Evening Republican, Volume 21, Number 18, Rensselaer, Jasper County, 30 January 1918 — The First Savings Bank [ARTICLE]

The First Savings Bank

DepMita Afcowt «800 First Year Overcame Poverty la Uttle Scottish Village

By S.W. STRAUS

(Priatiwf New Ytck sad CUctfe Bahar)

One hundred and ten years ago there ■were no savings banks. The savings bank is an institution which was founded in the year 1810 by Rev. Henry Duncan in the little Scottish village of Ruthwell. Before that time, poverty seemed to be the normal condition of half the population of the British Isles. Pauperism was so common as to cause no Comment. Hundreds of thousands in Scotland alone lived on charity and it was generally accepted as a hopeless fact that “the poor we have always with us.” Doctor Duncan was of sturdy Scotch covenantor blood. He was a man of unusual strength of character, originality and resource and extraordinary talent for making friends. The distress of his parishioners preyed heavily on Doctor Duncan’s mind and he felt if there was some way of teaching them to be thrifty he would have an effective remedy for the poverty he saw all around him. The chief trouble was that the smallest sum the public banks would accept was £lO and comparatively few of the Scottish villagers had so large a sum, about $48.75 in American coin. So, Doctor Duncan conceived the idea of a poor man’s bank, as he called It, which would receive deposits of any amount, however small. After studying the subject long and carefully, he published a pamphlet to call attention ito. his project, so, as he said, as to render this measure suitable not for one locality only but “for Scotland and the world.” The only banks the poor had In those days were a stocking, a chink In the wall, or a loose board in the floor. They were often robbed and the temptation to use a portion of this precious nest egg was often too strong. Doctor Duncan argued shrewdly that if their funds were transferred to a bank, they not only would be safe from theft but the owners would hesitate to break Into them except in cases of urgent need. • In his pamphlet he says: “If any method then could be devised for giving to the artisan a place of security, free of expense, for that part of his gains which the immediate

wants of his family do not require, with the power to reclaim all, or part of it, at pleasure, It would be a most desirable thing, even if no interest should be received.” Ot course tnere were pessimists and suspicion and prejudice to overcome, but at last in 1810 the bank was opened in a Uttle shingled cottage. There were no vaults, but a large iron strong box, too heavy to move by hand, answered the purpose. In view of the suspicion which he says was entertained by many, Doctor Duncan provided three locks for the strong box. He held one key and two elders of his church each held the others. Of course the box could not be opened without all three keys, in the presence of all three trustees, r; In the first year the deposits amounted to £lsl. In the second year £176 was deposited. This grew to £241 in the third, and £922, or more than $4,000, in the fourth. For a poverty-stricken village these deposits, aggregating more than $7,000, were regarded as remarkable, since it must be remembered that all deposits were in small sums. The effect of the opening of the savings bank on the village was all that Doctor Duncan hoped for. Within a year there was a remarkable decrease in the number of those who sought charity. Thrift and happiness replaced poverty and discontent. Within a few years there was scarcely a pauper in the village, as Doctor Duncan records. In the meanwhile the fame of this remarkable little institution began to spread and Doctor Duncan soon found that his labors as a minister were swallowed up by those of a banker. His correspondence Increased day by day; letters poured In from all over England and the continent of Europe and from America asking for information. In 1814 he published a book on savings banks, which was widely circulated, and savings banks began to spread throughout the British Isles. It seems strange at this time to read that savings banks could have aroused opposition. This, however, was a fact. There was a bitter fight in parliament before the first savings bank act was passed in 1817. Cobbett, the best known editor of his day, used his powerful Influence against the plan, but Doctor Duncan was a fighter as well as a philanthropist. He went before the committee of parliament himself and so Impressed both lords and commons with his sincerity, the force of his personality and the justice of his cause, that the bill was passed. This was in 1817. Savings banks spread rapidly over Great Britain and then over all the rest of the world.