection. They will be found in the order in which the 
 charters were granted : 
 
 Provident Institution for Savings, in the town of Boston, Decem¬ 
 ber 13, 1816. 
 
 Institution for Savings, in the town of Salem and vicinity, 
 January 29, 1818. 
 
 Institution for Savings, in the town of Portland and vicinity, 
 June 11, 1819; not organized. 
 
 Institution for Savings, in Newburyport and vicinity, January 31, 
 1820. * 
 
 Provident Institution for Savings, in the town of Hallowell and 
 vicinity, February 21, 1820; not organized. 
 
 Institution for Savings, in the town of Roxbury and vicinity, 
 February 22, 1825. 
 
 New Bedford Institution for Savings, June 16, 1825. 
 
 Lynn Institution for Savings, June 20, 1826. 
 
 Provident Institution for Savings, in the town of Taunton and 
 vicinity, February 26, 1827. 
 
 Springfield Institution for Savings, June 16, 1827. Original charter 
 limit, thirty years. 
 
 Institution for Savings, in the town of Haverhill and vicinity, 
 February 8, 1828. 
 
 Worcester County Institution for Savings, in the town of Worces¬ 
 ter, February 8, 1828. 
 
 Provident Institution for Savings, in the towns of Salisbury and 
 Amesbury, February 20, 1828. 
 
 Fall River Institution for Savings, March 11, 1828. 
 
 Plymouth Institution for Savings, June 11, 1828. 
 
 Lowell Institution for Savings, February 20, 1829. Original char¬ 
 ter limit, thirty years. 
 
 Warren Institution for Savings, in the town of Charlestown, 
 February 21, 1829. ♦ 
 
 Institution for Savings, in the town of Barnstable, January 29, 
 
 1831. 
 
 Provident Institution for Savings, in the town of Gloucester and 
 vicinity, February 3, 1831. 
 
 Dedham Institution for Savings, March 19, 1831. 
 
 Institution for Savings, in the town of Newton, June 17, 1831.' 
 Institution for Savings, in the town of Fairhaven, February 10, 
 
 1832. 
 
 Weymouth and Braintree Institution for Savings, February 16, 
 
 1833- * 
 
 Savings Bank for Seamen, in the city of Boston, March 7, 1833 ; 
 name changed to Suffolk afterward. 
 
 As has been stated, of these twenty-four institutions as incor¬ 
 porated, all but two commenced business, and with the exception 
 
HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 9 
 
 of the Taunton, which failed in 1843, the Gloucester in 1844, and 
 the Barnstable in 1878, all are in existence at the present time. 
 
 To assist in a more intelligent comprehension of the very remark¬ 
 able progress of these early institutions, the following table has 
 been prepared, giving the number of depositors and the total 
 amount of deposits in each institution in 1834, and also in 1887, 
 the year of the latest available returns. The Springfield Institu¬ 
 tion appears to have made no returns in 1834, owing, no doubt, 
 to the fact that its deposits were too small to justify a statement. 
 Leaving this item out of the calculations in 1834, and also omit¬ 
 ting the three institutions which had failed prior to 1887, is it 
 not, truly, a remarkable showing, that the number of depositors 
 increased from 24,252 to 310,293, and the total deposits from 
 $3,406,935, to the significant figure of $122,940,940. The average 
 deposit in 1834 was $140, while in 1887 it was $392. 
 
 Table Showing Comparative Condition of Twenty-two 
 Savings Banks in 1834 and 1887. 
 
 
 1834. 
 
 1887. 
 
 Date. 
 
 Name. 
 
 Accounts. 
 
 Deposits. 
 
 Accounts. 
 
 Deposits. 
 
 1816.. 
 
 Boston. Provident. 
 
 IL 495 
 
 $1,686,202 
 
 72,955 
 
 $26,897,853 
 
 1833.. 
 
 Boston. For Seamen*. 
 
 272 
 
 32.937 
 
 49,292 
 
 20,045,975 
 
 1831.. 
 
 Barnstablef. 
 
 142 
 
 17,160 
 
 — 
 
 — 
 
 1831.. 
 
 Dedham. 
 
 538 
 
 61,166 
 
 5,307 
 
 1,930,266 
 
 1832.. 
 
 Fairhaven. 
 
 102 
 
 9,102 
 
 816 
 
 429,021 
 
 1828.. 
 
 Fall River. 
 
 335 
 
 46,692 
 
 io ,995 
 
 5 , 459,623 
 
 1831.. 
 
 Gloucester % . 
 
 240 
 
 20,014 
 
 — 
 
 — 
 
 1828.. 
 
 Haverhill. 
 
 327 
 
 25 , 73 i 
 
 12,075 
 
 4,109,421 
 
 1829.. 
 
 Lowell.. 
 
 1,026 
 
 114,105 
 
 10,846 
 
 3 , 775,382 
 
 1826.. 
 
 Lynn. 
 
 461 
 
 33,646 
 
 8,348 
 
 2,720,345 
 
 1825.. 
 
 New Bedford. 
 
 1,162 
 
 207,764 
 
 20,091 
 
 10,413,463 
 
 1820.. 
 
 Newburyport. 
 
 L 5 I 3 
 
 232,460 
 
 0 
 
 " 3 - 
 
 00 
 
 d 
 
 M 
 
 4 , 893,275 
 
 1831.. 
 
 Newton. 
 
 61 
 
 1,829 
 
 6,253 
 
 r,524,901 
 
 1828.. 
 
 Plymouth. 
 
 703 
 
 91,672 
 
 6,302 
 
 2 ,i 9 L 455 
 
 1825.. 
 
 Roxbury (Boston). 
 
 668 
 
 83,913 
 
 II ,060 
 
 4,017,894 
 
 1818.. 
 
 Salem. 
 
 2,205 
 
 360,852 
 
 16,633 
 
 6,844,981 
 
 1828.. 
 
 Salisbury and Amesbury. 
 
 263 
 
 30,557 
 
 5 U 37 
 
 L 739 , 55 o 
 
 1827.. 
 
 Springfield §. 
 
 — 
 
 
 23,642 
 
 9,325,298 
 
 1827.. 
 
 Taunton J . 
 
 845 
 
 121,938 
 
 — 
 
 — 
 
 1829.. 
 
 Warren (Boston). 
 
 622 
 
 62,556 
 
 15,407 
 
 5,958,070 
 
 1833-. 
 
 Weymouth. 
 
 26 
 
 1,097 
 
 L 732 
 
 554,773 
 
 1828.. 
 
 Worcester. 
 
 1,246 
 
 165,542 
 
 22,562 
 
 10,109,394 
 
 
 
 24,252 
 
 $3,406,935 
 
 3!°,293 . 
 
 $122,940,940 
 
 * Name changed to Suffolk. t Failed in 1878. % Failed in 1844. 
 
 % Not reported in 1834; probably too small. || Failed in 1843. 
 
IO 
 
 HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 General Law of 1834. 
 
 Up to this time there had little fault been found with the 
 management of the savings banks of this State. A proper conser¬ 
 vatism, born, no doubt, of the sacred character of the trust as 
 •regarded by the originators of the institutions, had prevailed in 
 the administration of affairs. But the multiplication of banks, which 
 became somewhat rapid during and subsequent to the year 1828, 
 had suggested the propriety of a general law regulating and con¬ 
 trolling the affairs of all. Such a law was passed April 2, 1834, at 
 which time, as has been previously indicated, the total deposits 
 was $3,406,935 divided among 24,252 depositors. The provisions of 
 this very important act may be briefly summarized as follows : 
 
 1. The officers were to consist of a president, treasurer, and such 
 number of trustees as the corporators might elect, with other 
 officers if needful. 
 
 2. All officers, except the treasurer, were to be chosen annually 
 by the corporation at such time as the by-laws directed; the 
 treasurer was to be elected by the trustees, to hold office at the 
 pleasure of said board. 
 
 3. The limit of deposits was fixed at $1,000, except such as 
 belonged to religious or charitable corporations, “ said sums to be 
 invested, used, and improved for the benefit of said depositors.” 
 
 4. Deposits were to be invested as follows: (1) In the stock of 
 any bank incorporated by a law of the Commonwealth or of the 
 United States; such investment not to exceed one-half the capital 
 stock of any bank. (2) Deposits on time and at interest in any 
 bank. (3) Notes or bonds with bank stock as collateral security; 
 the loan not to exceed ninety per cent, of the par value of such 
 stock. (4) Mortgages of real estate; the total loan not to exceed 
 three-fourths of the whole amount of deposits. (5) Public funds 
 of the Commonwealth or of the United States. (6) Notes of any 
 county, city, or town of the Commonwealth. (7) Personal security, 
 with principal and two sureties all residing in the Commonwealth. 
 
 5. No officer or committee of the corporation was allowed to 
 borrow any money thereof. This did not apply to the trustees. 
 
 6. All profits were to be divided proportionately among the 
 depositors or their legal representatives after paying all necessary 
 expenses. No provision was made for accumulating a reserve. 
 
 7. The treasurer was required to make returns of the condition 
 of the bank to the Secretary of the Commonwealth, whenever so 
 requested by the Governor. The items furnished in said returns 
 were to cover the following: (1) Number of depositors ; (2) amount 
 of deposits ; (3) amount invested in bank stock; (4) amount depos¬ 
 ited in banks on interest; (5) amount secured by bank stock; (6 ) 
 amount invested in public funds; (7) loans on mortgages; (8) loans 
 to counties, cities, and towns; (9) loans on personal security; (10) 
 
HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. II 
 
 cash on hand; (u) total dividends for the year; (12) amount of 
 the annual expenses. In short, everything seems to have been 
 required that could by any means throw light upon the actual 
 condition of these institutions. This return had to be sworn to 
 by the treasurer and five or more trustees, and was, in due time, 
 laid before the General Court by the Governor. An additional 
 safeguard was provided in subjecting these institutions to an exami¬ 
 nation by a committee of the Legislature whenever desired. It 
 does not appear that this provision was ever made use of. 
 
 The first return under the new law was called for and made 
 September 27, 1834. The showing was as follows: 
 
 Number of Banks. 22 
 
 Number of Depositors. . 24,256 
 
 Amount of Deposits. $3,407,773 
 
 Investments : Bank Stocks. 1,192,097 
 
 Loans secured by Bank Stocks. 557,93° 
 
 Deposits in Banks. 520,669 
 
 Other investments. 942,923 
 
 It will be observed that out of a total deposit of $3,407,773, 
 these institutions had invested in banks, in one form or another, 
 $2,270,696, or nearly seventy per cent, of the deposits. It was 
 this fact, first revealed by this return, that provoked unfavorable 
 comment among those solicitous for the permanent well-being of 
 these institutions. And, as the crisis of 1837 soon afterward made 
 evident, this anxiety was not without foundation. 
 
 During 1834 and 1835, eleven new banks were chartered, making 
 the whole number in operation, October 29, 1836, twenty-eight; 
 five out of the eleven banks chartered not having perfected their 
 organization. During the same period there had been an increase 
 of 4,500 in the number of depositors, and of nearly $1,000,000 in 
 the total amount of deposits. 
 
 Crisis of 1837. 
 
 The crisis of 1837 was widespread in its effects. Laying hold of 
 the banks of discount with a damaging severity, it immediately 
 involved the savings banks in the general collapse. As had been 
 expected and predicted by thoughtful men, the large holding of 
 bank stock by these savings institutions had resulted in making 
 the general crisis more universal, and in bringing loss and hard¬ 
 ship to those not well able to bear it, namely, the minors and 
 wage workers whose savings had been confided to the care and 
 keeping of such institutions. It not only involved individuals in 
 unexpected loss, but the collapse of so many savings banks gave 
 a rude shock to public confidence in the system. The losses to 
 stockholders, resulting from the financial crisis of 1837, have been 
 estimated in round numbers as $2,000,000, while the savings banks 
 were involved, it is estimated, to the extent of from $250,000 to 
 $300,000. 
 
