New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1870-03-16
SAVINGS BANKS.
UNCLAIMED AND SURPLUS MONEYS - LETTER
FROM A TRUSTEE.

savings banks. lately introduced in the Legislature Ny
Mr.. Murphy of Albany. entitled, An Act to po''e or
tho transfer Of unclaimed aud surplus moneys from
savings banks and institutions for savings 10 the CUSTODY
of the State" The magnitude Of tho amounts OF money
involved by such measure. the number OF persons
IN it, and It's direct bearing on tho savings
OF the enormous mass OF thrifty workers III 'hi'
CITY, may be inferred from the following figures from an
official estimate made JAN 1867. There wero ~ 'ht
time over $l32 100000 deposited IN the savings p'"so
the whole State and out OF that sum 5oD were III '
CITY and in Brooklyn In this city there were
9O7 ,l92 deposors or one TO every TWO ana ONO INN" "
population The amount OF the surplus funds reere ~
by the bill is approximately estimated at sl2VOoov1' VI
which over twohirds, sSOOOOO is owned in Newlork
City.
The surplus fund il portion OF the earnings OF DaA
which is not paid out dividends, but Is retained III inc
control OF the bank reserve fund IN case OF Pac'
Of large loss or of any serious involvement The import
ance OF keeping such fund hand arises from INC
chances Of great financial losses which no wisdom ana
economy can entirely In any such contingency
the surplus like money laid by for rainy day. tides the
bank over the difficulty, with unimpaired credit ana
without loss to depositors. 1t 10 also necessary
for bank 10 have sufficient surplus funds TO
guarantee poor depositors against loss In order
to gain tho popular confidence requisite to
prosperity The first question the new depoSitor asks
before handing in his money, ia, "How much surplus
have yOu gotp "What security have that SHAH no'
lose this money!"
The ct Of Mr. Murphy's bill Ia in the first and third
sections Tie first section refers to this surplus fund'
and ordains that the Treasurer or secretary Oh every
savings bank dong business in this State SHALL WDih
co days after the passage Of this act pay over 10 'He
Controller Of the State per cent Of all moneys belong
ing at the time of the passage OF this act to said bank
which have accumulated from the net earnings oil tho
institution and which known as surplus funds ana
If any OF said moneys invested in any real OF per
sona property any security, 1t shall be the uuy VI
the Treasurer Secretary Of the institution 10 uso'
OF said property at public auction, to the highest puoi
after advertising said sale for co days after the passage
OF this act and pay over to the Controller ~ per cc
OF the whole amount of the proceeds thereof
The policy OF the State has always been to foster ana
encourage these institutions and though during the past
Is years many efforts have been made to get hod Oh 'uc
surplus funds none have been successful. Less'"'o
committees have been appointed as In 1852 TO eN'no
the affairs Of OF the older and weather. savings III
suons but they have always reported against inter
ference The bankers declare the present bill Is out
roroou and unconstitutional In the charter OF most
saving, banks which contracts made with the trustees
and depositors by the state, the following proVso is "
serted in substance We shall divide all the earnings
pro rata among the depOsitors, reseryng iund ho'
greater than 10 per the deposit as surplus unn
70 e end that any loss or depreciation Of the securesor
property Of SAID bank shall be made good TO the dpoor
from the said surplus fund The bankers CONSUMER
that this surplus fund is much the properly OF tAe
depositors al any time as their deposits and equally
trust and that the State 10 moro take that iuhd
than she could the deposit Itself In a somewhat similar
case which occurred in neigborng city week or two
ago legal decision given in favor Of tho banks
The State Of Pennsylvania sought TO cscheat 100000 OF
the surplus funds Of the Philadelphia Savings Fund
Society on the ground that its owners were dead and
that il was without an The Judge held that the
obvious purpose Of producing fund by improving ana
tho NJ
adequate security for the repayment "f drpo'ltpfS,
