Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1883-10-19


that they must not be trustees in any other
savings bank; that majority of them must
not be directors IN National or State banks
that they must not borrow, directly or in
directly, the funds Of the corporation. No
deposit In excess Of $4,000 shoald be re-
ceived.
As to investments, the committee believe
that savings banks should be restricted to
the following: Securities for the payment
of which the faith Of the United States is
pledged the stocks or bonds Of any State
in the Union, which has not for the period
of ten years prior to investment defaulted in
the payment of either principal or interest
OF any debt authorized by the Legislature
thereof the municipal obligations Of coun-
ties, cities and towns, issued for municipal
purposes where the net Indebtedness does
not exceed five per cent OF the assessed val
,atiop, regard also being tad to population
| first mortgages on real estate, the amount
of the loan not TO exceed two.thirds Of the
actual value Of such real estate, but not over
| fifty per cent of the deposits should be loan
ed in investments OF this class; first mort
gage bonds of railroads that for five consecu-
tive years preceding such Investment have
not defaulted in the payment of interest up
on their obligations, and In addition have
annually paid dividends amounting to at least
five per cent; stock OF any National or
State bank, provided no savings bank shall
hold more than five per cent Of the stock Of
any such National or State bank.
In real estate, savings banks should be
limited to, first, building requisite for the
convenient transaction of their business, and
from portions of which, not in use, rev.
cnue may be derived, the cost OF which
should not exceed five per cent Of the de-
posts, and second, such as shall have been
purchased by them at sales upon the fore
closure OF mortgages owned by them, or up
on judgments or DEGREES obtained or render
ed for debts due to them, bat all such real
estate should be sold within five years after
it shall be vested in them.
The committee further make some general
recommendations. Savings banks should be
allowed to deposit, subject in all cases to
immediate payment in any National banking
ASSOCIATION, State bank or Trust company,
sums net exceeding IN amount ten per cent
of their deposits. No savings bank should
be allowed, in any case, to loan on personal
security of any kind or character, as such
Investments "do not possess the clements of
security that should be thrown around the
investment of these funds. There is another
reason. A line of demarca,ion should be
drawn between the business Of savings banks
aud other financial institutions. They should
not discount paper, buy or sell exchange,
collect or protest promissory notes or time
bills of exchange, cor otherwise trespass on
the proper business of discount banks"
Every savings bank law should provide
That, before the declaration of any dvi-
dend, there should be set aside, as a surplus
fund, from the net profits which have accu-
muated during the preceding period. not
less than one-lourth of one per cent of the
whole amount of deposits, until such fund
amounts 10 fifteen per cent of the whole
amount of deposits.
As to the important matter OF State super
Vision, the committee say: Among the
various recommendations which the commit
tee have made already, and will make, there
is none of greater importance for the sccuri
ty of deposltors than that every law should
provide for full system Of reports to, and
examinations by, All authority having an alb
soute power TO remedy abuses. There is no
better system that can be devised in this d.
rcction than that in use In New York, and
the committee would recommend the follow
ing as near as possible OF that The New
York system is, briefly stated, as follows:
at shall be the duty OF the superintendent
OF the banking department to communicate
to the Legislature a statement of the condi-
ton OF every such corporation from which
report has been received. 1t shall he the
duty OF said superintendent, once in two
years, either personally or by some compet-
ent person or persons to be appointed by
him; to visit and examine every savings cor
poration in this State. The said superlnten-
dent and every such examiner shall have
power to administer an oath 10 any person
whose testimony may be required on any
such examination, and to compel the appear
ancc and attendance of any such person for
the purpose of such examination, by sum-
mons, subpoena, or attachment, in the man.
mel now authorized in respect to the attend
ance OF persons as witnesses in the courts OF
record of this State
When it appears to the superintendent that
any corporation has violated the law, or is
conducting its business in an unsafe aud I'm.
lawful manner, she shall, by an order under
his hand and seal, direct the dscontinuance
OF such illegal and unsafe or unauthorized
practices"
Semi-annually every savings corporation
shall make report in writing to the superin-
tcndent OF lis condition, statement OF all its
liabilities and investments, and such other
things as he requires.
These are important suggestions and valu-
able recommendations, and ii is to be hoped
they will bear practical fruit. Especially
important is the matter Of State supervision.
Recent events have proved that the Vermont
system is little better than q sham and a
humbug. 1t needs thorough oyerhauling
and revision, and the present is an excellent
time to dicuss aud consider how to do 1t.
Personal AND POLITICA L NOTES.
A National Army of Retributionn has