USA > Massachusetts > Suffolk County > Professional and industrial history of Suffolk County, Massachusetts, Volume II > Part 37
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Andrew T. Hall, 1856-42, sixteen years; Waldo Flint, 1856-57; Thomas Lamb, 1856-83, twenty-seven years; A. D. Hodges, 1856-79, twenty-three years; Benjamin E. Bates, 1856-48, twenty-two years; J. Amory Davis, 1854-66, nine years; S. H. Walley, 1866-78, twelve years ; John Cummings, 18:2-86, fourteen years; H. A. Rice, 1878-81, three years; A. W. Stetson, 1828-83, five years; Wm. Perkins, 1879-83, four years; Geo. Whitney, 1881-84, three years; R. E. Demmon, 1883- ss, five years; C. O. Billings, 1883-88, five years; C. A. Vialle, 1883-86, three years; S. A. Carlton, 1884-85; Geo. Ripley, 1886-88; G. S. Bull- ens, 1886-90, four years; W. S. Blanchard, 1881-91, four years; T. N. Ilart, 1888-90; T. P. Beal, 1888-92, four years; A. L. Newman, 1889- 93, four years; Moses Williams, 1890-93; Phineas Pierce, 1891-93; Franklin Haven, jr., 1891-93; John Carr, 1892-93; S. N. Aldrich, 1893. The Clearing-house has but two managers, Henry B. Grove, whose term of service extended from the organization of the Clearing-house in 1856 to his death in April, 1877, a period of twenty-one years. Ile was succeeded by Nathaniel G. Snelling, who had been assistant manager from 1861 to 1811, and who still continues in service as man- ager, having been officially connected with the Clearing-house for about thirty-two years. The assistant managers have been Nathaniel G. Snelling, 1861-42; Fred S. Hodges, 1827-79; C. W. Esterbrook, 1879- 85; Charles A. Ruggles, 1885-93. Eben Staniford has served as clerk from the organization of the Clearing-house in 1856 to the present time -a period of thirty-seven years, being the longest term of service of any person ever connected with the association.
The present officers of the association, elected March 31, 1893. are as follows: President, George Ripley of the National Hide and Leather Bank ; secretary and manager, Nathaniel G. Snelling ; assistant manager, Charles A. Ruggles; clerk, Eben Staniford ; Clearing-house committee : Phineas Pierce, Moses Williams, Franklin Haven, jr., John Carr, S. N. Aldrich.
The expenses of the Clearing-house amount to about $18, 000 annually, as compared with about $16,000 in 1827-28, and $13,000 in 1861-68, when the exchanges were less than two billions, as compared with up- wards of five billions during the last year. In either case the expenses
396
SUFFOLK COUNTY.
constitute an almost infinitesimal fraction of one per cent. of the tran- sactions effected.
'The regular clearing-house year ends March 31, but the following table shows the number and capital of the banks associated, and the clearings and balances by calender years, which for some purposes is more convenient :
CALENDAR
YEAR.
No. of
Banks at
CAPITAL AT END OF YEAR.
EXCHANGES
BALANCES.
Balances
to clearings
per cent.
1856 (9 mos.)
