The Jersey City news., 1906-01-03

Mt TRUST
LAWS REVISED
=
Companies W ant the
striotions Which I'm
ie Them Removed
Is ARE AGAINST THEM
THEIR SUCCESS is DEMON
RATED BY THE GREAT IN
EA!SE OF THEIR BUSINESS

in this State favorable to a revis-
{ the laws governing trust compaties
lie coming session of the Legislature.
he laws applying to state and savings
ks limits the amount of loans that
The total liabilities to any bank
y person or of any company. corpar-
or firm, for money borrowed, inr
ling in aSe Liabilities of company or
the habihties Of the several mem
Is thereef. shall at no time exceed ten
centum Of the aggregate amount of
capital stock of such bank actually
lid in, and of the permanent surplus
and of such bank
There is no such limitation placed on
trust companies, and the national,
ate and savings bank people think that
law Considered good" for them should
as good for the trust comps MES. At
rapts have been made in the past look
lg to the revision of the law along these
ines, bat the trust companies have been
sbls 10 prevent the change.
During the past ten years several trust
mpaaies and state banks have gone to
% wall in New Jersey. to the great dis
e l.,
on has shown lack of vibilance on the
part of directors.
The business of these esta blishments,
1t has been shown, is often left almost
Fhslly to some trusted official who has
more than once taken advantage of his
opportunity to u1e other peoples money
for his personal benefit.
When the crash comes the directors. to
escape the penalty of negligence by max
ing good the deficiency in the treasury of
the broken bank or trust company, enter
q general denial Of negligence of duty,
and, in some instances, charge the de-
partpaent of banking and insurance with
responsibility for the failure.
This is the defense recently made by
~ Dr. Harrison of Lakewood, one of the
directors of the defunct Monmouth Trust
Company, which went down with the
failure of the First National bank, of
Asbury Park, through the alleged manip-
nations of Albret C. Twining Harrison
Declares in his answer to the suit filed in
Ehe Court Of Chaneery last Thursday
khat had the state department of bank
Ing and Insurance not closed the doors of
ehe Monmouth Trust Company it would
have been able to meet all it's obligations,
and that its insolvency was, in a large
Measure, due to the depreciation in the
value of it's securities caused by the clos
ing Of its doors by the state authorities.
The activity of the trust companies in
he direction of securing deposits aroused
he national bank people year ago and
the first of the year many of them an
nounsed that beginning with June 1,
1905, shey would pay interest Of one and
! half per cent. on active accounts and
three per cert. Oh inactive accounts.
The result OF this move was to bring
n IL &
money that would have gone to the trust
e0rupanies for the reason that they had
ktxsys paid interest on deposits.
The trust companies were not asleep,
tzpd they threw out inducements to the
wage earners of the State in the form of
little iron banks, into which deposits of
sgy amount might be placed and irons
ferred to the trust companies, after
which they would become interest-draw
Ing. The trust companies held the keys
10 the banks, which could not be opened
bS the depositer, who was permitted to
take the banks home with him. The
novelty of the proposition appealed to
frugal people, and the s'hone bank" de-
partmsnts Of the trust companies became
sxccsdingly busy.
There are now in existence in New
Jersey SO trust companies with deposits,
according to the last report of the COM
missioner Of banking and insurance, ag-
gregating s10S, SAT .eS3, and resources
amounting to s152, ,4s3,54o.
During the year 1904 there was an in-
crease in the resources of these institu-
tions over the previous year of $28,043,-
154, or ten per cent. and an increase in
the deposits of $40 49s. .10s. or eleven per
cent. The amount of deposits on which
interest is paid is $93, 3,s29, ,7ss.o1.
The character of the securities held by
Children Testhi1g.