12 
 
 HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 Changes of 1838. 
 
 By an act passed in February, 1838, it was attempted to amend 
 and strengthen the general law of 1834 by providing for a regular 
 and more exact investigation of the affairs of the savings banks. 
 By the appointing of three commissioners whose duties were to 
 visit the banks once at least every twelve months, a twofold bene¬ 
 fit was expected. First, a rigid examination by competent parties 
 was thus made inevitable, giving practical assurance of a proper 
 publicity in the internal affairs of these institutions ; and, secondly, 
 such intimate acquaintance with the practical operation of the 
 system throughout the State as would be thus secured, would 
 naturally result in improved laws for the regulation of the same. 
 These commissioners were allowed the freedom of the banks so 
 far as was necessary to a complete and thorough examination of 
 all books and accounts. All directors, officers, and agents were 
 required to furnish such additional information as should be desired 
 by the commissioners. Special examinations could be ordered by 
 the Governor at his discretion. A majority of the commissioners 
 could at any time, on sufficient evidence, secure an injunction of 
 the Supreme Judicial Court restraining any bank, or, in the last 
 event, to stop the same from transacting business. They were 
 required to make a report of their official proceedings to the 
 Governor in December of each year. This law was in force only 
 five years, being repealed in March, 1843. The powers conferred 
 were rarely exercised. 
 
 The commissioners appointed under the above act were Waldo 
 Flint, Julius Rockwell, and Jonathan Shore. They made their first 
 report December 31, 1838. It was quite an elaborate exposition on 
 the nature and functions of the banks as they were or should be 
 conducted. The report filled forty-five closely printed pages, and, 
 being about the first literature upon the subject of our local bank¬ 
 ing, is very interesting and profitable reading. 
 
 Investments. 
 
 The following is a summary of the investments of the banks of 
 the State as they appeared at the close of business the last Satur¬ 
 day of October, 1838, according to the above-mentioned report: 
 
 Bank stock. $1,426,188 
 
 Deposits in banks. 568,787 
 
 Loans on bank stock. 563,931 
 
 Public funds. 70,000 
 
 Loans on public funds. 10,000 
 
 Mortgages of real estate. 1,121,300 
 
 City and town loans. 465,247 
 
 Personal security. 672,117 
 
 Cash on hand. 144,162 
 
 $5,04L732 
 
 Here, again, it will be noticed that the percentage of investments 
 in bank stocks in one form or another is somewhat high, being 
 
HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 13 
 
 more than one-half the total assets. But, when compared with the 
 report of 1834, when the average was about seventy per cent., the 
 showing is an entirely favorable one. 
 
 The moral effect of the crisis of 1837 upon the savings banks 
 of the State cannot be better illustrated than by noting the changes 
 in the character of the loans during the following decade. We 
 have at hand such a comparative statement, including the years 
 1836, 1842, and 1847. 
 
 Comparative Statement of Investments. 
 
 Security. 
 
 1836. 
 
 1842. 
 
 1847. 
 
 Public Funds.. 
 
 5,182 
 
 727,518 
 
 357 d 48 
 
 410,242 
 
 1,192,097* 
 
 520,669* 
 
 1 , 373,667 
 
 1,919,902 
 
 597,893 
 
 1,050,052 
 
 249,081 
 
 217,066 
 
 2,130,290 
 
 4,132,386 
 
 947,094 
 
 2,053,001 
 
 143,305 
 
 140,540 
 
 Mortgages of real estate. 
 
 County and town. . 
 
 Personal... 
 
 Bank stock. 
 
 Deposits at interest. 
 
 Thus it will be seen that what, at the time, seemed an element 
 of weakness and was so regarded, namely, a too intimate relation 
 between the Institutions for Savings and the Banks of Discount, 
 was, by virtue of the calamity of 1837, turned to good account 
 in bringing about certain changes in those relations, not only in 
 the line above indicated, but also in other directions hereafter to 
 be noted. The rapid increase in the amount of funds invested in 
 public, real estate, and personal securities, is of itself indicative of 
 a healthful advance in the right direction. 
 
 Further Progress. 
 
 For several years following the crisis of 1837 there were few 
 additions to the number of banks; some that were chartered did 
 not complete their organization, and four were discontinued. The 
 Institution for Savings in Taunton, chartered in 1827, failed in 
 1843, and finally closed up its affairs in 1848, after paying divi¬ 
 dends to its depositors amounting to 82X per cent. 
 
 In 1841, the law was so changed that savings banks were allowed 
 to loan money upon the stock of Massachusetts railroads as col¬ 
 lateral, when the capital stock of such railroad was paid in full, 
 not subject to mortgage, and not worth less than par at the time 
 of the loan. A loan was not to exceed 85 per cent, of the par 
 value of the stock, and was in no case to be in excess of 5 per 
 cent, of the deposits. Investments of this class were never large. 
 
 The year 1846 witnessed certain changes in the law affecting the 
 returns required of the banks. In addition to previous require¬ 
 ments, the new law called for the following: (1) Where bank is 
 
 * In 1834. 
 
14 
 
 HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 located; (2) amount of each kind of public funds; (3) amount of 
 stock in specified banks ; (4) amount loaned on stocks, the different 
 varieties to be named, with amount of loan on each; (5) amount 
 held in real estate ; (6) amount on deposit in each and all banks ; 
 (7) rate and amount paid in dividends during the past year, with 
 average for past five years. 
 
 Another act provided that a married woman might give a receipt 
 for money deposited before or subsequent to her marriage, the 
 same to be a valid release to the bank. This was the beginning 
 of legislation defining the rights and privileges of women and 
 minors in their relations to these institutions; and such legislation 
 has been of inestimable value. 
 
 An act was passed in 1847 requiring such banks as were closing 
 up their affairs to make returns of the same on the second Wed¬ 
 nesday of January of each year, under penalty of a fine of $20 
 for each day’s neglect so to do. 
 
 Application of Law of 1834. 
 
 By the law of 1834 the savings banks were required to make 
 their returns to the Secretary of the Commonwealth, who, in turn, 
 laid abstracts of the same before one of the houses of the 
 Legislature. It had been the custom to print these abstracts with 
 the other documents of the house before which they were laid. 
 In 1847, a different course was taken. Instead of publishing them, 
 they were referred to the Committee on Banks and Banking, with 
 instructions to investigate and report in regard to the manner in 
 which the various laws had been conformed to during the year. 
 The report that followed brought to notice certain technical viola¬ 
 tions of the law concerning investments, particularly investments 
 in the securities of other States, and of the cities of other States. 
 It seems that the banks chartered previous to the enactment of 
 the law of 1834 took exception to the enforcement of the said law 
 as against privileges conferred on them by their respective charters, 
 they holding, very tenaciously, to the opinion that their charter 
 rights could not be lawfully abridged by subsequent legislation. 
 The controversy was long continued. At length the Provident 
 Institution of Boston took the matter to the court for settlement. 
 The court decided that the laws of the State, being for the good 
 of all, could not be construed as favoring any, and that all banks, 
 charter privileges to the contrary notwithstanding, must conform 
 to the requirements of the general law. 
 
 Board of Commissioners of 1851. 
 
 The term of the bank commissioners, appointed in 1838, having 
 expired in 1843, the matter went by default until 1851, when a 
 Board of Bank Commissioners was created, having similar powers 
 
HISTORY OF THE MASSACHUSETTS. SAVINGS BANKS. 15 
 
 and duties to their predecessors. This board, however, was required 
 to visit each bank once every two years instead of annually, one- 
 half to be visited each year, and all new ones during the first 
 year of their existence. It was provided that special examinations 
 should be made at the instance of five or more bank officers, or 
 of the same number of creditors, instead of at the request of the 
 Governor. These commissioners were to make their returns to the 
 Secretary of the Commonwealth annually in December, and were 
 also required to report all violations of the law to the Attorney- 
 General for enforcement. 
 
 It was also provided that no bank should be allowed to discount 
 a note or bill of exchange on which the name of a bank com¬ 
 missioner appeared. In 1858, this last provision was amended so 
 as to prohibit said commissioners from becoming sureties for 
 borrowers. These provisions were incorporated into the general 
 statutes of i860 with slight changes. 
 
 In 1865, the Board of Commissioners was abolished, to take effect 
 January 1, 1866. In April of the same year the office of Commis¬ 
 sioner of Savings Banks was created, with the same duties and 
 responsibilities as the Board of Commissioners, except that exami¬ 
 nations were to be made annually. Thereafter, the bank returns 
 were made to this officer instead of to the Secretary of the Com¬ 
 monwealth. In 1875, an additional commissioner was appointed to 
 assist in the increasing duties of the office. 
 
 Taxation. 
 
 In 1850, the subject of the taxation of bank deposits began to 
 be agitated in certain quarters with considerable warmth, and a 
 petition was presented to the House of Representatives asking for 
 legislation in this direction. The committee to whom the matter 
 was referred made a report in which the situation as viewed by 
 them was stated as follows : “ The act petitioned for would deter 
 people from depositing in savings banks, and would weaken the 
 stimulants and inducements to industry and frugality among the 
 people of the Commonwealth, and increase the number of the poor, 
 the poor rates, and the taxes upon property already subject to 
 taxation, thus injuring many and benefiting none.” 
 
 That this view of the situation was very much distorted is quite 
 evident in the light of later experience. The rights and privileges 
 of these institutions, as we have seen, were guarded with most 
 jealous care; and it is greatly to the credit of those having their 
 welfare in view, that a becoming prudence was always manifested 
 in giving sanction to anything that had the semblance of innova¬ 
 tion. The fact, however, was becoming more and more apparent, 
 that the Institution for Savings was no longer solely what its 
 founders had intended to have it, namely, a place where the wage 
 
l6 HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 worker and other persons of limited means might safely and profit¬ 
 ably leave their small accumulations. The success and reliability 
 of these institutions had begun to recommend them as a means 
 of investment for persons of fortune. It was this circumstance, 
 more than anything else, that brought about the agitation in favor 
 of taxation of bank deposits. It was found, also, that the number 
 of individuals who were taking advantage of the law authorizing 
 savings banks to loan on taxable securities were becoming daily 
 more numerous throughout the Commonwealth. The banks were 
 carrying a considerable amount of such securities as collateral for 
 loans, when, in 1849, a law was passed requiring them to make 
 returns to the assessors of the towns in which the parties so 
 pledging lived, of the names of the persons and the amounts held 
 for the benefit of each. These returns were to bear date May 1st 
 each year. 
 
 In 1851, a law was passed covering the other ground just referred 
 to, in so far as it required the treasurers of the banks to return 
 to the towns of Massachusetts an annual statement of the amounts 
 on deposit in excess of $500 belonging to the individuals named, 
 residents of said towns. These returns were required to bear date 
 May 1 st, and to be forwarded previous to the 10th day of the 
 
 same month, under penalty of a fine of fifty dollars for any neglect 
 
 » 
 
 so to do. 
 
 By a law of April, 1852, the above act was supplemented so as to 
 permit an assessor of any city or town in the State to call for 
 a statement, from any savings institution, of the amounts to the 
 credit of any residents of said town, when said amounts were in 
 excess of $100. In 1866, this limit was changed to $200. Such 
 requests from assessors were to be in writing, and could be made 
 at pleasure. 
 
