New-York tribune., 1912-01-04
Recommendations.
In his recommendations to the Legislat
ure Superintendent Van Tuyl says:

IN MS recommendations to the LeEiSlat-
ure Superintendent Van TuyI says:
Prior to the year 1890 many so-called for
elgn mortgage, loan or investment com
panes were engaged in business in this
state practically without supervision.
Prominent among them were the so-called
w MeStern farm mortgage companies
through the failure of many of these cor
porations at about this time large sums OF
money were lost to the people of this state
and the necessity of placing such corpora
lions under adequate supervision was
brought home TO the Legislature and the
people of the state generally. In an en-
uedVor TO bring all corporations of this
general character under the supervision OF
the superintendent of Banks the definition
adopted and inserted i'm the banking law in
1892 was very broad and general in its
terms.
1 have no desire to extend the jurisdic-
ton of this department or to add to its
responsibilities. | think, however. that the
Legislature might well give consideration
TO this matter and more clearly define mort
gage, loan or investment corporations and
the jurisdiction Of this department with
reference to them. The advisabity of at
tempting to protect the investing public
especially small investors, against the
fraudulent or deceptive sale of inadequatey
secured bonds. contracts. and even stocks,
is receiving the attention Of the lPgis-
latures of many states.
I wish TO call your attention to the ne
cessty of affordng further protection TO
the depostors in the savings banks of this
state by requiring every savings bank TO
accumulate an adequate surplus. While
officers and trustees of savings banks are
usually iudicious and conservative, the
rivalry that almost necessarily exists be-
tween different savings institutions ana
the competition for deposits with national
and state banks and trust companies that
has resulted from those institutions pay
ing high rates of interest upon what are
denominated special interest accounts
acCentuates and increases the natural de-
sire of the officers and trustees OF savings
banks to make as large a return as posi-
BILE to depositors. This desire to make a
large immediate return to depOSitors by
way Of dividend. usually misCalled inter
est" is of course, in direct conflict with
the even more important purpose of ac-
cumulating a sufficient surplus to safe
guard beyond question the deposits them
selves and cannot be harmOniZed with It.
The possible dangers Of allowing unre-
stricted dividend or interest payments 10
depositors by institutions which nave "A
comparatively small surplus have become
apparent to the officers of savings banks
throughout the state, and ! am informed
that both the State Savings Bank Associa-
ton and others interested in this question
will present bills making ii compulsory
upon officers and trustees of savings banks
to accumulate a reasonable surplus. This
can of course. only be accomplished by
limiting in some way the return 10 de-
positors until such surplus has been ac-
cumulated / trust that some satisfactory
solution Of the questions involved Will he
reached during your present session ana
proper legislation enacted.