The sun., 1918-12-30
TRUST POWERS FOR
STATE BANKS ASKED
Change in Existing Law Is Ad-
vocated by Superinten-
dent Skinner.
IN LINE WITH NATIONAL
Branch Institutions Also Are
Urged-Other Amendments
Are Proposed.
IN LINE WITH NATIONAL

ALBANY. Dec. 2e.-Importan amend
ments to the New York State banking
law will be urged by George I. skinner,
State Superintendent OF Banks, In his
forthcoming annual report to the Legis-
laturo. Among the amendment. sug-
ges;ed Is one which would give TO State
banks trust powers under certain re-
s%trictions.
The Federal Reserve Board recently
was authorized by Congress to give SIM
liar powers to national banks in this
and other States. Superintendent kin
ner also favors giving to State banks
in certain large upstate cities the priv
ilege of operating branch Offices.
Prior to this year" says Superln.
tendent SINNERS report. the Federal
reserve act was amended so as to per-
nit the Federal Reserve Board to au-
thorize national banks applying there
for to exercise certain powers OF trust
companies when not in con%travention of
State or local law. II has now been
amended SO as to authorize the Federal
Reserve Board TO grant by special per-
NIT TO national banks applying therefor.
when not in contraventlon OF state or
local law, the right TO act as trustee.
executor. administrator, registrar of
stocks and bonds. guardian OF estate.
assignee, receiver. committee of estates
o: lunatics or in any other f1duciary
capacity in which State banks. trust
companies or other corporations which
come into competition with national
banks are permitted TO act under the
laws OF the State in which the national
bank Is located.
Inconsistency Charges.
TT seems strange as well as incon-
sistent with any theory of State rights
hat in order to protect national b
from competition or to enable them to
compete with State Institutions II should
he considered proper TO take from the
States the right 20 determine the quail
hcations Of executors, administrators
ana trustees. or to provide that when
he exercise OF such powers by national
banks is expressly in contravention OF
State laws II shall o be deemed in
co0travention Of such laws 10 any COM
peting institutions are permitted 20 eS-
crcise them.
." am 70 thoroughly convinced that
not only during the period of the war.
but during the reconstruction period,
there should he the utmost harmony and
cooperation between all banking insti-
buttons, both State and national. that
I do not deem It wise TO make compari-
acrs. to express my opinion OF proposed
legislation that might compel all bank
Ing institutions 90 become members OF
the national system or of attempt to ad-
Verttse one class of institution at the
expense Of another and TO promote COM
petition, rivalry and i'll feeling between
them.
Under existing circumstances and
NnnIffFAnu Ax-nN Isua-fyns-as ~, -4af
ton. II passed by the national Govern
nent. must be accepted in good faith.
and some amendments to the State bank
Ing LAW are, In NV Judgment, rendered
necessary BY the enactment above re-
ferred TO.
Asks for Authority.
eft Is. I think. apparent that. n ma
tioral banks are to exercise the powers
stNecihed, the same powers should be
Conferred upon state banks under sub
FtBntially the same conditions and the
SUPERINTENDENT of Banks should also be
authorized to perform such duties in con-
nection with the receipt OF deposits from
national banks and 70 make such exami-
nations OF their trust departments IA
may be necessary under that enactment
IN order to carry II into effect. He has
no authority TO accept such deposits or
make such examination under the pres
en' banking law. and any refusal on his
part, based upon lack of authority.
would seem like a puerile attempt 10
nullify the Federal statute.
"On the other hand. the trust com
nanies Of tire state have bull. Up a
great reputation. not only on account 81
the safeguards that have been thrown
about their investment of trust funds
and the fact that hu: four such com
panies have occaslone1 any loss to de-
pos'tors IN forty-four years. but on ac-
oount Of the care which has been exer-
c,sed by the various superintendents OF
banks in authorizing such corporations
20 engage In business.
at has been the general policy OF
the department not to authorize trust
companies in small places where there
ives neither occasion nor opportunity for
the exercise of trsst powers to any
considerable extent As a result OF this
policy. there are only ninety-nine trus'
companies in the State, although they
nave aggregate reported resources al
S4.221.371,s09. and every S%uperinten,
dent OF Banks in recent years has beer
compelled TO refuse authorization TO pro-
posed trust companies IN cases where Il
was evident that there was no real i'm
tention to exercise the powers Of such
a company but solely a desire 10 oh
tain the use OF the name for advertis'
ing purposes.
81 think. therefore. that the banking
,aw should be so amended. both for the
protection OF the trust companies and
the people OF the State, as to prevent
the use OF the title trust company by
any corporation which has not been or
Eanized as a trust company under the
laws Of the State. Ample precedents
may be found for this suggestion In the
restrictions already contained in thu
banking law with reference TO the U.s.
ot the word bank and the use Of th'
'ord savings
Loans to Directors.
ut Is. moreover. only just that trus
companies be able TO make loans to the
directors from their ordinary. funds upo'
he same terms and under the came con
.ltions az banks
The reserves required by the Fedora
Reserve act at the present time are Il
fleet nuite as onerous as those aDplica
DE to state institutions which are nc
members Of the Federal Reserve Baul
- New York. In order. however, 10 en-
bile a member bank to ascertain whethe
20 IL complying with both the State bank
ing law and the Federal Reserve act. tw
computations are necessary. and ! there
fore recommend the adoption Of Al
amendment TO the bauEtug law Whicl