USA > New Hampshire > State builders; an illustrated historical and biographical record of the state of New Hampshire at the beginning of the twentieth century > Part 14
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The failure of the Exeter Bank led to an act by the legislature in 1847 directing the commissioners of the state, or discount, banks to make an annual examination of the savings banks, and from this time forward the commissioners made reports of these examinations first to the legislature and afterwards to the governor and council. These examinations were for a long time merely formal. The state banks largely engrossed the attention of the commissioners until these were superseded by na- tional banks during the Civil War. Savings bank officers for many years regarded the work of the commissioners, superficial as it was, as an unnecessary interference with their business. The commissioners were without author- ity to enforce their recommendations, and the public had little knowledge of them excepting in time of bank failures, when they came in for very full and oftentimes unwarranted criticism. They were paid directly by the banks they examined until 1883, and their appointments were frequently but for a single term. It was a number of years after the savings banks had become important factors in the business world be- fore the value of state supervision was appreciated by the people of the state and their representatives in the legisla- ture. The bank commission dates back to 1837, although its examinations of savings banks did not begin until ten years later, but it was fifty years before its work was rec- ognized as worthy of public support. In 1888 the reports of the bank commissioners, because of their completeness, began to attract attention, not only in the state but out- side, and in 1889 through the efforts of the commission-
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ers a continuing commission was created by the legisla- ture with a board of three commissioners, whose terms were three years, the first appointments being made so that the term of only one commissioner would expire in any given year.
From this time dates the effective work of the com- mission. It soon acquired the confidence of savings bank officers, who cheerfully co-operated with the commis- sioners in their examinations and welcomed their sug- gestions. Together they wrought great improvements in the management of these institutions, especially of the smaller savings banks. In 1895 the election of the chair- man of the board to the legislature resulted in legislation for the relief of the banks from burdensome taxation and the passage of laws for the government of these institu- tions and regulating their investments. With some mod- ifications these statutes remained the basis of the present work of the commission in their supervision of the banks.
Although the law prescribing the investments of sav- Ings banks dates only from 1895, not a few attempts were made earlier to have the legislature act upon this subject. In 1869, when the deposits had reached sixteen million dollars and the number of banks thirty-eight, the legislature passed a law requiring one-half the deposits of each savings bank to be invested within the state. This statute gave no end of trouble to both banks and the commissioners. It was burdensome for the large banks to comply with its provisions and the commissioners hes- itated to apply to the courts to enforce it against insti- tutions whose soundness was unquestioned. The banks most frequently violating the law were the most pros- perous of the state. Finally by tacit agreement both banks and commissioners ignored the statute.
In 1874 a law was passed forbidding savings banks to invest any part of their deposits in the stock of any rail- road or manufacturing corporation.
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In 1881 both these acts were repealed and a law was passed prohibiting any savings bank from loaning to any person or corporation, firm and its individual members, an amount in excess of ten per cent of its deposits and accumulations, or to purchase or hold by way of invest- ment or as security for loans the stocks and bonds of any corporation in excess of such ten per cent. For the next decade this was the only restriction as to the character of savings bank investments.
Before the repeal of the statute requiring one-half of the investments of savings banks to be made within the state some of the savings banks had invested largely in the growing West. Farm loans were then an attractive investment, promptly paying large rates of interest and generally reduced or paid at maturity. The prosperity of those banks which had taken large amounts of these loans, shown in increased dividends and increased de- posits, induced others to invest in that field. The dis- crimination in selecting loans by those first taking this class of investments was not followed by others who later invested in the West. So successful had been both banks and individuals in their early Western investments that almost any Western enterprise could be floated in the East late in the eighties. The investments extended from farm loans in well established sections in the West to all sections and to all kinds of enterprises. With the repeal in 1881 of the statute confining one-half the investments of savings banks to New Hampshire, the trustees promptly enlarged their investments in the West, until, in 1890, with few exceptions, the banks had the greater part of their deposits invested in the West. Without avail the commissioners called attention to the danger of such indiscriminate investment. Deposits were rapidly increasing. The banks were paying larger dividends than those of neighboring states, and a tax rate in excess of that of any New England state was easily met. In 1893
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the volume of deposits aggregated nearly seventy-five million dollars, ranking New Hampshire as the fifth state in the Union in the amount of her deposits. These de- posits came in part from other states, attracted by the rate of dividends paid by the New Hampshire banks, as was subsequently shown when conservatism influenced trustees to reduce the dividend rate and these deposits were the first withdrawn.