ard that the attending the administration OF the
Investment detracts nothing from the charter night 10
enjoy the accumulation for the true uses OF inc society
Also that the Society capable Of being the owner
inseu nasmuch as it has been casscd by the Lcgsla
ture with other business associations such as banks IN
surance companies &c, ior the payment oi '"A''' un'
The object TO which this great Of six millions Of
banks cannot but cause a smile play the counc-
nance even Of the disintercsed observer It's To be
funded and the interest PAID over annually 10 the on
troer. to be used for the erection OF The new capitol
Section Of the bill strikes at anothcr OF the sources
Of the prosperity OF the banks 10 VII tnel long deposits
" All moneys credited upon the books OF SAID savings
banks to the account OF individuals having deposits IN
said institutions. upon Whlch teIe mas btch htitA,F
deposit draft, ana on which the interest or any por
ton Thereon has not Deeh pau WITHIN p'Iod OF ~
years, shall be pald over 10 lhc ColIocr' lie SHal
pay the same into the state Treasury and
shall cause the Same TO be placed to The credit Of the
person IN whose name the deposit was originally name
urged IN opposition 20 THIS that deposits are made by
persons on inc suppression that NY VIII * sal' ana
they are very often LETT over 10 ana even 20 years ana
claimed AGAIN. II is important that the dVOSOr should
confidence The fdth OF the STATE, pledged
money aud that it shall continue in the custody OF the
same corporation TO "nich ~ "a' is, uulteu; Ho
,camon's Bank has Deeh epechl oY.tt Tor cst@tNc
attention. but 10y the Committee ~ lal2 very few cases
were found where deposits had been left unclaimed. The
President OF the B9"ery BANK says That WITHIN alcw
days deposits have beer called for which have been uu
claimed for over 20 years. and that II rarely happens that
which has been unclaimed for 10 years is small
every case In one bank OF over sOO0JO OF assets 1t
section Of Mr. Murphys b.l "a intended to enforce
o~cr the Treasurer Secretary any savings bank,
institution for sayngs snail al To pay the moneys
to be punished with fine Of not less than
Than five years with both fine ana Imprisonment"
tom the Committee on Ways aud Means rather than to
the Committee Banking 1t has been reported avoribly
from that Committee. and committed to Committee q!
the Whole. The hope Il generally expressed that II
passed it Will not be until after long aud careful deber
4 letter from trustee is appended. which indicates
the feeling Of the banking interest on the question
10 the Edior Of The Tribune.
SIR: IN order correct prevent the mislpprohen-
sion ana mischief which may be causcd ly tc many
correct aud unfOunded statements which have cmauatcd
from Albany, ~ regard to the management and resources
q the savings banks Of this state, present few PLAIN
statements capable a. demonstration by official records
]. il has bteh "LIh tIc present week asserted BY
member Of the Assembly, that onrfh of tho
-ayng, banks Of this State atc buIdcucd with needless
Aptu-cs; mat tAIdFhgdht h'ta'' hie pad 10 ohccrs
and Executive Committee ana hat large counsel fees
u is asserted also mat tAoIe are ~ many oi these
banks, immense amounts q unclaimed deposits. which
purposes not contemplated by law aud OF benefit 10
the dcpostUrs s. And II IL claimed that dcpOs.tOrs by
these cAtrdvapuu expenditure, dciTaudcd Of the
lust earnings OF their deposits. II Is also alleged that
savings banks have surplus safety funds too large for
the purposes for which surplus has been authorized 10
be reserved and that part Of the surplus should DO
iscatcd and placed Ia the Treasury OF the state
luasmuch very large portion Of the mOncycd capt
tai OF the state belongs 10 dcpositofs IN savings banks
and as the corrupt dishonest, incapable management
OF these Institutions would the Of tho
at large affect Ia degree the character
and standing Of all, the following facts be OF inter
est at this time.
The first savings bank In the state OF NeT-YOrk was
Chartered In the year 1879 and up 10 the present time
many hundreds OF millions Of dollars have been |
received and invested by the managers Of these ins
TONS though several occasions the commerce and IN