32
$30,760,000
S
1,052.358,154
$1.576.284
4.3
1857
34
31,560,000
1,395,344 685
121,160,094
1858
33,303,000
1,175,832,000
111,198,000
9.5
1859
35,931,700
1,443,750,000
128,594, 000
8. 9
1860
42
38,231,700
1,213,918,000
119,002,298
9.8
1862
42
38,231,700
912,998,000
134,331,295
14.7
1863
41
38,031,700
1,220,839,000
202,624,396
11.8
1864
42
38,812,100
2,365,384,000
253,980,682
10.7
1865
41,900,000
2,341,889,000
279,284,873
11.9
1866
12
41,900,000
2.262,939,930
262, 159,773
11.6
1867
12
41,900,000
1,866,200,886
229,903,997
12.3
1868
14
42,300,000
2,007,688,940
244,512,213
12.1
1869
44
47,350,000
2,124,213,630
35,189,430
11.1
1870
45
47,350,000
2, 147,492,884
244,164,149
11.4
1871
46
48,050.000
2,392,345,566
285,251,990
12.4
1872
46
48,350,000
2,622,319,417
300,380,161
11.5
1873
18
49,350,000
2,667,477,740
302,604,053
11.3
1874
18
50,050,000
2,501,094,148
303,066,619
12.1
1875
51
51,350,000
2,502,594,359
326,579,997
13.0
1876
51
51,350,000
2,283,729,198
319,629,049
14.0 13.6 14.1
1878
51
50,300,000
2,215,655,502
317.550,446 312,375,482 365,821,134 424.429,921
12.8
1881
51
50,000,000
4,233,260,201
522,899,724
12.1
1882
52
50,000,000
3,636,373,805
461,540,425
12.6
1883
52
50,600,000
3,515,747,083
433,651,493
12.3
1884
50,500,000
3,243,327,658
431,268,183
13,2
1×85
52
50,500,000
3.483,134,891
456,232,458
13.1
1886
50
50,500,000
4,095,215,231
496,051,964
12.1
1887
52
50,500,000
4,387,754,275
504.510,550
11.4
1888
54
51,200,000
4,427,357,070
520,648,556
11.7
1889
54
51,600,000
4,772,597,843
547,888,963
11.4
1890
54
51,400,000
5,139,878, 745
552,867, 294
10.7
1891
53
52,700,000
4,753,340,087
521,249,322
10.9
1892
53
52,700,000
5,005,389,685
566, 147,604
11.3
$101,779,836,690
$12,049,506,802
11.8
1893 (5 mos. ).
2,160,965,128
226,508,300
1877
51
51,850,000
2,236,197,949
1879
51
49,550,000
2,674,429,602
13.1
1880
51
49,550,000
3,326,343,166
133, 190, 000
1861
38,231,700
1.528,124.000
1
| End of Year.
397
BOSTON CLEARING-HOUSE.
When it is stated that the annual exchanges of the Boston Clearing- house amount to nearly three times the total annual foreign commerce of the United States, and that the total exchanges to date represent about fifty-five times the annual aggregate of the nation's imports and exports, some idea may be formed of the important place which this in- stitution occupies in the commercial world.
SAVINGS BANKS.
THE savings bank system of Massachusetts really commenced in 1816, when the Legislature chartered the Provident Institution for Savings in the town of Boston. Since then, under the fostering care of the State government, the idea has grown and spread, so that at the present time there are in the State one hundred and eighty-four sav- ings banks and institutions for savings, with combined assets of $115, - 898,159.44, which if divided among the people of the Commonwealth, on the basis of the United States census of 1890, would give to each person a sum exceeding $185. This accumulation is a vast sum and enters largely into the construction and basis of the financial interests of the State. It is the result of the good management of these institu- tions under the guidance and control of the State government, a con- trol which has sought to keep the investments as near to absolute safety as is within its power. Such has been the fidelity shown in their management that of the hundreds of millions of dollars de- posited in these banks since 1816, but one-seventh of one per cent. has been lost from failure and discontinuance of banks. The increase in the deposits of all the banks of the Commonwealth in 1892 over 1891 was $23, 493, 476.54, the largest for any year in the history of the banks except 1810 and 1871. The increase in number of deposits was 206, - 545, and in the amount deposited $9,130,099.02. This result is very gratifying, for there is no institution that can care for the savings of the poor man with greater safety, with more intelligence, and so little expense, and at the same time earn a greater return on the deposit con- sistent with safety. It is worthy of note, in this connection, that though the assets of the savings banks are $415, 898, 159. 14, the expense of investing and caring for this vast sum is only $936,829.59, or less than one-quarter of one per cent.
The following account of the Provident Institution for Savings, as well as the deductions from a valuable experience and close observa- tion of the savings bank system, both in the United States and abroad, was written by Col. Henry Lee:
399
SAITINGS BANKS.
