The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-11-08
WHAT SAYINGS BANKS ARE.
An Answer TO Recent Criticisms OF
Their Methods.

I Their Methods.
To THE NEW York HERALD Much at
tention has lately been called to the
mutual savings banks of New York
State. Upon the ground that correct
Information should be had by those who
criticise mutual savings banks / ask
space for the following statement OF
facts concerning these institutions:
First. the mutual savings banks OF
New York are an outcome of semi
charitable plan whereby savers Of small
sums can place them on deposit and
eventually receive fair interest from
investments made by the savings banks
The trustees serve without pay unless
they perform particular work. when they
are treated the same as any officer or
clerk OF hank They meet monthly
overseeing the affairs of the savings
banks. committee of the trustees ex-
amines the banks several times a year.
There are no stockholders in the saw
ings banks and consequently no stock,
the banks being conducted on the mu-
tual plan of depositors.
The law prohibits any trustee from
receiving any pay for his services or
from obtaining any of the money of
savings banks on loan. directly or in
directly. Every loan and investment of
the savings bank is prescribed by the
State banking law. The banks cannot
legally go outside of these Limitations.
Mutual savings banks are thus placed
among. the most conservative financial
institutions of the country.
mo more responsible class of men
acting In a business capacity can be
found than those connected as trustees
with savings banks. In every emer-
gency of the country. such as the civil
war; the great world war and when other
deplorable conditions have arisen, they
have been among the foremost in financ-
ing and upholding patriotism.
If there are any institutions which
should be protected against onslaughts
based on ignorance they are the saw
ings banks. No other financial institu-
tions in the State OF New York come
anywhere near supplying as much money
for home building as do the mutual
savings banks.
If there should be found to be spe-
cial cases of irregularity in the way
of bonuses charged in the making of
loans by any mutual savings bank in
the State it is the plain duty of the
Banking Department to correct them.
and 1t has the power so to do. There is
no good reason for mistrusting, on ac-
count of any instance of irregularity of
this character. institutions which have
done and are doing so much for the well
fare of the country as the savings
banks.
1t Is necessary for savings banks to
have on hand what is called available
funds, that is. sufficient amount of money
to meet calls from depositors.
There are reported 141 mutual saw
ings banks in the State; 120 pay per
cent. the others from S1a per cent. to
Az per cent.
1t is not good banking for a. savings
bank to put all of its funds in mort
cages or to follow any method involving
putting all its eggs in one basket.
Therefore, the excellent banking laws Of
New York State restrict the amounts
which savings banks may invest in vari-
Gus securities, and 1t Is we'll for the
business of the country that savings
banks In the State Of New York
having about two and one-half billions
of money to lend. invest their money in
Government bonds, municipal bonds. rail-
road bonds, mortgages. and retain a suf-
ficient amount in cash to meet all con-
tingencies.
The following statement will show the
condition of the savings banks in New
York State, according to the latest pub
lie report OF the Superintendent of
Banks:
Invested in first mortgages on real es-
tate. AZ per cent. OF assets.
In railroad bonds, Is per cent.
In Government bonds. IA per cent.
In State. municipal and land bank
bonds. 10 per cent.
Other assets. composed OF the follow
ing, per cent.
Promissory notes secured by
collateral ................. S11 900 900
Real estate (banking houses). Is, 1000 900
Other real estate. .......... 5000 600
Available funds as follows:
Bankers acceptances. .. 10000
Cash on deposit In banks and
trust companies. .......... 119, 900 900
Cash on hand. ................ 5000 900
Total collectlble interest...... 20. 900. 900
other assets. ............... 1000 900
Total assets. 81. 4j6 900 900
At the present time it Will be noted
that the largest investment is In first
class mortgages on real estate. a large
proportion of which represents home
building. The home building proportion
is especially large outside of the great
cities of the state.