USA > Massachusetts > Essex County > The story of Essex County, Volume II > Part 30
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The Salem Savings Bank was the first institution of its kind to be established in the county, and the second in the United States. Founded in January, 1818, it has developed into a strong and respected institution, at present ranking fifth among the twenty-four savings banks of Essex County in volume of deposits. Its growth over a period of one hundred and sixteen years has been consistently steady. At the time of the centennial anniversary, in 1918, the Salem Savings Bank had 22,023 depositors, the average depositor having almost $500 to his credit. Fifty years before, in 1868, the bank had already become a good sized institution, having 12,364 depositors at that time.
The original officers of the Salem Savings Bank were: Dr. Edward Holyoke, president ; Joseph Peabody, vice-president; and Wil- liam P. Richardson, treasurer. The presidents who served during the first fifty years of the bank's history were: Dr. Holyoke, Joseph Peabody, Nathaniel Silsbee, Daniel A. White, Zachariah Fowle Sils- bee, John Bertram, and Joseph S. Cabot. The present officers are : James Young, Jr., president; George R. Jewett, W. D. Chapple, W. A. Chisholm, George W. Grant, Richard Wheatland, and George A. Morrill, vice-presidents ; Roland A. Stanley, treasurer; Edgar W. Johnson, assistant treasurer. In 1934 the deposits were $19,895,- 636, and the undivided profits $915,234.
The Institution for Savings in Newburyport was the second of its kind to be founded in Essex County, and the third in Massachu- setts. At its establishment in 1820 it received a ready welcome. In 1830 the sum of $80, 193, which had increased to $337,766 in 1840, was on deposit. The preservation of many old Newburyport for- tunes is partly attributable to the use of this and other Essex County savings banks.
Essex-57.
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THE STORY OF ESSEX COUNTY
The growth of the Institution for Savings in Newburyport has been remarkable for a city with so small a population, particularly in view of the fact that a strong competitor in the form of the New- buryport Five Cents Savings Bank was founded in 1854. In 1850 the deposits of the Institution for Savings in Newburyport were $567,530; in 1860, $1,432,920; in 1880, $4,003,650; in 1920, $7,801, 118. At the present time the Institution for Savings in New- buryport ranks ninth among the savings banks of Essex County in volume of deposits. This is an excellent record for a bank in a city of 15,000, which supports another large savings institution as well.
The original officers of the Institution for Savings in Newbury- port were: William B. Banister, president; Jeremiah Nelson, Thomas M. Clark and Thomas Carter, vice-presidents; Peter Le Breton, treasurer; Samuel Tenney, secretary. The presidents from the date of founding have been: Mr. Banister, Thomas M. Clark, Eleazer Hale, Ebenezer Hale, Micajah Lunt, Josiah Little, Edward S. Moseley, and Henry B. Little. The present officers are: Henry B. Little, president; Nathaniel N. Jones and John E. McClusker, vice-presidents; William Balch, vice-president and treasurer; Hallet W. Noyes, secretary. The deposits in 1934 were $11,454,424, and undivided profits amounted to $430,000.
Three other savings banks were established in Essex County in the decade following the founding of the Salem Savings Bank. They were the Lynn Institution for Savings, established in 1826; the Haver- hill Savings Bank, February 8, 1828; and the Provident Institution for Savings in the towns of Salisbury and Amesbury, February 20, 1828.
The Lynn Institution for Savings has the distinction of being the third oldest savings bank and the largest bank of any description in Essex County. Its most spectacular growth has taken place within the last fourteen years. In 1921 the deposits of the Lynn Institution for Savings amounted to about $11,400,000. At that time the Salem Savings Bank was about the same size, and both the Essex Savings Bank of Lawrence and the Salem Five Cents Savings Bank had sev- eral million dollars more on deposit than the Lynn Institution. By 1934 it had outstripped all of its four rivals, having deposits of $31,000,000 and undivided profits of $550,000. Its nearest com- petitor in size is the Essex Savings Bank, of Lawrence, which that year needed more than $5,000,000 in deposits to equal the Lynn
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BANKS, BANKING AND INSURANCE
Bank. The rapid strides made by the Lynn Institution for Savings were due in part to the prosperity of the shoe and electrical indus- tries of that city during the 'twenties.
The early years of the Lynn Institution for Savings were no more spectacular than those of other Essex County savings banks. Its growth during the first eighty years of its existence was, indeed, quite gradual. Little did the men who founded the first savings bank in this small community of fishermen and shoemakers realize the destiny that lay ahead for the institution they had organized.