PROVIDENT INSTITUTION FOR SAVINGS.
" The first savings bank in this country to do business was the Phila- delphia Savings Fund Association, in November, 1816; it started before it was incorporated.
" On the 13th of December, 1816, the Provident Institution for Say- ings was incorporated. The forty-eight persons' named in the act of incorporation included the lieutenant-governor, the United States marshal, two judges, four lawyers, three clergymen, thirty-two mer- chants and tradesmen and five mechanics, some of them eminent, all of them respectable citizens.
" The first officers were William Phillips (lieutenant-governor), presi- dent; James Prince (United States marshal), treasurer; and James Savage (lawyer), secretary.
" There is a tradition that the bank was founded partly at the urgent request of good Bishop (afterwards Cardinal) Cheverus, ? that his people (as he called his flock) might have a place of deposit and so not spend or lose their little savings, and that a few years later, also at his request, the partial withholding of earnings and five years' surphis dividends were adopted to induce these same people to keep, as well as to put their money into the bank.
"Founded as a charity by thoughtful, conscientious, disinterested men, it has steadily developed for seventy-seven years from 961 ac- counts at the end of 1816, with a deposit of $16,000, to 90,000 accounts at the end of 1892, with a deposit of $35,590,000, and during this period not the loss of a dollar by dishonesty. The average deposit at present is $388. The range is from the minimum received, $1, to the maximum
I The names of these incorporators were as follows: Hon. William Phillips. John Phillips, Samuel Parkman, James Perkins, Thomas Daws, John Lowell, Russell Sturgis, Jonathan Hunne- well, Josiah Quincy, John D. Williams, Thomas K. Jones, Richard Sullivan, Redford Webster, William Little, Samuel Snelling, Jesse Putman. Rev. Thomas Baldwin, D. D., Rev. William E. Channing, Rev. Charles Lowell, William Mackay, Elisha Tichnor, Jonathan Amory, jr., Samuel H1. Walley, John L. Sullivan, John Bellows, Joseph Coolidge, jr .. John Richards, Ozias Goodwin, John Dorr, Samuel May, Gedney King, William Ropes, Andrew Ritchie, Edward Tuckerman, jr., William Hfarris, David Greenough, Thomas Motley, Beniamin Smith, David W. Child, Gideon Snow, Edward Craft, Jacob Hiler, Johnathan Phillips, William Cochran, Nathaniel G. Snelling, Lewis Tappan and James Savage.
2 Bishop John de Cheverus arrived in Boston in October, 1796, at which time there was but one Catholic priest in the city, and but few adherents of the Catholic faith. A man of scholarly attain- ments, of kind and lovable ways, he drew around him men of all shades of religious beliefs, and exerted a wide influence for good. In 1808 he was appointed Bishop of Boston, and after more than a quarter of a century of earnest and effective work he was recalled to France in 1823 and made Bishop of Montauban. He died in 1836, a short time after having been created a cardinal arch- bishop.
400
SUFFOLK COUNTY.
received, $1,000, and from the minimum drawing interest, $3, to the maximum, $1,600.
" The bank, in starting, paid five per cent. per annum on its deposits ; later the rate was reduced to four per cent., and in addition to this regular dividend an extra one paid every five years, as mentioned above, often amounting to an additional four per cent., making an average per annum of from seven to eight per cent. to the depositors of that date, if their money had lain there the whole five years, and proportionately to those whose money had lain a fraction of that period. As these dividends, unless called for, were added to the principal, the depositors received compound interest. More than half of the de- positors are either foreigners or children of foreigners, the Irish the earliest and most numerous, and after them the Germans and repre- sentatives of all nations. Of late years dividends and interest on funds have declined, and the rate has been reduced to four per cent. Of the amount now on deposit in this bank, say $35,590,000, there are invested in city and town bonds, $7,358,000; bank stock, $1,284,000; railroad bonds, $3,685,000; loans on mortgages (sixty per cent. loaned on asses- sors' value), $10,601,000; personal, with legal collateral, or three names and collateral (not over one year to run), $10,568,000; loans on public funds, bonds, stocks, $1,004,000; real estate and cash, $981,000.
