This class differs from State or National banks in that they have no special capital owned by a few or by many individuals, but their capital is the deposited money of a great many saving people. They are mutual. That is, every one who puts money in is practically an owner in the bank, and the profit made by the bank, after paying taxes and expenses, and putting aside a proper reserve, is paid to the parties whose money earns the profit. The people, in their dimes and dollars and tens and hundreds, own the Savings banks. Hence it is that these institutions are very rigorously guarded by the laws of our States. It is not the idea of a Savings bank to pay a large percentage of interest. Safety is the first thing, and in order to be safe, only choice and high-priced investments can be purchased by the managers.

Savings banks are voluntary trusteeships, undertaken by a few persons in a particular locality, either self-appointed, renewing their own number as vacancies occur, or chosen by the depositors. The corporate body thus formed receives deposits or funds, small in amount, and from the poorer classes of society. It undertakes to invest them with due diligence in the safest practicable way, and to divide all the income, after paying necessary expenses, among the depositors, at stated and convenient times. None of the profit on these investments belongs to the corporation itself. All of it belongs to the depositors. If a surplus is created, it is only for a safeguard against occasional losses or emergencies. In every respect, the corporation is nothing but the agent or trustee of the whole body of depositors, and works for their account and benefits not for its own.

"The principal reason for the creation of a Savings bank is to offer to the poor and to those of small incomes a means of keeping safe their occasional savings. A secondary reason is to enable such persons, by combining these small sums, to invest them, so as to earn some interest. Such persons do not ordinarily draw out their deposits, except on an emergency. The deposits are made to meet emergencies in the private life of the depositors, and are not subject to the daily calls of business. It thus appears that, as such emergencies usually result from sickness or lack of employment, the drafts will be gradual, not sudden, and are not subject to sudden increase by reason of commercial revulsions, unless in the exceptional case of panic. Large deposits, which do not come from savings, but which are the capital of persons who have acquired wealth, should be rejected.* They can invest their own funds, and they are likely to withdraw their deposits suddenly and in large sums."

In the introductory chapter of this part of our work we shall briefly set forth the utility of Savings banks. This, however, has been well done by another, Henry L. Lamb, and we cannot improve on what he has said concerning the utility of these institutions. His paper was read at an annual meeting of the American Bankers' Association in 1879, when he was acting as superintendent of the banking department of the State of New York.

First.—The savings institution is founded to help men and women.

Some one has said that they are meant "to help men to help themselves." It is not in simple human nature to save and to put by a store for the ever possible rainy day. The savage and the child go on in reckless improvidence. Some one must take care of the improvident, as society is organized now in the enlightened nations. There are saving people and spending people. There are people who create property and people who waste it. There are people who earn money and keep it, and people, too, who earn money and squander it. This is inevitable.

* "Certainly, the use of these institutions should be confined to the class for whose benefit they were devised, and only that class who have not the time, opportunity, or ability to investigate and determine for themselves a proper investment or adequate means to enable them to pay for the information through private sources, should be permitted to become depositors.

In case of temporary embarrassment, the largest deposits, those belonging to what may be properly termed a capitalist class, would be soonest withdrawn, and whenever private investment promises better returns these funds leave the banks. Whenever money is cheap and hard to place, this class solves the difficulties of investment by placing their moneys in our Savings banks. Instead of supporting the banks, they make of them a convenience, and prey upon their resources; instead of being an element of strength, they are a constant menace.

Most States recognize this principle, and have fixed limitations designed to exclude this class of depositors. Instance: Connecticut limits amounts receivable in any one year from a single individual to $ 1,000. Vermont limits the aggregate to $2,000. New York limits the aggregate to $ 3,000. Massachusetts limits deposits to $ 1,000 from each individual, and allows it, by accumulation of interest, to reach $ 1,600, but allows no dividend upon any sum exceeding $ 1,600. Each of these States makes varying exceptions as to trust funds, &c.