The first officers of the Lynn Institution for Savings included Amariah Childs, president, and Amos Rhodes, treasurer. The pres- ent staff comprises Charles A. Collins, president; Alfred E. Chase, Henry R. Mayo, John B. Newhall, and F. C. Spinney, vice-presidents ; Roger F. Nichols, treasurer; Edith N. Hudson and Miriam C. Nichols, assistant treasurers.
The Haverhill Savings Bank, the fourth of its kind to appear in Essex County, was established on February 8, 1828. After years of service to the community its deposits had exceeded $9,000,000 by 1921. That year over 17,000 depositors had accounts at this insti- tution. In 1934 the Haverhill Savings Bank ranked seventh in the county, and had deposits of $13,672,771. Fred D. McGregor is president and Alfred E. Collins is vice-president and treasurer.
The fifth savings bank to be established in Essex County was the Provident Institution for Savings in the towns of Salisbury and Amesbury, which followed the Haverhill Savings Bank by only twelve days, the date of its founding being February 20, 1828. This bank has been rather more the property of Amesbury than of Salis- bury since 1886, when the Salisbury Mills village was annexed to Amesbury. Though never a very large institution, it has served the community well for one hundred and six years. The deposits were $4,526,065 in 1934. J. Edgar Blake is president and Boyd N. Jones is vice-president and treasurer.
The Andover Savings Bank is the only other Essex County insti- tution of this sort that has passed the century mark. Besides its age, this bank is remarkable for the size it has developed. It is highly unusual for a community having less than 10,000 inhabitants to be the home of a savings bank with deposits of $14,668,228, which the books of the Andover institution showed in 1934. At present the
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THE STORY OF ESSEX COUNTY
Andover Savings Bank ranks sixth in deposits among the banks of the county.
Amos Abbot became president with the establishment of the bank, then known as the Andover Institution for Savings, in 1834. At present Burton S. Flagg is president and F. S. Boutwell treasurer.
During the next forty years, fourteen more savings bank were established in Essex County. Some of the county's most important banks appeared during this period. The Cape Ann Savings Bank of Gloucester, founded in 1846; the Essex Savings Bank of Lawrence, 1847; the Danvers Savings Bank, 1850; the Warren Five Cents Savings Bank of Peabody, 1854; the Newburyport Five Cents Sav- ings Bank, 1854; the Salem Five Cents Savings Bank, 1855; the Lynn Five Cents Savings Bank, 1855; the Beverly Savings Bank, 1867; the Lawrence Savings Bank, 1868; the Georgetown Savings Bank, 1868; the Ipswich Savings Bank, in 1869; the City Five Cents Savings Bank of Haverhill, 1870; the Marblehead Savings Bank, 1871; and the Broadway Savings Bank of Lawrence, 1872, were all established during this period. The additions to the savings banks of Essex County since that time have been few and relatively unimportant.
The Essex Savings Bank, which was founded in Lawrence in 1847, for years was the largest institution of its kind in Essex County, and now stands second only to the Lynn Institution for Sav- ings. It was established when the city of Lawrence was in its infancy, before the dam or any of the mills were completed, and only two years after the ground was first broken in preparation for the building of a town on the hitherto sparsely populated banks of the Merrimac River in Methuen. The Essex Savings Bank has grown up with the city of Lawrence, always being an important factor in the life of the community.
The first officers included men who were prominent in the develop- ment of Essex County and the early mills. Charles S. Storrow became president and Nathaniel White treasurer. Mr. Storrow was succeeded in 1860 by George D. Cabot, who was followed, in turn, by Joseph Shattuck in 1877. Walter E. Parker became president in 1903. The present officers are: Albert I. Couch, president; Rich- ard Ward and Robert B. Macartney, vice-presidents; and Herbert P. Wilkinson, treasurer.
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BANKS, BANKING AND INSURANCE
In the eighty-three years of its existence the Essex Savings Bank has never failed to compound interest each April and October, and has acquired a reputation unexcelled in Essex County. The years of successful management which had netted depositors $16,664,373.72 in dividends by 1921, in part explain the remarkable development of this institution. In 1921 the Essex Savings Bank had deposits of $17,700,000, and a surplus of $1,750,000. By 1934 the deposits had risen to $25,384, 183, while the undivided profits were $1, 169,431.
