People and Their Bank Accounts
W. A. Craick
THEY were discussing the business and financial condition of the Dominion—a
banker, a former large real estate operator and a wholesale merchant.
“You can’t deny,” urged the real estate man, “that our savings deposits are showing a most satisfactory increase. I reckon it one of the happiest signs of the times that the people should be piling up their savings in the banks. It shows that they are learning to be thrifty.”
“Canadians thrifty?” laughed the bank manager. “Why, man, didn’t you know that we were about the most unthrifty people on the face of the earth? I hate to pour cold water on your enthusiasm, but I don’t regard the increase of savings you speak about in quite the same light as you do.”
“What other construction can you put on it?” demanded the real estate man.
“Why, in the first place, when people talk about the increase in savings as an evidence of thrift, they usually forget entirely to consider the proportion of the increase that has been contributed by the banks themselves in the shape of interest.
At the end of May, 1914, we had roughly 664 million dollars on deposit in the savings departments of the chartered banks.
A year’s interest on that at 3 per cent, is pretty nearly twenty million dollars in itself, so that if not a single additional cent were placed in the banks by way of deposit during the twelve-month, we should have had at the end of this May,
684 million dollars. As a matter of fact we had nearly 692 millions, which would indicate that the increase due to excess of deposits over withdrawals was only eight million dollars.”
“Even that is something under present conditions,” interposed the wholesaler.
“It would be most creditable,” replied the banker, “if it really indicated the true situation. But it doesn’t. That is to say, it doesn’t prove that the Canadian people are beginning to give evidence of thrift.
If you will examine the savings accounts in the various city branches of some large bank, you will find this—the increases are confined very largely to the branches in the well-to-do residential and business sections. In the districts where the working people live, you will discover that the increases, if any, are exceedingly small, while in many cases there are declines.”
“That is to say,” remarked the wholesaler, “it is the fairly well-to-do people— the salaried and professional classes— who are showing the thrift at present?”
“Only partially. The laboring man is
certainly in difficulties and a good many thrifty artisans, out of work, have had to fall back on their savings to tide them over the hard times. But it is not the case that the middle and upper classes are becoming more thrifty. The increase to be noted in the savings deposits of the chartered banks is, in my opinion, attributable to three circumstances, all of which are quite outside the realm of thrift. The first is the slackening of the general business of the country, which has released a lot of money that would otherwise have been in circulation. The second, allied to the first, is the smallness of the present range both of investment and speculative opportunities—I mean opportunities that a man would regard as reasonably safe. The third, and this is important, is the policy adopted by many large institutions, of keeping an unusually large proportion of their assets in cash.”
“So you don’t think there is anything really very creditable in our increased deposits?” queried the real estate operator.
“I can’t say that I do. If they were a genuine indication of the awakening of a thrifty spirit, I would be delighted, but I can’t under any possible circumstances interpret them in that way. Consider the case of that very creditable institution, the Penny Bank. There’s a scheme, backed up and supported by some of the big chartered institutions, with the express object of teaching school children how to save. Now, I argue that if the big banks were getting increased deposits as a result of a wave of thrift sweeping over the Dominion, the Penny Bank would show the same trend. It is a savings bank, pure and simple, operating in the
public schools of between thirty and forty towns and cities, both east and west. What do we find in the case of the Penny Bank? A decreased balance in most places— more money going out than is coming in.”
“But that does not necessarily mean that people are not saving as much; they are doubtless economizing in other directions,” interposed the merchant.
“Quite true, but my point is this. The Penny Bank, which is one of the best possible barometers of monetary saving in the country, shows a decline in the amount of deposits per child attending the schools. That being so I maintain that, if there is an increase in the time deposits in the chartered banks, that increase is not to be attributed to a general development of the saving habit, but the reason for it must be sought in other directions. I think you will find that bankers generally are agreed as to that. It is unfortunate but it is true. We would like to boast about those increased savings but we can’t. There is actually no more thrift now than there was twelve months ago.”
