Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-01-10
LEGAL AIDS URGED
IN BANK MERGERS
New York State Official
Points Out Occasional Need
for Quick Action.
BY CHARLES F. sPEARE.

Special Dispatch to The Star.
NEW YORK, January 10.-In urging
an amendment to the banking law
which would permit prompt mergers OF
banking institutions in case of emer-
gencies, Joseph A. Broderick, New York
State superintendent of banks, in his
annual report makes this striking state
ment:
Had the present law contained such
provision, the Bank of United States
would have been merged with one OF
our strongest institutions and its closing
avoided"
Merger Efforts.
It is now generally known that there
were negotiations between the officers
and directors of the Bank of United
States and other New York institutions
to take over the former and that these
conferences continued up to their I'M
successful termination early in the
morning of the day that the bank sus-
pended payments. The last effort to
this end was said to have been made
in behalf of subsidiary of one of the
large New York banks.
Mr.. Broderick points out that, under
the present law, mergers to become eff
fective must be approved by stockhold-
ers. This involves great deal Of delay
and aggravates the situation which has
made the merger desirable. A change
in the law which is now being consid-
cred will permit a merger with the APP
proval of the superintendent of banks
and the boards of directors of any two
or more banking institutions and makes
ample provision for the protection of
the interests of stockholders of the
merging institutions.
Amendments Suggested.
Out of the experiences and studies of
the past year the superintendent of
banks finds it desirable that numerous
amendments be made to the banking
law in New York State. He attaches to
his report recommendations for over a
score of such changes, of which that
relating to emergency mergers is the
most important and the one which
probably will have the greatest degree
Of attention in the future It is well
known in banking circles that such
mergers have been effected in different
parts of the country in the last three
months and that through them a great
deal OF distress to bank depositors and
stockholders in banks has been avoided.
Other recommendations made by
Supt. Broderick that will undoubtedly
be brought up in the form of bills before
the Legislature at Albany this Winter
have to do with the segregation of
thrift accounts in commercial banking
institutions in cities with a population
OF $4,000 and over and placing restric-
tons on the investment of such thrift
funds; also the requirements that banks
and trust companies maintain reserves
against time deposits; another to per-
init the superintendent of banks to
order appraisals of real estate properties
owned or mortgaged by institutions by
Independent and impartial appraisers of
recognized standing.
Move to Protect Accounts.
A bill has already been introduced
in the New York Legislature designed
to protect thrift and savings accounts
In commercial banks and trust compa-
MES. This brings up an issue in bank
ing circles that dates back to 1910,
when the superintendent of banks then
recommended that banks or trust COM
panieS establishing or maintaining spe-
cial interest departments "for the ben
eht OF the provident and frugal poor
should be required to invest such de-
poSitS in accordance with the law COW
er1ng investment of savings bank funds.
The report notes that between Oc-
tober l, 1929, and September 80, 1880,
when deposits in general were on the
decline, there was an increase in the
deposits of LAB savings banks under
State supervision in New York of $231,-
367,732. 1t makes this significant state
ment: More recently the public showed
decided preference for this class
OF institution by placing on deposit with
them large sums of funds Withdrawn
from commercial institutions"
1t Is understood that one New York
savings bank has gained nearly 500
100000 in deposits since December /.
Copyright, 1917