Massachusetts stands first in the United States both in regard to the security of its savings banks and the per capita volume of sav- ings bank deposits, and Essex County is not outdone in those respects by any other section of the State. The laws governing savings banks are highly conservative in character, allowing only first mortgages on real estate, government, State, and municipal bonds, and a care- fully selected list of other securities to be used for investment of savings bank resources. For this reason, and because of the con- servative practice of the banks themselves, failure of savings banks is unknown in Essex County. Although during the present depres- sion the uncertainty as to the future of railroad bonds and the neces- sity for many mortgage foreclosures have forced the savings banks to reduce their dividends from four and one-half per cent. or five per cent. to three per cent. or three and one-half per cent., the sound- ness of these institutions has not been questioned. Doubtless, as soon as the present economic difficulties have disappeared, the former dividend rates will be restored.
Although the number of savings banks and the large volume of savings deposits in Essex County are indicative of the wealth and thrift of the people, it is difficult to find any exact measure of these qualities in the various towns and cities. Perhaps the most con- venient method of reaching a conclusion in regard to these matters is to compute the ratio in each community between the savings bank deposits and the population. Such a measure, however, is rather inaccurate, since a great volume of the deposits in many savings banks are from sources other than the savings of local people. The per capita savings, computed in the above manner, of the town of Andover, for instance, amounts to about $1,600. But this figure is so inflated by out of town deposits, deposits of private schools, and funds from various other sources, that it is a poor measure of the
902
THE STORY OF ESSEX COUNTY
habits of the citizens of the town. Similar difficulties can be found with figures computed for other communities. In spite of these defects, the very high per capita savings bank deposits of several of the towns and cities of Essex County does indicate to some extent the thrift of the people in this region.
Newburyport for a great many years has been a community of thrifty habits and substantial savings bank deposits. Prior to and dur- ing the War of 1812 several large fortunes were accumulated in mari- time trade and privateering, but, since that time, saving and preserva- tion of already amassed estates have been more typical of this city than rapid acquisition. These tendencies have been a boon to the savings banks of Newburyport, since a substantial part of many of the fortunes which have survived to the present day has been dis- tributed among the various savings banks of the county. The aggre- gate deposits of the Institution for Savings and the Newburyport Five Cents Savings Bank in 1934 amounted to more than $17,700,000. As the population of Newburyport is in the vicinity of 15,000, the per capita savings bank deposits are about $1, 180. This figure ranks second to that of Andover in Essex County, but since the Andover Savings Bank serves North Andover and other towns, and is a repository for academy funds, it is probable that actual per capita savings in Newburyport are larger than in any other community in Essex County.
Lynn, as might be expected in the county's largest city, has the greatest volume of savings bank deposits. The aggregate of the deposits of the Lynn Five Cents Savings Bank and the Lynn Institu- tion for Savings was, in 1934, about $51,240,000. Lawrence is next in line, with deposits of almost $50,000,000 in four savings banks, and is followed by Salem with about $41,000,000 in two savings institutions.
The trust companies, of which there are several in the larger cities of Essex County, have savings departments as well as com- mercial departments, but it has been expedient here to list and describe these establishments as commercial banks. Let it be remem- bered, therefore, that all of the savings of the people of Essex County which have been deposited in banks are not represented in the figures describing the savings banks immediately above. The deposits in the savings departments of trust companies are, however,
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BANKS, BANKING AND INSURANCE
almost negligible in volume when compared to those of the mutual savings banks of the county.
The growth of cooperative banking in Essex County has sup- plied another means of credit extension, this time to the small house- holder. If a man wishes to build or purchase a house he can, after buying a certain number of shares in a cooperative bank, obtain the necessary funds. The bank, in return, takes a mortgage on the property, and provides a schedule of payments which, if successfully carried out, will result in complete ownership for the householder.
Cooperative banking has been of considerable benefit to the social .organization. To aid thousands of families to own their own homes increases the self-respect, the responsibility, and the self-reliance of the people. The homeowner takes more pride in the appearance and upkeep of his dwelling than does the man who rents his quarters. The sentiments which are aroused in the householder and his family by the sense of ownership tend to spread to other matters as well, and have a socially beneficial effect upon the community.
Besides being agencies for extending credit to householders, the cooperative banks also act as savings institutions. Shares can be purchased at an installment rate of from one to forty dollars each month. Dividends are paid upon these shares, generally at a higher rate than the savings banks can offer, although at present, because of the condition of real estate and the commercial banks during the depression, the cooperative banks are paying shareholders about the same in dividends as the savings banks pay their depositors. Never- theless, in the long run, the cooperative banks constitute secure and remunerative agencies for savings. No Massachusetts cooperative bank has ever failed.
