Christmas club
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For many depression-era children and baby boomers, one of their first experiences with saving money emanated from the Christmas Club program that was offered from various banks. Starting in the Great Depression, and going well into the 1970s, this popular account was routinely offered by local banks.
The concept was that bank customers would begin depositing a set amount of money weekly into a set savings account. Fifty weeks later, the banks issued cheques to account holders, just in time for Christmas shopping.
The first known Club started in 1909, when Merkel Landis, treasurer of the Carlisle (Pennsylvania) Trust Company, introduced the first Christmas savings fund. The club generated 350 customers who saved about $28 each. The January 2, 1920, edition of the Belvidere, Illinois Daily Republican, announced that the town’s State Farmers Bank was encouraging parents to enroll their children in the Christmas Banking Club “to develop self-reliance and the saving habit” A 2-cent club would pay $25.50 the following Christmas.
For decades, financial institutions competed for the holiday savings business, offering enticing advertising items and premiums. From a numismatic standpoint, tokens also promoted the advantages of the club accounts. The Dime Saving Bank of Toledo, Ohio, issued a brass token “good for 25 cents in opening a Christmas account” for 1922-1923. There were also numbered tokens issued by the Atlantic Country Trust Co. in Atlantic City, New Jersey, inscribed on the reverse: “Join our Christmas Club and Have Money When You Need It Most”
The negative of Christmas club accounts is that they paid little interest and would not allow early withdrawals unless fees were paid. The December 23, 1949 episode of the radio program Life of Riley features Chester Riley visiting the bank to withdraw the Christmas Club money. Only one deposit of $2 was made to which the bank teller advises that there was a 75-cent charge for the passbook, a 75-cent penalty for not completing the program, and a 75-cent fee to cover the cost of mailing reminders. In all, Chester Riley owed the bank 25-cents.
The reality of various restrictions and low interest rendered the Christmas Club unpopular. The costs for many banks were very high to maintain. An example would be the Capital Communications Federal Credit Union. According to Dennis Halpin, CEO, there were 3,500 Christmas Club members in 1984. The cheques had to be produced, signed, collated, and mailed. The problem was that 70 percent would be returned to be deposited into another account.
Business writer James Suroweicki addressed the impact of Christmas clubs in the Feburary 2006 issue of Forbes magazine: "The popularity of Christmas club accounts isn't a mystery; if their money was in a regular account, people assumed they'd spend it." In an era when so many people are in debt, these Christmas clubs may appear as a viable alternative to getting a loan or using a credit card to pay for holiday purchases.
[edit] References
Numismatist, Marilyn A. Reback, pp.57-60, Volume 119, Number 12, December 2006
[edit] See also
Pinckney, Barbara. “Holiday Clubs Endure Despite Waning Popularity.” The Business Review (Albany, NY). Nov. 15, 2002. www.bizjournals.com
Sewall, Tim. “Christmas Club According Is Becoming a Thing of the Past.” Memphis Business Journal. Dec. 5, 1997. www.bizjournals.com
Slabaugh, Arlie R. Christmas Tokens and Medals. Chicago: Author, 1966. (ANA Library Catalogue No. RM85.C5S5)
Surowiecki, James. “Bitter Money and Christmas Clubs.” Forbes.com. Feb. 14, 2006. www.forbes.com
