, 1872-12-03

identical deposits if placed to the credit o.
savings banks in a National Bank, as is frequent
" tho case, are subject to tax of Il per cont
per annum. It is evident that Congress- intend.
ed to discriminate in favor Of those institutions
Which are organized for the purpose Of receiy-
! ing anu investing savings for the benefit of de-
posltors. aud not Of shareholders.
The official report of the savings banks in Now
/ England show the deposits at the close Of the
year 1871 to have been S312, ,333, ,479, or more
than three times the amount Of the aggregate
| deposits in the National Banks. The deposits in
| the savings banks Of the State of New York. at
the same date, were S267, ,905, 1865, sum also
considerably IN exceEs of the deposits Of the
National Banks Of TINT State. A large portion
Savings banks in some portions of New England,
| New York, and Pennsylvania, as well as other
| States, have recently become formidable compe-
| titors Of the National Banks by Offering much
larger rates of interest for deposits than ls sual
| IN weu-managed banks.
The proper functions of savings banks are to
| make safe and judicious Investments Of tho
| funds intruated to them, and, at specihed times,
to divide the earnings among the deposltors !;
put TOR the purpose OF ' gd on1 o.
| do business with regularly organized banking
| institutions, the custom prevails, to large ex-
| tent, Of offering high rates OF interest for de-
| posits before dividends have been earned. The
| tNA@5
able extent, endangered by Investments in street
| paper, in loans to the managers Of such insttu-
tions, ana in speculative securities.
| Tho savings banks are among the most import
| ant business institut ions OF tho country and
they should bo fostered and maintained; but at
| the same time they should be restricted to O
legitimate savings bank business, and not allow
cd to encourage violations of usury laws, nor to
be controlled by the personal interests OF share
! holders, managers, or trustceB Frequent publ
| cations Of reports should be required and their
affairs subjected to rigid scrutiny from time to
| time by competent examiners. Special charters,
with special privileges for savings banks and
trust companies, should not be granted, but all
such Institutions should be organized under gen.
eTal laws. The passage Of such law for tho
District Of Columbia, with judicious provisions,
would be productive Of beneficial results and
would afford an example, not only for those
but also for the older States, whose present say
ings bank laws are liable to great abuses.
LOCKING UP dREESBAcKs.
The act Of February 10, 1860, provides "t that
no national banking association shall hereafter
offer or receive United States notes or national
bank notes as security, collateral security,
for any loan Of money, Or for consideration
shall agree to withhold tho same from use, or
shall offer or receive the custody or promise Of
custody Of such notes as security, or as collat-
eral security, or consideration, for any loan of
money"
On the 5th of April last the Comptroller WAS
| advised that bank in the city of New York,
! with capital of 81, 100000, and whose average
exchanges Mt the Clearing House did not exceed
$500, 900, that morning creditor at the Clear
ing House for 81, 10000. As it was evident that
this large credit was not the result OF legitimate
business, the Examiner was directed to make
! an examination OF the bank, which was i'm
mediately done, in connection with q member
of the Clearing House Committee. From
the examination, which was thoroughly and
carefully conducted, it appeared that deposits
had been mado in that bank, by one individual,
upon the morning Of April 5, to the amount OF
81, 100, 900, the whole of which was drawn out
upon the same day, upon the checks OF the de-
positor, in legal-tender notes. The President OF
the bank denied that the bank had any interest
in these transactions, and there was no evidence
these deposits. These transactions we're the
subject. subsequently, Of an Investigation by the
Bank Committee of the House OF Represents
tives, and although it was clear that the spirit
Of the law had been violated, no evidence could
be obtained to warrant the commencement Of
suit for the recovery Of the penalty prescribed
in the act referred to. The investigation un-
doubtedly hnd the effect to prevent the repeti-
tion of similar transactions no offences of this
kind. on the part of any National Bunk, having
Comptroller.
Tho New York Clearing House Association
subsequently passed & resolution declaring s'that
the Clearing House Committee be aud is hereby
A4AN~s9Ny
that legal tender notes have been withdrawn
from use through the agency Of any bank, mem
ber Of the Association, to make an Immediate
examination Of the bank in question: and should
there appear to be completely on the part of the
bank or lts officials, to suspend said bank from
the Clearing House until potion Of the Associa-
ton shall be taken thereon
The withdrawal Of currency for illegitimate
purposes, has, however, since been accom-
plished without the assistance Of tho banks.
The rigid enforcement Of the resolution Of the
Clearing House will prevent completely on the
part Of the banks IN such transactions; and If
tho New York Stock Board aod the leading bank
ing houses will unite with the Clearing House,
and refuse to transact business With unscrupu-
lous men, VINO do not hesitate to embarrass le-
gitimate business for the purpose of increasing
or diminishing the values Of stocks or bonds in
which they are temporarily interested, they can
do more to prevent such operations than any
Congressional enactment.
EsoLvESr BANKS.
Twentv-one National Banks, organized in
eleven different States, with an aggregate capi-
tai of s. 2s6, ,1oo have failed since the oEganiza-
tion Of the system in 1868. The total circulation
OF these banks 50, 942, ,793, Of which 52 ILL.,,
430 has been redeemed in full, leaving 8 balance
still outstanding of 9501, 1858. which will also be
redeemed, upon presentation to the Treasurer of
the United States, from the avails Of United
States bonds held as security for that purpose.
OF these banks, five have been finally closed,
1.-TWO during the past Year,, having paid diri-
dends to their creditors, as follows:
Amount Of Dfri-
Name and locationof Capital c{aims d'dsp'd
bank. STOCK proret, per ct |
First, Attica, y. Y........S 1900 $122,059 IS
First, Medina, n. Y........ $4,000 170,1G5 s31
Tennessee, Memphis Tenn 100 900 375,o32 Tx
Grotons New York City,. COG 1!o,753 esH
First, Keokuk, 1owa....-. 100000 2o5,256 6sH
Six National Banks have failed during the past
year, as follows:
Nam, and ,ea ca1a, A@S91|s sfs ,d3s5 Psi <norz,
oFk knuk | xfarE |