4. REPORT ON SAVINGS BANKS AND BUILDING

ASSOCIATIONS OF ILLINOIS.

Until the last session of the legislature, in 1886-87, Illinois had no savings-bank law providing for the establishment and management of Institutions for Savings under the supervision of the State, similar to those in many of the Eastern States. There existed previous to 1877 many so-called savings banks, organized under special charters granted by the legislature before the revision of the constitution in 1871; and several still remain. These banks (corporations managed of course for the benefit of the stockholders) receive savings deposits and pay a stated rate of interest (usually 4 per cent.) under the common savings-bank rules. The panic of 1873 and the subsequent depression in business, extending to 1877 or later, forced many of these banks into suspension, and in other instances dishonest management led to the same result. The following quotation from the Chicago Evening Mail, quoted in the Tribune for Dec. 5, 1885, shows the effect of the failures in Chicago: "Chicago has been practically without savings banks for the last ten years. The experience of our people with the last lot broke down public confidence in these institutions completely. The scandalous and dishonest management of five or six banks then in existence had the effect of preventing the establishment of successors when they went down, for it was plain to capitalists that time was necessary to heal the wounds inflicted by Spencer, Haines, Meyers, and the rest, and that savings banks, no matter how well they might be backed then, would not be trusted." The lack of confidence in all institutions that were called savings banks, and the absence of any provision for State supervision for those that still remained, doubtless had much to do with turning the attention of provident workingmen toward the Loan and Building Associations, and in part accounts for their wonderful growth in this State.