" The paid officers are the treasurer, assistant treasurer, and four- teen clerks, and the annual expenses, including taxes, average one- half per cent. on the deposits. There are twelve vice-presidents and twenty-four trustees (in all thirty-six trustees) chosen annually by the corporation. There are about 120 members of the corporation living out of about 500 members elected from the commencement to the present time.
" The uninterrupted success of this institution is due to the quality of men chosen into the corporation, and from that into the board of trustees, but more especially to the board of investment elected yearly by the trustees. This board, composed of nine, including the secre- tary, meet the treasurer once a week, receive and dispose of all appli- cations for loans, and decide upon investments, and the seventy-seven years' prudent, skillful management of these vast funds by unpaid trustees, taken from the busiest, most high priced lawyers, merchants and manufacturers, is one of the most ereditable chapters in Boston's history. The directors of a manufacturing company, of an insurance company, of a bank, have a personal interest as stockholders in the
401
SAVINGS BANKS.
wise conduct of the business, but the board of investment of a savings bank are absolutely disinterested in performing their tedious task.
" The average service of the members of this responsible body has been ten years, of three of them thirty years; men whose services as trustees, etc., are in demand for all their working hours, but it would be invidious to single out any one of them for mention save Mr. James Savage1, who may be considered the founder of this great charity, and who, as secretary, treasurer, and president, and above all as president of the board of investment, rendered invaluable service for over forty years. In the face of ridicule and distrust, which deterred many of the leading men from co-operation, and turned back some of the original undertakers, the project might have been abandoned had it not been for his courage and resolution. He made the first deposit of $10; he paid the
] James Savage was born in Boston, July 13, 1984, and was a descendent of Major Savage, who, in 1663, undertook to erect a barricade in the harbor for the security of the inhabitants against a fleet then expected from Holland. This barricade grew in less than forty years to Long Wharf. Major Savage is buried in King's Chapel burying ground. Major Savage's first wife was Faith. daughter of Anne Hutchinson. His grandfather, Habijah Savage, was a graduate of Harvard College in 1695. He beld many civil and military positions. His father was Habijah Savage, a merchant, who married Miss Tudor. In 1795 James Savage received a Franklin medal, and sub- sequently continued his education at the Derby Academy, in Hingham, and the Washington Academy, at Machias, Me. He entered Harvard College, and was graduated in 1803. He received the degree of A.M. in 1806, delivered the Phi Beta Kappa oration in 1812, and the degree of LL.D. was conferred upon him in 184t. After the completion of his collegiate course he studied law with Chief Justice Parker, Samuel Dexter and William Sullivan, and became a member of the Suffolk bar in 1807. After the organization of the Provident Institution for Savings, in which he was a foremost spirit, he was connected with it in an official capacity, until the infirmities of old age had impaired his faculties. July 4, 1811, he de- livered the oration before the city authorities. In 1820 he was a delegate to the Constitutional Convention ; 182% and 1825, a member of the Common Council ; 1826, a State senator : 1827-28, an alderman. He was one of the founders of the Boston Athenaeum, and one of the editors of The Month'y Anthology, and for many years one of the contributors to The North American Review, and to the New England Magasine. He was for more than sixty years a member, and for fourteen years the president of the Massachusetts Historical Society, and honorary membership of many literary and historical societies at home and abroad was conferred upon him. Winthrop's " History of New England, with notes,"and a "Genealogical Dictionary of the First Settlers of New England," are his literary monuments. He traveled extensively in Europe and the West Indies. During the War of the Rebellion he proved a generous, high-minded and patriotic citizen ; but the death of his only son, Col. James Savage (October 22, 1862), who was wounded and taken prisoner at the battle of Cedar Mountain, proved a severe blow. One of the last occasions on which he spoke in public was in 1864, when the death of Jared Sparks was announced to the Massachusetts Histor- ical Society. He died March 8, 1873. Hon. George S. Hillard has said of him : " Mr Savage's literary labors were given to the early history of New England, wherein in accuracy and extent of knowledge he had no rival. And in his own person he was an illustration of the saying, 'abeunt studia in mores,' for his character seemed to have been moulded, in a measure, on his studies. He was eminently a New England product and the flavor of the soil was recognized in all his life and acts. He took from the l'uritan fathers of New England all that made them admirable, and re- jected all that made them unlovable. He had their religious faith, their inflexible sense of duty. their heroic spirit, their purity of life: but he had not their narrowness, their austerity, or their bigotry."
