William R. Mitchell Tells the Business Association It Will Be Feasible and Profitable
The annual meeting of the Norwood Business Association, held Tuesday evening in Odd Follows hall, was largely attended and highly interesting. The fact that Norwood ought to have a bank and that it was perfectly practicable and feasible to have one established here was the principal fact brought out by the much-applauded leading speaker of the evening.
The reading of the annual reports of the treasurer of the society, Edgar L. Bigelow, and the secretary, William T. Whedon were among the first business of the evening. These reports were in every way highly encouraging, and Mr. Whedon in his report gave a very interesting resume of the useful and important work done by the society during the past year. Melville G. Smith, N. L. Newman, H. C. Babcock, and Arthur G. Fogg were admitted to membership.
The following officers were elected for the ensuing year: President, J, A. Halloran; Vice President, Harold E. Fales; Secretary, William T. Whedon; Treasurer, Edgar L. Bigelow; Executive Committee, Dr. F. H. Nutting, Francis E. Everett, James M. Folan, Milton H. Howard. The new board of officers includes some of the best workers in the association.
Thanks were returned to the Lawrence Board of Trade for an invitation to the celebration of its semi-centennial.
William R. Mitchell of Middleboro, at the present time an official of the National Exchange Bank of Boston, formerly cashier of the Middleboro national bank, was introduced, and gave an interesting address on the subject of "Banks." Mr. Mitchell is related through marriage with a well-known Norwood family.
Mr. Mitchell gave a brief account of the origin and history of banks. The business of banking was very old. In ancient Greece and Rome, there were men and firms who received money on deposit and paid it out on drafts. The money changers whom Christ drove from the Temple were probably a kind of banker. Modern banking, hewever, origiuntod in Italy. The term bank or "banco", was applied to funds raised on small loans from the people. The first notable bank in modern times was the Bank of Venice. The idea of creating a large fund from the deposits of a large number of small depositors is the main idea of modern banking.
The earlier banks were quasi-public corporations where transactions could be regulated by law and whose affairs could be examined by government officials. Banks usually unite a brokerage and security department with their business. One great object of a bank is, of course, the furnishing of a secure place for the deposit of money and re-paying these deposits with such interest and dividends as they may have earned. Banking, however, is business and not philanthropy. Loaning at interest on deposits not called for is one source of the profits of a bank. To this, the bank adds a great variety of functions and transactions. Mr. Mitchell described in a very interesting way the four kinds of banks chartered in our state: savings banks, cooperative banks, trust companies, and national banks.
The trust companies are practically state banks, and it has been the custom for each of these companies to be created by a special act of the legislature. A bill is now under consideration providing for a state law by which any ten men can form a trust company. It was originally intended, as the name implies, that these trust companies should act as trustees for executors and trustees of deceased persons. But many trust companies ignore these functions. The trust companies pay out their money on checks and allow interest on trust balances. Trust companies generally pay interest on daily balances. National banks often do practically the same thing. Trust companies are allowed to lend money on real estate security. National bunks are not allowed to do this. Trust companies are not required to hold reserves. In the national banking system, reserves are fully provided for. A national bank can only loan 85 percent, and at least 6 percent of the amount remaining must be kept on hand, A trust company is in effect nothing more or less than a state bank.
Mr. Mitchell gave an interesting account of national banks and of their reserve fund and clearing house system. He showed why he believed it would be most feasible for Norwood to have a national bank, and how such a bank should bo organized. He showed the advantages which would accrue to a town, in the matter of taxes for ono thing, from a national bank, capitalized and controlled by Norwood people, and in answer to questions spoke of the great success of the bank at Middleboro, which at the end of two years, with a compamtively small outlay, had brought in large profits. He showed by a great variety of facts why it was perfectly feasible and practicable for Norwood to have a bank and thought abundance of material for directors could bo found in the Business Association, and Norwood would soon be out of the $50,000 class, as it would in a very few years or sooner have more then 6000 inhabitants. It was a good time now to start a small bank with $50,000 capital. He felt certain that the large Boston banks would give a bank in Norwood overy courtesy and encouragement.
A communication from the Boston Chamber of Commerce concerning changes in corporation laws was received and placed on file.
M. H. Howard reported on transportation facilities that the selectmen had granted the new turnout for the electrics between Nahatan street and Railroad avenue, and that the connection of the three roads would soon become an accomplished fact if the citizens and the railway companies agree to it.
The committee on growth of the town, through George Harding Smith, reported that they were keeping in coramunication with John Babb of the Universal Grinding Machine, and read a letter from the manager of the Bassett Motor Vehicle Company, with a capital stock of $2,000,000. According to the rather glowing letter and prospectus sent out by Mr. Bassett, with his portrait accompanying them, the company desires a good deal from the town and its citiizens. The report was accepted without recommendation.
President J. Edward Plimpton reported briefly in regard to new industries, stating that as far as he could learn the Wisdom Publishing Company was practically defunct.
Dr. F.H. Nutting, reporting from the committee on public schools, thought the schools were doing well, and recommended the town's keeping the present North schoolhouse as available for some future town purposes.
William Fisher of the committee on public health recommended that the town take up the sewerage question at one of its fall meetings.
Hon. F. A. Fales on the matter of permanent home reported that the room in the Bigolow block recently occupied by Robert Rogers had been secured. The association will also allow this room to be used by committees of the Old Home Week Association. Mr, Fales also reported from the Old Home Week committee that an Old Home Week Association had been formed.
F. J. Rea reported for the elm beetle committee and his committee was continued.
The association completed this large program of business a little after 10 o'clock, having had one of the most successful and interesting meetings in its history.
(All articles were originally published in the Norwood Messenger unless otherwise noted)
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