“While speaking of the Pennÿ Bank,” continued the bank manager, “I heard rather an interesting thing about it the other day. There are some few places, where it is operating, that have been showing a higher per capita rate of deposit this year than last, and oddly enough they are the places where munitions are being made. Take Galt as an example. For the first four months of the year the average monthly deposits of each child attending the Galt schools were 19, 28, 30 and 18 cents, respectively. A year ago for the corresponding months, they were 19, 23, 28 and 17 cents. Welland and Niagara Falls are other points that exhibit increases. For the most part though, the amount the children are saving is smaller than a year ago.
“In Toronto the situation is rather interesting. There has been a slight decrease in the average deposits, but if under existing circumstances, the youngsters attending Toronto’s public schools can maintain their savings within a cent or two of last year’s amounts, then indeed we are not doing so badly. The figures as issued by the manager of the bank are as follows:
1915 1915 Decrease January.........24 .22 .02 February........22 .21 .01 March...........27 .26 .01 April (Easter).. .15 .15
When you consider that these are figures reckoned on a school attendance of approximately 50,000 children, it is a hopeful sign.’!
'T'HERE can be little doubt that as
* compared with other nations, the Canadian people are not particularly famous for their thrift. The standard of living is generally high, the average person enjoys luxuries which would not be his in a less-favored country and, because money has been comparatively easily got, it has been as easily spent. The bank manager was perfectly correct in saying that Canadians were not thrifty, as thrift is reflected in the savings banks. As a matter of fact, it has been computed that the per capita savings of the people are only about $75, which is a good deal less than the amounts to the credit of the Belgians and French before the war.
Notwithstanding, thrift is by no means an unknown quantity in Canada and it may be hoped that the present period of depression will teach a healthy lesson. More than one man has solemnly sworn that he will never again be caught without a substantial amount of ready cash on hand, and if this sentiment spreads, there will be a very general movement towards building up savings accounts.
The Penny Bank referred to by the bank manager is possibly the most interesting example in Canada of what may be called methods of thrift or thrift ideas. It affords facilities right in the schools
for taking juvenile savings and it exerts a good influence on the children both through example and precept. The bank now operates in nearly forty cities and towns. Many very interesting stories could be related of the way the accounts have grown and the varied purposes to which the money so saved has been put. While usually set aside for specific objects, there are not a few youngsters who, on leaving school, transfer their savings to some chartered bank and become established as systematic savers for the rest of their lives. Even those who withdraw their money are not all lost to the cause of thrift. They have had a good lesson in its advantages and will, doubtless, later on become patrons of some savings bank.
THE chartered banks themselves do a good deal to encourage the saving habit. They provide attractive offices, furnish depositors with neat pass-books and convenient chequebooks, and make the process of depositing money easy and pleasant. Further than that, they are ubiquitous, and there are very few places of the slightest consequence in Canada, which are not equipped with banking facilities. In addition, the loan companies are now quite active in taking deposits, while for those who prefer Government security, there are the post office and the Dominion savings banks. Of a truth it is not for lack of facilities, that Canadians do not become a thrifty people.
But, with all this banking machinery, there is a great and grievous lack; and that is an absence of education. What do the masses of the people know about the advantages conferred by the savings banks, except by hearsay or accident? What
do they know about the value of thrift, except in a general way? Of all the chartered banks in Canada, the writer has yet to learn of one, which employs a specialist in savings—an official whose sole duty it is to develop schemes for building up the resources of the savings departments. And yet the savings department forms a most important part of the banking system which would be capable of enormous expansion, if only adequate advertising and other publicity methods were adopted.
npHRIFT methods, or schemes by which people save money, are almost as numerous as the accounts they maintain. Human nature differs widely and so do men’s ways of keeping or spending their resources. As a suggestive illustration, a case related by the manager of a branch bank in a small town near Toronto possesses undoubted human interest. A woman used to come into the bank every Monday morning and deposit from one to four dollars in coppers and small silver. She was not the treasurer of a Sunday School nor was she engaged in any kind of business that would involve the accumulation of small coins, and the banker became rather curious to learn her secret.
