The Rutland daily globe. [volume] (Rutland, Vt.) 1873-1877, 1873-09-24
SAVINGS BANKS.

HE suspension, or failure of savings
banks and trust companies, during the fear
full monetary panic of the past few days,
leads to the inquiry, VIVA, is savings
bunk or trust company, and why should
they be compelled tosuspcnd: In the out
set, we may say, and il will hc shown as
we proceed, that in the usual and proper
use OF the word suspension" or ''failurc, "
nothing of the kind has taken place. and
that with business honcstl, and faithfully
conducted an actual Suspension or failure
cannot ordinarily occur. When. however,
the whole business is left in the hands of
dishonest slIbordinatcs, The direction -
whose names give it character and stand
ing are derclict in their duty; when de-
posts are distracted and securities stolen.
failures and suspensions may take place,
but even then run that is general
attempt, upon the part of the mass of the
depostors. TO withdraw their deposits is
an act OF the most supreme folly, for the
injury done to the institution, is done alone
to the dcpostors both individually and col
lcctivcly. These depositors, the creditors
of the savings bank, constitute, in fact. the
institution. They. and they alone, are
interested in its welfare. and suffer by any
disaster which may overtakc it. The Sun
nysidc savings bank. for instance may
have legal. technical existence, without
deposltors or creditors, but. in their abb
sencc, il is bound hand and foot. and has
no vitality. 1t cannot do business, because
it has nothing to do business with. Its
legal cXstancc, to be sure, is derived solely
from an act of incorporation granted by a
legislative body, or an organization under
some general enabling law, wherein GER
tain individuals, their associates and sue
cessors, arc declared to be corporation for
specified purpose, with the right and power
of clecting officers, doing business, etc.
This is necessary step, but if it stopped
here, no business could he transacted, and
although it might, perhaps, be technically
true that there was such an institution. yet
it would be myth.
In orderto illustrate the truth of this, as
well as to show the folly of an attempt
under the influence of a panic OF other
cause-on the part of the mass of the
despositors to withdraw their money at
once, we will refer to q savings bank in
Vermont, the soundncss of which never
has been, or never can be, doubted, whose
charter and annual report from its origin
nearly quarter of century-arc be-
fore us it and is fair illustration. because
the principle of these institutions is the
same everywhere. Certain individuals,
their associates and SUCCESSORS are, as we
have said constituted corporation ''for
the purpose of enabling industrious per-
" sons OF all classes to invest such part of
" their earnings as they can conveniently
"spare, in safe and profitable manner. -
They, that is the bank or trustees, have
no capital stock no money subscribed
to commence business with can issue no
bills or promises to pay, to circulate as
money and, with the exception of the
treasurer, receive no compensation for
their services. The capital of the instittl-
tuition, the money with which business is
transacted, or to be transacted. is obtained
by the power granted "to receive, on de-
dosits for the use or benefit of the person
by or for whom the deposits may be made,
all sums of money offered for that pur-
pose, and manoge and impJoce tie same, "
which must be, the charter declares. IMAM
aged and improved to the best advantage. "
and the income or profit thereof shall be
divided among the depostors, according to
just rules to be made. There is, also, this
further provision, which, ut this uncture,
1t is necessary to bear in mind, and the rea-
son for which we shall entleavor to make
plain, as we go along. II is provided that
"all such deposits may be withdrawn by
the persons entitled thereto, at such rea.
- s0adbh times, and in such manner. as said
" corporation, by its bylaws, may direct"
II is the enforcement of the bylaw so
made, and with which every depositor is
or ought 10 be familiar rs an act of alb
solutc necessity and safety, which causes
1t to be incorrectly reported that there
have been failures" or Suspensions. A"
The depositors, by placing their savings in
one OF these institutions, thereby becomes
not only creditor but stakeholder there
OF. Each individual of the number is as
much, If not more, interested in its SOL
Vency, as the trustees or directors The
latter may have nothing to lose, while the
entire savings of the former are endanger-
ed or lost by real Failure" The de-
positors, II must be remembered, furnish
all the capital to carry on the business
No money can be obtained from any source !;
no money can be borrowed no bills or
promises to pay, to circulate as money,
can be issued /; but it must all come from
these depositors, creditors, stockholders, or
whatever you may, for convenience, de-
nominate them.
The money is SO placed that 1t may s.be
managed and improved to the best adj.
vantage" This cannot, of course be ac-
complished by a mere deposit of the cash
and then allowing 1t to remain, idle. The