New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1899-04-02
,SA WINGS BANKS OPPOSE 1T.
THE BILL LOOKING TO WIDENING THEIR
INVESTMENT FIELD NOT NEEDED.
PRESIDENTS OF PROMINENT INSTITUTIONS IN
THIS CITY EXPRESS DECIDED VIEWS RE
GARDING THB PROPOSED COMMITS
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THIS CITY EXPRESS DECIDED VIEWS RE
GARDING THB PROPOSED COMMITS
SION AND ITS OBJECT.
The bill which has been introduced In the Legls
lature providing for the appointment OF a commits
sion to inquire into the expediency OF further
tending the field OF legal investments for savings
banks OF tins State in the municipal bonds OF other
States does not find favor with the officials OF the
avings banks In this city. They assert. in fact.
that there is necessity for the wider scope of
investment In the direction urged by the measure,
and do not hesitate to say that the bill has been
drawn in the interest of bond brokers The purpose
Of the BILL as 1t now stands is to create commits
sion Of five TO inquire into and report to the next
Legislature what bonds OF cities OF over ten thou
sand inhabitants in New-Engand and the Middle
States may be safely admitted legal investments
for New-York savings banks
Those who anxious for the passage OF the
measure maintain that there is imperative need for
charging the field OF investment for savings in
stitutions. With this contention. however. the
banks themselves do not agree J. ITarsen
Rhoades president OF the Greenwich Savings
Bank, and president OF the Savings Banks Asso
citation OF the State OF New-Yorh said to n Trib-
une reporter yesterday:
mo such measure this is needed. and are
opposed to the whole thing There is necessity
whatever for the appointment OF such commits
sion as is asked for. We know all about the
create commission 10 arrive AT facts which are
already known. As matter OF fact we do not
want to go into that class OF bonds. for the
that already savings banks are carrying too large
a percentage OF their assets In municipal bonds
Let me give you some statistics that will demon
strate this. The banks carrying % per
cent Of their assets in the bonds OF municipalities
within the State. say nothing Of the fact that
they carrying about $G0O00,0cO. about per
cent. in the bonds Of cities Of other States max
Ing a total Of q per cent OF their entire invest
ments in municipal bonds. In this State. outside
OF Greater New-York. the savings banks carry
Ing 100000 of the entire municipal debt Of the
State, and ! repeat that there is need for the
extension Of the scope Of investment any further
in this direction Therefore the proposed legisla-
tion does meet with the approval OF the saw
ings banks officials and there is no why
the State should be called upon 10 pay the sal
aries and expenses OF commission Of five per-
to investigate into the standing of the class
Of municipal bonds referred TO, besides which the
credit of these small cities depends upon the man.
agement Of the officials in charge. and what may
be a good investment to-day may be very poor
investment year hence.
Another thing that should not be lost sight OF
in connection with these bonds Is that they are not
available in times Of depression must It be
overlooked that the entire amount Of the deposits
a considerable percentage OF the securities held
ily Bonds of counties more unstable in
times of exgency than the bonds OF cities towns
SO far the concerned outside OF the
State OF NewYork. It is always difficult matter
to keep in touch with the laws OF each State re-
garding municipal debt, and with the character Of
the municipality itself. and with the nature OF the
debt 10 be created, which has been created IN
which investment Is sought OF course. II would
never do to invest in railroad stocks To my mind;
a savings bank should have its securities invested
somewhat in these proportions 40 per cent In bonds
secured by mortgage upon real estate, ~ per cent
in Government and State bonds. 20 per cent in the
bonds Of municipalities. IL cent In the very best
class OF railroad bonds and per cent In cash or It's
equivalent.
assets OF bank would be invested IN class Of
securities which rule would be available AT all
times whether in conditions OF prosperity or In con-
dit!ons OF mercantile depression
James Mcmahon, president OF the Emigrant In
dustrial Savings Bank also expressed himself
opposed TO the suggested bill when seen yesterday
by a Tribune reporter. There was no occasion for
the measure, he said. because the banks OF this
State already had the power TO acquire SUCH Secur-
ties outside OF the State were desirable
You assured he continued. That
should the time when the savings banks ind
themselves crcumscTbed In their field or invest
nent they will initiate or suggest a bill really In
their interests which commission on the lines
proposed could never do, In my opinion do not
think II Is for the best interests OF savings banks
that the OF their investments should t~ Wild
ened to the extent indicated In this bill Moreover.
II would not be a good thing for our state. II
ought to be the policy Of savings banks 10 re-
main at home far practicable In their invest
ments.
inRs said: Il doubt the propriety or the Dill YOU
refer to- The scope OF savings banks investments
should not be touched except with the assent OF
hest for the banks-much better than do the bond
brokers The adding the list of permitted In
vestments OF the bonds Of municipalities and coun
ties OF OF ler States would not be an advantage.