After some time he was able to reach that stage of friendly intercourse with her which would enable him to get into her confidence and she told him the story of her bank account.
“My husband, you know, is a commercial traveler,” said she in effect, “and for a long time after we were married, we lived right up to the last cent of our income. Neither of us bothered very much about the future. One day, however, I had my eyes opened to the folly of our way of life and I decided that we would have to start in to save. I told my husband what I thought about it, but he didn’t enthuse very much, saying that he couldn’t save and that anyway I’d be all
right if he happened to die, for I would get his insurance. This rather discouraged me, but the next week I had a practical suggestion to make.
“ ‘Jim,’ said I, ‘Every week-end you bring home a pocketful of loose change, that you never know what to do with. Suppose you give it to me and let me put it in the savings bank.’
“He laughed at the idea, said he didn’t mind doing that much for me, but warned me that if I hoped to get rich by any such method, I’d be very much disappointed. I started in the very next week and I’ve been depositing Jim’s loose change ever since. Sometimes he gives me a little extra to put in with it because he is beginning to see that my idea is working out better than he expected. We’ve had the account now for nearly six years, and as you know the balance is pretty nearly a thousand dollars.”
There was a case of absolute downright thrift. The commercial traveler’s wife was a whole conservation commission in herself. She was a financial chemist, saving the by-products of her husband’s industry from total loss. Hers was not a case of setting aside a fixed amount weekly from the family income. She was in a sense doing better than that, for she was reclaiming those small and seemingly unimportant amounts that are frittered away on this, that or the other trivial object. After all, genuine thrift is just that —the conservation of one’s resources for the things that are really necessary and worth while.
Women, as a rule, undoubtedly play a very important part in encouraging thrift,
as unfortunately in some cases they do in discouraging it. There is a story told by a Toronto banker of a strong-minded young woman who taught her ftaneé a very excellent lesson on the subject. The youth was rather easy-going and not over-energetic and, while his income warranted their getting married, he hadn’t sufficient money saved up to be able to set up his wife in the sort of establishment that she wanted. Being naturally anxious to get settled down, the young woman tried to urge him to save, but he persisted in saying that he couldn’t do any better than he was doing. At last, she hit on a plan.
“Fred,” said something for me.
she, “I want you to do When you come to see me, you always ride both ways on the street car, don’t you ?
I know you’re often tired after the day’s work, but I believe you could walk one way if you tried. Suppose you do, and then give me the fare you save.
I’ll put it in the bank.”
Fred laughingly agreed ; that wouldn’t be very hard, said he.
“Now how many cigars do' you smoke each day?” continued the girl.
“Two,” said Fred.
“Couldn’t you cut it down to one?” she asked.
“I suppose I could.”
“Well, why not?
Do that, too, and give me themoney you save to deposit.”
“Very well!” groaned Fred. “I? there any other
penance you want me to perform?”
“Why, yes. I thought perhaps you could save five or ten cents on your lunch each day. You told me the other night that you paid thirty-five or forty cents for it. Couldn’t you leave out the pie or something like that; you’d be the better for it, I’m sure?”
“All right,” agreed Fred. “I suppose while I’m at it, I might as well go the whole distance.”
There were other suggestions of a similar character made by this resourceful young woman and in the end her fiancé discovered that if he practised all the economies she had invented, he would have to hand over at least fifty cents a day. The amount of the enforced saving came as a great surprise to him. It hardly seemed possible that he could afford to do without so much. Then, as the days slipped by, other savings suggested themselves. By the end of six months, the balance was nearly $200 and the day of the wedding was brought appreciably nearer.
“Well,” said Fred. “I never thought I could have done it. And what pleases me is that I got along just as well as if I’d spent the money.
“You’ve got along better,” replied the girl. “You’ve saved the money that will enable us to get married ever so much
' I 'HIS experience was quite on a par with that of a young bank clerk in a Canadian city, who had been accustomed to spend every cent he earned, and more too, on living expenses and amusements.
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People and their Bank Accounts
Continued from Page 41.
