New-York tribune., 1889-12-26
FOREIGN LOAN ASSOCIATIONS.
THE REQUIREMENTS MADE UPON THEM BY NEW
YORK LAws-oPINIoN OF THE AT

| THE REQUIREMENTS MADE UPON THEM BY Me-"
YORK LAws-oPINIoN OF THE AT
ToRNEY GENERAL
| Albany, ~ Y. Dec. 25.-Attorncy Gcnerai Iaoor
has written an opinion which will be notcd WIN ''
tcres by the numerous cooperative savings ana bun
ING loan associations throughout the STATE IL is III
answer to a communication from the acung snpernl'
tendent of the Banking Department, Chaflcs H. Man,
asnr what II any, steps need be taken by the inter
state Loan and Investment Association Oh 'hlcaso
prelimnary TO its continuing business In this STATE
Attorney General Tabor holds that the ASSOCIATION
referred to does business in this state subject 10 INC
provisions of Chapter 400 Of the laws oil lo52' De's
the law governing the organization ana regulation VI
trust companies Section 2l0 Of that ACT proVi"cS
that Every trust loan, mortgage security guarantee
or indemnity corporation or association ana every
corporation and association having the power anu e
celvng money on deposits, existing or Incorporated
under the laws of this state any corporation or as
sociation not Incorporated under the laws OF this
state which receives deposits Of money or assumes
obligations in this state, other than BANKS Institutions
for savings and insurance companies shall submit
to the state Banking Department, semianhuaiS'
report Of the affairs and condition OF such company
Section 224 of the same law says all corporations
or associations mentioned In Section "19 shai oeposib
with the State Banking superintendent 10 per cent
Of its paid up capital stock. which shall not Dc less
than $4,000 The only question here Is Iai' 'nc
Interpretation Of the words institutions for SAVINGS
which are exempted from the provisions OF secuoh
49, broad enough to include foreign building
and loan associations in that category! On this
point the Attorney General says.
"In the Interpretation Of the words institutions
for savings IL is best to conDe it to savings banks
Strictly speaking, savings banks the only instita
tlons for savings that are known IN our system OF
legislation. of there may be corporations
that are substantially used by investors institutions
for savings. person who buys mortgage from
mortgage company such company an institution
for savings and with any permanent investment In
a corporation the making such investment
in certain treats such corporation an in
sttution for savings. do not think. however, that
this corporation should be considered an sin
stltuton for savings within the meaning
of that term as used in Section 210. A
person subscribing to the stock Of the company
does investment, and such subscription is In
the nature of speculation. deposit is the placing
of money in the hands of another to be returned alb
soutely demand, either with without interest
irrespective of whether the use of such money by
the depository has been beneficial injurious. But
purchasing shares in building company is more in
the nature of business venturethe purchaser TAX
ing the risk of getting large, small profits at all.
"Another question is Is Section 2o4 confined TO |
corporatons receiving deposits of money in trust or
does II include all the corporations mentioned in Sec
tion 21oa 1t is capable Of being construed as to
confne the words are required to make report as
TO its affairs by Section 20 of this act To the words
which Immediately precede them, and therefore as
simply an additional Identification Of companies en-
gagged i'm receiving deposits of money in trust This
would be a narrow construction and would leave many
of the companies mentioned in section 219 free to
do business without complying with Section 224.
"The deposit required under Section ga Is not
only for the benefit Of depositors but also for the
benefit Of creditors Of the corporation making IT,
This is an indication that the section was not intended
to apply solely to corporations receiving money on
deposit. 1t Is difficult to see why guarantee or
mortgage company organized under the laws Of an
other state, with capital here. should not as far
as public policy is concerned be required to make
transfer of securities provided in Section "a
This section creditors OF certain corpora
tIons and it would be practically all the security
creditors would have in this state
This opinion is applicable to the large numDer Oh
foreign building and loan associations which have
agencies in this state aud Will be heartily
cOncurred in by the New-lork State League Of Co |
operative Savings and Building Loan Associations
who at their annual convention, In Utica, III June
adopted resolutions expressing their dsapproval OF the
scheme upon which these National associations are |
that no foreign association should |
be allowed to do business in this State, and that no
association I'm the state should extend Its business
beyond its own immediate neighborhood.