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Speaker 1: This Day in History Class is a production of iHeartRadio.

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Speaker 1: Hello and welcome to This Day in History Class, a

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Speaker 1: show for those interested in the big and small moments

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Speaker 1: of history. I'm Gabeluesier, and today we're looking at the

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Speaker 1: humble origin of the Christmas Club, a turn of the

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Speaker 1: century tool that helped families build holiday nest eggs one

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Speaker 1: week and a few pennies at a time. The day

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Speaker 1: was December one, nineteen oh nine. The first Christmas savings

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Speaker 1: account was opened at the Carlisle Trust Company in Pennsylvania.

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Speaker 1: Long before Black Friday sales, rewards programs, and credit cards,

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Speaker 1: the best way to ease the sting of holiday spending

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Speaker 1: was to join a Christmas Savings club, essentially a short

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Speaker 1: term savings account. The idea was to encourage people to

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Speaker 1: plan ahead for the holidays by making routine deposits throughout

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Speaker 1: the year. Then in late November or early December, account

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Speaker 1: holders would receive a check for the total of their

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Speaker 1: savings plus a small amount of interest, just in time

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Speaker 1: for shopping season. The first Christmas club on record was

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Speaker 1: started by merkle Landis, the treasurer of the Carlyle Trust

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Speaker 1: Company in Carlysle, Pennsylvania. However, the credit for the idea

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Speaker 1: belongs at least in part to a trio of shoe

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Speaker 1: factory workers. On December one, nineteen oh nine, three unnamed

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Speaker 1: employees of a local shoe factory came to the Carlyle

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Speaker 1: Trust with an unusual request. Merkele Landis later recounted that

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Speaker 1: meeting in the nineteen thirty five edition of Sigma Chai magazine,

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Speaker 1: writing quote, they asked me if they could open an

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Speaker 1: account in their joint names for the purpose of depositing

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Speaker 1: cash each week. They proposed to collect the money from

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Speaker 1: fellow workers. Their idea was to start with one to

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Speaker 1: five cents a week and increase the deposit by the

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Speaker 1: same amount every week for the next fifty weeks, and

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Speaker 1: then distribute the funds just before Christmas. Landis granted their

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Speaker 1: request and the shoemaker's account was opened that same day.

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Speaker 1: Then one week later, the Carlisle Trust extended the offer

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Speaker 1: to the public. The bank ran ads announcing the creation

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Speaker 1: of the first Christmas Savings Club. Anyone interested was invited

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Speaker 1: to deposit as little as one penny during the first

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Speaker 1: week of January nineteen ten. Then, after forty nine more

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Speaker 1: weeks of steady deposits, the account would earn three percent interest,

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Speaker 1: at which point it would be distributed. As the ad

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Speaker 1: put it, just when a little cash is most welcome.

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Speaker 1: The Carlyle Trust Christmas Club grew to three hundred and

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Speaker 1: fifty members during its first year, with each of them

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Speaker 1: receiving approximately twenty eight dollars in December of nineteen ten,

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Speaker 1: and while that may not sound like a lot, it

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Speaker 1: is the equivalent of about nine hundred dollars in today's money.

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Speaker 1: The program was so well received that the Carlisle Trust

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Speaker 1: kept it going the following year, and since the idea

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Speaker 1: of a Christmas club couldn't be patented, many other financial

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Speaker 1: institutions soon started forming their own holiday savings clubs. Maintaining

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Speaker 1: those special accounts wasn't cheap, but in the long term,

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Speaker 1: the banks knew they were a great way to reach

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Speaker 1: new customers. Early advertisements for Christmas clubs targeted families and

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Speaker 1: young professionals, the most likely future customers for car loans

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Speaker 1: and mortgages. Parents were also encouraged to enroll their children

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Speaker 1: in the clubs as a way to teach them financial responsibility.

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Speaker 1: Some banks offered incentives for opening a Christmas savings account

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Speaker 1: such as membership cards, cash prizes, or a free porcelain

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Speaker 1: Christmas bill. Some offices and businesses even gave out special

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Speaker 1: metal tokens that would count toward Christmas club deposits, a

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Speaker 1: fun practice to help keep people invested in the club

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Speaker 1: all year round. Those gimmicks proved so successful that by

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Speaker 1: nineteen sixty five, approximately fifteen million Americans were members of

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Speaker 1: a local Christmas club, and while a great many of

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Speaker 1: them put their savings toward holiday shopping, some used it

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Speaker 1: to cover other seasonal expenses, such as food, travel, or

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Speaker 1: insurance premiums. Christmas club accounts were a life saver for

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Speaker 1: generations of families on a budget, but by the nineteen eighties,

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Speaker 1: credit cards had become a much more attractive means of

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Speaker 1: facilitating holiday shopping. Unlike Christmas clubs, which blocked members from

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Speaker 1: withdrawing funds before a certain date, charge cards allowed customers

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Speaker 1: to spend money any time. Of course, they also allowed

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Speaker 1: cardholders to spend beyond their means, racking up debt, rather

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Speaker 1: than limiting them to the money they'd actually saved. Today,

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Speaker 1: the golden age of Christmas clubs is long since passed,

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Speaker 1: but that's not to say the practice has been forgotten completely.

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Speaker 1: Some banks and credit unions still offer holiday savings accounts,

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Speaker 1: and of course the idea of saving money for Christmas

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Speaker 1: is still around as well. Setting aside a few dollars

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Speaker 1: a week can make a huge difference come December. With

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Speaker 1: or without a club. But if you want that sweet

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Speaker 1: three percent interest and a shot at a free porcelain bell,

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Speaker 1: joining a Christmas club might just be for you. I'm

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Speaker 1: Gabe Luesier and hopefully you now know a little more

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Speaker 1: about history today than you did yesterday. You can learn

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Speaker 1: even more about history by following us on Twitter, Facebook,

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Speaker 1: and Instagram at TDI HC Show, and if you have

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Speaker 1: any comments or suggestions, feel free to pass them along

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Speaker 1: by writing to this Day at iHeartMedia dot com. Thanks

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Speaker 1: to Chandler Mays for producing the show, and thank you

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Speaker 1: for listening. I'll see you back here again tomorrow for

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Speaker 1: another day in History class