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( Originally Published 1918 )

The dictionary defines thrift as "frugality; good husbandry; economical management in regard to property; prosperity; success and advance in the acquisition of property ; increase of worldly goods; gain; luck; fortune; the condition of one who thrives." Its synonyms are given as "economy; profit; gain; prosperity."

Thirty-five words. All could have been summed up in four: A savings bank account.

It is an axiom that a savings account is the surest agency of thrift, since it implants and fosters a saving habit. It tends to cut down older habits of unnecessary spending. As soon as any-one has money in the bank, he begins to feel a new responsibility to himself, his family and. the well being of the public, respect for law, and love of order. From the day he makes the first de-posit, he is a better citizen in every way. He owns something that gives him a direct and jealous interest in his town and his country. He is a better patriot.

"Money breeds money." Nobody knows that better than a savings bank depositor. It will multiply of its own accord. When its increase has reached a point where it has purchasing power for a house and lot, or a bond, it is simply turned over to another process of increase, the increment finding its way back to the bank.

When Liberty Bonds were first offered, this principle had an unexpected demonstration. In the ten years or so before the United States joined the war, savings bank deposits had averaged an annual growth of over $150,000,000. Roughly, this means that the average savings of the people were $15 a year per capita of our whole population. There were about 20,000,000 savings bank depositors, whose average annual savings, thus represented, were not less than $75 each. The first loan was largely taken by these depositors, for three reasons: first, they had money, therefore they were part owners of the country, and they were the first to realize that fact and to come forward with the best help they could give the country in protecting their part ownership; second, it was the first time the aver-age savings depositor had a chance to become a government bondholder—not "bloated" so you could notice it, but a coupon-clipper (and once a coupon clipper always a coupon clipper, as every-one knows) ; third (and least), the bond interest rate was slightly better than the bank rate.

Savings bankers showed their quality at this juncture. The old fashioned banker would have been frightened at what to him would have looked like a wholesale and ruinous withdrawal of deposits. Not so the modern banker. He saw what it meant to him as well as to the nation, and got behind the movement, and speeded it up.

The inflow of fresh money dwindled, and old money began to flow out at the paying cage, mostly to pay for bonds. Bond cages had to be put in. For a little while, in some banks, extra help had to be taken on and their salaries paid out of profit and loss. But see what followed :

Most depositors began to bring in fresh savings. Faces looked into the bond cages that never before had looked through any grille in any bank, and their owners, having bought bonds, found out some of the advantages of savings ac-counts, and became depositors instead of private hoarders. What an old fashioned banker would have regarded as a sacrifice threatening ruin, the modern banker turned into a splendid asset of new business.

Savings were stimulated when savings depositors became bondholders. It was the beginning of what within a year became a clearly defined habit of making investments, which the banks handled. This habit, like any other habit of thrift, once established, is certain to become permanently fixed.

After the war, when war bond issues in small denominations will no longer be made by the government, these same depositors will be eager inquirers for safe small bonds of municipalities, sound corporations, public utilities and the like. Customers who formerly were depositors and nothing else, will have become Depositors and Investors. The thrift of the nation will be increased and fortified as never it was before.

Rainy day savings will not disappear. They will take on a new and better form. Depositors will increase in numbers, the business of the banks, through shaping their investments, will take on new and much larger proportions.

That we are a thrifty nation in a degree and to an extent greater than the most optimistic could have dreamed, is shown by the hard fact that the Liberty Bond flotations have freely drawn an average of $175 from buyers, all of it a money surplus over actual personal needs—and most of it from savings banks depositors. This can be counted upon annually so long as the war continues.

Considering these things, James H. Collins, one of the foremost and safest of American economists, wrote in The Saturday Evening Post:

"Where did our money go in those dim years of the past before June, 1917?

"And where does this apparent new wealth come from so magically?

"Under the head of net savings in pre-war days we find three leading items: The largest was life insurance, running to about eight hundred million dollars yearly for premiums, or roughly eight dollars per capita. The second was building-and-loan payments, five hundred million dollars yearly, or five dollars per capita. Third came our savings banks.

"The average per capita production of wealth in the United States before we got into the war was four hundred dollars yearly. The visible savings per capita were fifteen dollars yearly. But suddenly, in a crisis, we find $175 per capita of visible savings. Some of this is due to in-creased production of wealth. But the greater part simply represents savings that were invisible until Liberty Bonds, War Savings Stamps and taxation brought them out into the light of day. Of course, our savings-bank deposits, building-and-loan payments and life-insurance premiums represent but a small fraction of the money that Americans put aside. Every other family in the country has a savings-bank account, every sixth family belongs to a building-and-loan association, and the number of life-insurance policies and memberships in fraternal-insurance orders indicate that every other person in the country has some form of protection. But Americans have been saving billions of dollars by direct investments in business enterprises, homes, real estate, securities and the like. The difference between fifteen and a hundred and seventy-five dollars simply indicates invisible savings made visible—that until this big job is done, and done right, we will not build that new wing on the house or put money into city improvements which are not a prime necessity, new public utilities, real-estate development or other enterprises not needed to help the war along. We will forego speculation and wildcat promotions. We will stop trying to keep up with the Joneses and limit ourselves in clothing, food, fuel, light, travel, recreation.

"Twenty million bondholders created within a year means that every family in the United States has been canvassed in three great campaigns and shown how to save money systematically and also invest it safely. Twenty million personal budgets have been rearranged so that visible savings emerge from invisible. This does for the budget planner precisely what a sensible cost system does for the business man or farmer—brings earnings and expenses into the open, where they can be seen, and enables him to eliminate waste and put his fingers on profits.

"All the signs of the times point to such expansion of our investments and trade as an outcome of the Liberty Bond habit. That is what we are going to get out of war thrift. Many of the bond buyers now making their monthly payments may fall back into thriftless habits again. But many more will persist in systematic saving, and the hundreds of millions of dollars thereby mobilized for investment, massed in the same solid banking institutions that have handled Liberty Loan details, can be diverted to constructive foreign in-vestment and development.

"A good thing for the thrifty—a good thing for the banker--a good thing for nations that need capital—a good thing for our industries, trade and ships—a good thing all round."

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