New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1871-03-02
RAID ON SAVINGS BANKS.

THE GROWTH OF SAVINGS BANKs-THE BILLS Be
FORE TIE ALBANY LEGISLATURE 49, BANK
OFFICERS AT THE MERCY OF THE STATE
NsPFCTOR-ANOTHER ATTEMPT TO SEIZE
THE SURPLUS FUNDS AND UNCLAIMED DE-
POSTS.
Two bills affecting savings banks have been
l,elv introduced into the state Assembly, of which
seriosly cndanccrs the independence their officers
and trustees the other is adverse the interests OF
the depositors. The first bill is entitled. An Act to
amend an in relation to Savings Banks, passed March
D. 1861 and 10 confer additional powers upon the super
intendent of the Banking Department in relation TO
savings hanks in this State" The second hill is entitled
An Act to provide for the transfer Of unclaimed and
surplus money nom savings Banks and Institutions for
Savings 10 tie custody of the state"
ucOnsderng thc provisions otheSc two proposed acts
necessary to review the growth and progress of saw
iucs banks they frs instituted in this state
THE Bank for savings in the City of NewYork" the
pioneer OF this class Of institutions in this State. 1t
organized 29h November 1876 but did not obtain its char
ter tin "a March 1872 1t opened for receiving de-
posts the following Sd of July Among its first rus
tees were such mon Henry Rutgers DE Witt Clinton,
James E1stburn, John Pintard, Richard VaTick. and
William BayaTd. THIS three years after the opening
iu Philadelphia of the first bank in the country The
number Of accounts opened in the first six months OF the
business OF the savings bank ljz7, and the amount
of deposits St4,sO a. According 10 the last official
report that bank had C5c73 accounts open, and S56C36
deposits. In 1915 there u savings banks
in the state with Ss.6C953s deposits. The
report FOR showed y banks $1,000 depOsitors,
and SG545O59, deposits On the st Of January 1870 dhe
report up OF January, 1871 is not yet publishe,
there L. banks, 65l4 depOsitors, and deposits
amounting to S19i,CO299 the interest which to the
credit Of the dcpositOrs $O32O2O7 The aggregate
transactions OF an tho banks since their Organization
amount to more than 81 OOOO0OOOO and yet in all that
time the total loss their depOsitors has not amounted
TO sOOOOo less than 100 Of one per cent Without
assumiu that the Of savings banks is perfect, 1t
i fair 10 assert that system which has achieved so
marked success quite unequaled in other
commercial brlnches-shOuld not be subjected to ncon-
siderate and unnecessary legislative interference,
pcciay Of character to disturb the confidence OF the
depOstors.
The first bin, the for comforting additional powers
ON the Superintendent of the Banking Department is in
tended 10 hlyo the effect of producing extreme sub
scryency tha part the bank officials and trustees TO
state o and hence 20 political control The first sec
empowers thc superintendent TO examine the affairs
ofanv saving, bank and call before him, 10y Summons
subpoena, attachment" such persons he desires to
examine either as pr ncpas witnesses. The prOduc-
Of all books and papers is also compulsory under
this section. Section 2 says;
II uiu't shall appear that oFcer trustee Of
OF violation
OF he Oh m such .'uss Bank OF o:an statute o. The STATE IN a
tt n officer iras incompetent respect % iiych'rg
hr duties Of d on ac suleTiaienn .. hwlh nae me- any
% an T % A15 fbe Srre rjBtepIep shah mmei.
person examiner examiners Aforesaid proceed
20 @ ID, le'I o.. ifr 50 su1fnoe9 IN Tspset 70 @ =
A appear any Of them. sustained The us
removed from ofce and an order 10 that eject nv
~ 80 removed
This section If enacted. will constitute the Inspector
acciser prosecutor. judge in the and,
Isl, far rs two OF the charges enumerated mismanage
mont and ACKNOWLEDGEMENTS concerned the accused |
will be dealt with not on facts, but entirely at the DIS
erection Of the Judge, with laws for guidance and |
with no court Of appeal This is most dangerous
power 20 place in the hands OF man, hut Is rendered
-t more so by last clause Of the section. which
ouscts:
The renc which may be I'd under ta provision;
M In ms proyi.i however tla, ID, SnIern
rnt shall have power t. 3ee such portion Of -aa Fghe as may
go IN sen lr' ie ulo9 me lfis w., i l nv r,Us ~
m"ei lni an ac,an for such ,n-ys may 10 m'u-v m ,a r
sor,s5 '-' '''''"'
What rich source whence to exor back-mail for an
inscriptions inspector! lie would have power to sum
mon any number Of Witnesses and involve the in
any amount expenditure, and he is 10 determine what
portion the offending shall pay. The cost Of trial
might easily up TO thousands Of dollars Many
trustee would Willingly pay handsome sum down, to
escape such risk many would prefer TO retire at once
from an office from which they receive remuneration,
rather than incur the risk Of expense and the odium of
undergoing public prosecution. If any portion of the
expense sadded the trustee or officer mourning
thr superintendent suspicious luminosity the bank
could pay 10 without classifying their accounts be-
thu Inspector would refuse 10 pass Such accounts
m his next report. But the dread O the exercise OF Such
ID mower t9utly before them would be apt u l'ad
WtatriYdod Trustees 10 propitlae the inspector from
tim, 10 tiuc so insure immunity from prosecution
j. -bon,> Trustees would OF course do III order TO be
allowed 20 continue in their course OF dishonesty. such
20 of Procedure as this bill constitute would he the
vor-t kind of star Chamber; and The result ~ouId be
that AN careful business men, unc0nDected with politics.
would promptly decline positions a. Trustees or 0ncrs
ot Say.ag-iaub- and their places would be hled by
rir poll icilrs that are in favor AT Albany
The second h that which provides Tor the transfer or
unclaimed surplus money 10 the custody OF the state,
;, open % iunuueahle objections Of more or less ser
character. The first section enacts that the Treas
1fr IN
ha. within 90 days after the passage Oh lhis ac PHI
over 10 De paid over % the COHifoer OF Tue
state per cent OF al moneys belonging at the time OF
passage Of this act 20 SAID savings bahks or Ilsu
for savings which have accumulated nom the net
surplus funds, Ihe expectancy OF gi''uuSN a' S
latug surplus fund was forced On the officials by eX-
uoWlcdscd by the Legislature twelve years after the
opening OF the first one. In 1881, an amendment to the
Wa, passed. authorizing the Board of Trustees
"tO accumulate gradually, and hold invested, surplus
end hat IN Of reduction IL the mGrt price
Of ne pjc stocks and securities. held 10 be held by
deoosors IN reason OF such reduction may BE- prereRted
mute g0"d bg mans Of NE sad Jir'd' Other banks
policy approve that in 1896 further amendment was
passed Increasing the surplus from 10 10 per cent OF
made the 10 per cent surplus clause applicable TO
AN Saving, banks. Here is fund the policy
AZ creating which none doubt, accuuu-
lated. me proposed act acknowledge " from
The net earnings Of the banks 80 per cent of which the
Hon, II d. Murphy ~ Kings County desires Ia cOnhcae
for the especial benefit Of the Canal Fund, utterly |
regardless u the certainty Of thereby weakening the
me nef earning OF the money Of the depostors, and
L. thep fore, much their property as the reserve
The state cannot legally seize on these surplus funds.
The, essentially private pIopeLH though iRlrusttd
section Of Inc frt article Of the Constitution Of the State
enacted that private properly 'a b3t oe taken Tor
i i, ~ .iorsfs appointed by Court OF Record
Lie