The Vermont watchman. [volume] (Montpelier, Vt.) 1883-1911, 1883-08-22
Protect the Savings.

Trust Company will plead with future
Legislatures with more persuasive elo-
quence than the governor or his lieuten-
ant, the inspector of finance, could have
employed upon the present or the pre-
ceeding general assembly for the enact
ment of proper laws for the government
of savings institutions and trust COM
panies. BY as much as example is stronger
than precept, by 80 much will the st. Adams
preacher prevail over the milder official
expounders of the dangers that lie in wait
for reckless and unheeding financial man.
agement. In the only school at which, as
the proverb runs, fools will learn, the wis
dom of the recommendations and the
reasonableness of the warnings of the
state financial monitor, at too late day
for those who have confided in the st. AL
bans Trust Company, will be assiduously
conned and the bars raised, so far as stat
utory law can raise them, against the re-
currence of a similar prostitution of trust
funds. Notwithstanding the fact that
more than year must elapse before the
legislature will meet in regular session,
there is no danger that the point of the
warning will be dulled, or that such rec
concentrations as will then be made will
again fall upon body so apathetic or so
pre-oocupied by other matters as to be I'M
mindful of the protection needed by the
forty.six thousand owners of the $l4, 000,-
900 of hard earned money now in the
hands of the savings institutions of this
state.
Previous to 1857 the savings banks
were kept, for the most part, in the then
existing state banks, and the officers of
the latter were generally the officers of
the former. In that year the legislature
enacted that no officer of savings bank
shall at the same time hold office as presi-
dent, vice.presidept, cashier or treasurer
in bank of discount. Cashiers and presi-
dents of state banks who had been, as
treasurers and presidents of savings banks,
pooling the funds and management of the
two institutions resented this measure as
an imputation upon their integrity, but
the law was a wholesome one and the
comfortable bed-fellowship of the two in
situations was broken up. Considerations
of convenience have, however, induced a
cohabitation in certain instances, in viola
ton of the spirit, if not the strict letter,
of the law divorcing these institutions.
Some savings banks still have their places
of business in the same room with the ma
tional banks and, though nominally under
separate boards of officers, the cashier of
the national bank is practically the han
dler of the funds and the manager of the
savings banks. Up to 1878 savings banks
were conducted under individual charters,
with provisions, privileges and regula-
tions as diverse as the number of the
banks themselves. In that year, upon
representations made to him, Governor
Proctor recommended the enactment of a
general savings bank law, bringing these
institutions under regulations, require
ments and restrictions that were uniform,
and such law was passed. The law may
be improved and strengthened in some
essential particulars, still it has served to
bring these repositories of small savings
under wholesome control and wise limita.
tions from which the trust company, a
sort of a combination of bank of dis
count and a savings bank, is in large
measure exempt. The trust company came
into existence after the national banks
had usurped the places of the old state
banks. The pioneer was the st. Adams
company, chartered in 1868. Since that
time many others have been chartered
and seven have organized and are doing
business. OF these, two each are in Bur
lington and Rutland, and one each in Mont
pelier, Richford and Bradford. Each has a
special charter with diverse privileges, reg
ulations and restrictions. Some are al
lowed to make loans to their officers to an
amount not exceeding three per cent o.
their capitals, some have larger liberty
and some are prohibited from loaning
funds, directly or indirectly, to any o.
their officers or employees. Some are al
lowed privileges that are denied to 9th
ers. An inspector of finance, to know
with precision what are the requirement.
and prohibitions of the different charters
needs an encouragement at his elbow
Five of the eight trust companies-two a
Rutland, two at Burlington, and one a
st. Albans-are kept in national banks
and as general thing the officers of thu
! one are the officers of the other. Tn,
money and the management are pooled
the trust company is apparently a "run
7 ming mate y to the national bank to en-
I able the latter to make better financia
: 81 time" than if it were driven singl,
J. under the national banking harness. Fiv
a charters for new companies were grantee
= at the late legislative session, but onl.
9 two have organized and are doing bust
8 ness. Whether the number is increase,
d or not, it is plain that these compsnie