The sun. [volume] (New York [N.Y.]) 1833-1916, 1900-01-02
BUSINESS OF STATE BANKS.
A PROSPEROUS EAR As SHOWN M
SUPERINTkyDENT KILBUR,..

Surprising Development In tho business of
New York Trust Companies-Th~ state
Hanks Gained SO. 900 900 and savings
Blanks as5, 500, 900 In Resources IN 1890.
ALBANY. Jan. Superintendent OF the state
Banking Departments Frederick d kilburn.
In his annual report. says that nothing Ike
the development in the business Of the trust
companies Of the State. during the past year,
has ever before been known. and It engages
wide discussion and speculation In financial
circles regarding It's significance and possible
consequences" Eight new trust companies
were organized during the year and Ave were
In course Of organization when the year closed,
their combined capital and surplus aggregat-
ing S22.0 900. 900. The nfty-two trdst compa-
MES Ia existence last July reported resources OF
1922. 900, 900. or sl85,OOO, 900 more than were
reported by the forty nine trust companies on
Jan. |, 1919.
Regarding this immenss development, Supt.
kilOurn says: Alarm lest the com petition
thus created with banks may prove serious.
disturbing and hurtful oyerlooks the lact that
II the trust-company movement had not 90
Cured many more new banks would probably
have been organized. With the great business
activity in the country and the unprecedented
prosperity ol MI ls lhuustrldi eutcipiises II
VAS logical and Inevitable that banking
facilities should be increased. and the fact
that such increase comes in the form OF trust
comuanies instead OF banks need not IN itself
signify. The equalization OF tax burdens be-
tween the two classes " institutions. IL any il
required. and the question whether trust com
pnnics should be compelled to carry some legal
cash reserve ar. matters which will eventually
ullpst tl.p,A.alN4- ar la uItlstSd no tha ~
suit OF the teachings which experience will
supply"
The State banks gained $4,000. 900 10 re-
sources during the year. or more than 10 Der
cent. But inasmuch ~ there has been in the
same time u considerable elm nation from
their statements Of assets which had cone 10
be regarded H. doubtful or worthless, and the
quality ~ those whlch remain Is believed TO be
iinpIny"d, the gain In THEN actual condition
has doubtless been even greater.
The resources OF the savings banks increased
s45,IUO.OoO. from January e. July. which
nearly equals the gain made by them during
the entire year 81 lStS. while the mum Der OF
open accounts was Increased by $4,000 ia the
sane -iN months. whereas the total increase
during the entire year Of ls"s was only 60.
THE scandals in Building and Loan Associa-
ton afNlirs, says tie superintendent. have
been in part the elimination Qf recklessly I'M
proyiient manage nent which had been for
some time contlnu.ng N defiance OF remon-
~ 'i'N "'N' w W. "N''t VI
receive measures by the superintendent ~
Banks. and in Part newly undertaken schemes
for IIuuier whlcH were detected by the De
parunrut,s examiners and thwarted In one
at least ~ the latter class Of cases criminal pro.
ceelirg- were instituted against the con spira.
tors, and ne the direct result Of the services Of
the dcpHrtmrut u saving 5000 appears 30
have been Effected Tor The members OF the as
sorlatIons.
associations, as a lqrge number are doing al,
miralle work. Adequate State supervision u
these associations Is not merely justified. lut
Hue from The state 10 the rredulous and help.
less poor. who, without II, must be at the
mercy Of ~adventurers eager to TEMPT them by
their hHrd-eGrncd sayinRs. and unconsciouable
enough not TO make honest effort to fulfil their
rcprcs~n tatiOns even In part.
'To this end the Banking law should be
am"Hd"d 50 as 20 conferupOn the Superintend-
ent OF Bank the power 70 'ako and hold pos
session OF "A building and loan association when
he disc yers iEQt II is violating lis charter or
law. or H. cOudurtiug - business In al unsafe
or unauthori2eI manner. exactly as. under
Oi a bank Of deposit and discount or a savings
bank. Further amendments OF law which seem
vital TO the exercise 81 effective supervision Of
these assOciationS should prohibit real estate
purchases by them except on direct account ~
their members. after contract has been Ell
tered into by n member to buy anvtruct which
il j, proposed that the association acquire.
and should forbid any amendment Of hy-aws
rom becoming Oprrntiye until after shall
have been submitted 10 the superintendent or
Banks and shall have been approved by him"
SUIT. kilGurn argues against any legislation
that proposes To tax savings bank DEPOSITS. He
recommends an amendment 10 III. Banking
law tending to restrict all accounts, OF whatever
character. T. the outside possible limi OF
- 300. and TO prevent any individual from
having in any savings bank in any "ircum:
stances more than two accounts, only ono OF
which could be personal
Another recommendation contem plates the
Of an amendment to thu General Cor
~yoratiOn law which shall prohibit the use OF
the word trust as a part Of the name Of auy
corporation not organized under the Banking
Law aud. further. that II be- forbidden 10 any
foreign cooperation 10 10 any Kind of business
in this state under any Lnme which contains
such worl A. a part thereof.
The Superintendent renows his recon-
mrndatiOn that personal loan associations re
licensed by his department. lie also suggests
legislation 10 prevent Franklin Syndicate
- uInlID. N tkn fnfnrn