The Washburn times. [volume] (Washburn, Wis.) 1896-1976, 1903-01-29
BANKING BY FERRYBOAT
Ingenious System to Escape
Taxation In New York.
ACCOUNTS TAKEN TO NEW JERSEY

How Collection of Clearing House
Charges on Out Of Town Checks Is
Avoided-Outgrovvth of the Compe-
tition Between New York Banks
and New jerseys Financial Insti-
tutiOns.
Banking by ferryboat'' is the latest
development of the rivalry between
New York city and New Jersey banks,
says the New York Post. 1t is prac-
ticed by some banks and trust COM
panies Of Jersey City, Hoboken or
Newark, which solicit accounts in New
York with the understanding that a
collector will call regularly for de-
posits, enter the same in the passbook
and transfer the. funds 'by ferry
across the river. OF late banking by
ferryboat' has become very popular
because Of the opportunity it affords
to shift your bank balance just before
the tax lists are made up. Dozens of
accounts were transferred to New Jer-
sey institutions few days ago so as to
avoid paying taxes on New York de-
posits
In brief this is the system: A New
York man carries Z 100000 average
balance with Wall street bank. The
account is large enough to excite the
envy Of banks across the river, who
offer 21a or 3 per cent interest on daily
balances, all the facilities of metro
politan banking and an added induce
ment.
Deposit with u.s." says the New
Jersey banker, land your account viii
be beyond the taXgatherer's reach.
He can do nothing with you because
your deposits are entered upon the
passbook Of New Jersey institution.
Then, too, your account will be classed
as New York funds in the sense that
our checks will be made payable at
two banks, one in New York city and
the other III New Jersey. That will re-
lieve you from the clearing house col
give you a New York depository for re-
sort to in case of need. Our plan also
provides for certifcation of checks in
New York by an officer Of our institu-
ton who is duly qualified to indorse
accepted and payable at the - bank,
New York city, upon items presented
to him there. That gives you ali the
facilities Of New York bank without
even the trouble Of making your own
deposits. Considering the liberal in
tereSt allowed and freedom from taxa
ton, you are really better off than
you would be patronizing Wall street
institution"
Besides this, the banking by ferry
boat" idea has been availed of by
wealthy mortgages for the same pur-
pose. In such cases the holder Of the
mortgage assigns the instrument to q
New Jersey trust company receiving
In payment certified check which is
technically credited to his account.
This credit Is never drawn upon, title
to the mortgage being retransferred to
the original holder as soon as the Tax
period" has passed. This procedure
enables the man of easy conscience to
swear off his taxes in New York state
on the plea that he is in no way inter-
ested in mortgage investments. The
practice is said to be increasing from
year to year.
Although the Clearing House associ-
alton has proceeded at various times
against local banks which omitted the
collection charges on checks payable at
two points-one out of town and the
other located in the free district''-the
abuse is said to continue to greater
or less extent. In fact, some bankers
declare that the practice cannot be
reached by clearing house rules at ALL
Acting on this assumption, one New
Jersey trust company will, it is said
soon test the agreement by forming a
hard and fast alliance with a clearing
house bank.