Juniata sentinel and Republican. [volume] (Mifflintown, Juniata County, Pa.) 1873-1955, 1874-01-21
What thS Governor says of
State Hanks, savings Funds,
Trust Companies, and the
Exemption Law.

| still adhere to the principles laid
down in the Mifiiinburg and Woods
Run vetoes of last session. Recent
events have demonstrated the necessity
of fixing proper limitations TO the
powers conferred on these moueyed
corporations, and have afforded prac
teal illustration of the wisdom of rig
idly confniug them to objects that are
recognized BY the people as distinctive
Iy belonging to such institutions. When
bank of discount is permitted to be-
come also a savings fund, trust COM
rany, to buy and sell real estate, aud to
/ have the rights and privileges of
building association, it is difficult to de-
termine what are its legitimate fuDe
tion., or what security community
has Tor the safety Of it's deposits. /
have always entertained serious doubts
as to the propriety of banks of discount
paving interest on deposits, and am now
convinced that this pernicious practice
should be prohibited. Money will al
ways flow TO banks paying interest on
, deposits, and the large surplus thus
aggregated seduced by attractive offers
is sent to the great money centres
where it gives more impulse to specu-
/ laIiCn, while the sections from which il
is drawn suffer in all their enterprises
from the higher rate. they are Com
PEELED to pay for the money remaining
ing at home This system Of pur
chasing deposits was confessedly one of
the principal causes of the financial
c. ills of 1857, aud of this year. When
banks have large deposits on call, and
have their loans OF time, In the event
o: any great stringency IN the money
market, disaster is almost inevitable.
Within few years many State banks
have been chartered, with the captIva-
/ ting name of savings banks, designed
to attract deposits. These banks and
savings funds are entirely distinct in
organization and purpose, and should
never be associated in their manage
ment. The one is bank of discount,
intende l to supply the wants of busi-
ness, the other is simply repository
for peoples money, limited to small
amounts thus received to be invested
in mortgages on unincun- bered prop
erty worth double the amount of the
mortgage. and in secure public stocks,
in safe proportions. A bank is con-
Quoted With the avOwed object of ben
eft to its stockholders a savings fund
is presumed to be managed entirely in
the interest of depositors among de-
positors among the labOring classes, or
those of limited means and business
( qualifications, and the essential requI-
sites of which are such as prudence
and safety in the disposition of the
/ funds as will best enhance their value
/ for the benefit of these classes of de
posters. Men in charge of savings
funds should have no personal end S TO
ser.e; should be above temptation,
aud receive their highest reward in the
good accomplished By inducing saw
ing habit, which. once fixed, leads to
prosperity
/ The objects of trust companies should
be equally specific and well defined.
Some Of these companies are invested
with very extensive powers, are the
repositories OF immense sums Of money
and charged with the keeping and man
agemsnt of vast and important trusts.
1t should Re the duty of the State TO
see tha. their affairs are administered
with fidelity, not ou!y to the iudividu-
ais who contide il their management,
but to the public who are interested in
the security and stability of ti.ese COM
panies as barriers to wild speculation
and lis consequent fnaucial panics.
Allow me to suggest, therefore, that
all State banks, savings funds and
trust companies be made subject to the
examination of committee appointed
by proper authority that these insti-
tutions be required to publish quarter
Iy statements, under oath, Of the
amount of their assets and Liabilities
apd the names OF their officers tina;
by a general law their stockholders be
made personally liable for double the
amount of stock held By them aud
that they be compelled to have con
.tantly in their vaults cash reserve OF
ten per cent. of their net liabilities
These examinations, reports and re-
strlctIons cannot be hurtful to 'nstitu-
uons of established credit and high
character, while they will disclose the
unsoundness or mismanagemente Of those
that ought not to exist
THE EXEMPTION LAW.
The act of 1919 exempting certain
amount of the property of debtor
from levy and sale, on execution or dis
tress for rent, was intended for the wise
and humane purpose OF protecting his
family from sudden and absolute want.
This benevolent design is, however,
often defeated, and the law practically
! - H. lok,or