New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1910-05-26
UNION DIME CUTS RATE
Another Savings Bank Reduces
Interest On Deposits.
MANY OTHERS MAY FOLLOW
Strong Pressure for 312 Fer
Cent at Meeting of State
Association To- day.


-5-,4h sbe announcement yesterday that
smother savings hank had reduced It's rate
of interest from 10 81 per cent on oe-
rosits and strong sentiment prevailing
among many Of the local savings oank
officials in favor of q reduction. the annual
meeting OF the Savings Bank Association
Of The State of New York at the Chamber
NJ Commerce to-day promises TO develop
an interesting discussion on the subject
The Union Dime Savings institution, one
Of the Oldest in this city, with deposits OF
eho;,r ssoOoooeo took the initiative yester-
day and reduced the rate 10 81. II IS ex-
pected that other savings banks viii follow
she lead Of the Union Dime, particularly
some OF the smaller ones.
In 81 editorial on May 20 The Tribune
advocated the reduction Of the rate Of in
Terest OF savings banks
IL was strongly indicated yesterday that
at least six other Of the leading savings
hanks Of the city would cut their rate from
10 Slz, following the state ASSOCIATION
meeting to-day. The Emigrant Industrial
Bowerv, German and SeaInen's, 1t was sa4o
yesterday do not contemplate any reduc-
fson 1rorn the present rate of per cent,
but strong pressure is being brought 10
bear Oh them all TO reduce the rate.
Although four savings banks. including
the Bower-y. the largest in the country, re-
duced The rate from TO S12 last January,
The Union Dime is the first 10 reduce the
rate for the July disbursement. An Official
of the latter institution said yesterday that
she trustees had taken this action because
the highest authorities in the state be-
ifeved thai under present conditions per
cent was too high and should be reduced
II was <urrhsr said that the deposits had
been greatly increased during the last six
months. and 10 maintain the old rate OF
interest would mean reduction Of the
surplus. The reduction. It was said. would
not really affect any Of the deposltors, IN
asmuch as the step taken would increase
tie surplus, and later the depositors would
get the benefit OF this increase
Want Legal Interest Reduced.
F5anrv A. schenck. president of the Bow
cry Savings Bank. in discussing the reduc-
ZION said yesterday that the big deprecia-
lion in securities 10 the holding of which
savings banks are limited, such as state,
Kew York City and other city and railroad
bonds was behind the reduction.
The New York State Savings Bank As
ISOLATION has no power 10 compel any OF
SIS members to reduce its rate" said
Mr.. Schenck 1T can only exercise moral
force Many savings bank presidents and
controllers have intimated that their banks
will reduce rates beginning July / For
the sake Of the savings banks which are
unable TO keep up the higher rate some
mower such as the New York Clearing
House exercises over its members must De
brought 10 bear. Perhaps wholesale reduc-
ton by the larger savings institutions Is
the only remedy
1a0 afz7
advocated a reduction Of the legal rate Of
interest from TO 81 per cent. This was
the only sure means of keeping all the saw
tnes banks down TO the lower rate with
amy uniformity. II was said. If they reached
the maximum surplus, which one banker
thought was not likely for a good many
gears in any of the savings banks, with
the exception CT perhaps one, they could
Easily declare extra dividends instead Of
raising the rate OF interest
The trouble with the savings bank Of
fcials is that most of them are merchants
and not bankers said a banker who has
made an exhaustive study of the subject,
and in this matter they have TO deal with
= real banking proposition and do not know
just how 10 handle ii. It is essential that
there should be uniformity in the rate
among the banks and that il should be
reduced 10 81 per cent Present conditions
warrant thu reduction
Cheney 20 Speak To-day.
The subject of reduction of the interest
1ate was warmly discussed at last years
meeting of the Savings Bank Association,
the State Superintendent of Banks lending
the weight Of his influence 70 the cause of
the lower rate. and At to-day'S session Q.
Il. Cheney. the present Superintendent, is
expected 20 speak in favor of q general
reduction OF the rate from TO 312 per cent.
q step which he advocated in his annual
report 10 the Legislature last winter. The
speakers. in addition TO Mr.. Cheney, are 70
he William T. Dix, secretary Of the Mutual
Life Insurance Company, whose subject
viii be The Theory and Practice of Saw
ings Bank Insurance" and Pierre jay. vice
president Of the Bank Of the Manhattan
Company.
The law provides that the trustees Of a
savings bank may declare interest pay
TrenJs at 1he annual rate OF per cent as
q maximum, in such manner that de-
positors shall receive as nearly as may be
al the profits" after paying necessary ex-
penses and providing for the amortization
Of premiums discounts on securities
owned and for the surplus fund. It is the
view OF some savings bank officers that
Under this provision Of the law the several
institutions should fix their rates at each
interest period on the basis Of their ability
respectively TO make the disbursements. as
3 matter Of justice TO their depositors, and
that the Superintendent OF Banks should
exercise his authority in determining
whether or not any given institution is
strong enough TO make interest disburse-
ments al the rate fixed by its trustees