The morning journal-courier., 1908-01-02

[statement:
 Amissioners have received
 9ry from a savings bank which
 bonds in which it has invested s.e money of its depositors pursuant 70 statute to know if it is proper for the bank to loan these bonds to national bank under an agreement be- { tween said banks that the national bank is to deposit the bonds with the treasurer of the United states to be held as security for government de- posits or for the circulating notes of the national bank, the national bank to account to the savings bank for the in- terest collected on the bonds and to pay an additional sum for the use of the bonds, and, upon the request of the savings bank at the end of stated number of days, to return said bonds to the savings bank"
 You ask my opinion as to the le- gality of such a transaction.
 Chapter 23l, Public Acts of 1905, provides that savings banks may in- vest their deposits and surplus as fol- lows" s"-enumerating with much par ticularity in nine divisions, or para graphs, the authorized investments. which enumeration the stat uteS provides that All other invest corporated banks or trust companies located ill this state, or in the states of New York, Massachusetts or Rhode Island, or of loans secured by mort gages on unincumbered real esta,e situated in this state except as pro- vided in section 3,429) worth double the amount of the loan secured there on.'
 Section 3.i29, therein mentioned, re- lates to loans which may be made by , saSirss. banks in-certain towns on the y0fders of Massachusetts, Rhode Island or New York, on land in cer- tain adjoining counties in those states.
 These provisions are mandatory. The statute expressly states that "All other investments shall consist of de- posits," etc.
 In the statement submitted the slv- ings bank delivers it's bonds to the na- tional bank to be pledged as the bonds of the national bank, and all that the savings bank gets in return is the | written agreement of the national ha k to pay for the use of the bonds s-&f return them after demand Tn the meantime, if the national bank should become insolvent, the savings bank would be only general creditor; 1t would not have a secured, or even & preferred claim, and would have no security unless the promise of the na- tional bank was secured by collateral
 The transaction does not even pur- port to be an investment of the de- posits and surplus of the savings bank, but loaning of the securities in which its deposits and surplus are invested pursuant to statue.
 The savings banks of this state are Incorporated agencies for receiving and loaning money on account of the owners" The assets belong to the depositors, and the manner in which the managers must invest it's deposits and surplus is carefully restricted by statute. The relation of trustees and cestus que trust exists between the managers of savings bank and its depositors, and the deposits and sur plus of the bank either in cash or in the securities in which the deposits and surplus are invested. should at all times be in the custody of the mana. gers of the bank to respond to the de. nnands of it's depositors.
 1 find no authority in the statutes for such transaction as is set fortf in your statement In my opinion sucf . disposition of the securities owned by savings bank is Illegal