 These provisions were but preliminary to the law to which they 
 soon proved to be an inadequate substitute. They were abolished 
 in 1862, and a State tax of one-half per cent, on deposits substi¬ 
 tuted. In 1863, the tax was increased to three-fourths per cent.; 
 in 1865, it was reduced to one-half, and in 1868 raised again to 
 three-fourths per cent. This taxation of deposits, while it met with 
 strong opposition in certain quarters, as was to be expected, proved 
 to be the most equitable adjustment of the interests of all con¬ 
 cerned that could have been devised. The final tax of three-fourths 
 of one per cent, was only about one-half the rate imposed on other 
 taxable property—a discrimination to which no exception appears 
 to have been taken. 
 
 Five Cents Savings Banks. 
 
 In the two years, 1854 and 1855, twenty-six new banks were 
 organized. Of this number, twenty started on the plan of receiving 
 
HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 17 
 
 deposits as small as five cents at one time. The main purpose of 
 this departure appears to have been to facilitate deposits on the 
 part of minors. It was to this end that provision was made to 
 enable minors to deposit and to draw at will. While it was an 
 idea new to Massachusetts, the wisdom of the provision had been 
 sufficiently demonstrated in England, where it had been incorporated 
 into the general laws as early as 1817; and also in the State of 
 New York similar legislation had obtained since 1820. This pro¬ 
 vision was incorporated into the general laws of this State in May, 
 1855 - 
 
 Crisis OF 1857. 
 
 The financial and commercial reverses of 1857 were less severely 
 felt among the banks than in 1837. The banks of discount were 
 on a safer footing at this time, and hence, were better able to 
 stem the current of the impending disaster. The savings banks 
 were doubly assured of practical exemption from the general 
 reverses, from the fact that great care had been exercised since 
 1837 in regulating the amount of funds invested in bank stock in 
 any form ; and, also, from the very evident fact of the unusually 
 stable condition of these banks just alluded to. From the follow¬ 
 ing statement of the investments of the savings banks in 1858, it 
 will be seen that, whereas the amount loaned on the credit of the 
 banks in 1834 was 70 per cent., and in 1838 about 50 per cent., 
 at this time it was only about 25 per cent. Carrying the com¬ 
 parison yet further, it is instructive to notice that in 1838 the 
 loans on mortgages were 22 per cent, of the total loans, and in 
 1858, 37 per cent. The loans on personal security in 1838 were 
 13 per cent.; in 1858, 23 per cent.; county and town loans, 1838, 9 
 per cent.; in 1858, 10 per cent.; loans on public funds, 1838, 1^ 
 per cent.; in 1858, 3 per cent. The official returns for 1858 are 
 summarized as follows: 
 
 Total deposits. $33,914,971 
 
 Public funds. $1,089,977 
 
 Bank stock. 6,611,431 
 
 Loans on bank stock. 844,213 
 
 Deposits at interest. 1,065,828 
 
 Railroad stock. 104,363 
 
 Loans on railroad stock. 51,380 
 
 Real estate. 207,190 
 
 Loans on mortgages. 12,514,706 
 
 Loans to county and town. 3,363,989 
 
 Personal security. 7,751,265 
 
 $ 33 , 604,342 
 
 Commissioners’ Report, 1858. 
 
 The most noticeable feature of the commissioners’ report for 
 1858 is the pronounced position taken in opposition to a too 
 intimate connection between the savings banks and the banks of 
 
l8 HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 discount. In practice it had become a very common and profit¬ 
 able arrangement, to open and maintain the one in connection 
 with the other. By this method the necessary expense of office 
 rent was reduced, and, in many instances, the officers of one being 
 the officers of the other, an additional item, and a very consider¬ 
 able one, was also saved. It was evident to the commissioners 
 that this arrangement was likely to result, in the course of time, 
 in evil to the weaker institution, which would be, in nearly every 
 case, the savings bank. In fact, it had been found in a number of 
 instances that the affairs of two institutions thus domiciled were 
 very far from being distinct, the one from the other. And, in 
 the judgment of the commissioners, the tendency was inevitably 
 in the direction of confusion and of ultimate loss to the savings 
 banks where such relations were permitted. The language of the 
 report is as follows: “ In some instances we have found cashiers 
 of banks officiating also as treasurers of savings institutions. This 
 combination of duties we regard as objectionable. We think that, 
 as a general rule, there should be as little connection as possible 
 between banks and savings institutions.” The solicitude thus 
 expressed found similar utterance in the reports of succeeding 
 commissioners.* 
 
 The report also calls attention to the fact that the feelings of 
 jealousy which had been manifested towards the law of 1834 by 
 banks previously organized, in that it had invaded and abridged 
 their charter privileges, were still conspicuously manifest in certain 
 quarters. 
 
 Report of 1861. 
 
 The Bank Commissioners’ report, made to the Legislature in 1861, 
 has been considered one of the most valuable and suggestive 
 documents ever laid before that body on the subject of the banks. 
 It presents a very thorough analysis of the theory, policy, and 
 practical operation of these institutions, besides giving comparative 
 statistics of their development. The commissioners at this time 
 were Geo. Walker, J. F. Marsh, and W. D. Forbes. 
 
 Some of the facts contained in this report are of interest in this 
 connection; particularly the figures representing the growth of the 
 system. The number of banks in 1834 was 22 ; in i860 there were 
 93, an increase of fourfold. In 1834, the number of depositors was 
 24,256; in i860, 230,068, an increase of 848 per cent. The deposits 
 in 1834 amounted to $3,407,774; but in i860 they were $45,054,- 
 
 * At the time of this writing (March, 1889,) an adverse report is made in the Legis¬ 
 lature of Massachusetts on the question of separating the management of national and sav¬ 
 ings banks. This action is a great disappointment to both Governor Ames and Bank Com¬ 
 missioner Chapin, both of whom have pointed out the need of new and stringent legislation 
 in this matter, if the State is to maintain its cherished reputation for careful control of its 
 banking institutions. 
 
HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 *9 
 
 236, a significant increase of 1,222 per cent. The average deposit 
 in 1834 was $140.49; in i860 it was $195.82, an increase of 39^ 
 per cent. The average deposit to each person of population was 
 $5.58 in 1834, and $36.59 in i860, an increase of 620 per cent. The 
 percentage of population as depositors, in 1834, was 1 in 25 ; in 
 i860, as 1 in 5 4-10. The average expense of managing the insti¬ 
 tutions for the six years, 1834-9, was one-third of 1 per cent, of 
 the deposits; for the six years, 1855-60, it was twenty-eight one- 
 hundredths of 1 per cent. The average dividend for five years, 
 from 1840-44, was 5X P er cent.; for six years, from 1855-60, it 
 was about 6 % per cent. During the ten years from 1850-60, deposits 
 increased 231 per cent., while the population of the Commonwealth 
 increased only 24 per cent. During the same period the valuation 
 of the State increased 50 per cent., but bank capital increased 75 
 per cent. These figures indicate very clearly the relative growth 
 of population and wealth in Massachusetts during the given periods. 
 And what was true in this State was very largely true in other 
 New England States, as well as in New York. The accumulations 
 were greatly in excess of the advance in population. 
 
 The report also points out the fact that the material advance¬ 
 ment in this country was much greater than that in any country 
 of Europe; and also, that the laboring people of Massachusetts 
 wera accumulating money, in the form of bank deposits, much 
 more rapidly and generally than was found to, be the case among 
 like classes in other lands. 
 
 At no time previous to the very exceptional year of i860 was 
 there a decline either in deposits or in the number of depositors 
 in the savings banks of this State. And it is stated, as an indi¬ 
 cation of the greater relative resources of the working people of 
 this country, that the yearly fluctuations of deposits have always 
 been less severe and violent in this country than in England or 
 France. 
 
 Most prominent and important among the suggestions presented 
 in the report, is the recommendation that the possible scope of 
 investments be enlarged, so as to include the best municipal 
 securities, such as the bonds of the cities of Portland, Hartford, 
 Providence, New York, and Albany. It will be seen that this 
 suggestion bore fruit in the Act of 1863. 
 
 Conditions in 1861. 
 
 The opening of the Civil War wrought many changes in the 
 financial conditions of the country. The demand for money, uni¬ 
 versal and imperative, was felt in every community. The rates of 
 interest rose at once, and quite decidedly. Investments in public 
 funds became the most attractive on the market, by virtue of such 
 advance. The extent to which the opportunity was embraced by 
 
20 
 
 HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 the banks is made evident by an examination of their returns. 
 In 1861, the amount invested in public funds was $3,111,148; the 
 maximum was reached in 1868, when the amount was $31,987,621. 
 Of this sum, $25,488,011 was in Government bonds, these having 
 been, during the war period, a most attractive investment for the 
 banks. 
 
 Effect of Usury Laws. 
 
 The usury laws of Massachusetts had limited the rate of interest 
 chargeable in certain, cases so that mortgages of real estate paid 
 the banks but six per cent. The demand for money by the 
 Government at higher rates, therefore, wrought mischief with this 
 class of investments. The purpose of all usury laws has been, 
 primarily, to protect the borrower; and yet, was it ever known 
 that such laws accomplished their purpose ? To the contrary, have 
 they not more frequently wrought untold hardship ? At this par¬ 
 ticular juncture, the results of the law were very manifest. The 
 Government offered, at the outset, interest at the rate of 7 3-10 
 per cent., while the rate on mortgages was unalterably fixed by 
 law at a maximum of six per cent. Very naturally, therefore, bank 
 deposits were turned out of the channel of real estate investments 
 into that of public securities, consisting, very largely, of Govern¬ 
 ment bonds. Persons of small means, having only a home wholly 
 or in part paid for, found it nearly impossible to raise money 
 upon the same, in the hour of necessity, in consequence of the 
 practical hardship of a law that had been enacted ostensibly for 
 their particular benefit. Not only did the loans upon real estate 
 security not increase during a period when the demands for money 
 from every quarter were unexampled, but they show an actual and 
 decided decline. In 1862, the total loans by the banks on real 
 estate security amounted to $18,408,749; while in 1865 they had 
 fallen to $15,534,568. It was these conditions which suggested, and 
 rendered imperative, the law of May, 1865, making it legal, for one 
 year thereafter, to contract for interest at the rate of 7 3-10 per 
 cent., for a period not to exceed one year. The beneficence of 
 this law became so apparent, in contrast to the old one, that, in 
 1867, the usury laws were finally repealed. 
 
 The impulse immediately given to real estate security for loans 
 was apparent. Such loans on the part of savings banks, which, in 
 1865, amounted to 25 per cent, of their deposits, increased to 60 
 per cent, in 1875. 
 
 Investments—Act of 1863. 
 
 The general law of 1834 limited the amount to be invested in 
 the capital stock of any corporation to 10 per cent, of the deposits; 
 but in no case was such loan to exceed $100,000. The law of 
 1855, also, provided the same limit. By an act of 1863, this 
 
HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 21 
 
 restriction was made to cover not only investments in such stocks, 
 
 but, also, such loans as might be made on notes, with stock as 
 
 collateral security. 1 
 
 This same act, also, provided for a wider range of investments 
 for institutions for savings, by adding the following securities : (i) 
 public funds of the State of New York; (2) bonds or notes of 
 
 New England cities; (3) first mortgage bonds of any railroad in 
 
 the State duly incorporated, and which had paid regular dividends 
 for two years next preceding such investment; (4) bonds of rail¬ 
 roads which were unincumbered by mortgage ; (5) notes of citizens 
 of Massachusetts with the above described stocks as collateral; or, 
 on pledge of stock of such railroads, at not over eighty per cent, 
 of market value, or over ninety per cent, of par value. These 
 provisions, of course, did not apply to horse railroads. 
 
 Relations with the National Banks. 
 