Considerable defaults in payments of interest and prin- cipal of Western investments began as early as 1888, in- dicative of what might be expected, but it was not until 1891 that the legislature could be induced to act, and then only through a commission authorized to revise the stat- utes of the state. A tentative measure to limit invest- ments introduced in the legislature early in the session was indefinitely postponed by the house on the report of the bank committee made up largely of banking men. Later the commission to revise the statutes was induced by the bank commissioners to incorporate with their amendments of the statutes one prohibiting certain in- vestments of savings banks and limiting others. This measure, although far from being what the times de- manded, was vigorously opposed by bank men and would have been defeated had it been separated from other amendments to the public statutes which the legislature finally adopted as an entirety.
For four years more no attempt at legislation affecting savings bank investments was made. In the mean time the panic of 1893 had occurred, and with it came the sus- pension of a considerable number of savings institutions. When, therefore, measures were presented to the legisla- ture of 1895 to safeguard the interests of savings deposit- ors, they were passed as presented with little material amendment. The wisdom of the legislation of 1895 has never been questioned. The statute then enacted to regu- late the management of savings banks has not been
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changed, and the statute relating to the investments of savings banks has been amended only to meet the change of character of such investments. The principle that the legislature should prescribe the investments of savings banks is now fully recognized, although it took nearly three-quarters of a century to convince the public of its necessity.
Applications for charters of savings banks have not always been granted. At times the legislature has been chary in incorporating these institutions, and in 1854 it authorized the union of two existing savings banks, be- ing of opinion that public interests would be served by such consolidation. Nothing came of this act, as the trustees of the two institutions could not agree upon the terms of union. Later when the fever of Western invest- ments was at its height, the legislature gave an affirmative reply to almost every application for a charter carrying with it savings bank privileges. Some of these charters were never used, while others brought only financial loss to those interested. Since 1895 no trust company char- ters with savings bank privileges have been granted, and savings bank charters proper have been of the mutual kind.
The losses to savings banks on account of Western investments were considerable, and the most critical pe- riod in the history of New Hampshire savings banks was on the twelve months beginning June, 1893. A number of banking institutions were put in the hands of receiv- ers, while nearly all the savings banks in the state took advantage of their by-laws requiring notice of the with- drawal of deposits. Other suspensions of banks followed in 1895 and 1896, but confidence had been partially re- stored, and later failures occasioned no alarm among de- positors. The passing of the panic of 1893 so success- fully by the New Hampshire savings banks, intensified as it was by their large Western interests, is still a marvel as
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we look back upon this crisis, and it is a tribute to the confidence inspired by those bank officials whose institu- tions rode out the storm. The large loss of deposits occasioned thereby has been in part made up, and the in- crease in deposits thepast three years has been normal and healthy. Too many savings banks existed a decade ago. If there had been no panic, the tendency of the times would have materially reduced the number, giving to the public fewer yet larger institutions and therefore better managed. Improved facilities for travel and mail have obviated the necessity which once existed for savings banks in small communities, and experience has shown that the successful management of these institutions must be in the hands of men in daily contact with the business world. The future of the New Hampshire savings banks is bright with promise. Depositors are satisfied with conservative dividends. Investments are more carefully made. Rivalry of these institutions in seeking deposits has ceased and the lessons of the past few years are likely to be of lasting benefit.
18I
INDUSTRIAL NEW HAMPSHIRE
BY G. A. CHENEY
"Necessity is the mother of invention," says the old adage, but the history of mankind down through the ages does not warrant the conclusion nor justify its ac- ceptance. True it is that the march of civilization, since the days when Moses led the children of Israel out of the land of Egypt and bondage, has been the march of invention, but anterior to this truth and proceeding from it is the still greater one that the Genius of In- vention is co-existent with an intelligent under- standing of human life and an adherence to the laws governing it. During their sojourn of forty years in the Wilderness the children of Israel by their method of living came to possess not only healthy bodies, but sound intellects, because of their compliance with physiological law. They triumphed in all the fields of human effort, as brilliantly in the arts and sciences as upon the field of battle. They were the chosen of God by divine decree, but through the agency of a right interpre- tation of those laws that govern the building of the human body and the development of the intellect. As the de- scendants of the Israelites the Rabbinic races adhering to Levitical law have ever continued a mighty factor in the progress of human life. Every individual of both sexes, regardless of social condition or determined aim in life, was taught to work with head and hand. Leaving the Rabbinic races for a people of the Christian era it is to
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be observed that the Dutch, as the inhabitants of the Netherlands are called, have won the grandest of successes in all things that are essential to human progress. The very land that is their home was won from the sea, lagoon, and lake, by labor that continued for centuries. Though their country was small in area and themselves comparatively few in numbers, they were yet a mighty nation, rich in agencies and means for the betterment of mankind that they by skill and research had either in- vented or discovered. In the earlier centuries men from Holland went to England and introduced various of the arts and sciences and stamped their individuality upon the national character and life.
