The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1883-10-12
Savings Banks and their Manage
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At tho annual meeting of the Bankers As
socistion last year, a committee iof three was
appointed on motion of Mr. W. e. Gould ITO
take into consideration the laws of the various
States regulating Savings Banks, and to pre-
pare for the next annual session Of this associa-
ton plan for organizing and maintaining
such institutions, whereby certain essential
features may be incorporated into the several
State laws so that banks of rhis class NAV be
controlled by more uniform legisla ton"
This committee presented its report at the
annual meeting Of the Benkers' Association in
Louisville, KY, on Wednesday They first
presented synopsis Of all the general laws
regulating savings banks in those states where
there are such laws, that is in all the New En-
gland States, New York, New Jersey. Mary
land, Ohio, Michigan, Indiana, Wisconsin and
Minnesota. They then present summary OF
the conditions which appear TO be generally
recognized by these laws as essential and make
the following suggestions:
Every sound and healthy savings bank law
should provide as its first great governing eie-
ment, that all savings sinstitutions organizing
under its provisions, shall be strictly mutual.
Only those savings banks that are carried on
in this way can be truly said to answer the re-
quisitions of their definition, 'that they are
tions."
They alone are calculated to attract the
earnings OF the poorer and industrial classes.
Many dangers present themselves to our view
in that plan, where savings banks are organic
ed with capital stock, and, after paying a
percentage to depositors, divide the surplus
profits among the stockholders.
Each bank is run only in the interest OF the
sSning man, ate afSsr buying % Gp co controllng % IN
terest of the stock, to subvert the entire fund
to his own use or benefit.
In place Of the system prevailing in Maine
and Massachusetts, OF a large number of cor
porators who elect from their number d5ssR-
mated number of directors the committee APP
prove OF the New York system in which the
trustees themselves are the corporators, re-
newing their numbers as vacancies occur.
They think also that the limitation OF the
amount to be deposited by any one depositor
should be strict The sum they maintain as
a wise limit Is $1,000. With regard to invest
ments the committee recommend that such
institutions be confined to the following,
/; Securities for the payment of which the
faith of the United States is pledged.
2. The stocks and 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
3. The municipal obligations of counties,
cities ard towns, issued for municipal pur.
poses where the net Indebtedness does not ex-
coed five per cent. OF the assessed valuation re-
gard also being had to population.
4. First mortgages on real estate, the
amount Of the loan not to exceed two thirds Of
the actual valce of such real estate, but no.
over fifty per cent. of the deposits should be
loaned in investments of this class.
8. First mortgage bonds of railroads that for
five consecutive years preceding such invest
ment have not defsulted in the payment Of
interest upon their obligations, and in addition
have annually paid dividends, amounting to at
least five per cent.
6. Stock of any national or State bank, pro-
vided no savings bank shall hold more than
five per cent of the stock of any such national
or State bank.
Que of the committee, Mr.. Hepburn Of New
York, objects to the sixth of these recommends
tions. The conditions upon which the institu-
tions should be allowed to hold real estate are
set forth, and at some length the general prn-
ciples which should govern their financial
management.
The report shows that the committee, con-
sisting Of Mr.. Gould, (chsirman) Mr.. A. d.
Lynch OF Indiana, and Mr.. A. p. Hepburn Of
New York, have given much thought to the
subject, and their recommendations will COM
mand wide attention and prove of great use
fulness.