He was reckoned a good sport and when any fun was going on, he could be relied upon to do his share in footing the bill. After a time, he had to face the problem of preparing his finances for matrimony. With a laudable resolution he set himself to save and though his income was not more than eleven hundred dollars a year at the time, he contrived within a twelvemonth to put aside between three and four hundred dollars.
How was it done? Simply by giving up those pursuits which had previously been a drain on his purse and stopping every possible leak. One scheme, which he found an excellent one, was to go for a trip into the country every time a holiday came round. Previously he had preferred to stay in the city. Joined by a crowd of friends he had been accustomed to indulge in a round of expensive amusements that invariably left him poorer than when he started. Now, by going to his home or on a visit to friends, his sole expense was the railway fare and, as the distances were never great, this did not involve heavy cost.
As a rule, the bank clerk, who above all others should realize the importance of saving, rarely practises what he preaches. Of course, he has perhaps less reason for saving than men in other callings. If so be that he is on the staff of one of the big chartered institutions, he is pretty sure of a life-berth and at the same time he has a pension to look forward to, when old age looms in sight. For these reasons, he sees small necessity for saving out of a salary, which he reckons small enough in any case. There are, however, interesting cases of saving among bank clerks and one such instance may be quoted as a suggestion.
A BOUT five years ago, a young bank clerk, who had been thinking seriously of the future, came to the conclusion that it would be a desirable thing to possess some capital. He cast about for means of securing it. It seemed impossible that he could do anything with his salary, which was barely sufficient to enable him to meet expenses and he did not want to borrow. Eventually he made a bargain with himself. At the end of the year, a raise in salary was due. He determined to put aside the extra money that was coming to him and continue to live on his former salary. So that he would not be tempted to spend a cent of the increase, he directed that the money should be paid into a new account which he opened for the purpose.
With admirable determination, this young man has stuck to his compact. He is still living on the salary he was earning five years ago, while his actual income has been doubled and he has between two and three thousand dollars capital saved up and invested. Doubtless he has had to deny himself a lot of the pleasures which his companions have enjoyed in the interval, but he has the satisfaction of know-
ing that, while all these pleasures have vanished into thin air, he has something substantial to show for his self-denial. By and by he too can have his enjoyment, but it will not be on money that he could not afford to spend.
is the women who are the great -*■ savers,” declared one banker, and he illustrated the statement by turning over page after page of a savings ledger. Sure enough, three out of every four names were names of women. Some were stenographers putting by a few dollars from each week’s earnings. Some were domestics, likewise salting down part of their wages. Not a few were married women who from their weekly or monthly allowance were contriving to put by a little for the future.
“Men,” explained the banker, “would, in nine cases out of ten, feel a certain amount of shame in depositing small sums and that prevents a good many of them from running an account. Women never think of that. Men are perhaps more inclined to fritter away any small sums which they might put by, on shoe shines, cigars, drinks and the other odds and ends that consume so much of their spare cash, while women are more limited in their possible dissipation. Men do not very often have the opportunities in their work to learn in a practical way how to save, whereas women in their housework are constantly on the alert to conserve their resources, even in very small items. For all these reasons, we bankers find that it is the womenfolk who are saving most of the money.”
AND why do Canadians save? From an analysis of a certain number of typical accounts, it would appear that the motives are varied. There is seemingly very little thrift for thrift’s sake alone. Comparatively few people in Canada are saving money just because they feel it to be a duty they owe themselves and the state to conserve their money and build up a reserve fund. The large majority have certain specific objects in sight, which, while laudable enough, fall somewhat short of this more desirable purpose.
Many accounts are opened to finance matrimonial ventures and it would surprise the public to know how many young women and girls, without any immediate prospects of getting married, are building up their savings accounts with this aim in view. Not a few Canadian savings bank accounts owe their existence to real estate investments, either prospective or accomplished. To meet payments on such purchases, people get into the habit of saving and what they save goes into the bank until such time as the money is needed. There are accounts opened to provide for the future education of children or to secure the advantage of a college course for the young depositor, to obtain the necessary amount for the purchase of a desired article or to afford capital to set a person up in business.