New-York tribune., 1908-01-02


continuance of such practices several of the state
| institutions now closed would not have found 1t
Regulations covering all details of financial man
agenent are unnecessary and would be unwlse: unr.
and expediency be left to the determination
the Superintendent of Banks only when the policies
aaCPtea seem EN- to promise dangerogs results
to require observance of Of his directions
of Banks be given anhorT to 'n direct the
tnuance of objectionable practices on the part Of
tunity to the Institution subjected to criticism to
no he ee pd m b a so
dh0w cause to the of the in
| facts in the premises, charge of the in
snd siuon on the i Of its b being ing in an unsafe
| AUTHORIZATION TO BEGIN BUSINESS
Section 50 Of the banking law has the eaptio
Incorporaton, and provides for the issue of GER
tihsate IN the case of all corporations organized
| not expressly provided for in subsequent sections
Until a comparatively recent period it has been
held that this authorization certificate must in the
has complied with the law.
have taken the position that the Superintendent
of Banks was required give his written approval
be safely intrusted to ii he allowed consider
able degree Of discretion and should inquire with
regard to the character, fitness and financial re-
sponsibility of the incorporators; The same At
|
of branches of bank, the superintendent had prac
cally no discretion if the institution solvent:
The law, in my judgment should be amended
as to make certain the degree of discretion which
l therefore recommend that in the case of The
| Incorporation of banks of discount the superin-
tendent be required to make investigation with
regard to the character fitness and financial re-
sPonslbllty Of the ncorporators and as to whether
the public convenience and advantage would be
poration and upon the bass of this nvestigaon
in his discretion. to issue withhold certificate
n ppin hlIS
should apply to the establishment of any branch
OF bank or trust company.
POWER TO TAKE POSSESSION.
Section Il Of the banking law gives the Superin-
tendent Of Banks power, when he has reason to
unsound or unsafe condition to do banking business
bankers property and business 1t does not specif-
cay give the right to close any other institution
property The terms bank and Individual
banker are clearly defined in Section of the bank
superintendent in exercising this power in the case
weights the m hsopy this
believe that such power would be upheld only when
difficulty might be experienced should the existence
sH other be & X the 1f
as much needed in the case of a building and loan
association. mortgage company d trust
pany as in the case of a bank.
therefore recommend that Section Il be amended
I the same powers in connection with other corpora
Bank sr or vdaa he has in the case OF
BANK SUPERINTENDENT AS RECEIVER.
The delay and expense of receverships Of
subject of public discussion, much to the dscredit
| by the Governor to consider questions relating to
| state banking institutions has compared the
ing institutions and has given its views of the ad-
visibility of making the Superintendent of Banks
| the statutory receiver of banking corporations.
GOING OUTSIDE THEIR SPHERES.
that the different classes of financial institutions
should eonf1e their public service TO- their own
between the functions of each class and confusion
Holding Of these instuons sricy withn the the
| original lines of their intended activity. AS a
field OF another has ensued It was not the original
engage, in commercial banking, trespassng upon
| original legislative intent that the bank Of dis
count should engage in the business Of a savings
| However far these encroachments may have
tended e or 3 whateyeT may a have @ been the their mpTo
| additional functions without some warrant in law
na contemnated bv fbe IeejsIate m that
as We'll as to the corporations themselves 1t
tinsuishing features corporate power and
strction as have characterized each from the out
set far it is possible. however the assump-
tion Of powers and functions outside of the apPro
| under state supervision restrained from further
rgfpass gn11o1 upon one an9thers domains mai
| philanthropic institutions whose function it
| absolute protection in the investment of these
UNPROTECTED SAVINGS.
| Yet We lind the bank of discount. with question
! able authority encrOaching a very large extern
/ through what is commonly termed the interest dc
partment," named in evasion of the spirit of the
pass books with regulations similar to those adopt
! ed by the regularly organized savings banks in
some cases with the evident purpose of deceiving
depostors to the character of the Institution in
"ri The savings deposits Of these banks are not pro-
! tectec by the safeguards which it has seemed
| proper to impose upon the legitimate savings in
| stitutions They may be used with those of
mercial accounts. in loans and discounts: they are
| vestment of such deposits should be limited to
these securities should be set aside for the protec
ton OF such deposits in case of liquidation or other
trust companies in so far as they have encroached
| upon the legitimate field of the savings bank.
! placed upon the size of a deposit account upon
! which bank trust company might pay interest
| tribute TO cure of the existing condition 1t
would be difficult however to apply this principle
bank privileges. In such localities the of the
and in our judgmen. worthy of encouragement
A like evil exists in the case of certain business
| corporations such department stores. which
Trough merely technical compliance with law
receive deposits and pay therefor high rate of in
terest This practice should be prohibited by legis-
| lation.
TRUST COMPANIES AS BANKS
The trust company in its original conception was
| capacities. 1t not contemplated that a trust
| company should DO commercial business yet We
| functions of the trust company, and owing per-
| hans TO improper competition. il has made large
! bank of discount. Commercial deposits re-
ceived and discounts made by some institutions OF
this character the principal parts OF their bust
ness Though the law may permit, and to force
discontinuance Of The practice be IMP mPrac5lcabi
reserves distinction however in reserve require
Ineuts should be made between a trust company
,Ych has adh business