New Britain herald., 1926-01-21

of the expense of conducting the bank and profit 10 the stockhold- or. for tho bank has been organized by the stockholders and is being conducted for profit.
 A Mutual iavings bank has no stock and no stockholders. It is not allowed by law to do a commercial banking business. Its directors may not receive any compensation ex- ccpt n fee for attendance at direc- tors meetings, which by law is limited to not exceeding five dollars for each meeting, if present. Thess meetings occur but once month regularly. No officer or director of a Mutual Savings bank can be bor- rowcr, CT surety for a borrower, from that bank. Its deposits can be invested only in such ways as are prescribed by the laws of the State Of Connecticut, and these laws are very stringent and Include only the highc .t-grad9 seouritiee. A very thorough examination and audit Is made every year by the Bank Con- missioner of the State. A Mutual Savings bank substantially acts &a trustee for it's depositors. It re- cciN.s their deposits, invests them In accordance with the provisions Of the law, and pays 10 tho der sitor whatever is earned by these invest mcnts, after deducting the expense of conducting the bank and a mod crate, reasonable amount for the &C., emulation of surplus or reserve to provide against losses, or depre- citation in securities. In effect the dcpositors are the owners of these mNo- 'ments and they are the only ones 10 whom dividends arc paid. II can be readily understood why rato of interest on deposits. that is as high as is consistent with good business management by a bank which is being conducted for the benefit of its stockholders, might with perfect safety be exceeded by a bank which is being conducted for the benefit of its depositors.
 For the past year and one-half this bank has been paying. interest to its depositors at the rate of per cent per annum, and l wish most emphatically to state that it has been done with no impairment of security and with perfect safety: of this our incorporators and deposi- tors may be assured. Neither has it been done with the object of at- tracting deposits Iii the opinion of the management the present day depositors are entitled 10 substan- tially the net earnings, after re- serving sufficient 10 maintain the ratio of surplus to Deposits. Our earnings being ample 10 justify an increase Of the rate of interest from F per cent 10 per cent for the period from July 1, 1924, to January l. 1925. we felt that justice to our depositors demanded that it should be done, and having been ample for the subsequent period. the rate of per cent has been maintained and will be continued as long as our earnings warrant it.
 As shown by the statement of surplus, fund has been accumu- lated ample to meet all contingen- cies and all that is needed for the future is to maintain the same ratio of surplus.
 The whole history of the bank for more than siXty-three years shows that this policy is a safe one and has resulted in safety and profit 10 its dopositors. Such rates of inter- est as conditions at the time war ranted, varying from per cent 10 6 per cent have been paid. A reason- able surplus has been accumulated. besides meeting from the surplus earnings all depreciations in securi- ties or losses, and absorbing a loss of over five hundred thousand dol lars through dedication nineteen years ago. and during all this period all depositors have received their to- tai deposits with interest In full. If they wished them.
 l mention, with sorrow, the loss hy death since our last meeting of II. Dayton Humphrc:. MT. Hunt phrey was connected with the bank for long period of years--first as an incorporator, then as a director. and, during most of the time that he served as director, a member Of the real estate ,oan committee. He was a firm friend of the bank and during tho long period of his serv- ice rendered most loyal assistance and advice. His genial disposition en1eared him to all of us and VIC shall long cherish his memory.
 There have also been two rcsigna- lions from our incorpors tors. be- cause of permanent change of resi- k. Pasco and Stanley A. 1ciek.
 I wish to commend our force Of employees. for their loyal interest and devotion to the best interests of thc bank, and wish 10 thank them, and the other officers of the bank. for their hearty cooperation and valuable assistance.
 Respectfully submitted.
 F. N. STANLEY, President. New Britain, Conn,
 January 20, 1926.