New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1879-07-29
sayings BANK FUNDS MISUSED.
SOME CURIOUS DISCLOSURES.

RESULTS OF EXAMINATIONS BY BANK SUPERINTEND-
EST LAMB-THE ATToESEY-GENERAL DECIDES
THAT SAVINGS BANK TRUSTEES ARE PERSON
ALLY LIABLE FOR FUNDS ILLEGALLY EXPENDED.
MI Lamb the Acting Bank superintendent has
addressed letter 20 the AttOrueyGeneral IN which
his opinion Is asked concerning the personal abl-
ity OF savings bank trustees for of bank funds
not authorized by the statutes The Attorney-Cien-
eraI decides that trustees are personally liable in
such csses and that the statutes OF limitations do
not hold where trustees are sull acting in that
pacity Il is understood that the Bank Superin-
teDdent will now proceed to demand restitution in
all such cases. Mr. Lambs letter says
I deem it useful and beneficial If indeed not absO-
Iutev necessary 10 give to the body Of trustees Of the
savings banks OF the state more exact and sharply
defined satement Of the limitations Of their powers IN
the management aud especially in the Appropriation,
of lie trust funds other purposes than the payment
al inter, st 20 depOsiI0rs. As understand the
laws Which regulate the conuucJ OF sucu tIus-
tees tlev may lawfully use the funds of deQostors.
beh include ali thr OF the savings banks only
In the modes specifically namsd IN the statutes.
Powers expressly granted be exercised Dy trls-S
And no more All laVs seem 20 restrict tue powers Ot
% making Investment deposits 10
WAYS and securities; to payments i9r necessary eH-
after rrssrvug something 20 hctuh"Ia'e surplus ."
meet poSsibl loSSrs. - L.,
examinations vRch shows kat Tus.o+s TOO frequently
haze vsws that ore sound. ard that Ihey 90 aoS
rhoh arr At unlawful a. believe, ana lHprCpor
In several savings bsBk- committees OF trustees nave
been paid FOR services trustees upon committees ia
one III, CHAIRMAN OF regular standing committee was
pad thousands OF dollars ior seTSlors; 'hesn nc
eorIuralion had q u stsff Of Dersy paid oiicers I'D
another savings bank staining ORDER was
made that annual supper should DE- ea1sn
bv the trustees at the expense Oh 'uo
1sug snd II WAS eaten year after year IL cost OF
hundreds OF dollars; ~ one saYluEs pIu1 no's.1
appropratsd - contribution by ths DAnE' OF us u.s
tsss 10 gvs = service OF plato " Local orgah4sr o.
railroad nlstpTise; In Two othtlsa cohI!Du.n We
made By order ofhs trustees OF each To -ld me Yellow
eyer sufferers IN south ia auotAera large sum vas
gwen, BY ordsr OF the trustees 20 a chtl'aDiS1
organization wholly independent OF the DAuA' hpu
m ms same one, thousands OF dollars hhVS
been appro rriated 70 iho wldoWs OF uec f'.i
wge they lived IN one savings bank profit and loss
account when analyzed was found 20 cover psyment
mus explained: the lawyers expenses were mostly
for cost o zsttlug bill tarOugh Ds4satuIs 70 pay Us
interest on moneys advanced he state to ouid w69
bridge over our canal, IN l574' In anothel, fIoOoo
was vot.d IA au offrrr IN lump = gratuily Tor past
services, though he had Deem ptlu 1ai-' -, -,
saving, bank nave pad money FOR alleged strNee III
procUrpg general savings bank legislation which was
never rendered IL l. dur me ersAt ln-Jol'S % "
say, they promptly spurued such GAINS oi mon -
FL frequency o. sdea Hc1S sPIg Y,ris
qure some restrotiyr @ tba s,ats has edged
Oh the par Of tue officers IN whom 'io fbs
powers for Jne sup,rVI5Oa OF such cofpor1lous'
wsest and MOST effective way, ~ iitsons of their
impress upon trustees the leEAi n.naa"" "a their
powers their Liabilities for IlISco-uuot, ga so-eig
duties TO the de oaitos whose Oy syy,iDnous ana
for certain purposes. No men are more sVi ~ ib
loyal Ia the discharge duty than kfeA' man! oi
trustees OF savings banks Inc L-oS ana tbo need OF
however. show TOO many eIceptlous anu 'ho "o ~
more knowledge or more discipline
Acknowledgement Schoonmaker. IN his reply
saysI
I'm addition 10 the compensation OF officers CLERKS auu
att0rueys expehdiure may be lawfully made nom W
iucue for the Incidental ana necessary expenses vi lne
institution such a. furniture, rents A1er, lue IkAt'
.tatiouery watchmen, and whatever may DC teiIlstv
Tor the proper management OF the trust properly dh
ia prutrcLou. Expenditures Tor those purposes "a
within the legitimate duties OF the trust DH netheI
tne deposits nor their income can Dr. hNluLy ussu
ar expended Tor other purposes. lheY cannol DO
u.ed ." 10 pay trustees cotbpenha.loh loF ser
yIces upon cummittees"; nor " the chaIIlhal,
of "A regular standing committee iOr services
AS trustee In acting as such charmAn' e.o'
toeut from the money Of depOsitors Tor Az such pnr
poses are clearly Illegal, ana render the ul9loes wv
or eousout 10 them, personally liable Tor Ia.
iyrfsl0a of TIE funds. IL h. undoubtedly INC guy %
The SUPERINTENDENT of the BANK Department 10 require
m. restitution of tue funds MlrappfopIla'c@ vi
uiJ diTerted by the trustees OF saw
iygs banE, and IN case OF failure 10 hlaAS
titutou 10 report tue facts 10 the Attorney -nehei
tiI uroerellnss may be Instituted for their recovery
scrortluc u law Nor there any DOUBT that toe is
ms, of Tie funds or their Illegal expenditure b5 mo
tiu,tees and relusul 60 make rnstituuOh, constitute
"a, sises III trust furnish ground lof the rehoFa
"a m cuipf bic trustees unuer tie provisions OF ch"p''
49, of the laws OF SO, aud tie Revised statutes Int
f, al limitations nave proper Application tocasce Oh
truf- bar lie LIABILITY OF trustees lut le& hppopta
nom oi trist funds continues while 500 trust Rotation -
t-ts pfoprr proceedings afc delayed uhtstsoh.
auer me relation ceases. recovery VIII DC Daifeu Oy
! Lanai al lGle.