Other nations of Europe, past and present, were in need of the agencies of progress, enlightenment and strength, as well as the Dutch, but they were wanting in that deep religious spirit that dominated and permeated Dutch life. They recognized the Divine law that by work alone can a nation succeed and become strong and enduring. In brief, the greatness of the Dutch character and its long continued strength has for its explanation the fact that they utilized the faculties of head and hand. They toiled and thereby gained physical strength, and, as a result of bodily vigor they had sound minds, and these they strengthened and developed by the utilization, of the mental faculties.
Not only did Dutch life have its influence upon the English national character, but the first settlers of New England came to these shores by the way of Holland, and the stop-over in the land of the Dutch was of eleven years' duration, in which time the vitalizing life and ways of the industrious self-reliant Netherlanders stamped its lasting impress upon the receptive Pilgrims, who, like their hospitable hosts, knew and accepted that Divine law that inculcated the employment of all physical and mental faculties.
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When once their footing had been made secure upon the shores of Plymouth bay the Pilgrims, without delay, set about the building of a nation. The mechanical agen- cies with which they might clear the forests, build homes and shop and factory were of the scantiest nature and often times wholly lacking, but History nowhere records that there were idle hands or heads among the Pilgrims. Then the Puritans came in 1630, and Massachusetts had two colonies instead of one, but the people of both, liter- ally to a man, held that it was a part of their religion to keep employed head, hand and heart. The people of these colonies as their numbers increased pushed out into the interior of New England. They settled Connecticut and Rhode Island, for Roger Williams and his followers were of the same spirit as the Puritans if differing on points of church polity; and into New Hampshire went the purest and best type of the Puritan man and woman, and a century later came that strong and virile contingent known in history as the Scotch-Irish, and quickly there- after New Hampshire became one of the strongest of the American colonies.
New England throughout its entire Colonial period and for quite fifty years following the Revolution, was essentially an agricultural community, but every farmstead represented almost every factor incident to the material life of the times. Beneath each roof tree was the diversified industry of the town of to-day. Each farm grew the flax and produced the wool for the household's supply of linen, yarn and cloth. The carding, spinning and weaving were portions of the domestic life of the individual home, and the furniture, farm imple- ments and kitchen utensils were for the most part home made. The axe, adze, shave, and above all the jackknife, were almost the only tools with which these things were wrought, but the skill of their production remains to this day an object of admiration.
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While it is true that the necessities of Colonial New England were great and of direst stress, still it is true in greater measure that they regarded it a religious duty to labor the livelong day with head and hand. The neces- sities of other peoples have been as great, yet they have ceased to exist or at least degenerated because they did not toil and spin. It was the utilization of their physical and mental faculties that won for the people of Colonial New England their success and that made Puritan New England the Genesis of American invention.
It was the continued use of the jackknife that cul- minated in the production of that multitude of articles that the whole world long since designated as "Yankee notions," and New Hampshire, primarily Puritan but enriched, strengthened and vitalized by that generous in- fusion of Scotch-Irish blood, has from first to last played a mighty part in the story of the development of indus- trial America, the greatness of which growth is the mar- vel of the world.
New Hampshire's early settlers sought, as did those of other New England provinces and colonies, for deposits of iron and other of the baser metals. John Winthrop, Jr., who came to Massachusetts Bay with the then large sum of one thousand pounds sterling or five thousand dol- lars as it would be termed to-day, was the industrial king of his day. The Great and General Court of Massachu- setts Bay granted him enormous subsidies in the form of land grants if he would but find his iron and erect fur- naces. He explored every known section of the then New England, but the only furnace of any particular account and permanency was one he erected in one of the towns near Boston. An attempt was also made to erect salt works at Portsmouth, but the clearing of the forests and the manufactures of the individual households com- prehended the principal efforts along this line for not a few decades succeeding the settlement of the province.
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The erection of saw mills and grist mills were of first and vital concern to the settlers, the first to furnish ma- terial for farm buildings and the second for the grind- ing of corn, rye, and oats. It was not until nearly a cen- tury had passed that wheat culture succeeded either in Massachusetts or New Hampshire. Indian corn was the great food dependence, and the remoter settlements in the province depended upon the home grinding of this for a supply. Sometimes a stone mortar was the means for its grinding or rather its pounding into meal, but the more frequent means was the hollowing out of a stump of a tree cut at the required height, while the pounding was done by the pulling down of a strong young sapling to which a weight was attached. The natural rebound of the tree aided in the work of grinding. The rye and Indian corn of the forefathers were foods natural and complete in their organizations, and so built the bodies of the grow- ing generation. Their teeth remained with them to old age and the grave, and they never became prematurely aged as is the case with the American people of to-day.
