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sections in which Italians, Slavs, Magyars, or other southern and eastern Europeans are employed. Immigrant banks are found in the isolated iron ore mining camps of Minnesota and Michigan, in all bituminous mining localities of any importance in the East, Middle West, Southwest, or South, and in all industrial localities which have grown up around such industries as textile, iron and steel, and glass manufacturing. The importance of the business conducted by them may be seen from the fact that probably about 90 per cent. of the total amount of money sent abroad annually by aliens working in this country passes through the hands of immigrant bankers.* More than one-half of the so-called banks also receive deposits, and, altho the average deposit is less than $100, the aggregate amount held reaches high into the millions. . . . The significant fact in connection with the entire system, however, is that only a comparatively few States, eleven in all, have made any effort to regulate these private banks built up on the patronage of aliens. New York has the most drastic law. It has had a marked effect on fraudulent practises as under it about twenty indictments for larceny, forgery and misdemeanors have already been filed and two bankers have been sentenced to State's prison. The legislation of other States is not so satisfactory.
THE TERM IMMIGRANT BANK A MISNOMER
As a matter of fact the term immigrant bank is a misnomer. The immigrant communities which have affixt themselves during recent years to our industrial towns and cities have many needs which can be satis
Approximately $125,000,000 in 1907 and $70,000,000 in 1908 was sent abroad by aliens residing in this country through immigrant bankers that deal with nine of the largest banking agencies doing such business.
Pages 113, 114.
fied only by a person or company familiar with the languages spoken, and with the customs, habits, and manner of thought of the people. There is money to be sent to the old country; friends and relatives are to be communicated with and brought to the United States; business affairs must be transacted in this country and in the native land; and advice is to be sought on a multitude of affairs. To meet these needs the institution popularly known as the immigrant bank has come into existence. In many respects the immigrant bank is practically a bureau of information and a clearing-house for necessary services to the immigrant population, and it thrives upon the ignorance and lack of assimilation of the immigrant people. Its banking functions, however, while limited, involve a large amount of money and affect the welfare of a great number of people.
The branches of business and employments carried on by the banks in addition to their usual banking functions are real estate, rental, insurance, and collecting agencies, notarial offices, labor agencies, postal substations, book, jewelry, and foreign novelty stores, saloons, groceries, butchers, barbers, boarding bosses or room renters, printers, pool-room keepers, furniture dealers and undertakers. These combinations are typical of practically all communities, and so may be considered as fairly representing the immigrant banking business generally.
The Origin of Immigrant Banks
The connection between banking and other branches of business may be easily explained. In the mind of the immigrant, the steamship agent is the sole con
necting link with the fatherland. As the representative of well-known lines, he ascribes to the agent a standing and responsibility such as he has no cause to assign to any American banking institution. Nothing is more natural than that the immigrant should take his savings to the agent and ask that the agent send them home for him. Having made the start, it is natural that he should continue to leave with the agent for safe-keeping his weekly or monthly surplus, so that he may accumulate a sufficient amount for another remittance or for the purpose of buying a steamship ticket to bring his family to this country or for his own return to Europe. It is not long before the agent has a nucleus for a banking business, and his assumption of banking functions quickly follows.
Those proprietors who confine their operations to banking and steamship agencies, as distinguished from those who conduct such in connection with some other business, are usually the most intelligent men of the immigrant population of any colony or locality. They are always possest of considerable influence, and may be political leaders in the older and more established immigrant communities. Almost without exception, they are able to speak English and have some degree of education. Frequently they have reached their position of prominence through successful mercantile enterprise. Not a few got their start as day laborers. In most cases the basis of their success lies in a native ability which is by no means necessarily the product of business experience or financial training.
Native ability is not, however, the source of the success of the great number of those bankers who, in a purely personal way, are acting as custodians of their
countrymen's funds. The responsibilities imposed upon those who act as bankers for the immigrants are so light as to make the assumption of that important office dependent upon no other qualification than the would-be banker's ability to inspire the confidence of his compatriot, a matter which racial ties render comparatively easy. There are numerous instances where strangers have gone into communities and established themselves as steamship agents and foreign-exchange dealers. Their only qualification was that they were Italians among Italians, or Magyars among Magyars. Hundreds of saloon-keepers and grocers act as bankers without the least fitness or equipment. It is true that they become bankers only as individuals through their position as merchants. Altho banking functions are more or less forced upon men of this character, and altho they may be exercised in a thoroughly honorable way, the fact remains that many hundreds of thousands. of dollars belonging to immigrant laborers are handled by ignorant, incompetent, or untrustworthy men.
The causes for the failure of the immigrant laborer to turn to the regular American institutions to satisfy his banking needs rather than to the less responsible men of his own race are threefold: (1) The ignorance and suspicion of the immigrant; (2) the fact that American institutions have not developed the peculiar facilities necessary for the handling of immigrant business; and (3) the ability and willingness of the immigrant proprietor to perform for his countrymen necessary services that otherwise it would be impossible for them to obtain.
Possibly the great hindrance in securing immigrant patronage for American banks lies in the alien's ignorance of the English language. Inability to read
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