The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1873-06-25

brighter and more glorious than any which
preceded it.
The Savings Banks-RepOrt Of the
superintendent of the Banking De-
partmcnt.
The annual report Of the Superintendent of
the Banking Department concerning the con-
dition of the savings banks in this State,
which was submitted, as the law requires, to
the Legislature, has been printed and is now
before us. 1t gives the condition of these
banksup to the first day Of the present year.
There was on deposit at that time $685. 2S6, 621.
The total assets of the institutions amounted
to 1906, $3.50, 33L There was an excess of
assets over all liabilities of $40, S46. So
far this exhibit shows healthy condition
But, of course, the soundness Of the banks
depends, first, upon the character Of these
assets, and, second, upon their ample availa-
bility in case of crisis, in which securities
ciated. Stock Investments constitute about
fifty per cent of the entire assets-that is to
say, $153, $50, 756. Most Of these are solid
securities Of the United States, of different
States, counties and towns. Deprecated Sc
curities, as the report says will sometimes be
found; but in many, though not In oil cases,
these were purchased several years ago.
and when the States issuing them
were in undoubted credit. It will be
seen, upon looking through the SEIZED
ules that some savings banks have
been tempted too far by the low rate at which
certain Southern securities were offered in the
market to invest in them. The timely remark
is made that these institutions cannot afford
to tamper with anything doubtful, however
great the temptation. Next to investments in
bonds and stocks the largest amount was in
bonds and mortgages of real estate The sum
thus invested was $104, $50, S54. The law re-
quires that savings banks can only loan money
on first mortgage, and that not exceeding
half the value of the mortgaged property
These are safe provisions, and, while strictly
adhered to, there need be no fear of loss to
depositors from such investments, though
there may be losses to the banks occasionally
from overlooking defective titles or other
causes. The amount loaned on public stocks
was only S14, 575, 907. The cash on deposit in
banks and trust companies was So, 532, 497
The cash on hand was very small-a trife over
one per cent of the whole assets. 1t amounted
to So, 796, 1885, thus showing that the savings
banks hold very little unproductive capital
In case of q run upon them they depend upon
the prompt conversion Of their securities or
upon the aid OF other banks in the way of
loans. The small balance of the $3O5, $3.50, 331
assets is made up of investments in real es-
tate, S6,469, 430, and in loans on personal
securities and to private corporations.
The growth of the savings banks business in
this State has been extraordinary. In twenty
years the amount of deposits has increased
from 1888, 1873 to 1886, $780, 2l. Nearly
twenty per cent, or one-ffth of the people
have deposits, and the average deposit of each
individual is S346 70. The remarks of the
Superintendent on this growth are worthy of
notice. He says 1.-The large increase in
the amount of average deposits in recent
years is evidence that a considerable share of
the total deposits is not the earnings Of labor,
but that capital also has been attracted by the
safety and profit afforded by these institutions
in considerable sums, and in much larger pro-
portion than was the case in former years."
While he is not prepared at present to urge
the passage of law to prevent such an ex-
pansion of the business, he says it is easy to
perceive that the diversion Of capital in that
way may ultimately become such an abuse Of
the system as to call for legislative inter-
ference. He adds, that if the banks should
be restricted as to the amount Of individual
deposits which they may be authorized to re-
ceive, in order TO confne them to the objects
for which they were originally intended, and
if q remedy could be provided which could
not be evaded by means of deposits being
made for one individual in the names Of
different persons, the effect would be bene-
fetal upon the system and in pub
lie point Of view. In connection with
this subject he refers to the impolicy of grant
ing charters to savings banks in localities
already sufficiently supplied. Their unneces-
sary multiplication causes sharp competition
for business, and the result is that their pri-
mary object-the safety Of their loans and in
vestments-is frequently lost sight of in the
necessity of attempting to realize large profits
from hazardous securities and from COM
bination of functions foreign to the objects and
purposes Of savings banks. AS consequence
some of them have been converted into or
binary banks of discount and deposit, to buy
and sell exchange and to assume the func-
tons Of trust companies, although they have
no capital from which to make good sudden
depletions. Institutions so conducted do not
carry out the purpose of affording secure
place of deposit for the earnings Of industry,
but, on the contrary, invite disaster. The
Legislature is called upon to refuse charters
except where their necessity. is clearly estab-