New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1908-01-02
REPORT ON BANKS.
Continued from ninth page.

eipes require If a commercial bank is doing a
trust business this business in should be pro-
tected by proper safeguards
RESERVE.
Money is the basis of credit The stability of
credit depenas largely upon the reserve OF money
il does our system OF credit. the reserve is OF the
utmost Importance TO commercial ana nhahciai III
teTests ..,. u.s.r,,. ,,,a,, he proper or it
n,ay be inproper It should NOT oe to cnrt bust
ness activity. No required. and no less Is
that the same reserve requirement applies equally
TO ali business Of the same character. only upon
this theory a proper reserve be determined loI
the requirements banking of different characters
am m not in sympathy with the idea because
certain financial institutions in given locansy are
observance OF the above principle other institutions
eouiize the basis of oompetiton or that they may
bear what is termed their share OF me enroen ;
different however to justify ice mt ' o
equalize the powers and limitations of corporations
designed in their creation to differ but in the maj,
business n sss Of t each t demands .'.'' ~
many years that the reserve of national banks in
the city of New York should be Is per cent rms
Grafton of the position held by these institutions in
me naonat hanklns system nh h ' Of that system
throughout the country. Demands upon these re-
serves from different sections and various times
are great and uncertain. depending upon the neces-
sites of economic conditions. aus.
IT can be shown that state pahs ara az q u nj,
stand in this p9S fa Of eS BUSINESS s
Of similar character, their required reserve
should be no less
our state banks enjoy the reserve agency privi-
fRer oh State S institutions This limitation
posture may account for the fact that the pei pei
deposits of our state banks is but Is per cent, as
with IS Pe a Gsn eT a the the epo 1T
eminent funds, avail of the prfvllege OF lssu-
their business is similar to that. Of the national
bank They were originally intended to supply the the
al p6C of he Y.
sentially banks of deposit and discount -
with the tam Minimum ' esai IF in New
City. this requirement being reduced in acSordance
Zach bank is required TO make depost of $1,000
IN yage With the he Bsng o Thers
other restrictions as TO the permanent invest
ment of the capital fund
TRUST COMPANIES.
There class OF financial institutions f aTG6ra to
activity than the trust company and this range Is
with the policy of management There are those
companies which adhere closely TO what may De
termed the legitimate trust company business
6ank Wbetfer his Condition follows the original
intent or not it exists at the. present time. and
must be dealt with accordingly The encroach,
of the trust company upon the banking ne I
has not been great. however as to warrant tLe
general conclusion that there Is no. AN a be
two classes of institutions -, 20. ..o+ .
Ialse -bey nrInde denosits by order of
are inactVe c+6n eiu nf eestes sinking funds
under Corporate mortgages. and the like. we'll as
the surplus funds of individuals and corporations
deposited for income and pending Investment "A, A
large proportion of the 6e0Ss OF ana the active
working capital Of individuals or Corporations
which are subject 90 daily draft and constant hue
So far as statistics are available, comparison Of
the cearings of the banks and trust companies
confirms this belief In the city OF New s a9r aon
Oooe6e The trust companies clearings in the same
year amounted to approximately = per cent OF the
clearings Of the banks
1rrx-
In the matter of exposure as reserve agents these
companies in a similar position to that OF the
state banks. The percentage of deposits due 10
is only - per cent as compared with 10 per cent
FOR the state banks and 45 per cent for the ma
With View to safety, stability and strength
of trust the Legislature has prescribed a larger
amount of capitalized financial responsibility Tor
Classes of banking corporations. The minimum
, saPa at fs soG o6 s and less amount in similar
portion in other parts of the state according 10
Ia addition the law cOmpels investment of the
s4sa % Imnn;cnai bonds or in first mortgages
improved real estate The aggrega1e Gaea! sss o.
600 0C9 Again. the law compels the deposit with
fsf IF tbeee companies in securities similar those
prescribed for capital investment Ihese deposlIS
eeE e he ss S 5ee department amount III ''S
reatures which in nv Judgment distinguish the
business and character of our banks and the busi,
have their immediate bearing upon the considera-
ton of the question of adequate reserves
RESERVE RECOMMENDATIONS.
therefore recommend that every bank or indi-
vdua banker having its pTincipal place OF bust ST
mess "a any e ss al t an Zines have on hand re-
fund equal to at least % per cent OF the ag
fund may, and at least three-ifths thereof must,
consist of either lawful money of the United
bills issued by any lawfully ORGANIZED banking
moneys deposit. subject To call: with a re
serve agent approved by the Superintendent OF
That every bank or individual banker. having its
principal place of business elsewhere in this state
shall at all times have on hand a reserve 1uid
equal to at least - per centum Of s aggregate de-
at least two-fifths thereof must consist of lawful
money aforesaid and the balance thereof must
reserve agent approved by the Superintendent of
That every trust company. having its principal
place of business in any city in the state having
hand fund equal TO at least Is per of
the aggregate Of its deposits The whole Of such
reserve fund must consist OF lawful money as
That every trust company. having its principal
place of business elsewhere In this state. shall at
all times have on hand d reserve fund equal to DIT
whole of such reserve fund may, and at least 30
per cent thereof must. consist of lawful money as
aforesaid. and the balance thereof must consist of
money deposit. subject call. with a
agent approved by the Superintendent of Banks
In estimating for the purposes of reserve. the
total amount Of its deposits. trust company may
exclude: ~ ,oons,s held ~ :, in ,,ust +be ssro-
sition whereof is wholly within the control OF the
trustee otherwise
dsTs represented by certificates showing the
amount Of the deposit and the date of issue and
Any officer ernrloye of trust company who
the time of issuing certificate deposit by which
fits holder may demand or receive payment thereof
in advance of its maturity shall be guilty of mis-
demeanor
~ ACCUMULATION OF RESERVES.
Annie time should be given for the establishment