New-York tribune., 1903-07-12
PRAISES JERSEY SAVINGS BANKS.
Says Requirements There Are More Stringent
Than Those of New-York.

To the Editor of The Tribune.
Sir; An article appeared in The Tribune few
days ago claiming to come from a prominent Off
cial of the largest savings bank in the city of
New-York conveying to the casual reader the i'm
preston that the State of New-York and the East
ern States are the only States which have enacted
laws for the proper safeguard of savings deposit
ors This impression is misleading that a reply
is necessary in justice the savings banks in the
State of New-Jersey
In this State. New-Jersey. all investments made
by savings banks strictly regulated by the
statutes Of the State The investment of their
funds in bond and mortgage Is limited in each case
to 80 per cent of the appraised value of the real
estate covered by the mortgage, such appraise-
ment being made and certified to by committee
of three members Of it's board of managers.
New-Jersey savings banks can also invest in
bonds of the United States and OF any State in the
Union which has not defaulted In ten years in the
payment of its obligations In municipal bonds
where the debt of the locality is limited in rail-
road bonds which must be absolute first mort
gage. and on which the railroad company has paid
at least per cent per annum all its stock for
five years previous to the investment. This stand
ard of security in the bonds is higher and safer
standard than that of the New-York law, where
the railroad bonds in which a savings bank
invest its funds named by of the legis-
lature, thereby leaving open the temptation of
Wall Street brokers TO influence the legislature to
% take IN FOR savings banks investment certain bonds
which they may be particularly interested in selling
New-Jersey savings banks may loan certain
percentage or IundS on demand or time loans
upon collateral security of the class the
bank is allowed to buy for investments and moth
Ing else The market value of such CollateralS
must be 20 per cent in excess of the amount of
the loan.
In the State of New-Jersey the managers of saw
inss banks are prohibited from borrowing or being
personally interested in the lOanng of any funds
OF the Institution with which they are connected.
A surplus should be. and is. accumulated by all
New-Jersey savings banks for the protection of its
depositoTs. in order to meet any depreciation in
value. which is liable TO happen 70 even the best
investments This surplus is limited to Is per cent
of the total deposits and any excess of 10 per cent
must be divided to the depostors.
That there banking institutions which seek
savings deposits and which do not come under
the laws established for the protection of savings
banks In New-Jersey is undoubtedly true at the
present time but the many prominent, well ordered
and strong savings banks of New-Jersey are sur
rounded with wise safeguards which make them
as sound any institutions Of the kind in the
world.
The Monmouth Trust Company, alluded to in the
article referred to. which recently came to dis
astrous end, not savings bank, nor was it
doing business under the laws which govern saw
ings banks in New-JerSey. II. W. NJ.
Morristown y. j.. July g. 1903