 As the National began to succeed the State banks, the general 
 provisions regulating the legal relations between them and the 
 savings banks for the most part remained the same as with the 
 State institutions. Strange to say, however, it was provided that 
 no savings bank should hold, in any form, the stock of any such 
 bank, to an amount exceeding one-fourth its capital—the limit in 
 the case of the State institutions having been one-half the capital 
 stock. 
 
 Real Estate. 
 
 Previous to 1870, the savings banks were only allowed to invest 
 their funds in real estate by special act of the Legislature. Such 
 authority had been given in a few instances. During that year a 
 general law was enacted, allowing a bank to invest not over ten 
 per cent, of its deposits in real estate for banking purposes, but, 
 in no case, was the amount so invested to exceed $200,000. 
 
 By a law passed in 1868, it was provided, that real estate held 
 under foreclosure, or, by sale under provisions of the mortgage, 
 or, upon judgment for debts due, or, upon settlement to secure 
 such debts, must be sold within five years from the date of 
 assuming such security. 
 
 Unclaimed Deposits. 
 
 The first act of the Legislature relating to unclaimed deposits 
 was passed in 1871. The savings banks of this State had had an 
 uninterrupted career of more than sixty years, during which time 
 nearly two generations of depositors had passed away. It had 
 been found that, in very many cases, the banks were holding 
 money upon which no claim had been made for a good many 
 years. Also, in numerous instances, the lawful limit prescribed for 
 deposits, and for the accumulation of interest, had been reached. 
 
22 
 
 HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 necessitating some action whereby the parties interested, or their 
 legal representatives, might be brought to a knowledge of the facts. 
 The law of 1871 was the first step taken in the matter, and seems 
 to have covered only the matter of excessive interest. It provided 
 for public notification through the papers, once in five years, of 
 the names of the parties interested, with the last known residence 
 of each, and of the sums held, over and above the amount on 
 which interest was allowed. 
 
 In May, 1887, an act was passed providing for this matter more 
 in detail. It demands that within fifteen days after the last busi¬ 
 ness day of October, 1887, the treasurer of each savings bank shall 
 return to the Commissioners of Savings Banks a sworn statement 
 containing the names, amounts to the credit, the last place of 
 residence or post office address, together with the fact of the 
 death—if known to the treasurer—of depositors who shall have 
 made or withdrawn no part of their deposit within the twenty 
 years next preceding. The treasurer is also to give public notice 
 of the above facts through the papers once a week for three 
 weeks in succession. These requirements do not apply to persons 
 known to be living, or to accounts representing less than twenty- 
 five dollars. The commissioners are expected to embody all such 
 returns in their annual report. 
 
 Discrimination. 
 
 Among the early laws for the government of savings banks, it 
 was provided that no persons interested in making the loans for 
 such institutions should themselves become borrowers of the same. 
 The law proved to be a wise one. In the course of time it came 
 to light that an abuse, resembling somewhat the one which the 
 above law was intended to prevent, had become somewhat common. 
 It was found that favoritism was too often shown in the placing 
 of investments. Personal acquaintance, direct or indirect, had more 
 weight, at times, than the actual merits of the security offered 
 would warrant. Thus, to a certain extent, the public found their 
 privileges with these institutions unduly and improperly abridged. 
 It must not be understood that this abuse of their trust by bank 
 officials was by any means common in the State. It was not 
 general, but frequent and disturbing enough to call for legislative 
 action, which was had in 1872. The act of that year provided 
 that the taking of any fee by an officer of an institution for 
 savings, or the depriving of any individual of his rights or privi¬ 
 leges, by any preference being shown in the matter of granting 
 loans, was an offense punishable by a fine of twice the amount 
 illegally taken. 
 
 Annual Returns. 
 
 The law regarding the annual returns to the Government on the 
 
HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 23 
 
 part of the banks has been changed from time to time. The 
 purpose seems to have been to keep the public informed, more 
 and more definitely, in regard to the growth and practical working 
 of the system, not less than to provide against illegal practices, 
 and the unwarranted abuse of privilege and authority. From 1846 
 to i860 the changes in the law were infrequent. The general statutes 
 of i860 contained one noticeable amendment, in that a return was 
 required of the average annual rate of dividend since the last extra 
 dividend, instead of for the previous five years, as formerly 
 demanded. This was again changed, in 1862, to the demand for 
 a statement of the dates on which extra dividends were declared, 
 and of the average annual per cent, of dividends for the period 
 ending at the time of and including the last extra dividend. 
 
 In 1867, the following items were called for in addition to pre¬ 
 vious requirements : 
 
 1. Number and amount of deposits received. 
 
 2. Number and amount of deposits received exceeding $300 at 
 one time. 
 
 3. Number and amount of withdrawals. v 
 
 4. Number of accounts opened. 
 
 5. Number of accounts closed. 
 
 6. Surplus on hand. 
 
 An act of 1874 added the following: 
 
 1. Rate of interest on loans. 
 
 2. Total amounts of loans at different rates of interest. 
 
 In 1875, another act called for the number and amount of loans 
 not exceeding $3,000 each. 
 
 The law of 1876 provided for a much larger number of items 
 than had previously been required. They may be summarized as 
 follows : 
 
 1. Returns were to be made to close of business the last busi- 
 day of October. 
 
 2. Number of corporators. 
 
 3. Amount of deposits, and each item of other liabilities. 
 
 4. Par value, and estimated market value of public funds, bank 
 stock and railroad bonds, held as investments. 
 
 5. Estimated value of real estate, with the amount invested in 
 same. 
 
 6. Amount of profits earned. 
 
 7. Rate and amount of each semi-annual dividend, instead of each 
 ordinary dividend. 
 
 8. The time for declaring dividends to be fixed by the by-laws 
 of each institution. 
 
 9. Number of open accounts. (Instead of number of depositors, 
 as previously.) 
 
 An act of 1879 added the following items to the required 
 returns : 
 
24 
 
 HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 1. Number of deposits of $1,000 and upward. 
 
 2. Number and amount of deposits of $200 and less. 
 
 3. Number and amount of deposits of $100 and less. 
 
 4. Number and amount of deposits of $50 and less. 
 
 5. Number and amounts of deposits held by women, guardians, 
 in trust, and by charitable associations 
 
 In 1880, the act of 1879 was repealed, and the following sub¬ 
 stituted : 
 
 1. Number and amount of open accounts of $50 and less. 
 
 2. Number and amount of open accounts exceeding $50 and less 
 
 than $100. 
 
 3. Number and amount of open accounts exceeding $100 and less 
 than $200. 
 
 4. Number and amount of open accounts exceeding $200 and less 
 than $500. 
 
 5. Number of accounts of $1,000 and more. 
 
 6. Number of accounts to the credit of females, guardians, in 
 trust, and of religious and charitable associations, whenever called 
 for by the commissioner. 
 
 In March, 1888, this portion of the general law was still further 
 amended, and all previous amendments consolidated, so that sec¬ 
 tions 40 and 41 of chapter cxvi. of the Public Statutes now read : 
 
 Sec. 40. “ The treasurer of every such corporation shall annually, 
 within twenty days after the last business day of October, make 
 a report to the commissioners, showing accurately the condition 
 thereof at the close of business on said day. The report shall be 
 in such form as the commissioners shall prescribe, and shall specify 
 the following particulars, namely: Name of corporation and number 
 of corporators; place where located; amount of deposits; amount 
 of each item of other liabilities; public funds, including all United 
 States, State, county, city, and town bonds, stating each particular 
 kind, the par value, estimated market value, and amount invested 
 in each; loans on public funds, stating amount on each; bank 
 stock, stating par value, estimated market value, and amount 
 invested in each; loans on bank stock, stating amount on each ; 
 railroad bonds, stating par value, estimated market value, and 
 amount invested in each ; loans on railroad bonds, stating amount 
 on each; estimated value of real estate, and amount invested therein; 
 loans on mortgage of real estate; loans to counties, cities, or 
 towns; loans on personal security; cash on deposit in banks, with 
 the names of such banks, and the amount deposited in each; cash 
 on hand; the whole amount of interest or profits received or 
 earned, and the rate and amount of each semi-annual and extra 
 dividend for the previous year; the times for the dividends fixed 
 by the by-laws; the rates of interest received on loans; the total 
 amount of loans bearing each specified rate of interest; the 
 
HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 25 
 
 number of outstanding loans which are of an amount not 
 exceeding three thousand dollars each, and the aggregate amount 
 of the same ; the number of open accounts; also the number and 
 amount of deposits received; the number and amount of with¬ 
 drawals ; the number of accounts opened, and the number of 
 accounts closed, severally for the previous year; and the annual 
 expenses of the corporation; all of which shall be certified and 
 sworn to by the treasurer. The president and five or more of the 
 trustees shall certify and make oath that the report is correct 
 according to their best knowledge and belief.” Section 41. “ Begin¬ 
 ning with the year ending with the last business day of October, 
 1889, and annually thereafter, such reports shall also state the 
 number and amount of deposits of fifty dollars and less, of those 
 exceeding fifty dollars and not more than one hundred dollars, of 
 those exceeding one hundred dollars and not more than two hun¬ 
 dred dollars, of those exceeding two hundred dollars and not more 
 than five hundred dollars, of those exceeding five hundred dollars 
 and less than one thousand dollars, of those of one thousand 
 dollars or more; and of those to the credit of women, both adult 
 and minor, guardians, religious and charitable associations, and in 
 trust, respectively, received during the year.” 
 
 Law of 1876. 
 
 The general law of 1876, approved October 1st, was, in the main, 
 a codification of existing laws governing institutions for savings. 
 This law, with such amendments as were made previous to 1882, 
 was incorporated into the general statutes of that year. In this 
 re-arrangement, certain important changes were adopted, a brief 
 summary of the more important of which seems called for in this 
 connection. 
 
 1. Trustees to meet once in three months, to prepare a state.' 
 ment from the books of the exact condition of the bank, such 
 statement to take the form of a trial balance of its accounts. 
 This statement to be posted in a conspicuous place in the bank 
 until the next meeting. 
 
 2. The maximum amount of deposits to be loaned on first mort¬ 
 gages in the State, was reduced from 75 to 70 per cent.; such 
 loans not to exceed 60 per cent, of a fair valuation. All loans to 
 be made on the recommendation of not less than two members 
 of the board of investment, who shall certify thereto. 
 
 3. Deposits in national banks, on call and at interest, not to 
 exceed 20 per cent, of the total deposits. (In i860, the amount 
 allowed was 7 per cent., and in 1863, 12 per cent.) 
 
 4. Loans on personal security not to exceed one-third (changed 
 from one-half) of deposits, and to run not longer than one year. 
 
 5. Before declaring a semi-annual dividend, there must be reserved, 
 
2 6 
 
 HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 out of the six months’ earnings, not less than one-eighth nor more 
 than one-fourth per cent, of the deposits, as a guaranty fund, 
 until the same shall have reached five per cent, of the deposits, 
 at which amount it shall be maintained to meet losses. 
 
 6. Ordinary dividends limited to five per cent. 
 
 7. No dividend to be declared unless the net profits of the 
 previous six months, over and above such sums as are added to 
 the guaranty fund, are at least two per cent, of the deposits, 
 without the approval in writing of the Savings Bank Commis¬ 
 sioners. (In March, 1880, the amount of net profits required was 
 changed to \ l /z per cent.) 
 
 8. Once in three years, when the net profits over and above the 
 guaranty fund and the regular dividends amount to one per cent, 
 of such sums as have remained on deposit for one year next pre¬ 
 ceding, such profits shall (changed to may in 1888) be divided 
 among depositors whose funds shall have remained on deposit for 
 one year at least, in proportion to -the amount of dividends 
 declared on their deposits for the three years preceding. 
 
