The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1875-11-16
The Savings Banks and the District
or Columbia Bonds.


OF Columbia Bonds.
The letter addressed by Mr. Charles S.
Fairchild, the Attorney General elect, to At
torney General Pratt on the question of the
propriety of allowing the savings banks of
the State 10 invest their funds in the three
sixty-fve bonds of the District Of Columbia
touches subject of great Importance to the
people of New York. These bonds were
issued to pay the old creditors of the Dis
trict, and at the last session of Congress an
attempt was made to secure their assumption
by the United States. 1t failed, and it is not
now necessary to discuss the reasons of the
failure or the character Of the securities. 1t
is sufficient to state that the action of Con-
gress deprecated the value Of the bonds. 1t
is now proposed to sanction their purchase
by the savings banks Of New York. The
present Attorney General has given an opin-
ion to the Superintendent Of the Bank
ing Department that the officers of
our savings banks may invest their funds
in these bonds The Attorney General elect
who will take Office in less than seven weeks
has already, as Deputy Attorney General,
given q contrary opinion, and in his letter he
announces that as soon as he is installed at
the head Of the law department Of the State
he shall refer the question to the courts for
their decision. AS this disagreement with
the views Of Attorney General Pratt places
Mr.. Fairchild in antagonism to the present
management Of the Office he resigns his
position as deputy.
Mr.. Fairchild's action will be generally
approved He is to say the least, on the
safe side Of the question. Everything that
relates to the entire and unquestionable
security Of the savings bank investments is
Of vital importance to the people of the
State. There are plenty of perfectly safe in
vestments for the money Of these institu
tons. Why, then, should there be any at
tempt to give them the privilege of in
vesting in bonds upon which even
the faintest shadow of doubt can
rest? There can be only two reasons for
such an attempt. Either the people who
hold the bonds of the District of Columbia
desire to place some of them in the hands of
savings banks, in order to bring to bear
upon Congress an additional inducerent for
their assumption by the United States, or
the savings banks seek to invest in them as
a speculation, in the expectation that upon
their assumption they will rise in value.
In either case they are just the securities
which savings banks should be prohibited
from purchasing. The anxiety to place the
bonds with such institutions indicates that q
doubt is felt as to their assumption by the
United States. If, on the other hand,
savings bank desires to speculate in bonds
that may rise in value it must be prepared to
stand a loss in case their value should
decline, and this is an illegitimate ven
ture The money intrusted to such institu-
tons by the industrious poor should
be sacredly guarded, and it seems singular
that the Bank Superintendent should 60 out
in purchasing speculative securities. 1t is
still more surprising that the Attorney Gen
eral, being aware of the opinion entertained
on the subject by his successor, should fly
in the face of that opinion on the very eve Of
his own retirement from office. 1t will be
well for the depositors in savings banks to
keep watch for the institutions that invest in
the bonds in question, for certainly no pru-
IDENTIFY managed bank ought to touch such
securities with the letter of the Attorney
General elect before them.