Vermont watchman and State journal. [volume] (Montpelier, Vt.) 1836-1883, 1882-11-01
The Savings Institutions.

The report of the inspector of finance fur
nishes some important suggestions of legis-
lation which, if we have correctly followed
the reports of the proceedings at the state
house, have not yet been covered by bills in
troduced. A careful study of the reports of
state officials will disclose opportunities for
law making of practical character. The
recommendations of the auditor of accounts
have been embodied in bills now pending,
and it will be difficult to show any good
reasons why his suggestions should not be-
fore the close of this session, be incorporated
into the statutory law of the state. The
savings institutions very closely affect the
thrift and welfare of the commonalty, and
any laws by which the rights and property
Of this class can be guarded against danger
from disaster or from the overbalancing
power of the moneyed class should have the
early and careful attention of the law-mak-
ers. The savings institutions as class are
managed with degree of honesty, caution
and efficiency, which have not only saved
their depositors from loss but have made
their investments reasonably profitable. 1t
would not be surprising if in the best sys-
TEN of management there would be disclosed
by investigation and experience points to be
protected and opportunities for improve
ment. Mr.. Dubois in his report suggests
some of these points. We observe that bills
have been introduced to charter several new
trust companies. Six trust companies are
already doing business in the state, each
under a special charter embodying, we be-
lieve, varying and essentially different priv
ileges and provisions. The inspector re.
minds the general assembly that these COM
panies, except in the matter of making an
nual reports and requiring bonds of treasur-
ers, and other minor points, are not subject
to the general law under which the savings
banks act. He specifies important points
which he thinks should be protected by law
and expresses the opinion that a general
law should be passed under which the trust
companies should uniformly act, or that
more of the provisions of the savings bank
law should be made applicable to these com
panies He enforces his recommendation
by the very pertinent suggestion that the
people at large consider these companies the
same as the savings banks, when in fact
they are not amenable to the same laws to
any great extent.
The inspectors remarks under the head
of Investment of Deposits and "Large
Loans-Losses," are worthy of serious atten-
ton. This official considers that the prac-
tice of placing money in the hands of agents
on deposit for investment is not warranted
by law. If this practice is necessary, he
recommends that it be legalized and put
under such restrictions as shall place the re-
sponsibility for all such transactions square
ly upon the trustees. In the general search
for desirable investments, some banks have
loaned money outside the state on school
district securities. A school district in some
of the western states is larger than YER
mont town and its bonds may be Just as
good as those of town, county, city or state,
but the law, as interpreted by the inspector,
authorizes the latter but does not include
the former. II it is desirable to widen the
field for investment by removing any re-
| striction now imposed upon the banks, they
should be relieved by legislative enactment
from any such temptation, Willingly or un-
Willingly, to disregard the laws. That some
Limitation should be made to the amount
loaned single individual or firm or upon q
single class of securities, is a suggestion SC
obviously wise, and so much in accordance
with the dictates of common prudence, that
the mere mention of the absence of any Legal
restriction against such loans should be suff
cient to secure the necessary legislation
Such limitation is made in the nationa
bank law. 1t might not be unwise to invest
the inspector of finance with something Of
the authority which the comptroller of the
currency has to enforce the banking laws, ant
TO check any tendency to depart from the ways
of sound financial management especially
in case tendency is developed, as has beer
shown TO be the case with some of the say
ings banks and trust companies, to put toc
many eggs into one basket.
The entire tax on savings banks dep, sits
the inspector thinks, should remain in tn,
state treasury for the use of the state. Tn,
late able state treasurer, Hon. John A. Page
entertained similar views, and an inspection
of the table showing the distribution, as wei
as reason and common-sense, would seem Il
sustain the recommendation of the inspec
tor and ex-treasurer. The recommendation
to set aside larger sum as a surplus thai
the law now requires is a prudent one, AM
we believe the state will desire to see thi
! and others which we have briefly enumel
r ated embodied in the law of the land b.
/ fore the close of this session. Mr.. Roberti