 The practical results of the law regulating the accumulating of 
 a reserve, seem to have been effectual in preventing the widespread 
 tendency to divide the entire profits semi-annually among the 
 depositors. The tendency to compete with each other, among the 
 banks, led, too often, to the sacrificing of the guaranty fund for 
 the sake of a more favorable showing in dividends. Thus we find 
 that in 1867, the average surplus held by the savings banks was 
 3.94 per cent, of the deposits. In 1870, the average was 1.83 per 
 cent.; in 1871, 1.77 per cent.; in 1872, 1.65 per cent.; and in 1873, 
 1.56 per cent.—a continuous decline. The law of 1876, as has been 
 seen, calls for an undivided guaranty fund of five per cent, of the 
 deposits. 
 
 The Crisis of 1873. 
 
 The panic of 1873, coming unannounced, as do all such crises, 
 found the banks poorly prepared to weather the impending storm. 
 The investments in real estate mortgages were not only large, 
 but it was soon found they had been based too generally on 
 excessive valuations of the property involved. Hence, when the 
 depression came, real estate values fell to a point alarmingly near, 
 and too often below, the amount of the mortgages. The attempt 
 to force the sale of such property resulted in a further decline. 
 Besides, the demands by depositors became continuous and unusually 
 large. Individual necessity compelled many to resort to their bank 
 accumulations to meet their expenses. Reduced incomes, incident 
 to hard times, was the aggravating cause of this necessity. The 
 savings banks were expected to respond promptly to such demands. 
 But the chief difficulty was not found in dealing with these small • 
 
HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 27 
 
 depositors, whose withdrawals, though considerable in the aggre¬ 
 gate, were individually limited. The situation became trying, and 
 at length alarming, when large depositors, those who had used 
 the banks as a convenient means of investment, began to with¬ 
 draw their deposits from fear lest the banks might succumb to 
 the trying ordeal through which they were passing. Not only was 
 it found that large numbers had accounts reaching the full lawful 
 limit, but, in numerous instances, resort had been had to ingenious 
 devices, whereby a person, by opening several accounts, “ m trust,” 
 for example, for as many imaginary individuals, had credit on the 
 books for several times the amount permitted by law. When the 
 crisis came such accounts were the first to be closed. 
 
 Taking into the account all these contingencies which seemed to 
 operate with peculiar force just at this juncture, and also con¬ 
 sidering the other fact, that the financial and commercial depres¬ 
 sion was of unusual duration, it is not, perhaps, so surprising, that 
 the period from 1873 to 1880 was one of unexampled severity in 
 the history of the Massachusetts savings banks. Whether regarded 
 from the point of view of the number of institutions involved, or 
 of the aggregate losses, the record is equally without a parallel. 
 
 Stay Law of 1878. 
 
 The “stay law,” so called, of March 21st, 1878, was the imme¬ 
 diate outcome of this distressing situation. It was intended, not, 
 as has been very generally supposed, as a measure to shield the 
 banks, but as the best available method to protect the interests 
 of depositors. This view of the matter—and it is the true and 
 only reasonable one—was but little regarded at the time, and much 
 unjust and harsh criticism of the law and its authors was indulged 
 in by those whose immediate interests were the most protected 
 thereby. 
 
 The law simply provided that the Bank Commissioners should 
 be empowered to limit the time and the amount of the payments 
 to depositors whenever, in their judgment, the welfare of the 
 depositors so demanded. The right of appeal to the court was 
 reserved to the depositor in case of any dissatisfaction ; the decision 
 of that tribunal was to be final. The May following, a law, sup¬ 
 plemental of the foregoing, was passed, giving debtors of a bank 
 the right to set off a deposit against a claim, where both were 
 vested in the same individual, provided said deposit was not made 
 over from another person subsequent to the commencement of a 
 suit. This amendment, however, being pronounced unconstitutional 
 by virtue of its implied favoritism toward certain debtors, the 
 Attorney-General advised the banks not to act under it, at least 
 for a time. 
 
 The first bank to take advantage of the stay law was the Brighton 
 
28 
 
 HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 Five Cents, which made application for the same on the very day 
 the law passed the Legislature. In this case, the Bank Commis¬ 
 sioners directed that, during the period from March 21st to Septem¬ 
 ber 21 st, 1878, not more than 10 per cent, of the total amount due 
 should be paid to each depositor; 10 per cent, additional was to be 
 paid during the period from September 21st to March 21st, 1879. 
 No further sums were to be paid except by order of the com¬ 
 missioners. 
 
 Between the passage of the stay law in March, 1878, and Novem¬ 
 ber 1 st, 1879, twenty-four banks availed themselves of its protec¬ 
 tion, all but six of which resumed at the expiration of the prescribed 
 limit of time, where the order had not been previously revoked. 
 Of these six, all but one were ultimately restored to full corporate 
 functions, the Ashburnham alone going into voluntary liquidation 
 
 The real magnitude of the crisis can be justly estimated when 
 it is known that out of the 180 savings banks in operation in 
 October, 1875, no less than forty-six were forced either to suspend 
 payment entirely, or to seek refuge under the “ stay law.” Twenty- 
 four out of the above forty-six were stopped by injunction of the 
 Supreme Court, and twelve of these were obliged ultimately to 
 close their affairs, two only paying in full. 
 
 Regarding the amount of liabilities involved in this disaster, we 
 quote from an article on the subject by Dudley P. Bailey. He 
 says : “ The amount involved was one-fifth of the largest sum ever 
 held on deposit by the savings banks. The liabilities of the banks 
 placed under injunction amounted, at the date of the proceedings 
 against them, excluding duplications, to $24,439,218. The liabilities 
 of the restricted banks, not including those enjoined, amounted, at the 
 date of restriction, as nearly as can be ascertained, to $27,873,414, 
 giving a total of $52,312,633, out of a maximum of deposits, in 1877, 
 of $244,596,614. When it is remembered that this large sum for a con¬ 
 siderable portion of two years paid no dividends, and that in many 
 of the banks there will be a considerable loss of principal as well as 
 interest, the magnitude of the disaster to the material and moral 
 interests of the State can be in some measure appreciated.” The 
 same authority also states that, while the net losses of all the 
 savings banks of the State for the fifty years preceding 1866 were 
 only two-thirds of 1 per cent, of the average deposit for the period, 
 the losses for the thirteen years, from 1867-79, were 2.2 per cent, 
 of the average deposit for the latter period. “ While the average 
 deposit increased only about fifteen times, the losses increased 
 thirty-eight and one-half times.” Placing the average liabilities 
 of the banks for two years at $20,000,000, and estimating the 
 losses at not less than two years’ dividends at 4 per cent., the 
 total loss from this source would reach $1,600,000. From whatever 
 point, then, we view the situation, the calamity appears sufficiently 
 
HISTORY OF THE MASSACHUSETTS SAVINGS BANKS 
 
 2 9 
 
 appalling. Annexed will be found a table showing the details of 
 the operation of the stay law on the twenty-four banks to which 
 alone the law has ever been applied : 
 
 £ 
 
 < 
 
 >< 
 
 < 
 
 H 
 
 m 
 
 w 
 
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 t—I 
 
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 <1 
 
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 rsi v 
 
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 c— r—. c— t—• c~~ r— c-~ t— r— c—• r— c— i>~ r^- c— c— c— t— 
 
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 h 
 
 Board of Commissioners. 
 
 With the increase of the number of savings banks, and the 
 consequent demand for their thorough and frequent supervision, the 
 
30 HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 duties of the commissioner, appointed in 1866, were fast getting 
 beyond control. Accordingly, to supplement his labors, an addi¬ 
 tional commissioner was appointed in 1876, the two to be known 
 as the Board of Commissioners of Savings Banks. The original 
 members of this board were J. Gatchell and C. Curry. They made 
 their first report to the Legislature, January 3rd, 1877, it being 
 the eleventh in the series since the appointment of the first com¬ 
 missioner. 
 
 The duties of the Receiver, during and for some time subse¬ 
 quent to the year 1878, when so many banks were forced into 
 liquidation, were important and responsible. It was desirable that 
 their doings should be properly inspected and audited. Accord¬ 
 ingly, in May, 1878, an act was passed placing the matter in the 
 hands of the commissioners. It was provided that said commis¬ 
 sioners should examine and report upon the returns of such 
 receivers when so required by the court. They were also required 
 to examine, once each year, the accounts and the doings of the 
 receivers, and to embody the results of such examination in their 
 annual report. The commissioners were to have free access to all 
 books, and were required to report all violations of duty to the 
 Supreme Judicial Court. They were also empowered to examine 
 officers of banks, if desired, in the prosecution of these duties. 
 
 The commissioners having brought to the attention of the Legis¬ 
 lature the fact that they had found methods of bookkeeping 
 employed in certain savings banks radically defective, by an act 
 passed in April, 1879, the authority to prescribe such methods as 
 were considered satisfactory was given the board. This authority 
 covered, also, the matter of auditing. 
 
 In March, 1880, it was made the duty of the commissioners to 
 hold in their custody a copy of the bonds given by the treasurers 
 of savings banks, and to request new bonds whenever they seemed 
 to be demanded. 
 
 By an act of March 16, 1882, all books and papers of insolvent 
 banks are to be deposited with the Commissioners of Savings 
 Banks, by the receivers of such institutions, within one year after 
 the final settlement of their affairs. 
 
 In February, 1888, the law of 1876, requiring the commissioners 
 to visit and examine the savings banks once each year, and oftener 
 if necessary, was amended, so as to provide that in cases where 
 an institution is connected with a national bank, arrangements 
 shall be made whereby said commissioner shall make his visits in 
 connection with the national bank examiner. 
 
 Taxation. 
 
 From first to last, the matter of the taxation of savings banks 
 has attracted not a little attention from legislators and others. As 
 
HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 31 
 
 we have already seen, the proper course to be pursued in this 
 particular, in connection with the deposits, was for a long time an 
 unsettled problem, resulting, finally, in a direct tax. It is probably 
 true that the savings banks of Massachusetts have gained immeas¬ 
 urably, in comparison with those of other States, by favorable 
 legislation in this matter of taxation. 
 
 In March, 1879, the law of 1876 was amended, exempting from 
 taxation such real estate as was held by the banks under fore¬ 
 closure, by virtue of the provisions of the law of 1868, and for 
 the period there specified. This provision afforded great relief at 
 a time when the banks were forced to carry an unprecedented 
 amount of such assets. 
 
 An act of May, 1881, provided for the exemption from the State 
 tax such deposits as were invested in real estate mortgages, or in 
 real estate used for banking purposes. This was a modification of 
 the acts of 1862 and 1868, and was one of the early steps in the 
 direction of the removal of taxes twice imposed. 
 
 By the law of 1868 the tax on deposits was reduced from three- 
 fourths to one-half of one per cent. In May, 1881, it was again 
 restored to three-fourths per cent., to take effect after January 1st, 
 1882. 
 
 The law of 1876 provided that real estate, held under foreclosure, 
 could remain a legal asset for five years from the date of fore¬ 
 closure, at the expiration of which time the property must be 
 sold. To such an extent had the savings banks been forced to 
 assume such property, during the period of depression from 1873 
 to 1880, that compliance with the law at this juncture threatened 
 serious losses to these institutions. The conditions of the market 
 did not warrant the indiscriminate forcing of real estate sales. 
 Accordingly, the original law was set aside by the Legislature from 
 time to time, for certain specified periods, to meet this situation. 
 It was extended thus in 1882, 1883, 1884, and 1886, by several 
 special acts of the general court. In 1886, the limit was established 
 at July 1st, 1888, with the provision that further time be allowed, 
 at the request of the trustees of any institution, by the Bank 
 Commissioners. 
 
 Receivers. 
 