51
402
SUFFOLK COUNTY.
first extra dividend for five years out of his own pocket, to be refunded when it could be without disturbing the investments. His faith, his good sense, his aggressive honesty, his independence, combined to es- tablish and maintain the bank upon its proper basis, so that through all there years it has been conducted strictly as a charity to the poor and helpless; security, rather than profits, aimed at.
" I insert here the names of all who have served as members of the Board of Investment, with period of service:
YEARS,
YEARS.
Thomas L. Winthrop, lieut. gov. 15
H. H. Hunnewell, 6
John Dorr,
18
Edward Wigglesworth, 16
Samuel Snelling, 11
Francis B. Crowninshield, 16
Thomas W. Ward,
6
James M. Beebe, 14
James Prince,
1
Joseph Whitney, . 5
1
Benjamin Guild,
14
William W. Tucker,
John C. Gray,
11
James S. Amory,
Charles C. Parsons,
5
William S. Dexter, (still serving)
18
John A. Lowell,
16
Augustus Lowell, (still serving) 1.
Edward Brooks,
11
George P. Upham,
Samuel Dorr,
1
George Higginson, 13
Peter Wainwright, 35
David R. Whitney, 6
Thomas B. Wales,
11
Arthur T. Lyman, -
Ozias Goodwin,
19
Israel G. Whitney, (still serving). 11
William Parsons,
1
Charles U. Cotting, (still serving) 14
John Lamson,
11
George A. Gardner, 6
Nathan Rice,
4
Edward I. Browne,
George Howe,
16
Charles W. Amory, (still serving) 10
Peter R. Dalton,
Channing Clapp, 1
Nathaniel II. Emmons,
Louis Curtis, (still serving) B
William Perkins,
29
Robert H. Stevenson, (still serving)
Benjamin Thaxter,
12
Henry Whitman, (still serving)
George II. Kuhu,
20
"Some banks having allowed, and even courted deposits of many thousands, either to swell their assets, or to oblige influential custom- ers, a law was passed in 1826, limiting deposits to $1,000 each, a limit self-imposed by the Provident Institution from the beginning.
" The withholding of a portion of the income not only served to check withdrawals in hope of an extra dividend every five years, but it also furnished a reserve fund to meet losses. But as most banks did not adopt this practice, and as those which did were periodically left destitute, the Legislature recognizing this normal condition, and the need of a permanent reserve to guard against insolvency in the
James Savage,
J. Huntington Wolcott,
403
SAVINGS BANKS.
event of a run upon the banks, decreed that from one-eighth per cent. to one-fourth per cent. on the deposit should be set aside annually for a reserve fund. Since 1826, when this law was passed and from one- eighth per cent. to one-fourth per cent. of the earnings per annum added cach year to the reserve, no five years' extra dividends have been de- clared by the bank.
"Unscrupulous persons have imposed upon the bank by opening several accounts as trustees and subsequently withdrawing the deposits without the concurrence of the persons interested. The doubt as to the existence of these beneficiaries has led to a law requiring the trustees to give their names, but it would be safer to insist upon the presence of both beneficiary and trustec when the money is deposited and when withdrawn.
" The accounts are balanced every six months, and are audited and the assets examined every twelve months for the board of investment by a sworn and accomplished auditor, who is changed every two years, and also by the bank examiners and by a committee of the corporation.
