The Quiet Disappearance Of The Safe Deposit Box

The Quiet Disappearance Of The Safe Deposit Box

Michael Waters  December 2, 2022 Very Informative & Interesting

Once revered as the safest way to store physical valuables, safe deposit boxes are now being phased out by major banks. The move is already starting to backfire.

In the opening sequence of The Bourne Identity, a young Matt Damon wakes up with no idea who he is. All he has is a code — the account number for a safe deposit box in Switzerland.

At the bank, an attendant leads him into an elaborate steel vault, where he’s presented with a safe deposit box. Inside are the first clues to his identity: a gun, a watch, stacks of cash, and a series of passports under different nationalities, including one bearing the name “Jason Bourne.”

Over the years, safe deposit boxes have become iconic — a staple not only of the banking industry but also of heist movies and spy flicks. Inside Man, The Dark Knight, Casino, and The Da Vinci Code all feature pivotal safe deposit box scenes.

In Hollywood, safe deposit boxes are so prominent, in fact, that it’s easy to miss the seismic changes racking the industry: In the wake of the 2008 financial crisis, big banks have quietly abandoned the safe-deposit business.

Both HSBC and Barclays have shuttered their safe-deposit services in many countries, and Capital One joined them in 2016. Most recently, this past September, JPMorgan Chase announced it was phasing out its safe deposit boxes, too. In the coming decade, other major banks seem likely to join them.

What went so wrong?

The Rise Of The Safe Deposit Box

The Civil War was just days away when a New York businessman named Francis Jenks stumbled on an idea that would change the face of the banking industry.

In March 1861, while on a trip to England, Jenks — the moneyed son of a Harvard professor — began to wonder what he was supposed to do with his valuables while he was out of town.

He decided to create a company that would store items for New York’s “fashionable inhabitants,” who wanted to, say, decamp to Europe for the summer.

Rather than worry about burglaries, Jenks suggested that the urban elite store their books, wills, jewelry, tea sets, and silver with him.

He opened a massive, marble building in lower Manhattan, complete with a thick steel vault. Inside, he offered 500 safe deposit boxes to customers.

To ensure the safety of the boxes, Jenks required two keys to unlock a box: one key for the customer and one key for his employees. Guards armed with muskets stood in front of the building at 146 Broadway through the night.

He called it the Safe Deposit Company of New York.

It was the first company of its kind — and as the Civil War broke out, demand soared. Bold-faced names like the Vanderbilts, the Guggenheims, the Roosevelts, and more began storing their valuables with Jenks. Hetty Green, the millionaire businesswoman, maintained a private vault so big that it could fit a desk inside of it.

It was such a success that copycat safe deposit box companies began proliferating across the US, with names like the Mercantile Safe Deposit Company and the Lincoln Safe Deposit Company.

While the first safe-deposit companies were stand-alone organizations, dedicated solely to safekeeping, major banks soon got involved. By the early 20th century, nearly every bank in America had a safe-deposit arm.

The Tricky Economics Of Safe Deposit Boxes

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