New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1906-03-18
PRESENT METHODS DEFENDED.

PRESENT METHODS DEFENDED.
In defending the present methods Of trust
companies. Mr.. Borne, the president Of their
state organization. said that trust companies
had grown enormous simply because they
supplied public want They are the savings
banks of the we'll to do. OF individuals firms and
corporations" he said with the Increase Of
wealth supplies Of surplus moneys have grown
and 1t has been the natural DESIRE on the part
Of their owners that these moneys should bear
interest. The trust companies recognized this
the result being that. while ten years ago the
number Of trust companies in this state was
thirty-eight with combined capital Of SD OOO,-
900 and deposits OF S8O7, 100000 to-day the
number OF trust companies has grown to eighty
one. with S64OOOOOO OF capital, over s., 100000
600 deposits, and with $4,000 depositors
Coming back to the record Of the character OF
the trust company deposits as shown by the
extent to which they are drawn on by the
depOsitors. hold that this feature should be
taken into consideration IN any bill instituting
trust company reserve. Therefore, IN this re-
spect, bill for a Is per cent cash reserve IS
unjust and negotiable.
Every trust company has among its deposits
a number Of time deposits OF varying periods
for which certificates are issued. from ten days
TO one year These deposits cannot be with
drawn until the termination Of the period ar
ranged for at the time they are deposited. 1t
is unnecessary to hold reserve against deposits
OF this class.
Let US examine into this claim Of similarity
Of business Carefully tabulated figures for the
year 1905 show that the clearings of the banks
in the New-York Clearing House. with COM
bined deposits of S97T 651 300 were 500 S22.-
OG0.201; and that the clearings Of the trust com
panies Of Manhattan, Brooklyn and Queens,
forty-eght in number having deposits Of $685.
39O.j6S. amounted 10 50. $50. 1872 600 being less
than per cent Of the cIearings Of the New
York City banks; IN other words, the extent TO
which customers of New-York banks drew on
these institutions was fourteen times greater
than the extent TO which trust companies were
drawn on by their depositors. Surely with these
figures before us the claim cannot be made that
the business of the trust company IS similar to
that Of the bank. It shows couclusively that
the deposits of a more stable and peSma-
nent character.
Now as 10 trust companies themselves They
are creatures OF the state, and the state has
every reason to be proud OF them They have
conducted their business with rare Judgment
| and conservatism. and have served the public
and their depositors well. In 1905 they distrfb-
uted to their depositors $32OOOOOO in interest
and paid to their stockholders s1O4OOOOo =,
Ten years they have distributed 10 depositors
/ SI4hOO0OO in interest and have maid tbaf-
| stockholders S62.O0OOOO in dividends In other
words they have distributed two-thirds OF their
earnings among their depositors. They are ra~pa
taxpayers. In 1905 they paid to the state OF
Network $23O139O in taxes. as against S973 -
O@S paid by the New-York State banks.
I shall not oppose the Stevens bill. as It now
stands but I do not think that the reserves
which II demands need be as large as II stinu-
lates"
In commenting on the figures given nv Mr.
Borne IN reference to the clearances of banks
and trust companies. the bankers call attention
to the immense transactions OF the New-Yorlx
Stock Exchange which pass through the Clearing
House.
The Clearing House clears not only the checks
OF the Clearing House banks and those who ara
hon-members with deposits amounting to S147.-
VVVVVO said Mr.. Parker. president OF the New
Aork Produce Exchange Bank. but also the
checks given by the trust companies. and in
ADDITION the vast number Of checks and drafts
received by banks from their correspondents all
over the country and from foreign countries: and
10 these also must be added the checks given by
the STOCK Exchange houses (whOse volume OF
business Is enormous, the average sales per
week are about S5OOOOOOOO par vaIue) for the
payment OF loans stock and bonds. and these