"The enormous amount of $393,000,000 deposited in the savings banks in this State December 31, 1892, might lead one to suspect that the law limiting the individual deposit had been to some extent evaded. But the increase in the aggregate deposits, while irregular, ranging from one-half per cent. 1846-4%, to twenty per cent. 1852-53, has been uninterrupted, averaging from 1834 to 1894 (I assume the rate of prog- ress from 1892 to 1894, a period of sixty years), fourteen per cent. per annum.
"The very small addition to the deposits from December, 1876, to December, 1812, of only one-half per cent., may perhaps be ascribed to the law enacted in 1876 fixing the maximum at $1,000 each, and the consequent withdrawal of the large sums dropped by persons who shamefully misused these charitable institutions. The ratio of increase of deposits from 1864 to 1814 was two hundred and forty-seven per cent. ; from 1814 to 1884, twenty-one per cent. This reduction is due to a diversion of savings from the banks to the endowment orders, so called.
" What limit, if any, shall be fixed upon the total in any one bank has never yet been determined. The views of the trustees of the Prov- ident Institution have been expanding since Mr. Savage said 'that if ever the bank should have $10,000,000 on deposit it would be time to close the doors,' until now they have over $35, 000,000, and stand ready to receive more.
404
SUFFOLK COUNTY.
" If the banks go on receiving deposits, two questions arise: first, whether the business of considering and making investments and regu- lating the policy of the bank will not occupy the whole time of the board of investment and involve their being compensated; second, whether the increased assets can be satisfactorily invested without ex- tending the list of possible investments.
"Up to this time the board adheres to the present circumscription of investments, and anticipates no difficulty in investing what moneys they receive.
"All legislation should be based upon the understanding of the original intention of the founders of this great charity. As savings banks have been long established in Great Britain, and as the whole subject has been very frequently diseussed and very thoroughly investi- gated from 1812 to 1863, it may be worth while to recount briefly their experience and their conclusions derived from that experience.
"Security rather than a high rate of interest is chiefly regarded by the class for whom savings banks were instituted, and interest rather than security by those for whom they were not instituted, has been constantly urged by those entitled to know, and abundantly proved by the increase of deposits of the former and the withdrawal of the deposits of the latter class under the gradual reduction of the rate of interest from four and one-half per eent. in 1817 to three per cent. in 1861, when the complete security provided by the post-offiec savings banks, then established by Mr. Gladstone, but allowing only two and one-half per cent. interest, rapidly depleted the old savings banks with their higher dividends but imperfect security.
"In December, 1844, there were 5,068 post-offiee banks with 3.045,- 000 depositors and £23, 158,000 deposits.
" The experience in England, as well as in France, Germany, Ilol- land and Switzerland, has further demonstrated that the millions de- posited in savings banks prudently invested will not, year by year, yield a higher income than the best government securities, and that as the deposits, and consequently the investment, increases, the difficulty increases, and that the security of the principal is in inverse ratio to the interest.
"An investigation into the workings of savings banks in Great Britain for forty years revealed a loss to the government, who received the deposits of the savings banks, of $22,000,000 on a payment of $192,000,000, or about twelve per cent .- about one-third per cent. per
405
SAVINGS BANKS.
annum-a portion of which was ineurred by loss of interest on a neces- sary cash balance, on funds not at once invested, but principally by an invariable loss on the sales and purchases of consols; and an analysis of the records of our savings banks would confirm this experience, for, as by their fundamental conditions savings banks are bound to receive and repay deposits at the will of the depositors, it is obvious that the immediate or almost immediate investment of deposits as they are re- ceived entail the frequent purchase of stock at high prices in prosperous times, when deposits are pouring in, and that immediate repayments of deposits on demand must, conversely, involve the frequent sale of stock at low prices in times of depression, when deposits fall off and withdrawals are numerous. The expense of conducting the banks- rent and salaries, etc. - which in England is defrayed by the one-quarter per cent. difference in rate of interest allowed by the government to the banks and that allowed by the banks to the depositors, would here have to be taken from the interest earned, and reduce still further the amount credited to the depositors.
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