 In March, 1881, the general court passed an act providing for 
 the final disposition of such funds as remained in the hands of 
 receivers, after the affairs of an institution for savings had been 
 formally and legally closed. It was as follows: “ Receivers of 
 insolvent savings banks and institutions for savings having unclaimed 
 moneys or dividends belonging to the estate of any such corpora¬ 
 tion remaining in their hands for one year after the final settle¬ 
 ment ordered by the court, shall deposit the amount so remaining 
 uncalled for with the treasurer of the Commonwealth, with a 
 
32 HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 schedule of the names and residences, so far as known, of the 
 parties entitled thereto, and said treasurer shall receive and hold 
 the same in trust for such parties and their representatives; and 
 said treasurer shall pay over the same to the parties entitled 
 thereto, upon proper demand made therefor, upon being furnished 
 with evidence satisfactory to him of the identity of the claimant 
 and the justice of the claim.” 
 
 In June, 1883, an additional provision was enacted, requiring 
 receivers to make annual returns to the court of the names, 
 amounts due, and the residences, when known, of such persons as 
 have not claimed the amount due them from any insolvent insti¬ 
 tution. The court has to require notices served on such persons 
 in due form. After one year from the date of such notice, the 
 receivers are required to report again, after which all remaining 
 moneys are to be turned over to the treasurer of the Common¬ 
 wealth as before provided. All books and papers are to be 
 deposited in like manner. 
 
 There is no part of the law governing savings banks that has 
 been subjected to more numerous changes and amendments, from 
 first to last, than that relating to the matter of investments. With 
 the growth in number and in available resources, the banks have 
 been brought face to face with the practical difficulty of loaning 
 their funds within the limits prescribed by law. In the exercise 
 of their duties of supervision over the affairs of these institutions, 
 the Bank Commissioners have been led, from time to time, to 
 suggest and recommend such increased facilities for making loans 
 as, in their judgment, seemed within the bounds of safety. Very 
 many of these suggestions have been incorporated into the laws 
 regulating investments. 
 
 The law of 1876 limited investments in county and town notes, 
 to such as were issued by counties and towns in Massachusetts, 
 under prescribed conditions. In 1880, this privilege was extended 
 to include the States of Maine, New Hampshire, Vermont, Rhode 
 Island and Connecticut where the indebtedness did not exceed 
 3 per cent, (changed to 5 per cent, in 1881) of the valuation. 
 
 In April, 1881, provision was made for widening the scope of 
 previous enactments, by adding investments in first mortgage bonds 
 of railroad companies incorporated under the laws of any of the 
 New England States, and located wholly or in part therein, and 
 which have earned and paid regular dividends for two years next 
 preceding. Also, the same privilege was granted in respect to the 
 bonds of roads which were guaranteed by the above companies. 
 Also, investments were allowed in the bonds or notes of any 
 Massachusetts railroad unincumbered by mortgage, and having paid 
 a dividend of not less than 5 per cent, for two years ; and in the 
 notes of individuals secured by such railroad bonds or notes. In 
 
HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 33 
 
 1887, the above was again amended so as to include the notes of 
 citizens of this Commonwealth, with collateral consisting of the 
 capital stock of any railroad of the New England States, whose 
 road is wholly or in part in the same, and which has paid a 
 dividend of not less than 5 per cent, on all stock for the five 
 years preceding. Loans on such stock are not to exceed 75 per 
 cent, of the market value, and the notes are not to run more 
 than one year without renewal. 
 
 In May, 1882, investments in any form in the capital stock of 
 any national bank were limited to 3 per cent, of the deposits. By 
 another act of the same month, investments were permitted in the 
 bonds of the States of Pennsylvania, Ohio, Michigan, Indiana, 
 Illinois, Wisconsin, Iowa, and the District of Columbia, or in the 
 bonds issued, for municipal purposes, of any city of the above 
 States and of New York State, having more than 50,000 (changed 
 to 30,000 in April, 1885,) inhabitants, and whose net indebtedness 
 does not exceed 5 per cent, of the valuation of taxable property; 
 and in the notes of the citizens of this Commonwealth with the 
 above securities as collateral, such loans not to exceed 80 per cent, 
 of the value of the collateral security. This law was repealed in 
 March, 1887, and another substituted which was in no essential 
 different from the foregoing, except that it specified what census 
 should be used in determining the population of cities, and also 
 changed the amount to be loaned on such collateral from “ 80 
 per cent, of the value” to “an amount not exceeding the par 
 value.” 
 
 It has happened from time to time within the past decade, that 
 many of our best roads, having acquired by purchase, lease, or 
 otherwise, the possession of certain lines or branches, the property 
 of which being subject to some form of incumbrance, has had the 
 effect to invalidate the obligations of the parent road as a legal 
 investment for savings banks. To remedy this practical difficulty, 
 where the credit of the main road was in no way impaired by 
 such acquisition, special acts of the Legislature have been had to 
 cover the individual cases as they have appeared. Such special 
 legislation will be briefly referred to. 
 
 1. Act of April, 1883. Investments allowed in bonds or notes of 
 Old Colony Railroad, notwithstanding the mortgage on that part 
 of the road formerly belonging to the Boston, Clinton & Fitch¬ 
 burg Railroad. 
 
 2. Act of June, 1885. Investments allowed in bonds and notes 
 of the Fitchburg Railroad, notwithstanding the mortgage on the 
 Boston, Barre & Gardner Railroad. 
 
 3. Act of March, 1886. Investments allowed in the bonds of the 
 Worcester, Nashua & Rochester Railroad, notwithstanding the lease 
 to the Boston & Maine Railroad. 
 
34 
 
 HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 4. Act of March, 1887. Investments permitted in bonds or notes 
 of the Fitchburg Railroad issued according to law. 
 
 5. Act of February, 1888. Investments allowed in the bonds 
 or notes of the Boston & Lowell Railroad Company, notwith¬ 
 standing the mortgages on those portions belonging to the Salem 
 & Lowell, and the Lowell & Lawrence Railroad companies. 
 
 6. Act of April, 1888. Investments permitted in the bonds and 
 notes of the Boston & Maine Railroad Company, notwithstanding 
 the mortgages on those portions belonging to the Eastern Rail¬ 
 road in Massachusetts and New Hampshire, and to the Portsmouth, 
 Great Falls & Conway Railroad. 
 
 7. Act of May, 1888. Investments allowed in first mortgage bonds 
 of New York & New England Railroad issued on their terminal 
 facilities in Boston, said mortgage not exceeding 60 per cent, of 
 the value of the property mortgaged. 
 
 Among the general acts of legislation affecting savings bank 
 investments, subsequent to the year 1882, may be mentioned the 
 following : 
 
 In April, 1884, clause 6 of section 20, chapter 116, of the Pub¬ 
 lic Statutes, was amended, limiting investments by savings banks 
 and institutions for savings in bonds and other personal securities. 
 The amendment provides “ that the total liabilities to any such 
 (bank) corporation, of any person, or of any partnership, company 
 or corporation, for money borrowed upon personal security, includ¬ 
 ing in the liabilities of a partnership or company not incorporated 
 the liabilities of the several members thereof, shall at no time 
 exceed 5 per cent, of the deposits and income." 
 
 In February, 1879, a law was enacted permitting loans upon the 
 notes of depositors to the amount of one-half the deposit in each 
 case, the book and deposit to be held as collateral. 
 
 In 1885, it was provided that investments could be made in the 
 bonds and notes of such incorporated districts in Massachusetts 
 as have a net indebtedness not exceeding 5 per cent, of the last 
 valuation of its property. 
 
 In March, 1886, the amount permitted to be deposited in national 
 banks and trust companies was limited to the maximum of 5 per 
 cent, of the deposits, and in no case to exceed 25 per cent, of 
 the capital stock and surplus of said deposit banks. 
 
 General Legislation. 
 
 In May, 1885, a quite important act was passed, providing for 
 the payment of deposits of deceased persons upon orders or drafts 
 given previous to .such decease, provided demand for payment is 
 made within thirty days thereafter, or before notice of such decease 
 has been received by the bank. 
 
 In March, 1886, a law was passed relating to the bonds required 
 of savings bank treasurers. It had reference to continuing them 
 
I 
 
 HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 35 
 
 in force, by requiring a renewal of the same as often, at teast, as 
 once in five years. 
 
 By a special act of February, 1886, the Suffolk Bank of Boston 
 was allowed to exceed the prescribed limit in its holding of real 
 estate, the amount being fixed at $250,000 in addition to that 
 previously authorized. 
 
 In February, 1888, an act was passed demanding that during the 
 year 1889, and every third year thereafter, savings banks shall call 
 in the books of depositors for verification, in such manner as the 
 trustees may direct. One of the chief obstacles to a complete and 
 satisfactory examination and verification of the accounts of a sav¬ 
 ings bank lies in the fact that a large percentage of the depositors 
 seldom present their books for comparison with the bank accounts, 
 having no intelligent idea of the need or desirability of so doing. 
 This law was proposed and enacted for the purpose of meeting 
 in some measure this situation. Many of the institutions employ, 
 temporarily, a special accountant to attend to such examination. In 
 this way the regular officials of the bank are exempt from possible 
 criticism regarding the exactness with which the law is complied with. 
 
 In March, 1888, an amendment to the law of 1876, regarding 
 the duties of trustees, was enacted. It covered a point which had 
 for some time been looked upon with apprehension by the com¬ 
 missioners, namely, the want of regularity with which, in some 
 cases, these advisory officers attended to their duties. It was 
 accordingly provided that, “ if a trustee fails to attend the regular 
 meetings of the board, or to perform any of the duties devolved 
 upon him as such trustee, for six consecutive months, his office 
 shall thereupon become vacant.” 
 
 In March, 1888, the forty and forty-first sections of chapter one 
 hundred and sixteen of the public statutes, previously quoted in 
 this history, was slightly amended. The time for making the annual 
 report was changed from fifteen to twenty days following the last 
 business day of October; the returns are to contain a statement 
 of the amount of each extra as well as of each semi-annual divi¬ 
 dend ; the report is to be signed by the president, as well as by 
 “ five or more trustees,” and the date on which the law requiring 
 a statement of the number of deposits of each specified amount is 
 to take effect, was fixed at “the year ending with the last business 
 day of October, 1889.” 
 
 Conclusion. 
 
 After all, the true test of the value or practical utility of any 
 system is the discriminating analysis of time. If there exist elements 
 of weakness, nothing can prevent their exposure ; and, on the other 
 hand, any resources of strength and stability will inevitably find a 
 deserved recognition. Time may, indeed, be a stern arbiter, and yet 
 she is usually a just one. 
 
36 HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 Thesb reflections force themselves into prominence when viewing 
 in the retrospect the savings bank system of this country, and espe¬ 
 cially of Massachusetts. Starting in this State, as we have seen, 
 while the idea, in a practical sense, was yet new to the world, it has 
 enjoyed a career of continuous prosperity and advancement. Strange 
 to say, it has met with but few reverses, and these have been 
 brief and generally restricted in their influence ; so that the system 
 remains, after more than seventy years of practical operation, as 
 strong and helpful in its maturity as could have been hoped for by 
 its warmest advocates and supporters during its incipiency. 
 
 We have by no means, however, reason to flatter ourselves that 
 the system has arrived at a condition of perfection, for there may 
 yet be found many suggestions for its improvement. And yet it 
 may be confidently accepted as true, that in no other State of the 
 Union, nor in any country of the old world, has there been a more 
 marked advance, or more permanent and satisfactory results attained, 
 in the practical endeavor to provide for and to stimulate habits of 
 prudence and thrift among the common people than in the State of 
 Massachusetts. The wisdom of her foremost lawmakers, not less 
 than the sound practical sense and business insight of her best 
 citizens, have been invited to the task. The results have been com¬ 
 mensurate with the effort put forth ; and it is therefore with a just 
 pride that we behold the fruition of their endeavors. 
 
