The Clarksburg telegram. [volume] (Clarksburg, W. Va.) 1874-1926, 1909-09-16
SA WINGS OF BANK
SHOULD BE APART
Declares Pierre Jay at Nation
al Convention of Bank
Supervisors.

ing laws in all states, today spoke at
the State Bank Supervisors Association
convention in favor of legislation
which will In all cases separate the
savings OF depositors from commercial
accounts. 1t is only by doing this. he
declared. that the establishment of
postal savings banks by the govern
ment can be prevented.
Mr.. Jay In part said:
Since we met in June. 1908, a
question In which we are vitally inter-
ested, the safety of bank deposits. has
been made one of the major issues of
a great political campaign. The re-
suit has been the election OF a Presi-
dent, pledged by his platform to Gre
ate postal savings bank. In South
Dakota. Nebraska Kansas and
Texas laws have been enacted guar
anteeing safety of deposits. Thus. it is
plain that public opinion in some parts
of the country. at least, is not salts
fed with the conditions under which
banking is now carried on, or with the
measure of protection which bank
supervision has managed to give.
New York Leads.
II think 1t IS clear that the nation
al bank act and most of the state
banking laws only empower the SUI
pervlsor to see that the law is obeyed.
1t remained for New York, however,
after the panic CT 1908. to give to the
supervisor power not only to direct
the discontinuance of unsafe and I'M
sound practices. but after certain steps
to take possession of and liquidate
any bank which neglects under d.
rections.
I'm addition to recommending that
provisions similar to these existing in
New York be enacted in every state 1t
is also recommended:
Il. That the supervisor should be a
practical banker or should have some
other recognized qualification for the
office.
'2. That politics should play no
part in his appointment.
.'3. That he should have a free
hand in selecting his assistants.
~. That his stan should be large
enuogh to make thorough semi-an-
nual examinations.
IS. And since am no longer a
supervisor. may add that the salar-
les paid should be large enough to Sc
cure high grade of men as super
visors and examiners.
Separate Savings.
Among the various regulations APP
proved by your association, there is
one which seems to me of transcend
ant Importance at this time. 1t is that
savings deposits. when taken by COM
mercial banks and trust companies
should be required by law to be segre-
gated from other deposits and invested
in thise securities In each state which
are considered safest and best. We
are face to face with postal savings
banks legislation. 1t is safe to say
that none of us would favor this ex-
tension Of government activity IL safe
depositaries for savings could be pro-
vlded by individual effort.
lin my opinion the postal savings
bank is not national but a: local is
sue. The call for 1t comes from the
west and the south where there is no
savings bank legislation, and where
banks are far removed from settle
'ments. New York, New England, New
Jersey and Pennsylvania call for them
very little because the legislatures of
those states have provided savings
bank legislation.
IF state banks ali over the country
were made safe deposltarfes for sne
savings of the people there Is little
doubt that the agitation for the postal
savings bank would cease.
Protect Savings Deposits.
There is a simple way of accom-
plishing this and it has already been
adopted in California, Connecticut.
Massachusetts,. Michigan, New Hamp-
shire, Rhode Island, Ohio and Texas.
This plan will come before the COM
ng convention of the National Bank
'rs' Association as the approved legis-
alive program of the law committee
II its savings bank sections and II
'ave been told is being considered by
he National Monetary Commission.
THE plan requires complete segre-I
ration of savingsideposits from COM
nercial or other deposits of a bank or
rust company, the investments and
accounting Of which are kept as sep
rate from the other business as IL
he savings department were another
'ank entirely. The savings deposits
must be invested as only the laws OIL
he state permit. In case of failure
he assets of the savings department
nay be used to pay of the savings
epositors first and even II those as
cts should prove insufficient the say-
nss deposltors have equal claim with
ther creditors on the general assets