and write, necessitating the transacting of business through an interpreter, combined with a poor comprehension of the check system and other banking devices, is apt to cause him to prefer more informal banking relations. A natural hesitancy to place confidence in strangers of other races is augmented in many cases by a positive suspicion of American institutions.

A possible explanation lies in the fact that these races, largely agricultural in character prior to coming to America, are not accustomed to the extended use of banking facilities, or, if so accustomed, they confine their relations to the financial institutions operated by the government in their respective countries. They have learned that banks of this country are not government institutions, and for that reason look with disfavor upon them. Ignorant of American customs, unable to use the English language, and finding but little encouragement to overcome his hesitancy, the immigrant turns to the bankers of his own race as the only ones really able to perform the services he needs.

Ownership and Organization

The tendencies of the members of different races to become bankers seem to be largely dependent upon the numerical importance of the several races in different localities and as a consequence upon the opportunity for doing business. Italians, Hebrews, Poles, Magyars, and Croatians are most frequently encountered as heads of banking institutions, altho scattered representatives of other races are also often encountered.

Immigrant banks are almost without exception un

incorporated. They are, as a rule, privately and individually owned. In every center of alien population there is a very sharp competition among banks conducted by men of the different immigrant races. Altho the connection with New York City in one way is very intimate, there is no close alliance through ownership. It is believed that not more than a dozen of the immigrant banks of New York City have branches in the interior.

With some notable exceptions, branch banks are not maintained. Mismanagement and dishonesty on the part of those placed in charge appear to have been the leading cause of failures in the attempts to establish branch banks. The business is essentially a local development. Of the 110 establishments from which specific information was secured during the recent investigation by the national government, 97 reported that branches were not maintained.

Banking Functions-Deposits

These immigrant institutions have only four distinct banking functions-deposits, loans, money exchange, and foreign exchange. Collections, domestic exchange, insurance, and rentals are carried on by a considerable number of banks, but the first four mentioned are the distinctive banking functions.

The receipt of deposits is as a rule merely incidental to the main functions of an immigrant bank and directly contributory to the personal interests of the proprietors. Immigrant banks are rarely commercial or savings institutions. Deposits are usually left for temporary safe-keeping rather than as interest-bearing savings accounts. Such deposits are not

subject to check, and there is, therefore, seldom need of clearing arrangements. Many so-called bankers do not openly solicit deposits and do not make a practise of receiving them, while others actively seek deposits as an important part of their business. But whatever the capacity in which the banker receives money, it is essentially a personal one in which he disposes of it. Beyond an understanding that deposits are subject to demand at any time, there is no consideration given nor limitation implied as to their use. So far as his depositors are concerned, the immigrant banker is at liberty to use their funds to suit himself.

The most objectionable use to which deposits are usually put is that of direct investment in the proprietor's own business. Grocers and saloon-keepers have admitted that deposits are used freely, to meet current bills, or are invested outright in their concerns.

Many immigrant bankers, especially in the smaller towns where the principal profits arise from the sale of steamship tickets, redeposit the funds intrusted to them in national or State banks. Many bankers thus derive from 2 to 4 per cent. interest on thousands of dollars which have been deposited with them, but upon which they are making no returns. If deposits are subject to such an active demand as to prevent their redeposit as a savings account, they are often deposited as part of the immigrant banker's checking account and thus made to yield a low rate of interest.

As a rule the immigrant bankers are not satisfied with the small profit secured by redepositing funds placed in their care. They seek opportunities yielding a larger return and in this way deposits come to be used for loans or investments. The larger and best class of immigrant banks make loans, just as the

ordinary American bank, in the regular course of banking operations. It is also extremely common for them to invest funds intrusted to them in real estate and stocks.

The most usual evidence of deposit furnished by the immigrant banker is the ordinary pass-book used by American banks. In some cases only a personal receipt or a deposit slip of the usual form is given to the depositor. Some of the smaller institutions make use of a secret word, and a few of the more irresponsible banks furnish no evidence of deposit whatsoever.

Deposits left for safe-keeping are seldom allowed to accumulate to an amount greater than $100. Individual sums in excess of that amount are sometimes left for short periods, and the average savings account in some banks reaches $200 and $300. But $100 appears to be the limit of an accumulation against a remittance home. In the table below are shown the aggregate amounts of deposits, the number of depositors, and the average amount of deposits of 31 immigrant bankers of different races, including some of all the classes of banks.

AGGREGATE AND AVERAGE AMOUNT OF DEPOSITS

and number of depositors, in 31 immigrant banks, by race of proprietor

While the aggregate sum held by these 31 banks is comparatively insignificant, yet it represents the savings of over 3,000 laborers, the average of deposits being $65.45. It is obvious in this connection that the average deposit is too small to warrant bringing a suit in the event of the refusal of a banker to pay.

TRANSMISSION OF MONEY ABROAD

Immigrant banks act as agents in the transmission abroad of immigrant money.* The transmission is effected by means of the "money orders" of certain large banking houses which are placed in the hands of immigrant bankers and sold by them to their cus

tomers.

The amount of money sent abroad by various correspondent banking houses of immigrant banks in the two and one-half years ending June 30, 1909, is shown by the table below. This table is a summary of carefully prepared statements furnished by four general banking houses, the financial departments of an express company and of a steamship company, and three large Italian banks, including the New York office of the Bank of Naples. These are the leading concerns through which immigrant banks transmit money abroad.

The remittances of immigrant bankers formed probably 90 per cent. of the total amount of money sent abroad each year by the above companies. It appears, therefore, that approximately $125,000,000 was sent abroad through these agencies by immigrant banking

As a rule, immigrant banks in the interior communities do not handle foreign money except as an accommodation to their patrons, buying from them such small sums as are not exchanged upon their arrival at New York, and securing for them, usually from New York or local banks, such as they may wish on departure for Europe.