 Since the early days of the savings bank system in Massachusetts, 
 as we have seen, most, if not all, legislation in its behalf has been 
 in three distinct, and yet, really analogous directions. First and 
 primarily, the endeavor has been to make the system so simple and 
 practical that every possible means of helpfulness to the common 
 people, for whose benefit these banks are intended, may be afforded. 
 To this end the necessary business details attending the opening of 
 accounts, the deposit and withdrawal of money, the privileges of 
 minors arid of dependent persons and the like, have been reduced to 
 the simplest and most apparent methods. Also, in the matter of 
 expense attending the management of the affairs of these institu¬ 
 tions, as, also, in the regulation of taxation, a just and proper spirit 
 of discrimination favorable to their pecuniary interests has always 
 prevailed. 
 
 Secondly, in the regulation of the very vital interests of these 
 institutions as connected with the investments prescribed and 
 allowed, the policy has always been to give the largest freedom 
 practicable, within the limits of safety. From year to year these 
 limits have been wisely extended, so that they have come to include 
 many of the more substantial classes of securities out of the State, 
 and, in some instances, outside of New England. Originally, the 
 investments were required to be made almost entirely within the 
 limits of Massachusetts, but the widespread development of State 
 
HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 37 
 
 and municipal credit elsewhere, served to dictate a more liberal 
 policy. A strict conservatism, however, has always obtained in all 
 legislation affecting this important interest. There is one class of 
 securities which has never met with special favor among legislators 
 in this State, namely, Western mortgages. Other States have 
 admitted them to their legalized catalogue of investments. It 
 remains to be seen whether these securities will prove safe and 
 reliable during a series of years. 
 
 The third point which has engaged the attention of our law¬ 
 makers quite constantly, and which has had the effect to create a 
 widespread confidence in our savings bank system, is the strict 
 supervision of the affairs of the individual institutions demanded, 
 and the constant publicity given to the same. The sworn returns, 
 required annually of the officers, have been enlarged and elaborated 
 in their details, until they now cover every department and feature 
 of the system, the special knowledge of which can be of any 
 possible value in revealing the internal condition of the banks. 
 
 Thus it has been seen that, during the past fifty years, little 
 has been omitted, so far as our present wisdom and experience can 
 dictate, the accomplishment of which would, in any great degree, 
 have given greater strength or increased popular favor to a class 
 of institutions in the State upon the existence of which has 
 depended, in no small degree, the moral as well as the material 
 prosperity of the common people. 
 
 Annexed will be found tables showing the growth of the savings 
 bank system from its inception in 1816 to 1887, the year of the 
 latest available returns, which indicate, more succinctly and clearly 
 than could be done in any other form, the various changes that 
 have taken place, and the surprising advance that has been made in 
 the several departments of the system. 
 
 Jable Showing the Progress of the Massachusetts Savings 
 
 Banks from 1816 to 1887. 
 
 Years. 
 
 No. of 
 Charters 
 Granted. 
 
 1 
 
 No. in 
 Existence at 
 Close of 
 Each Year. 
 
 Years. 
 
 No. of 
 Charters 
 Granted. 
 
 No. in 
 Existence at 
 Close of 
 Each Year. 
 
 1816. 
 
 1 
 
 X 
 
 1827. 
 
 2 
 
 8 
 
 r8iy . 
 
 O 
 
 1 
 
 1828. 
 
 =5 
 
 x 3 
 
 
 
 
 
 
 1818 . 
 
 1 
 
 2 
 
 1829. 
 
 2 
 
 i =5 
 
 tStq . 
 
 0 * 
 
 2 
 
 1820. 
 
 O 
 
 1=5 
 
 T820 . 
 
 1 
 
 2 
 
 1821. 
 
 4 
 
 IQ 
 
 T82T—/J. 
 
 0 
 
 'X 
 
 l832. 
 
 I 
 
 20 
 
 182=5..'. 
 
 2 
 
 5 
 
 1833. 
 
 2 
 
 22 
 
 1826 . 
 
 1 
 
 6 
 
 
 
 
38 
 
 HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 Table Showing the Progress of the Massachusetts Savings 
 Banks from 1816 to 1887 —continued. 
 
 Years. 
 
 No. of 
 Charters 
 Granted. 
 
 I 
 
 No. of Banks ' 
 in Operation. \ 
 
 Amount 
 
 of 
 
 Deposits. 
 
 1 
 
 Annual 
 
 Increase 
 
 Per Cent. 
 
 No. of 
 
 Depositors. 
 
 Average to 
 
 Each Account. 
 
 l 
 
 Dividends 
 
 Reported. 
 
 Average 
 
 Rate of 
 
 Dividend. 
 
 1834.... 
 
 8 
 
 22 
 
 $3,407,773 
 
 _ 
 
 24,256 
 
 $140.09 
 
 $138,576 
 
 _ 
 
 1835.... 
 
 3 
 
 27 
 
 3,9 2I ,37° 
 
 15 
 
 27,232 
 
 143-99 
 
 135,853 
 
 — 
 
 1836.... 
 
 1 
 
 28 
 
 4,374,578 
 
 11^ 
 
 29,786 
 
 146.19 
 
 166,422 
 
 — 
 
 i 837 --.. 
 
 2 
 
 30 
 
 4,781,426 
 
 9/6 
 
 32,564 * 
 
 146.51 
 
 295,225 
 
 — 
 
 1838.... 
 
 0 
 
 30 
 
 4,869,393 
 
 2 
 
 33,063 
 
 147-27 
 
 248,039 
 
 — 
 
 1839.... 
 
 0 
 
 30 
 
 5,608,159 
 
 
 36,686 
 
 152.86 
 
 216,957 
 
 — 
 
 1840.... 
 
 0 
 
 3i 
 
 5,8i9,554 
 
 3 % 
 
 37,470 
 
 I57-98 
 
 262,001 
 
 — 
 
 1841.... 
 
 0 
 
 30 
 
 6,714,182 
 
 15K 
 
 4U423 
 
 162.08 
 
 246,868 
 
 — 
 
 1842.... 
 
 1 
 
 30 
 
 6,900,451 
 
 2^ 
 
 42,587 
 
 162.03 
 
 282,231 
 
 — 
 
 1843.-.. 
 
 0 
 
 3i 
 
 6,935,547 
 
 K 
 
 43,217 
 
 160.40 
 
 319,339 
 
 — 
 
 1844... 
 
 0 
 
 3* 
 
 8,261,345 
 
 19 
 
 49,699 
 
 160.23 
 
 3n,42i 
 
 — 
 
 1845.... 
 
 4 
 
 33 
 
 9,813,288 
 
 18% 
 
 58,178 
 
 168.66 
 
 407,403 
 
 — 
 
 1846.... 
 
 5 
 
 38 
 
 10,680,933 
 
 85-6 
 
 62,893 
 
 169.82 
 
 345,443 
 
 $4 67 
 
 1847.... 
 
 2 
 
 39 
 
 11,780,813 
 
 10 
 
 68,312 
 
 172.45 
 
 742,462 
 
 6 50 
 
 1848.... 
 
 4 
 
 4i 
 
 11,970,448 
 
 1 Y \ 
 
 69,894 
 
 171.26 
 
 46 i ,774 
 
 — 
 
 1849.... 
 
 1 
 
 43 
 
 12,111,554 
 
 
 71,629 
 
 169.08 
 
 384,843 
 
 4 50 
 
 1850 ... 
 
 2 
 
 45 
 
 13,660,024 
 
 13 
 
 78,823 
 
 I 74-57 
 
 470,646 
 
 4 64 
 
 1851.... 
 
 8 
 
 45 
 
 I 5,554,089 
 
 14 
 
 86,537 
 
 179-73 
 
 543,470 
 
 4 78 
 
 1852.... 
 
 2 
 
 53 
 
 18,401,308 
 
 12 
 
 97,353 
 
 189.01 
 
 033,236 
 
 4 69 
 
 1853-..• 
 
 6 
 
 60 
 
 2 3,370,ro2 
 
 27’ 
 
 117,404 
 
 T 99-°5 
 
 845,688 
 
 4 78 
 
 1854.... 
 
 16 
 
 73 
 
 25,936,858 
 
 11 
 
 136,654 
 
 189.88 
 
 999,877 
 
 4 °4 
 
 1855.... 
 
 10 
 
 80 
 
 27,296,217 
 
 4% 
 
 148,263 
 
 184.10 
 
 1,049,435 
 
 4 97 
 
 1836.... 
 
 0 
 
 81 
 
 30,373,447 
 
 1094: 
 
 165,484 
 
 184.15 
 
 1,123,038 
 
 4 19 
 
 1857.... 
 
 1 
 
 86 
 
 33,015,757 
 
 8% 
 
 177,375 
 
 186.13 
 
 J , 242,383 
 
 5 °5 
 
 1858.... 
 
 0 
 
 86 
 
 33,9 I 4,97 2 
 
 2% 
 
 182,655 
 
 185.67 
 
 1,363,993 
 
 5 °6 
 
 1859.... 
 
 1 
 
 86 
 
 39,424,419 
 
 16 
 
 205,409 
 
 I9I-93 
 
 1,450,024 
 
 5 01 
 
 i860.... 
 
 4 
 
 89 
 
 45,054,236 
 
 14 M 
 
 230,068 
 
 195.83 
 
 1,663,407 
 
 5 °5 
 
 1861.... 
 
 5 
 
 93 
 
 44,785,439 
 
 *3-5 
 
 225,058 
 
 j 98.99 
 
 U943,532 
 
 4 50 
 
 1862.... 
 
 0 
 
 93 
 
 50,403,674 
 
 12 y 2 
 
 248,900 
 
 202.50 
 
 1,977,463 
 
 4 *3 
 
 1863.... 
 
 2 
 
 95 
 
 56,883,828 
 
 *2 4-5 
 
 272,219 
 
 208.92 
 
 2,087,115 
 
 4 90 
 
 1864.... 
 
 5 
 
 97 
 
 62,557,604 
 
 10 
 
 291,616 
 
 214.52 
 
 2,258,495 
 
 4 !4 
 
 1865.... 
 
 3 
 
 102 
 
 59,936,482 
 
 *4 I_ 5 
 
 291,488 
 
 205.62 
 
 2,738,531 
 
 4 75 
 
 1866.... 
 
 1 
 
 102 
 
 67,732,264 
 
 13 
 
 3 i6 ,853 
 
 213.76 
 
 2,908,235 
 
 5 26 
 
 1867.... 
 
 6 
 
 108 
 
 80,43^583 
 
 l8 % 
 
 348,593 
 
 230.73 
 
 3,514,715 
 
 5 42 
 
 1868.... 
 
 8 
 
 “5 
 
 94.838,336 
 
 18 
 
 383,094 
 
 247.55 
 
 4,481,264 
 
 5 80 
 
 1869.... 
 
 20 
 
 130 
 
 112,119,016 
 
 18 1-5 
 
 34U769 
 
 259.67 
 
 5,444,719 
 
 6 00 
 
 1870.... 
 
 10 
 
 I 39 
 
 *35, 745,097 
 
 21 
 
 488,797 
 
 277.71 
 
 6,725,428 
 
 6 11 
 
 1871.... 
 
 18 
 
 160 
 
 163,704,077 
 
 20% 
 
 561,201 
 
 291.52 
 
 8,103,004 
 
 6 09 
 
 1872.... 
 
 *3 
 
 172 
 
 i8 4,797,3 i 3 
 
 12^ 
 
 630,246 
 
 293.21 
 
 9,622,775 
 
 6 07 
 
 1873.... 
 
