to the investment of the deposits. As these consist of small sums, the hard earnings of the working classes, the worth of which, relatively speaking, is far greater to them than the deposits in other banks to their wealthier customers, the state seeks to guard the keeping and use of them with greater care. To this end strict regulations exist in the mode of lending them, the kind of security that must be taken; and discounts to merchants and others of ample means who would like to borrow on credit are denied.

8. Mode of Governing. — Finally a marked difference exists in the mode of governing. Many savings banks are governed directly by the trustees who possess adequate powers delegated to them by the charter or general laws, or both. Some of them, however, are governed by a smaller body of directors selected from the trustees. In banks thus organized the directors may be endowed, either by law or by-laws adopted by the trustees, with nearly the entire power of general management. In truth, where boards are thus carved out, it is with the view of relieving the trustees of nearly all duty, hence they rarely meet, in many cases not more than twice a year. Often the sole functions left to them are to fill vacancies in their own number and also in the directory. In other cases they retain the power to declare dividends and such supervision over the directors and other officers as they deem desirable for effecting the best results.

XXII. THE DEPOSITORS

1. Nationality of Depositors. As already explained, the depositors belong chiefly to the working classes and, in the larger cities especially, many of them are foreigners. The number, too, in some of the older banks, is very large. Thus the Philadelphia Savings Fund Society, which was organized in 1819, has over two hundred thousand depositors.1

2. Making Deposits. Many of them have a very imperfect idea of the mode of depositing and drawing out money. In general, it may be said that a savings bank requires a ticket or voucher for the money received, like a bank of discount and deposit. However small the amount, this invariably accompanies every deposit. The ticket in the case of the larger banks is a little fuller than the ticket already described. It contains four things: the amount of the deposit, the name of the depositor, his address, and the date. In some banks these tickets are made out by the depositors themselves; in many cases the depositors are quite unable to do this, and the tickets are prepared by the receiving teller.

3. Registry. When a depositor appears for the first time, he is required, as in the case of an ordinary bank depositor, to enter his name in a book kept for that pur

1 The exact number on March 9, 1903, was 235,160. Of the 45,713 depositors who opened accounts in this bank in 1902 26,007 were Americans, 4,863 Irish, 400 Russians, 3,904 Germans, 1,904 Italians, 1,627 English, 1,425 Austrians, 319 Turks, and the remainder were from twenty other countries.

pose. It lies on a revolving desk, which in a large bank is in constant use. In this the depositor writes his name, or, if unable to do this, it is written for him and he makes his mark. At the same time some additional information is extracted from the depositor relating to his residence, age, whether married or not, whether white or colored, his father's, mother's, wife's name, his occupation, and whence he came. The information thus gathered is in due time tabulated, and valuable conclusions are drawn therefrom. 4. Pass Book. -The next step is to give him a pass book. This has a number outside and inside corresponding with one opposite the line on which his name is written in the signature book. This number is very important, for it is the key to all of his dealings with the bank. There may be a dozen similar names, but there are never two similar numbers. For this reason the number is written on every deposit ticket, it is written opposite the first entry in the book of the bank, it stands at the head of the ledger account. These numbers are printed wherever they can be to avoid mistakes; but, as depositors may forget the number of their book, it is necessary to find him somewhere by name. The signature clerk therefore enters his name on a card which is put in an alphabetical index of the names of all the depositors.

5. Pass Book not Negotiable. A savings-bank book is not negotiable. Various attempts have been made to endow them with this quality. There is one conclusive reason at least why they never should be. As we have learned in a former chapter, one of the peculiarities of negotiable paper is, a third person to whom it is transferred in good faith for a proper consideration is completely shielded from all defenses that the maker might use against the original payee. The third person can take

such paper without the slightest fear, unless he has actual knowledge of good defenses by the payee. If the depositor of a savings-bank book could transfer his book to another, like an ordinary negotiable note, the transferee might acquire rights or advantages not possessed by the depositor. Consequently it has been decided that a depositor should not be permitted by assigning his book to confer rights not belonging to himself; "that the nature and purpose of savings banks, and the relation of depositors to each other, as well as their mutual security, all require the application of the principle that no depositor can convey to another any greater right to the funds of the bank than he has himself, and that any defense on the part of the bank which is good against the original depositor is equally good against his assignee." 1

6. A Deposit can be assigned. Though wings can not be given to a pass book, even by a rule providing for its transfer by a depositor to the order of another, a depositor may make a valid assignment of his entire deposit by giving an order on the bank, that will prevail against any creditor who may subsequently sue the assignor and attempt to secure the deposit in satisfaction of his claim. Such an order becomes effective from the time of its delivery. It works an assignment of the deposit, just like the giving of a check by a depositor in a bank of discount in Illinois and some other states. In like manner the delivery of a savings-bank book, though unaccompanied by a written assignment, with the intention that it shall be held as collateral security for the payment of a debt, transfers the title to the deposit so perfectly that the creditor can hold it against any one who may try to take it in satisfaction of a debt due from the depositor.

1 McCaskill v. Connecticut Savings Bank, 60 Conn. 310.

7. Second Deposit. When a depositor appears the second time to deposit money, he fills out and signs a deposit ticket with the additional insertion of the number of his book. This is taken to the receiving teller with his money, and the amount is entered therein and he goes away.

8. Special Deposits. Savings banks rarely receive special deposits. When they do, the relation between such depositors and a bank is very different from the relation existing between it and ordinary depositors. A special depositor is regarded as a lender, and consequently, should the bank fail, he would be entitled to payment before general depositors were permitted to receive any portion of their deposits. This is the law, so the courts have said, even though a savings bank has no right or authority to receive a deposit in a special manner. As such depositors have no share or interest in the profits or earnings of the bank, they do not share in its losses so long as the assets are sufficient to pay its debts. The general depositors can not shift upon them any share of the burden which properly rests upon themselves alone. As owners of the bank, and of which they are not creditors in a general sense or for all purposes, the general depositors, who alone are entitled to share in the bank's profits, must bear its losses, and can rightfully claim such assets only as may remain after payment of the corporate debts." 1

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9. Withdrawal of Deposits. Having described the mode of depositing money, let us describe how it may be withdrawn, for the process is quite different from that in a bank of discount. In many banks the method is to fill out a receipt for the amount desired by the depositor in a

1 See Cogswell v. Bank, 59 N. H. 43; Newark Savings Institution, 28 N. J. Eq. 552,