The Providence news. (Providence [R.I.]) 1891-1906, 1903-02-20

The senate was called to order by Gov
rum present.
The record Of yesterdays session was
read and approved.
Governor Garvin presented the follow
1ng message, which was read:
Gentlemen-I desire TO place before you
some important facts regarding the FIN
ancial institutions OF this state In which
the peoples money Is deposited.
l. The national banks of Rhode Island
with a capital OF sls0Ss 96ll0. holds de-
posits OF SO, LES. 96s 81, secured by double
Inability OF the shareholders and other
government regulations
q The state banks, few and not i'm
portant with a capital OF SS16,675, have
deposits OF s7S5.sS5se These make re-
port TO the state once year, practically
no protection for depositors.
g. The savings banks of Rhode Island,
with a surplus account of "a. .025. .S29 .02, hold
deposits of $73,52S, ,50S43 somewhat less
u than that OF the previous year These de-
posits are somewhat protected by restric-
lions as to the banks Investments and
n report to the state once a year, while
the safety OF some OF these banks II
guaranteed by the character OF the mer
who administer them. How inadequate
these safeguards may be, however. hai
been fully shown by the past failure o.
such institutions in this state
a. The trust companies, with broa'
and extensive powers and In which ex
ecutors, trustees and guardians ma
y place their trust funds and thereby b
leased OF any responsibility, with capi
tai OF ss.7s42s9.s3, hold deposits OF sS7,
f8357l11, OF which s2S,14l.1034 Is in thei
savings or participation departments.
In reviewing the situation, / find tina
the banks OF Rhode Island. including tn
National banks, with capital and surplu
OF Sc, ,714 704.43, hold deposits OF sl51 ,256
1851. or about 1l9 millions more ths
their capital. or this l5l millions OF de
posits. 10 millions are protected by IN
United States government and the othe
l22 millions should be as we'll protecte
by the State OF Rhode Island.
also find that the Savings banks d
posits show a falling off, while the Trus
oompanies' deposits show an Increase &
.000 OF which eight and a half mi
lions was In savings or participation d.
partments. This distinctly shows th
tendency OF such companies 70 usurp IN
place OF savings banks and absorb N
savings and capital OF the people.
AS those large and growing state ir
stitutions, having special powers an
advantages under Their charters. are b,
comming a very large financial factor.
would seem that the deposltors In the
n ought TO be amply protected
the state. The following practical saf
Y guards are suggested as having prove
very efficient II coupled with some pr,
viso as TO making loans on real estat
Cd That a state examiner should be a
pointed, TO be paid by the banks a reg
4 lar fee. and who should make a thoroul
4 examination OF every bank trust cor
pany and saving bank Incorporated
4 the state, at least once I'm every .
months at forty-eight hours notice, AZ
at such other times as the governor
the state shall direct. making full repor
Of same 10 the governor within two da
after each examination.
Cd That every state bank OF trust cor
pany shall keep on hand a reserve
fffeen per cent OF their deposits and pa
ticIpation accounts.
CD That the amounts placed In tru
companies as savings bank or particip
tion accounts shall be subject 20 q
sarne restriction as 10 investment Al
payment OF taxes as deposits in savin
banks.
(D That every state bank or trust cor
pany shall be prohibited from loanii
more than ten per cent OF the amount
lfs capital stock 10 any one individus
corporation or combination OF corpor
tions. provided this does not apply
bills OF exchange drawn against actu
values. or TO loans where United State
state or municipal bonds are actual
1eld 80 collateral