The saving banks of America present a striking contrast to these democratic banks. Our savings banks also have performed a great service. They have provided for the people's funds safe depositories with some income return. Thereby they have encouraged thrift and have created, among other things, reserves for the proverbial "rainy day." They have also discouraged "old stocking" hoarding, which diverts the money of the country from the channels of trade. American savings banks are also, in a sense, banks of the people; for it is the people's money which is administered by them. The $4,500,000,000 deposits in 2,000 American savings banks belong to about ten million people, who have an average deposit of about $450. But our savings banks are not banks by the people, nor, in the full sense, for the people.

First: American savings banks are not managed by the people. The stock-savings banks, most prevalent in the Middle West and the South, are purely commercial enterprises, managed, of course, by the stockholders' representatives. The mutual savings banks, most prevalent in the Eastern states, have no stockholders; but the depositors have no voice in the management. The banks are managed by trustees for the people, practically a self-constituted and self-perpetuating body, composed of "leading" and, to a large extent, public-spirited citizens. Among them (at least in the larger cities) there is apt to be a predominance of investment bankers, and bank directors. Thus the three largest savings banks of Boston (whose aggregate deposits exceed those of the other 18 banks) have together 81 trustees. Of these, 52 are investment bankers or directors in other Massachusetts banks or trust companies.

Second: The funds of our savings banks (whether stock or purely mutual) are not used mainly for the people. The depositors are allowed interest (usually from 3 to 4 per cent.). In the mutual savings banks they receive ultimately all the net earnings. But the money gathered in these reservoirs is not used to aid productively persons of the classes who make the deposits. The depositors are largely wage earners, salaried people, or members of small tradesmen's families. Statically the money is used for them. Dynamically it is used for the capitalist. For rare, indeed, are the instances when savings banks moneys are loaned to advance productively one of the depositor class. Such persons would seldom be able to provide the required security; and it is doubtful whether their small needs would, in any event, receive consideration. In 1912 the largest of Boston's mutual savings banks - the Provident Institution for Savings, which is the pioneer mutual savings bank of America - managed $53,000,-000 of people's money. Nearly one-half of the resources ($24,262,072) was invested in bonds - state, municipal, railroad, railway and telephone and in bank stock; or was deposited in national banks or trust companies.

Two-fifths of the resources ($20,764,770) were loaned on real estate mortgages; and the average amount of a loan was $52,569. One-seventh of the resources ($7,566,612) was loaned on personal security; and the average of each of these loans was $54,830. Obviously, the "small man" is not conspicuous among the borrowers; and these large-scale investments do not even serve the individual depositor especially well; for this bank pays its depositors a rate of interest lower than the average. Even our admirable Postal Savings Bank system serves productively mainly the capitalist. These postal saving stations are in effect catch-basins merely, which collect the people's money for distribution among the national banks.

Progress

Alphonse Desjardins of Levis, Province of Quebec, has demonstrated that cooperative credit associations are applicable, also, to at least some urban communities. Levis, situated on the St. Lawrence opposite the City of Quebec, is a city of 8,000 inhabitants. Desjardins himself is a man of the people. Many years ago he became impressed with the fact that the people's savings were not utilized primarily to aid the people productively. There were then located in Levis branches of three ordinary banks of deposit - a mutual savings bank, the postal savings bank, and three incorporated "loaners"; but the people were not served. After much thinking, he chanced to read of the European rural banks. He proceeded to work out the idea for use in Levis; and in 1900 established there the first "credit-union." For seven years he watched carefully the operations of this little bank. The pioneer union had accumulated in that period $80,000 in resources. It had made 2900 loans to its members, aggregating $350,000; the loans averaging $120 in amount, and the interest rate 6 1/2 per cent. In all this time the bank had not met with a single loss.

Then Desjardins concluded that democratic banking was applicable to Canada; and he proceeded to establish other credit-unions. In the last 5 years the number of credit-unions in the Province of Quebec has grown to 121; and 19 have been established in the Province of Ontario. Des-jardins was not merely the pioneer. All the later credit-unions also have been established through his aid; and 24 applications are now in hand requesting like assistance from him. Year after year that aid has been given without pay by this public-spirited man of large family and small means, who lives as simply as the ordinary mechanic. And it is noteworthy that this rapidly extending system of cooperative credit-banks has been established in Canada wholely without government aid, Desjardins having given his services free, and his travelling expenses having been paid by those seeking his assistance.

In 1909, Massachusetts, under Desjardin's guidance, enacted a law for the incorporation of credit-unions. The first union established in Springfield, in 1910, was named after Herbert Myrick - a strong advocate of cooperative finance. Since then 25 other unions have been formed; and the names of the unions and of their officers disclose that 11 are Jewish, 8 French-Canadian, and 2 Italian - a strong indication that the immigrant is not unprepared for financial democracy. There is reason to believe that these people's banks will spread rapidly in the United States and that they will succeed. For the cooperative building and loan associations, managed by wage-earners and salary-earners, who joined together for systematic saving and ownership of houses - have prospered in many states. In Massachusetts, where they have existed for 35 years, their success has been notable - the number, in 1912, being 162, and their aggregate assets nearly $75,000,000.

Thus farmers, workingmen, and clerks are learning to use their little capital and their savings to help one another instead of turning over their money to the great bankers for safe keeping, and to be themselves exploited. And may we not expect that when the cooperative movement develops in America, merchants and manufacturers will learn from farmers and working-men how to help themselves by helping one another, and thus join in attaining the New Freedom for all? When merchants and manufacturers learn this lesson, money kings will lose subjects, and swollen fortunes may shrink; but industries will flourish, because the faculties of men will be liberated and developed.

President Wilson has said wisely:

"No country can afford to have its prosperity originated by a small controlling class. The treasury of America does not lie in the brains of the small body of men now in control of the great enterprises. ... It depends upon the inventions of unknown men, upon the originations of unknown men, upon the ambitions of unknown men. Every country is renewed out of the ranks of the unknown, not out of the ranks of the already famous and powerful in control."