For many years cooperative banks have played an important rôle in the economic and social history of Essex County. Many strong institutions of this sort have grown up, until at the present time every city and almost every town of any importance has one or more coop- erative banks. The cooperative banks of the county range in size from the Equitable Cooperative Bank of Lynn, with assets of $10,322, 107.45 in 1933, to the Economy Cooperative Bank of Mer- rimac with assets of $145,660.40 that same year. At present there are twenty-three cooperative banks in seventeen Essex County towns and cities. The total assets of these institutions amounted to about
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THE STORY OF ESSEX COUNTY
$51,423,000 in October, 1933. This figure is somewhat below that of 1930, when an all-time high point was reached.
The cooperative banking movement in Massachusetts began in 1877, when several such institutions were founded. Among the earliest of its kind to be established in the State, and the first in Essex County, was the Haverhill Cooperative Bank, incorporated August 20, 1877. Amos W. Downing was president and George S. Little treasurer. During its fifty-seven years of development it has acquired a reputation for service and good management. In Octo- ber, 1933, its assets were $2,780,090.42, and it stood first among the three cooperative banks of Haverhill. The presents officers. include Edward A. Fitts, president, and James G. Page, treasurer.
The Equitable Cooperative Bank, of Lynn, incorporated Octo- ber 2, 1877, is the second oldest institution of its kind in Essex County. Among the first officers were James H. Richards, presi- dent, and A. M. Preble, treasurer. The growth of this institution has been remarkable. With assets of $36,781 in 1885, this figure was increased to $365,963 in 1895, to $730,065 in 1905, to $3,882,- 710 in 1915, and to $6,026,645.72 in 1921. The assets in October, 1933, of $10,322, 107.45 exceeded by almost $6,000,000 those of its nearest rival in Essex County. In 1921 it was surpassed by only two cooperative banks in the State, both of which were located in Boston. This tremendous growth attests to the confidence of the people of Lynn as to its security, and to the consistently remunerative dividend rates paid. At present, Frederick Hixon is president and Edwin C. Lewis is treasurer. The Equitable Cooperative Bank rivals in size and economic importance many of the leading savings and commercial banks of the county.
During the 'eighties a number of cooperative banks were added to the list of those doing business in Essex County. In 1886 the Amesbury Cooperative Bank and the Marblehead Cooperative Bank were incorporated, followed, in 1887, by the Gloucester Cooperative Bank and the Citizens' Cooperative Bank of Haverhill. In 1888 the Lawrence, Newburyport, Peabody, Salem, and Beverly Cooperative banks were established. From 1889 to 1910 the following coopera- tive banks were incorporated : the Economy, of Merrimac; the Atlan- tic, of Lawrence; the Lynn; the Merrimack, of Lawrence; the Dan- vers; the Roger Conant, of Salem; and the Groveland. Since 1910
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BANKS, BANKING AND INSURANCE
another cooperative bank has appeared in Lynn, and one each has been established in Saugus, Ipswich, Swampscott, and Methuen.
The second largest institution of this kind in Essex County is the Gloucester Cooperative Bank. Founded in 1887, this bank had assets of $4,382,196.20 in October, 1933. From the incorporation of the bank until quite recently six per cent. was paid annually to the shareholders. This high and constant return on the shares made them a favorite form of investment in Gloucester, and was instru- mental in bringing about the institution's remarkable growth. At present Maurice F. Foley is president and Arthur J. Hall is treasurer.
The Salem Cooperative Bank and the Peabody Cooperative Bank rank third and fourth on the list, as to size, with assets of $4,228,- 303.25 and $4,045,858.26, respectively. No other Essex County cooperative banks, excepting, of course, the two described above, have assets of more than $4,000,000. The officers of the Salem Cooperative Bank are: Ernest P. Lane, president, and Norman W. Armour, treasurer; while those of the Peabody Cooperative Bank are: Patrick H. O'Connor, president, and Roy W. Howe, treasurer.
