The sun., 1910-05-27
DIFFER ON INTEREST RATE
BUT SAVINGS RIVKs AREUNlNI-
MOIS lGlINSS INCOHE TAX.

. A. the annual meeting of the State Saw,
inEs Ranks Association Yesterday at ths
Chamber OF CommerUs Orion a. Cheney
the State Superintendent oI Banks. talted
for a reduction Of the interest rate from
/ 20 81 per cent. There was no spoken
opposition 10 Mr.. Chensy's ideas. for Il
.Nas apparent that the members Of the
association had come In a receptive frame
of mind. ready TO hear what ho or any ona
else had 10 say and unwilling to stir up a
discussion in a public meeting. The ap-
plause was not general rather Il was con
| fined 10 groups here and there.
None the less after the meeting members
could be found who we're willing to declare
that legislation along the lines suggested
| hy the hank superintendent might easily
be framed for the newt session OF the leg
stature and that the measure would not
90 begging for support among the banF ers
u this State
Mr.. cheney was introduced by tho
president elect. Charles y. HaEaman who
IL president of the Troy Savings Rank.
I have mo- wish 10 regulate or dictate
the policy Of your institutions.' said the
State Superintendent. for In my opinion
that Is not within nv province. But the
marvellous growth in savings bank de-
posits in the last wear has been called Ia
your attention and ! want to say a few
things about their relation to interest.
| The amount Of interest paid dopOsitors
was 40 great that the ratio Of surplus "a
deposits was reduced more than one
third of per cent. Another factor which
We cannot fail to consider in connection
with this continued decrease in surplus
ia the reduction in earnings and the large
depreciation in bond values since the frs,
Of the year
For tho last twenty wears there has
been an annual decrease Of sav ings bank
surplus in relation 20 deposits. ~ that to-
dav the percentage 10 less than half of
what Il was in iSsO. While this condition
has not proved disturbing thus far I
personally am convinced that the time
has now arrived when steps should be
taken TO prevent q further reduction
There can be no doubt II the Justice Of
the principle that every dollar of net
earnings that can be distributed " With
prudence among the depositoFs should
b. 40 distributed. vet IN u not time 10
analyDe the present conditions and de-
terniDe what real prudence demands?
The first consideration which should
be gwen 90 all Swings funds n absolute
safety The surplus % bank represents
It's margin Of safety. II cannot be too
A.
every hank whose deposits are increasing
should carry prOpOrtiOnate sums 10 IL
surplus fund al every dividend period
Savings hank trustees establish their
institutions through fine sense of un-
selfish devotion and disinterested philan-
thropy, but when the banks deposits
grow some trhtess ara attacked with
the gruw big fever | believe IN the
call ~ ambition. but when men enga Eed
m purely philanthropic enterprise
hegn to -cheme hoW 20 take business
away from what they call rival institu-
tons u ~ time to scrItinize their real
motives
IT has been stated that N per cent Of
our savings hanks wish 10 reduce their
Z PER cent interest rate until their surplus
s properly restored but owing 10 the
refusal ~ others Co adopt the same course
nothing tan he done. II - hard 90 recon
Cils the attitude - either SIDE 90 the very
evident duty II the savings hank trustees
II b. my opinion that under present
conditions only hunted number ~ our
savings hanks are IN a position warranting
continuance ~ the per cent rate
Vet even II ! we're trustee of one II th,-s.,
institutions with sufficient surplus
would consider Il INV duty a. the lndiv.
dual dep1sit0rs II my hank to help
af
by voting 10 reduce N. prevailing rate
Tor a tim" a. least Pride IN ones own
institution ~ q desire % get some one
else's deposits should blind NJ one a. the
conditions which al present exist
Many Of the members ~ the assOcia-
ton gave evidence of their approval 20
these IDEAS and they gave Mr. cheney
their attention a. h. continued
No legislation directly bearing on
savings banks has been enacted this
present year NJ the few bills relating 20
the subject which were suggested. only
one covering segregation of savings de-
posits in commercial institutions had the
sanction of the banking department No
action was taken by the legislature IpOn
the measure but progress has neverthe-
less been made toward the solution Of q
very important problem The Trust
tompanies' Association has authorized
tho appointment o. n committee 10 con
Ter about the matter with the Supsrin-
tendent % banks and any committee
that NAV he selected from the state
Bankers Association would doubtless vel
come being joined In their deliberations
hy a committee from your association,
should YOU care To appoint one ! hope
that We may be- able 10 So the good and
prosperity " oil Of our banks instead of
just one
Mr. Hanaman said that he hoped tha,
the association would stand with him on
a platform Of excluding commercialiEm
from their business Many times. he
thought, an alleged altruism was used a.
cover for something quite different
The trouble was that when one bank
which had a large income on compare
tive himsv securities was able 10 put tIp
il rate of interest. IL forced another in
stitutiOn 10 come up 10 that rate. and the
fault for the change lay undoubtedly
in the first hank IL was one ~ the
provinces of the savings hank 20 dis
courage the transfer of deposits. and 10
convince depOsiiors that the safest way
was 10 leave their funds IN the bank
Why. one depositOr came to me. said
Mr. Hanaman. who thought that he had
10 draw out his interest 70 get "
II was poor business. said the president
elect to draw upon the surplus 10 nay in
teuest
There was no discussion Of these prin-
ciples from the floor. The only incident
outside the regular programme was the
Introduction Of a motion in opposition
20 the income tax. Il was moved bv
counsel for tho executive COMMITTEES with
that bOfy's concurrence II was.
RssoIr,d. That the savings banks n the