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A Massachusetts Savings Bank

BEING AN ACCOUNT OF THE

Provident Institution for Savings

F

TOGETHER WITH A DISCUSSION

PROBLEMS
SAVINGS-BANK MANAGEMENT AND LEGISLATION

BY

HENRY LEE

PRESIDENT OF PROVIDENT INSTITUTION FOR SAVINGS

WITH

APPENDIX SHOWING STATISTICS AND LAWS OF

MASSACHUSETTS SAVINGS BANKS

PUBLISHED BY COMMITTEE ON CHARITIES AND CORRECTION TO MASSACHU-

SETTS BOARD OF MANAGERS, WORLD'S FAIR, 1893

PROVIDENT INSTITUTION FOR SAVINGS.

The first savings bank in this country to do business was the Philadelphia Savings Fund Association, in November, 1816; it started before it was incorporated.

On the 13th of December, 1816, the Provident Institution for Savings 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 merchants and tradesmen, and five mechanics; some of them eminent, all of them respectable citizens.

The first officers were, William Phillips (Lieutenant-Governor), President; 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' surplus dividends were adopted to induce these same people to keep as well as to deposit their money in the bank.

Founded as a charity by thoughtful, conscientious, disinterested men, it has steadily developed for seventy-seven years from 961 accounts at the end of 1816, with a deposit of $76,000, 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 of deposits is from the minimum received, $I; to the maximum received, $1,000. The lowest amount drawing interest is $3 ; the highest amount drawing interest is $1,600.

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The bank, in starting, paid 5 per cent. per annum on its deposits; later, the rate was reduced to 4 per cent., and, in addition to this regular dividend, an extra one paid every five years, as mentioned above, often amounting to an additional 4 per cent., making an average per annum of from 7 to 8 per cent. to the depositors at 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 depositors are either foreigners or children of foreigners, the Irish the earliest and most numerous, and after them the Germans and representatives of all nations.

Of late years dividends and interest on funds have declined, and the rate has been reduced to 4 per cent.

$35,590,000

.

Of the amount now on deposit in this bank, say
There are invested in city and town bonds
Bank stock.
Railroad bonds
Loans on mortgages (60% loaned on assessors' value)
Personal, with legal collateral, or three names and collat-

eral (not over one year to run) Loans on public funds, bonds, stocks Real estate and cash

$7,358,000
1,287,000
3,785,000
10,601,000

.

10,568,000
1,004,000

987,000 $35,590,000

The paid officers are the treasurer, assistant treasurer, and fourteen clerks; and the annual expenses, including taxes, average 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 one hundred and twenty members of the corporation living out of about five hundred 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 secretary, meet the treasurer once a week, receive and dispose of all applica

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