( Originally Published Early 1900's )
These are banks for receiving and taking charge of small sums, the savings of industry, and were instituted for the benefit of workmen and others, who were able to spare a little from their earnings. It is believed that Quaker thrift in Philadelphia, Pa., led to the inception of the idea, and that the first savings bank in the world was founded in that city in 1816. As the scheme grew in popularity throughout the United States, guardians of minor children, administrators of estates of deceased persons, and other holders of trust funds, found the savings banks very serviceable as places of deposit for money that had to be laid away for a specified period of time. Hence, the exigencies of business transactions forced an innovation upon the original plan. In the United States this use of savings banks is still maintained; but during the past fifteen years Safe Deposit and Trust Companies have been numerously established for the special purpose of holding funds, both in trust and in legal dispute, besides securities of all kinds, jewelry, diamonds, and articles of like value. Thus a guardian, an administrator, or a society will invest money in Government, State, or City bonds, or, if permitted by the terms of trust, in real estate, or stock of various corporations, and place the bond, certificate of stock, or other acknowledgment of the indebtedness, with a Safe Deposit or Trust Company, for safe-keeping. The savings banks are allowed by law to invest their money in first-class securities only, so as to prevent their officers from using the fund in the irregular pursuit of "wild-cat" speculation.
The average rate of interest allowed by savings banks in the United States on deposits is four per cent.; it is frequently below that rate. Some of the larger banks will not permit individual deposits beyond a special amount at one time, while others decrease the rate of interestas the amount of deposits increases, claiming that their vast aggregates of deposits cannot be invested, under the law, in a manner that will warrant the maximum rate of interest after paying current expenses.
From Philadelphia the original conception or plan of the savings bank extended all over the United States, throughout the United Kingdom, France, and other countries. Several Acts of Parliament were successively passed between 1817 and 1828 for the regulalation of savings banks in England ; and in the year last mentioned the whole of these were consolidated in one statute (9 Geo. IV., chap. 92). This Act, together with another passed in 1833, conferring additional and important privileges on savings banks (3 Will. IV., chap. 14), constitutes the existing law relative to these establishments. In 1835 the Act was extended to Scotland.