New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1878-03-27
ORR SAYINGS BANKS,


On the whole the annual report of the State
Banking Department shows a very satisfactory
condition of affairs In our savings banks. The
restrictions imposed on them by the act OF 1919
have proved in every respect judicIous. Nine
banks failed in this State last year; but, as
the report justly says, not one or them
ever should have been organized. The sum
they owed to their depositOrs, $1,6OO,OOO, IS
little more than the half of l per cent on the
total deposits in tho State. The actual loss 10
depositOrs is much less than even that small
percentage, since nearly all OF the broken
banks will pay something, and few Will re-
turn more than 20 cents OH the dollar Inc
present is a period in which feeble ana
badly managed trust concerns must lneV-
itably be weeded out. The process, applied
to the savings banks of our State, has
proved far less destructive than with other
classes of moneyed corporations and COM
harrison with the heavy misfOrtunes of such
banks in adjoining States is exceedingly favor
able to New York. There is, besides, far rea-
son for hoping that the trials of our savings
banks are nearly at an end and the confidence
of depostors has not been SO shaken by any OF
the failures here rs to cause general runs"
such AS have occurred in Newark and in sew
eral cities and towns of NewEngland.
Another indication that these banks are not
losing in popularity may be found in the IN
crease in number of accounts opened last year,
over those that were closed. The statistics
give this increase at nearly $4,000. This Is
the more remarkable not only as occurring
during time when wages are low and many
working-people are in want of employ
ment, but also as following directly
upon the reduction of the rate OF in
terest to per cent. That reduction
has. indeed caused some withdrawal of de-
posts, but this seems to be almost wholly on
the part of larger capitalists, who had pre-
viously used savings banks merely as a con-
venience for investing their funds. That Is
use which is not to be encouraged. 1t is in
furious in several ways, especially in rendering
the banks liable for large sums on call, and
thus precluding them from investing the
money in such permanent securities as mort
cages on real estate. A further limitation of
the rate of interest on very large deposits
might ultimately benefit the community, as
well as the savings banks, by forcing more
active use for idle capital
There is q reduction of surplus as well as OF
deposits, though the decrease of neither Is OF
serious significance. The falling of in surplus
is doubtless chiefly due to the decline in value
of United States securities at the close of last
wear. when the Silver Bill was pending.
1t may be roundly estimated that this
loss dminishes what the banks would
have otherwise gained in profits, by
about three fourths of l per cent on the
deposits; but it will not probably reduce the
rate of interest paid. below the per cent
limit. While it is evident that the savings
banks of this State can continue safely to pay
per cent. it seems unlikely that the postal
bank scheme, offering only per cent, will, if
authorized by Congress, entice away many
J.nn