6. Simplicity Of Business

There is another difference between a savings bank and bank of deposit and discount worth mentioning. The business of the former is much simpler because it receives for the most part only money for deposit. Consequently a savings bank has no elaborate system of correspondents or accounts with other banks. It generally keeps a deposit in one or two, perhaps three or four other banks, on which interest usually is paid. One object of this is to have a larger immediate fund that may be used to pay depositors, for the money thus kept is supposed to be at the momentary call of the savings bank. Another object is, when depositors deposit checks they are redeposited by the savings bank with one of its depositories which undertakes their collection. The savings bank has no connection with the clearing house or with banks in general. Each one is a self-centered, self-acting institution without Connections with other banks of any kind, except as just explained.

7. Investment Of Deposits

Another difference relates 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.