The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1884-12-12
THE STATE SAVINGS BANKS.
Examiner Bingham's Report Shows
Them To Be in Good Condition.
Their Business Growing and with Satisfac-
tory Neutrality-suspicious. to the Legis-
lature for Amendments to the Law.

The report of j. ]. Bingham, examiner of the
Indiana savings banks. has been filed with
Auditor of State Rice Besides giving com
prehensive statement of the condition of the
savings banks, he makes several sugges-
tions and recommendations to the General
Assembly regarding changes in the laws govern
ing the management of the savings institutions
Six years ago, the examiner says, made an ex-
animation of the savings banks, when there
were ten of these institutions doing business in
Indiana, four of which have since gone into
liquidation The German Savings Bank of
Lafayette, paid all its obligations in full. The
State Savings Bank, of indianapolis, paid its de-
positors 90 per cent The Richmond Savings
Bank went into voluntary liquidation The
receiver of the indianapolis Savings Bank has
not yet wound up its business, but has paid the
depositors thus far 60 per cent There is yet re-
mainingproperty unsod and appraised at $25. 600,
and if it sells for its valuation the depositors
may receive 10 per cent additional.
1t will thus be seen that the savings bank sys-
tenn in Indiana has not been altogether a success,
as the number has decreased, with loss to the
depositors in two of those that went into liqui-
dation. However, five now doing business
have been successful in marked degree, and
one while doing limited business, has a good
financial standing. The six banks now doing
business are the Peoples Savings Bank, at Evans
vile; the St Joseph County Savings Bank, at
South Bend; the Peoples Savings Bank, at
South Bend; the Terre Haute Savings Bank
the LaPortc Savings Bank and the Lafayette
CO.. Al
most prosperous in the State.
The dividends paid by these banks are q and
per cent semi annually There has been a
small increase in the deposits during the last
year, notwithstanding the stagnation in business.
The reports of the banks on Oct. 81, 1885,
showed deposits amounting to 81, 108, 42I41
This year they reach 81, III, 00905, an increase
of $62, 5Sl 80. The loans have also increased. A
year ago they were 81. TIA, 800 "a, and this year
they are 81 SIG l73 So an increase of $o1. ia Oh
Our savings bank act" the examiner says,
is an embodiment of the main features of the
laws which govern such banks in the Eastern
States A careful review will show that the sys-
tenn is an anomaly in banking The depositors,
who are really the stockholders. have no word in
their management. The trustees have money
invested in them. They give no assurance to the
depositors but their good name for honesty, and
their skill as fnanciers and business man
ayers. Iney nuSb edcn own Dereu real
estate worth at least So, 900, and they must have
certificate from the judge of the Circuit
Court in the county in which the bank
is located that they are In all respects suitable
persons to be intrusted with the management of
a savings bank After this is done, the institu
tons so far as the management is concerned,
are self-perpetuating The law evidently con
templates them charitable institutions for
the pay of the trustees is hut trife
''There is one feature of the law which creates
a fru3Pantpe for the securitV of the dcDOsitOrs
in requiring a certain per cent OF the profits
to be set aside for a surplus fund, until
it reaches at least 10 per cent of the deposits.
ONLY one of the banks thus far has carried out
this provision of the law to the full extent In
other banks the losses have been charged to this
fund, and the failure to credit it with a sufi-
cient percentage of the profits has operated to
keep it below surplus of 10 per cent. of the de
posits. In these cases it has been upon the
theory that the earnings belong to the depositors
and should be distributed among them. 1t
would be better for the depositors TO have ap
propriated a sufficient sum from the earnings
than to have larger dividends until this END
is accomplished. While large dividends
very acceptable. security of the principal is a
more important consideration"
In examining the banksa great deal of liberty or
license in carrying out the provisions of the law
was found. but the examiner further says that
his examinations in many respects. have been
gratifying and satisfactory. There is i'm
provement IN the methods or business, especially
as TO details. The system of book keeping ex
hibits the daily transactions accurately, and the
accounts with the depositors have such corrob-
orative proofs that they cannot fail to be salts
factory, well correct, which prevents
controversy or dissatisfaction in settlements.
Three of the banks have women for ook-keepers
and the work is done with intelligence, neat
ness and promptness that demonstrates their ca
pacity in this department OF labor, fully equal to
the opposite sex.
The examiner suggests to the Legislature, as
additional security to the depositor, either
an amendment to section 2730, Revised
Statutes. 1881, to make imperative the
accumulation of the surplus fund to equal
10 per cent of the deposits in a reason
able period, or by providing for paidup
capital stock equal to at least 10 per cent of the
deposits to be regarded guarantee fund, and
SO invested in safe and valuable securities, with
the provision that when the payment of, or set
ting aside a sufficient amount to pay the divi-
dends, and after deducting the necessary ex-
penses the trustees may make from the surplus
profits in cash, such dividends the capital
stock as in their discretion may seem best. The
act should also provide for the punishment of
intentional fraud by the trustees or officers.
A Complicated Damage Suit.
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