Fortunately for the earlier settlers, the province abounded with water power. Streams of varying size were everywhere available for the erection of saw mills and grist mills to which were added later mills for the fulling and dressing of cloth, and tanneries. The tannery, which once came to be a part of almost every considerable community, is seen to-day only here and there, and that as a large establishment, representing the present day idea of centralization of capital and labor. But the saw mill still remains, and its numbers increase with each genera- tion, and its capacity is as a hundred fold. The possible production of the old-time up and down saw in the mills of the fathers was two thousand feet a day of the old- time Puritan length of fourteen hours. The resawing band saw of to-day has a capacity of one hundred thou- sand feet, and the portable steam circular saw mill that
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is planted everywhere about the state, anywhere from ten thousand to twenty thousand feet.
From first to the present every farmstead is to some extent a lumber manufactory as well as representative of various other products. The boy who was born on a New Hampshire farm learned the use of the tools of the carpenter, the stone mason, the painter and the leather worker, and their use developed the inventive faculties. He gained proficiency, and proficiency is progress, and progress is the result of the utilization of the head and hand. The old up and down saw gave way to the circu- lar saw, hand planing to machine planing, and likewise every process of handling and fashioning lumber from hand work to that by machinery, and in these wonderful and astonishing strides in lumber manufacturing New Hampshire has been to the fore. Her great areas of for- ests and her abounding water power were gifts of nature, and her sons saw their opportunity and trained mind and muscle that they might the better accept that opportunity.
During the decade which ended in 1890 the value of the manufactured lumber products according to the United States census was $5,641,445, and the feeling prevailed that New Hampshire's forest resources were nearing exhaustion, for the above values only represented the merchandise lumber of regular establishments. But in the decade ended in 1900 the value of the state's manu- factured lumber products was $9,218,310, an increase over that of the preceding ten years of almost double- or, to be exact-ninety-five and three-tenths per cent. The capital invested in lumber manufacturing plants in 1900 was $11,382,IT4, and there were five hundred and fifty-three of these plants.
In the same class with lumber manufacturing interests is that of wood pulp and paper. In 1890 the value of pulp and paper made in this little state alone was $1,282,- 022, but in 1900 the value had increased to $7,244,733, an
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increase of nearly three hundred per cent, and the indus- try ranks fifth in the state. It is a manufacturing inter- est that in the past three years has progressed at tremen- dous strides and includes all phases of the pulp industry.
A surprising revelation of the last national census was that the boot and shoe manufacturing industry of the state had passed the cotton manufacturing interests and assumed first rank. For decades preceding first position had been held by the cotton manufacturing industry and without apparent danger of any rival. The census reports of 1890 give the total value of the factory made boots and shoes as $11,986,003. In the succeeding ten years the value of the product reached the magnificent total of $23,405,558. This is an increase of practically one hun- dred per cent in a brief ten years, and is a growth rarely equalled in the history of the industrial development of the country. Nor does the census of 1900 tell the story to date, for that states the facts only up to 1899 as the census year ends with the "9" and not with the cipher. Thus to illustrate: The census of 1900 was for the ten years which ended December 31, 1899, and not on December 31, 1900. Therefore three full years and more have come and gone since the last census, and in those years the shoe manufacturing industry in New Hampshire has grown as never before. New factories have been built and old ones enlarged and re-equipped with more effective machinery and to-day New Hamp- shire ranks third among the states of the Union in the money value of her factory made boots and shoes. In ยท the decade ended December 31, 1899, the value of the boot and shoe product in Massachusetts showed an in- crease of less than one million dollars over that of the census of 1889 as compared to the more than eleven millions increase in New Hampshire. The city of Man- chester, for so long famed as a great cotton manufactur- ing centre, is to-day the sixth city in the United States as
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a shoe manufacturing community. The growth of the industry in the state has added very materially to its population, its general prosperity, and material well being. Everything indicates that it is now securely anchored in the community and that it will continue to increase.
Diversity of industry is the sheet anchor of a state as well as a town, the safeguard, assurance and stability of its material welfare, and in this respect New Hampshire is indeed most fortunate, for within her borders are ninety-five distinct and classified industrial interests. The total number of her industrial establishments or plants is four thousand six hundred and seventy-one, having a total capitalization of $100,929,661. They give employ- ment to seventy-three thousand people who receive in wages $30,000,000 annually. The total value of the products of these manufacturing plants is $1 18,709,308, which means a per capita rate of two hundred and eighty- eight dollars to every man, woman and child in the state.
Cotton manufacturing, so long the first industry in the state, is now, as said, the second, and adding the value of wood pulp products to those of lumber, it would come dangerously near being third. New Hampshire is the sixth state in the Union in the value of her cotton man- ufactures, which were in 1899 valued at $22,998,249, and of this sum Manchester contributed $11,723,508, or about one-half. Manchester itself ranks as the fifth city in the country in the value of its cotton manufactures. The total number of spindles in the state is 1,249,875, an in- crease of about fifty-two thousand in the ten years.
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