New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1895-06-02
A NEW SAVINGS BANK LAW
IT OPENS UP A WIDER FIELD FOR
INVESTMENT.
JOHN HARsEN RHOADEs FAVORs THE PRO
VISIONS Oh THE ACT-JoHN F. TOWNSEND
SPEAKS FOR THOSE WHO ARE DOUBT
FIJI, OF THE SAFETY OF THE


SPEAKS FOR THOSE WHO ARE DOUBT
Full OF THE SAFETY OF THE
MEASURE
The rev savings bank bill. commonly known
as the Thompson bill which was passed py INC
LEGISLATURE and recently signed by the "o'e'ioi'
has aroused considerable discussion among savings
bank officers and they are not all agreed upon
the benefits TO be derived from the new law
The chief changes made by the new measure
from the old are in the enlargng OF the scope LOT
investments The difference Of opinion is as ~
the question OF the security and safety OF 'he III
yes;ments to be found In the new fields whicn
have been opened New-York savings Daiihs'
VALUE OF THE SAVINGS BANKS
TIL. savings hanks in this State for number OF
vosrs have been managed with care, sagacity,
skin and conservatism. and their monthly ana
yearly reports give full and true accounts oi '"e'
condition They have proved themselves tho'-
ouehlv worthy Of trust. They are In mamie.
benevolent institutions. and have neither capita
nor stockholders All the profits. after deduc'ins
exoonses and putting aside n small portion OF 'he
earnings to create a reserve FUND, peiohs 10 "o
positors This fund insures 10 oeposi'o''
the full return Of their deposits. with Interest I'M
der all possible contingencies The deposits III '''e
savings banks OF this State exceed $UOw'Vo ana
the number OF depositors is about l.oVVo' III ',e
last twenty years the deposits nave nearly "
while the amount available for investment u"''s
the same period has decreased neari! w pc. ~"
II is estimated that In 1901 the date OF the lid
.r,,, 80 the 4 ner cent United States Govern
ment bonds the deposits In the savings paihs
will amount to the enormous sum OF >""'"o'''"V'
II will necessarily be hard task ior the 'us'eoS
10 invest wisely and keep invested this vast sum
of money and with the object OF aiding 'hen' III
This the new bill was drawn. Such men as John
Harsen Rhoades. president OF the Greenwich saw
incs Bank; the late Edward WOOD. presioent %
the Bowery Savings Bank; Merritt lrnloie' Presi-
4
Of the South Brooklyn Savings institution An
drew Mills president of the Dry DOCK savings
institution J. Mcmahon. president OF the INDUSTRIAL
Savings Bank and William c. Sturges presiuvn'
OF the Seamen's Bank for Savings, lea the nshl
for a new law for a number Of years. They met
with opposition from other institutions, such as
insurance companies and trust companies. ana
from those who feared that II an extension OF 'he
limit of investment was allowed 1t wouid cause d
rise in the rate OF interest on MUNICIPAL 'o"n'
county and village bonds within the stare as the
banks were largely restricted TO that class OF III
vsstment Tammany Hall. also for some reason
and others opposed the measure, ard the ir'enus
of the bill met with constant defeat. Nhen Inc
last LEGISLATURE met It was Determined 10 inahe
anal effort 10 secure favorable legislation, ana the
,,rosa,t measure was carefully drawn as 10
protect depos,tors, and was approved by the OH
GERS and trustees Of nearly all the savings oa"N'
in the State.
II was argued that unless the scope Of invest
tho rate Of interest TO be paid depositors must
no still further reduced; and it was feared that
such reduction would not only iead 10 VIII"
drawals OF deposits, but be serious check 10 inc
incentive TO save tho part OF the people EVeiy-
thing il was commended that can be done 10 los
ter and encourage thrift on the part OF me Io g
iature. The great sum OF s6aeco.co now held by
the banks is Proof pG S 1a n Of the savings
Bank law and upon the OF rests s the
nrosnerity of the State itself.
The chief opposition. besides that already men
tension in the direction intended would open field
that might e S. eKy and The BILL as
proved by the bank men, finally passed pom
mIsar brought about by misleading
statements made by several nemspapers h1 hy
the bankers and the other not so approved and
under the belief that the GoyeT1or had the wrong
him not TO sign IT.
PROVISIONS OF THE NEW LAW.
Mr. Rhoades upon investigation. found that the
Governor had the right bill. and it was signed
As originally introduced Section of the bill con-
tanned the following:
In the stocks bonds interest-beartng OBJ
legations of any State of the United States, issued
@ IN 'en Se 'G saf
there has not been default since the issue thereof
in the payment OF either principal or interest or
interest has been paid regularly for a period Of
less than five years next preceding such in
To this section. in Section 5, number OF cities
added TO the law as it existed prior to the
passage Of the Thompson bill. This did not meet
the ideas OF the more conservative banks. and the
following amendment inserted:
In the stocks bonds erest-bearing obiga-
tons OF any State Of the United States which has
BY such IL sSsn
ment Of any part of either principal or Interest Of
state be contracted. and in the bonds interest
bearing obligations OF any State OF the United
Legislature Of such State, which have. prior the
passage OF this act. been issued for the funding or
settlement of any previous obligation of such State
heretofore In default. and which sad funding
In the payment Of either principal or Interest since
the issuance Of such funded settlement obligation
ment obligation has been paid regularly for period
Of not less than ten years next preceding such in
vestment.
With that amendment the bill opposed by
any savings bank officials.
John Harsen Rhoades. president OF the Greenwich
Savings Bank and also president OF the Savings
Banks Association. Is one of the best authorities
savings banks legislation and the effects of the
law in the city. The Greenwich OF the
largest savings banks in the country. having deposits
Of about s2S.00DCo0 and a surplus of $4CoO60O. Mr..
Rhoades consented yesterday 10 talk at length to
Tribune reporter upon the effects OF the law
savings banks investments.
False reports that have been published" said Mr..
Rhoades. led to serious msapprehensions con-
corning the Thompson bill. 1t is called. This Is
duo great deal TO the fact tina, II Is believed that
the bill that has become law is the the
one originally presented by Mr.. Thompson. Another
idea have also gotten around. and that Is
that the law opens the way for unsafe invest
ments: Now we have a great advantage in being
organized. and united action has always favored
conservatism. both IN legislation and elsewhere and
conservatism merits confidence. We will start off
with this axiom The wider you make the scope Of
investments. consistent with perfect safety. the
better return you able 10 give the depositor and
the better you give the depostor the greater
nducement ne she would have save money.
But 1t must be forgotten that the element Of
lX1N in fhn
OF savings bank investments.
FIELD OF INVESTMENT EXTENDED.
Now In regard TO the changes in the law Under
the old law we could invest In loans on real estate
TO the extent OF s. per cent OF our deposits United
states Government bonds. bonds Of States which