 2 
 
 i75 
 
 202,195,343 
 
 sy 2 
 
 666,229 
 
 303.49 
 
 10,807,906 
 
 6 15 
 
 1874.... 
 
 4 
 
 179 
 
 217,452,120 
 
 IYt. 
 
 702,099 
 
 309-71 
 
 11,782,914 
 
 6 17 
 
 1875.... 
 
 2 
 
 180 - 
 
 237,848,963 
 
 9 2-5 
 
 720,639 
 
 330.05 
 
 12,816,579 
 
 6 15 
 
 1876.... 
 
 0 
 
 180 
 
 243,340,642 
 
 2^ 
 
 739,289 
 
 329-I5 
 
 12,403,074 
 
 5 67 
 
 1877.... 
 
 0 
 
 179 
 
 244,596,614 
 
 
 739,757 
 
 330.64 
 
 11,193,795 
 
 5 00 
 
 1878.... 
 
 0 
 
 168 
 
 209,860,631 
 
 *141-5 
 
 674,251 
 
 311.25 
 
 8,174,568 
 
 4 00 
 
 1879.... 
 
 0 
 
 166 
 
 206,378,709 
 
 *1% 
 
 675,555 
 
 305-50 
 
 7,272,822 
 
 3 68 
 
 1880.... 
 
 1 
 
 164 
 
 218,047,922 
 
 5 x A 
 
 706,395 
 
 308.68 
 
 7,957,887 
 
 3 93 
 
 1881.... 
 
 0 
 
 165 
 
 230,444,479 
 
 5% 
 
 738,951 
 
 311.85 
 
 8,293,774 
 
 4 00 
 
 1882.... 
 
 1 
 
 167 
 
 241,3 11 ,362 
 
 4 7-io 
 
 772,518 
 
 312.37 
 
 8,530,385 
 
 3 97 
 
 1883.... 
 
 1 
 
 168 
 
 252,607,593 
 
 4.68 
 
 806,010 
 
 3 I 3 4° 
 
 9,535,39! 
 
 4 09 
 
 1884.... 
 
 1 
 
 168 
 
 262,720,146 
 
 4 
 
 826,008 
 
 318.06 
 
 9,877,713 
 
 4 15 
 
 1885.... 
 
 5 
 
 171 
 
 274,998,412 
 
 4% 
 
 848,787 
 
 323-99 
 
 10,284,661 
 
 4 M 
 
 1886.... 
 
 0 
 
 172 
 
 ^A 91 D^ 
 
 5-89 
 
 906,039 
 
 321.40 
 
 1 10,504,861 
 
 4 06 
 
 1887.... 
 
 0 
 
 i73 
 
 302,948,624 
 
 4.04 
 
 944,778 
 
 320.66 
 
 n,i55,440 
 
 4 06 
 
 * Decrease. 
 
HISTORY OF THE MASSACHUSETTS SAVINGS BANKS. 
 
 39 
 
 Table Showing Investments of Massachusetts Savings Banks 
 at Different Periods from 1834 to 1887, three right- 
 • hand figures being omitted in every case. 
 
 
 1834. 
 
 1838. 
 
 1847. 
 
 1852. 
 
 1857- 
 
 1863. 
 
 Public funds. . 
 
 2 
 
 70 
 
 2,130 
 
 1,176 
 
 855 
 
 18,343 
 
 Loans on public funds. . 
 
 — 
 
 10 
 
 14 
 
 7 
 
 20 
 
 59 i 
 
 Bank stock. 
 
 M92 
 
 1,426 
 
 1,978 
 
 3,555 
 
 6,189 
 
 9,887 
 
 Loans on bank stock. 
 
 557 
 
 563 
 
 M 3 
 
 550 
 
 1,049 
 
 37 i 
 
 Railroad bonds.. . 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 Loans on railroad bonds.. 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 Loans on railroad stock. 
 
 — 
 
 — 
 
 3 °° 
 
 261 
 
 106 
 
 80 
 
 Railroad notes. 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 Real estate (for banking- purposes). 
 
 — 
 
 — 
 
 9 2 
 
 102 
 
 170 
 
 348 
 
 Real estate (by foreclosure). 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 Loans on real estate. 
 
 387 
 
 1,121 
 
 4 U 32 
 
 5,615 
 
 11,099 
 
 16,685 
 
 Loans on personal security. 
 
 283 
 
 672 
 
 2,053 
 
 5,023 
 
 8,885 
 
 4 , 5 i 4 
 
 Loans to counties, cities, and towns (notes) 
 
 269 
 
 465 
 
 947 
 
 2,012 
 
 3,370 
 
 4,970 
 
 Deposits in banks on interest. 
 
 520 
 
 568 
 
 140 
 
 288 
 
 1,288 
 
 742 
 
 Deposits in banks not on interest. 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 Loans to Massachusetts..... 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 Loans on depositors’books. 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 Sundry assets*. 
 
 — 
 
 — 
 
 44 
 
 i 45 
 
 214 
 
 — 
 
 Cash on hand. 
 
 24 
 
 144 
 
 210 
 
 388 
 
 296 
 
 936 
 
 
 1867. 
 
 1872. 
 
 1877. 
 
 1882. 
 
 1887. 
 
 Public funds. 
 
 29,960 
 
 21,998 
 
 33,229 
 
 36,152 
 
 40,304 
 
 Loans on public funds. 
 
 1,218 
 
 1,680 
 
 L 259 
 
 716 
 
 903 
 
 Bank stock. 
 
 10,921 
 
 16,972 
 
 26,154 
 
 25,300 
 
 26,850 
 
 Loans on bank stock. 
 
 441 
 
 L 52 i 
 
 1,224 
 
 j,ii 7 
 
 i, 43 i 
 
 Railroad bonds... 
 
 733 
 
 4,602 
 
 9,076 
 
 9,016 
 
 21,185 
 
 Loans on railroad bonds. 
 
 
 — 
 
 !33 
 
 — 
 
 171 
 
 Loans on railroad stock. 
 
 278 
 
 545 
 
 
 — 
 
 232 
 
 Railroad notes. 
 
 — 
 
 
 — 
 
 — 
 
 3,080 
 
 Real estate (for banking purposes). 
 
 576 
 
 1,968 
 
 2,840 
 
 2,540 
 
 2,390 
 
 Real estate (by foreclosure). 
 
 — 
 
 — 
 
 5,091 
 
 7,201 
 
 2,512 
 
 Loans on real estate. 
 
 21,259 
 
 89,684 
 
 116,241 
 
 86,129 
 
 119,792 
 
 Loans on personal security. 
 
 9,636 
 
 33,329 
 
 34,124 
 
 56,928 
 
 78,518 
 
 Loans to counties, cities, and towns (notes) 
 Deposits in banks on interest. 
 
 6,577 
 
 12,464 
 
 10,170 
 
 9,293 
 
 8,791 
 
 1,524 
 
 1,729 
 
 6,950 
 
 12,907 
 
 7 , 7 i 7 
 
 Deposits in banks not on interest. 
 
 — 
 
 — 
 
 — 
 
 — 
 
 528 
 
 Loans to Massachusetts. 
 
 — 
 
 — 
 
 — 
 
 — 
 
 950 
 
 Loans on depositors’ books. 
 
 — 
 
 — 
 
 — 
 
 — 
 
 215 
 
 Sundry assets*. 
 
 — 
 
 — 
 
 2 U 35 
 
 2,280 
 
 909 
 
 Cash on hand. 
 
 1,141 
 
 i ,657 
 
 L 52 i 
 
 1,060 
 
 61X 
 
 * This item includes railroad stock, accrued interest, premium and expense accounts, and 
 such other assets as are not classified. 
 
A Necessary Work for Every Banker and Lawyer. 
 
 AND BANK COLLECTIONS 
 
 By ALBERT S. BOLLES, 
 
 PROFESSOR OF 
 
 0 
 
 Mercantile Lav and Practice in tie Wharton School of Finance and Economy, 
 
 UNIVERSITY OF PENNSYLVANIA, 
 
 AND EDITOR OF THE 
 
 ~R A TS TR— FIT?,^ !MI A-ZTISTIE. 
 
 -«-<♦►->- 
 
 This important work is divided into three parts : The Receiving and Keeping of 
 Deposits; the Paying of Them ; and Collections. 
 
 In the First Part the following subjects are considered : 
 
 Kinds of Deposits and Liability for their Loss—Nature of Items of Deposits, When Checks are 
 considered Cash—Authority of Banks to Receive Deposits—Deposits after Banking Hours— 
 To what Officer Deposits should be Paid—Nature of a Depositor’s Contract, When is a Bank 
 Debtor, and When Agent of a Depositor—Pass-books. 
 
 The Second Part covers the following subjects: 
 
 Nature of a Check—Order of Payments—Payment of Deposits—Corporation Deposits—Payments 
 to Executors and Trustees—Attaching Creditors of Depositor—Principal and Agent—Partner¬ 
 ship Deposits—Paymentof Joint Deposits—Payment of Wife’s Deposits—Payments to Donees— 
 Payments by Special Agreement—Saving Bank Deposits—Payment of Forged Checks—Pay¬ 
 ment on Legal and Forged Indorsements—Payment of Certified Checks—Payment of Certi¬ 
 ficates of Deposit—Payments impending and after Insolvency—Presentation of Checks for 
 payment—In what Money shall Deposits be Paid—When can a Depositor Sue a Bank—When 
 can the Holder of a Check Sue the Drawer and Indorser—When can the Check Holder Sue 
 the Drawee—When a Bank can recover Money Paid by Mistake—The Statute of Limita¬ 
 tions—Overdrafts—When can a Deposit be Retained to Pay the Depositor’s Indebtedness- 
 Payment of the Depositor’s Notes—Payment through the Clearing House—Public Deposits. 
 
 In the Third Part, relating to collections, the following subjects are fully 
 treated: 
 
 Collection of Notes and Checks—Liability of the Collecting Bank and Sub-Collecting Bank to the 
 Owner—Proceeds of Collections- Damages. 
 
 The comprehensive nature of the work must be apparent from this description 
 The law in sixteen hundred cases is carefully stated. The work contains 554 pages 
 Price, in cloth, $ 4 . 50 ; full law sheep, $ 5 . 00 . 
 
 Published by HOMANS PUBLISHING- COMPANY. 
 
A BOOK FOR ALL NATIONAL BANKS 
 
 AND THEIR ATTORNEYS. 
 
 — THE — 
 
 NATIONAL BANK ACT 
 
 AND ITS 
 
 JUDICIAL MEANING, 
 
 WITH AN APPENDIX 
 
 CONTAINING OFFICIAL INSTRUCTIONS AND RULES RELATING TO THE FORMATION AND 
 MANAGEMENT OF NATIONAL BANKS, UNITED STATES BONDS, AND THE 
 ISSUE AND REDEMPTION OF COINS AND CURRENCY. 
 
 BY 
 
 ALBERT S. BOLLES, 
 
 Editor of the Banker's Magazine , and author of “Banks and their 
 
 Depositors. ” 
 
 The work contains nineteen chapters, which treat of the powers of the Comptroller, 
 Organization, Conversion, and Beginning of National Banking Associations, their 
 Extension, Powers, Directors, Shareholders, Increase and Reduction of Capital, 
 Duties of Banks as Public Depositaries, Regulation concerning their Circulations 
 Interest, Criminal Offenses, Preferences, Dissolution and Receivership, Examination, 
 and Reports, Taxation and other matters. All the cases which show the meaning of 
 the National Bank Act are noticed. The work, therefore, is a complete exposition of 
 National Banking Law to date. 
 
 It contains 400 pages. Price, in cloth, $ 3 . 00 ; full law sheep, $ 3 . 75 . 
 
 Published by HOMANS PUBLISHING COMPANY, 251 Broadway. 
 
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