ings banks are usually made under the distinct agreement with the depositor that the bank is entitled to 30 or 60 days' notice from him of his desire to withdraw his deposit at the end of that time. This is to afford the bank some time within which to sell its securities, or otherwise arrange to provide the cash to meet demands of depositors. This rule operates sometimes, too, to check any panic arising among the depositors, from idle rumor or otherwise, as to the safety of their deposits, for it gives time for proving the falsity of the rumor and re-establishing confidence among the depositors.

The business of a "stock" savings bank can usually be discontinued, if it is in a sound condition, by a vote of twothirds of the shares, or of a "mutual" savings bank by a vote of two-thirds of the number of trustees. In case of the unsoundness or insolvency of a bank of either class, a receiver may be appointed, by the courts or by other provision of law, to collect its assets and pay off the depositors, as in the case of a "commercial" bank.

LOAN AND TRUST COMPANIES.

The business done by loan and trust companies is a combination of that done by commercial banks and by savings banks, together with other kinds of business not allowed to banks of these other two classes.

Loan and trust companies receive deposits payable either on demand or on time, paying a low rate of interest thereon

(from 2 to 3 per cent.), and are not required to keep any stated percentage of their deposits on hand as a “cash reserve," as is required of commercial banks. As a rule, they keep very little actual cash on hand, but deposit some of their funds on demand in commercial banks, which usually pay about 2 per cent. interest for the use of these deposits.

As to investments of their funds, loan and trust companies are in some cases required by law to invest an amount equal to their capital stock in bonds and mortgages secured by real estate, or in stocks or bonds of the United States, or those issued by any county, city or town of the State in which the company is located, or issued by such State itself. They are at liberty to invest their deposits in the same way as their capital, or in any other stocks or bonds secured either. by real estate or personal property, and also to make loans on the security of either real estate or personal property.

In practice, only a small proportion of their loans is made. on real estate security, the bulk of their investments consisting of loans on collateral security of stocks and bonds other than real estate, or of stocks and bonds and other securities purchased and owned.

Besides the business of receiving deposits and making such investments as have been described, loan and trust companies are permitted to act as trustees in various ways, viz., as trustee under any mortgage or bond issued by any municipality, body politic, or corporation, or to execute any other municipal or corporate trust; to act, under appointment of any court, as guardian, receiver or trustee of any minor, or as trustee or executor for the estates of deceased persons or

of lunatics, idiots, or habitual drunkards; to act as fiscal or transfer agents for any State, municipality, body politic or corporation, and in such capacity to receive and disburse money, and transfer, register and countersign certificates of stock, bonds, or other evidences of indebtedness. In fact, they are permitted to execute any trust of any kind whatever which might lawfully be executed by any person or corporation. They are also usually permitted to purchase, invest in and sell stocks, bills of exchange, bonds and mortgages and other securities, and to borrow money, but cannot issue bills to circulate as money. In some places these companies are allowed by law to receive upon deposit for safe-keeping, bonds, mortgages, jewelry, plate, stocks and valuable property of every kind, and to charge rent or hire for such safe-keeping; and, finally, to guarantee or insure persons holding titles to real estate against loss by reason of any defect in such titles arising from any unknown cause.

From these enumerated powers it will readily be seen that trust companies largely invade the limited field of legitimate commercial banking, and so constitute formidable competitors to banks of such class.

The business is done entirely by stock companies, each shareholder, as in the case of most commercial banks, being liable, in case of failure and loss, to an amount not exceeding the par value of the shares held by him.

The management is entrusted to a board of directors or trustees elected by the shareholders, whose term of office sometimes is for three years one-third of the whole number being elected each year.

In case of failure or insolvency, the affairs of the company are liquidated or wound up by a receiver, as in the case of commercial banks, who collects the debts of the company and applies the proceeds, as far as they will go, first to paying off the creditors, distributing the balance, if any, to the shareholders.

CHAPTER III.

CAPITAL STOCK: SHAREHOLDERS' RIGHTS AND LIABILITIES.

BEFORE a bank of any kind with capital stock can be organized, those who propose to organize it must first ascertain whether they can induce other parties to join with them in supplying the requisite amount of money for the purpose. All those who agree to do this are said to be "subscribers," and the first step to take, therefore, is to open a "list" of subscriptions, wherein the subscribers, by signing their names, agree to take a certain number of "shares," each share representing $100, or a smaller or greater amount, as fixed by law, and to pay in the money for same at or before a date named in the agreement, either in one amount or in several amounts called "instalments." With National banks the law requires that at least one-half of the capital must be paid in before the bank begins business, and that the remainder must be paid in five equal instalments monthly thereafter, or one-tenth monthly until the whole is paid in. All payments of capital stock should be made in actual money or the equivalent of ready money, and no promises to pay money at some future time should be accepted for this purpose. For each instalment paid, the subscriber should receive a proper voucher, or temporary receipt, stating the amount, the date of payment, and that it is the first, second, or other instalment paid. At the same time a book should be kept by the person or persons receiving these payments,