New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1918-12-30
Skinner Urges
Amendments to
State Bank Law
Would Confer Trust Powers
aud Permit tho Open
ing of Branch Offices


ALBANY. \. Y. Dec. 29.-lmportant
amendments 20 tho New York State
banking law will be urged by State
superintendent Of Banks George 7. /
skinner. in his forthcoming annual
report to the Legislature. Among the
amendments suggested is one which
would give to state banks. in New York
state, trust powers under certain re-
strictions. The Federal Reserve Board
recently was authorized by Congress to
give similar powers 10 national banks
in this and other states. Superntend-
cnt Skinner also favors giving to state
banks in certain large upstate cities
the privilege OF operating branch
Offices.
prior to this year" says Supcrin-
,endcnt 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 contravention
of state or local law. 1t has now been
amended so as to authorize the Federal
Reserve Board to grant by special per-
nit to national banks applying there
ior. when not in contfavention OF state
or local law, the right TO act as trustee,
Executor, administrator. registrar of
;tocks and bonds, guardian Of estates,
ass gnee, receiver, committee of estates
% lunatics. or in any other fiduciary
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.
New Powers Recommended
1t is, think. apparent that, if
national banks are tc exercise the pow
erS specified, the same powers should
DC conferred upon state banks under
substantially the sa conditions, and
he Superintendent OF Banks should
Also be authorized TO perform such
juties in connection with the receipt
Of deposits from national banks and
0 make such examinations of their
rust departments as may be neces-
airy under that enactment, in order to
AIRY it into effect. He has no author
~ 20 accept such deposits or mae
such examinations under the present
banking law, and any refusal on his
part, based upon lack o. authority,
would seem like puerile attempt to
1ullify the Federal statute.
On the other hand the trust com
oanlcs OF the state have built up a
great reputation not emily on account
o the safeguards that have been
thrown about their investment of trust
unds and the fact that but four such
Companies have occasioned any loss to
iepositors in forty-four years, but OF
ccount of the care which has been
exercised by the various superintend-
ents OF banks IN authorizing such cor
9oratlons to engage in business. 1t
mas been the general policy OF the de-
partment not to authorize trust COM
pa1ies in small places where there was
neither occasion nor opportunity for
ne exercise OF trust powers to any
considerable extent. As result of
this policy, there are only ninety-nine
rust companies in the state. ALTHOUGH,
hey have aggregate reported resources
Il s3,22i 81 500, and every Superin-
'endent of Banks in recent years has
been compelled 20 refuse authorization
TO proposed trust companies in cases
where it was evident that there was no
real intention to exercise the powers
OF such d company but solely desire
o obtain the use of the name for adj
1ertising purposes. | think, therefore
hat the banking law should be SO
amended, both for the protection of the
lust companies and the people of the
ate, as to prevent the use Of the title
1rust company by any corporation
when has not been organized as q
orust company under the laws of the
S'ate. Ample precedents may be found
or tnls suggestion in the restrictions
Nlready contained in the banking law
nth reference to the use Of the word
oanN, and the use of the word
.avings. "o'u
IT is, moreover, only just that trust
\ .oWpaniea be able to make loans to
M luelr directors from their ordinary
N uhos upon the same terms and unde,
nc same conditions as banks.
Would Eliminate Computation
DC reserves required by the Fed
'aI heserve act at the present eime
are IN enect quite as onerous as those
'pplcable to state institutions which
are not members of the Federal r.
.erVe Bank OF New York. In order
however, to enable a member hank r.
ascertain whether it is COMPLYING ;tt
ooth the state banking law and the
feoeral heserve act, two computations
arc necessary, and | therefore recon.
meNa the adoption OF an amendment
tne banking law which Will relieve
banks and trust companies which arc
MEMBERS OF the Federal Reserve Rank
o. New York from the provisions OF
nay statute, provided they comply
WIN inc provisions OF the Federal Re-.
II believe that it is desirable TO give
wings banks the power to borrow
honey' with the approval Of the Suner.
'btendent OF Banks, for the purposn Of
purchasing bonds OF the United States
"ese bonds are. without laying undue
'nlphasis upon patriotic motives. the
most desirable Investments that sucF
Institutions can have, and it miph,
easily happen that AN institution De
'irous Of subscribing for a arps
mount of such bonds and amply abb
20 make such an investment might moi