The strongest cooperative banking community in Essex County is Lynn, with three institutions of this sort, whose combined assets amounted to $15,536,326 in October, 1933. Besides the Equitable Cooperative Bank, already described, the Lincoln and Lynn Coop- erative banks do a large business in this city. Next to Lynn comes Salem, where the Roger Conant and Salem Cooperative banks have assets of about $7,356,000, followed by Lawrence, with three coop- erative banks, whose combined assets are more than $4,500,000. Haverhill also ranks high with assets of about $4,463,000 distributed between two cooperative banks. Gloucester and Peabody are the remaining cities with more than $4,000,000 in cooperative banking assets.
The presence of seventy-eight banking institutions of all kinds in Essex County bears witness to a highly developed commercial and industrial organization, and at the same time sheds light upon the character and habits of the people. Probably no other section in the country of similar area and population can display a like volume of savings bank deposits, while the national banks and trust companies have sufficient capacity to meet the needs of the several highly indus- trialized cities. For every man, woman, and child in Essex County there is approximately $490 deposited in Essex County savings banks.
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THE STORY OF ESSEX COUNTY
Akin both to savings and investment is insurance. At the present time a great volume of insurance is sold annually by various agencies within the bounds of Essex County. These agencies, however, are so large in number that, with all due regard to their social impor- tance and to the really great volume of business done, it is impos- sible to make any attempt to describe or even to list them here, because of the limitation in space. Furthermore, most of the insur- ance sold in Essex County is ascribed to companies with headquarters elsewhere, many of them having a Nation-wide business. There are, however, a number of domestic insurance companies which are worthy of mention, while many old concerns no longer in existence are of considerable historical interest.
Insurance was first practiced in Massachusetts, apparently, in Boston, in 1724, when Joseph Marion set up a marine insurance office. Whether he acted upon his own initiative, or was the agent of a foreign company, is not clear. During the rest of the eighteenth century marine insurance as a safeguard to merchants and ship- owners against loss at sea came into general usage. Salem and New- buryport merchants found means of insuring their ships and cargoes at an early time.
The method used was generally a system of underwriting, the policy being signed by several men of property in the community. East signer contracted to pay a certain sum in case the ship were lost during the ensuing voyage. Men were willing to risk a moderate loss on policies such as these, as a good rate of interest was paid on the insurance if the voyage were successful, as was usually the case. A policy of this description is found among the papers of the late Hon. Jeremiah Nelson, now in possession of the Historical Society of Old Newbury.4
"On the cargo of the brigantine 'Ruby,' from Newburyport to one or all of the West India Islands and thence to port of discharge in the United States, $2,500 at 5 per cent.
Zebedee Cook underwriter $200
James Kittell
200
John Wills 200
James Prince
1,000
4. "History of Newbury, Massachusetts," Vol. II, p. 156. John J. Currier New- buryport, 1906.
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BANKS, BANKING AND INSURANCE
Ebenezer Wheelwrite
200
Theophilus Bradbury
200
Joseph Knight
300
Peter Herrick
100
Edward Toppan
100
$2,500
Sept. 19, 1797, office kept by Henry Hudson."
The first regular marine insurance office to appear in Newbury- port, so far as is known, was opened in 1776. It constituted merely an improvement upon the older system described above, as the func- tion of the agent was merely to conduct a headquarters where those desirous of getting their ships and cargoes insured for the next voy- age could be brought together with men wishing to underwrite insur- ance. The agent was really in the position of a broker. Doubtless there were offices of this sort in Salem before this time. Between 1776 and 1799 several such establishments were conducted in Salem, Newburyport, and possibly other commercial towns. The original office in Newburyport was kept by William Moreland from 1782 to 1787, when Michael Hodge succeeded him. Other offices were opened in Newburyport under the management of John Pearson, Henry Hudson, Samuel Cutler, and others.
Probably the first insurance company to be incorporated in Essex County was the Newburyport Marine Insurance Company, which received its charter June 18, 1799. At this time the maritime com- merce of Newburyport was entering its greatest period, and there was ample opportunity for this first organized insurance enterprise. William Bartlet and several others were the incorporators. The concern was authorized to insure ships and merchandise, "or the life of any person or persons during his or their absence by sea."" The first meeting of stockholders took place at the house of Moses Daven- port on July 17, 1799. Ebenezer Stocker was elected president and William Woart secretary. The Newburyport Marine Insurance Com- pany continued to render a considerable service to the community until 1817, when, weakened by the War of 1812 and the far from prosperous years following, it was united with the Merrimack Insur- ance Company. The latter concern was organized by Jeremiah Nel- son and Nicholas Pike in 1814, and was liquidated in 1834.
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