New-York tribune., 1903-01-05
CONDITION OF BANKS.
Mr.. KTLBURNS REPORT.
Danger, He Says. an the Methods
of Some Trust Companies.

port TO the legislature I. d hllburn, state Sn-
perintendent of Banks, says that fifteen trust
companies having combined capital OF Sf.9oot-
600, and nearly an equal amount of paid-in
surplus were organized during the year ended
September SO last, and in the same time pre-
viously authorized trust companies increased
their capital in the sum of S4,loo,uo0- Besloes
this one company. with a capital and paid-in
surplus aggregaaing 100000 was authorized
In October, two companies are at present pro-
ceeding to increase their capital and dozen
or more applications 10 establish trust COM
panies have been submitted. either tentatNeS
or formally. several of which have been Denied
while Others remain under consideration This
was the noteworthy feature in the business OF
the department for the year. From July l. lSol'
TO July l. 1902 the increase in capital was
nearly $4,000 coo in surplus and unolFioeo
Profits over Sl5o0000o and in total resources
over S1o0.0o0.o0o Prosperity was enjoyed os
the companies generally for the entire sedi'
and stin continues. Mr.. Kilburn says;
In this respect there seems to oe no
ground for apprehension in any quarter, out
fhet All of the COMPANIES of recent organization
are prosecuting business along lines Nnicn eo.,
sisf with dignity and that non-interference Win
ofber Srsrif9rions-particularly savings banks
which ought TO obtain. is not go suIs, I-,sIl
particularly 10 an unseenly STRIVING ps tiIlv
humber of trust companies OF comparallNelS
recent organization 10 gain deposits OF q cndI 1
scter belonging properly TO savings pallhs oiII.-
ercounts but the methods employed IN some
instances TO attract them refieI upon tIle =
stitutions by reason OF having q een1Tneo -seoret
cheaper them in the puollc estlinaaloli- Aulrsts
ically at least, trust companies are estaonsIea.
mainly to i'll field within which oanhs Sdiilio1
act and their transactions are ia any -
,,ecie5 "a he on a large scale For them, then.
TO betray an anxiety 10 multiply accouIts % %
orrv dollar or two. or even Of five or zen
sIt S1itS aech snd almost 10 canvass from house
10 house for them, is sort OF puslhsSs I sS.e NC
must humiliate, and which If tns iaM siniv
power 10 in the premises, NVuiu NS '
require to be discontinued x,,, ,bare
In nearly every city, except New-York, wheLe
e tr1let company has been organized OF IaIe'
60 Which contains a savings bank the with
drawals of money from the savings DaIhS On si -
the few months following the oegnllllis % - rs
ness by the trust company nave eAceeueu eAi-s
6erosits In some cases this showing resultS
undoubtedly from transfer OF investment 90
counts from the savings banks TO lhe uus'
cor79renies which is not only quite legitiflale,
rut altogether desirable Accounts OF TINS Ia: cnaI
acter ought never to have been lahs uS on NV
hanks and / have endeavored throughout my
administration TO bring about their ellfnnaNoii.
But for trust companies TO solicll oeposies
that are savings, and 10 bid against the saNtnsS
banks for them, violates the splIL % +h @ +rT1st
certainly and in a degree discre0lts lhe CrusI
company and constitutes possioe oIsnts oaos " are
The depositors who open such acoouIies aco. a.
r,eculiarlv susceptible to alarm and panic ana
when their fears are once aroused II peooiiie0 i
impossible soon to allay them Ihey are Ia
naicula bly more liable than the average pusi-
ness men to start run, and having staI ce9 ~.
viii continue il longer and with more Fiolent
saao1r+ra+ions The savings banks have abun-
de1+ means Of protection against such demon
strations by reason Of their power 10 TeqolIe
si,tv davs' notice of intention to Wltndra"
derosit. but let crowd of wild and excited men
ana women present themselves at the doors
of a trust company, and it would De n1alNeiiouS
II il were able to escape SUSPENSION
-7,,a recor5 or hanks of deposit and discount,
che renort continues has been quite different
from, that of trust companies. This difference
has not been as regards safety and prosperity
but a. variety Of causes has contripuIeo ~
"a decrease in their number. and also 10 an aP
rrsrent reduction in their total assets ihlee
were taken over by national banks three were
absorbed by trust companies which were Or
rsnized TO succeed them, five were merseo Al
other State banks, and four went into the ma
+ional system by conversion. TWO or the iat'ei
,,ere the largest State banks in the State out
side of New-York City, having an aggregate oi
resources considerably exceeding SZo'Voo'oVo'
The understanding is that they made tne cnahse
solely that they might receive money rom 'n1
Emitted States Treasury on deposit Besides these
changes three other banks were forndlis en-
tered in the list Of closed banks
Thirteen State banks were organized during
che fiscal year six OF which are in New-f YORK
T,-v Their combined capital is S975Ooo
The number of discount banks which reported
90 4,a 5enartuoent in September. under the nnat
call in the fiscal year. was l94, which, however
included four that had some time before cedseo
70 dc active business and two that closed peiofe
The end of the month, while one that mao not
.,, bae,n business is not included The agsre-
gate capital of the banks reporting was 9-oaf1''-
700 their combined surplus and UNDIVIDED pronts
500 81 o1S and their aggregate resources Sool'-
7I61s4 which is almost exactly the amount
.boD-r n, the reports of corresponding date in
1900 but is So 100000 below the aggregate IN
seueraber 1901. when IL was the largest WIKI
one exception. that had been reported IN thirty
sfx wears Allowing for the assets Of the banks
,bat wen, ont of the system in the year, the
condition Of those remaining approximates very
cIaselv 10 that reported by them the year pe-
fore.
One hundred and twenty-seven savings banks
reported July /. 1902, reduction of one from
the number reporting six months before ohe-
the Empire State Savings Bank, Bufialo-
has gone into liauidation with arrangements to
nav its depositors in full According 10 the re-
ports Of the remaining savings banks as OF
July / 1902 the amount due depositors hao ap-
parentlv increased in one year by the sum OF
se4 os7.37s TO 81 051 $50 1s6. but since the En-
pjre State Savings Bank is not included the
real increase was S65 42s S25. Only twice in the
history of the savings banks of this State has
a larger growth been made in one year
BUILDING LOAN ASSOCIATIONS
In the fiscal year four Of the so-called ma
4iousl building and loan associations Of this
State were placed in the hands Of receivers at
the instance of the Superintendent of Banks,
and receiver was appointed for fifth by the
Tinted States court. Few OF the associations
e ,be STATE now do business on the expense
fund plan and the officers or almost all tnese
have promised 70 discontinue the practce al
an early date. and 10 amend tnelr arliG.es 81; %, oa
association accordingly. Any increase IN me
,,.r,g,ber O. second mortgage institutions Is no"