spirit and intent of the statute in this respect by keeping permanently uninvested all, or an undue proportion of the moneys received by them, he may report the facts to the Attorney-General, who shall proceed against such corporation in the same manner as against Banks of Deposit.

The trustees of any savings bank must not loan the moneys deposited with them upon any other personal securities whatever, and in all cases of loans upon real property, a sufficient bond secured by a mortgage thereon must be required of the owner.

Whenever money is loaned upon improved property, such property must be insured by the borrower, and the policy of insurance thereof assigned to the savings bank, and in case the borrower neglects to insure or keep insured such improved property, the Superintendent of Banks may insure the same at the cost and expense of the borrower.

No savings bank should directly or indirectly deal or trade in real property in any other case or for any other purpose than is authorized by this article, or deal or trade in any goods, wares, merchandise or commodities whatever, except such personal property as may be necessary in the transaction. of its business; nor shall any savings bank or any officer thereof in his regular attendance upon the business of the bank, in any manner buy or sell exchange gold or silver, or collect or protest promissory notes or time bills of exchange.

Savings banks may, however, sell gold or silver received in payment of interest or principal of obligations owned by them or from depositors in the regular course of business, and may pay regular depositors, when requested by them, by draft upon deposits to the credit of the bank in the city of New York, and charge current rates of exchange for such drafts.

No savings bank may issue any certificate of deposit payable either on demand or at a fixed day, or pay any interest except regular dividends upon any deposits or balances, or pay any interest, deposit, or any check drawn upon itself by a deposi

tor, unless the pass-book of the depositor be produced, and the proper entry be made therein at the time of the transaction.

The Board of Trustees may, by their by-laws, provide for making payments in case of loss of pass-book, or other exceptional cases where the pass-book cannot be produced without loss or serious inconvenience to depositors; but the right to make such payments ceases when so directed by the Superintendent of Banks, upon his being satisfied that such right is being improperly exercised by any savings bank; payments, however, may be made upon the judgment or order of a court or the power of attorney of a depositor.

The trustees of every such corporation may regulate the rate of interest or dividends not to exceed five per centum per annum upon the deposits therewith, in such a manner that depositors shall receive, as nearly as may be, all the profits of such corporation, after deducting necessary expenses and reserving such amounts as the trustees may deem expedient as a surplus fund for the security of the depositors, which, to the amount of fifteen per centum of its deposits, the trustees of any such corporation may gradually accumulate and hold, to meet any contingency or loss in its business from the depreciation of its securities or otherwise. The trustees usually classify their depositors according to the character, amount, and duration of their dealings with the corporation, and regulate the interest or dividends allowed in such manner that each depositor shall receive the same ratable portion of interest or dividends as all others of his class.

The trustees of any such corporation should not declare or allow interest on any deposit for a longer period than the same has been deposited, except that deposits made not later than the tenth day of the month commencing any semi-annual interest period, or the third day of any month, or withdrawn upon one of the last three days of the month ending any quarterly or semi-annual interest period, may have interest declared upon them for the whole of the period or month when so deposited or withdrawn.

No dividends or interest should be declared, credited, or

paid, except by the authority of a vote of the Board of Trustees, duly entered upon their minutes, whereon should be recorded the ayes and nays upon each vote; but accounts closed between dividend periods may be credited with interest at the rate of the last dividend, computing from the last dividend period to the date when closed, if the by-laws so provide. Whenever any interest or dividend shall be declared and credited in excess of the interest or profits earned and appearing to the credit of the corporation, the trustees voting for such dividend are jointly and severally liable to the corporation for the amount of such excess so declared and credited.

The trustees of any such corporation whose surplus amounts to fifteen per centum of its deposits, at least once in three years, shall divide equitably the accumulation beyond such. authorized surplus as an extra dividend to depositors, in excess of the regular dividends authorized.

A notice posted conspicuously in a bank of a change in the rate of interest shall be equivalent to a personal notice.

In determining the per cent. of surplus held by any savings bank, its interest-paying stocks and bonds should not be estimated above their par value or above their market value if below par. Its bonds and mortgages on which there are no arrears of interest for a longer period than six months are to be estimated at their face, and its real property at not above cost. The Superintendent of Banks determines the valuation of such stocks or bonds, or bonds and mortgages, as are in arrears of interest for six months or more, and of all other investments, from the best information he can obtain, and he may change the valuation thereof from time to time as he may obtain other and further information.

The trustees of every savings bank, by a committee of not less than three of their number, on or before the first days of January and July in each year, must thoroughly examine the books, vouchers, and assets of such savings bank and its affairs generally. The statement or schedule of assets and liabilities reported to the Superintendent of Banks for the first of January and July in each year should be based upon such examination, and shall be verified by the oath of a majority of the

trustees making it; and the trustees of any savings bank may require such examination at such other times as they shall prescribe. The trustees must, as often as once in each six months during each year, cause to be taken an accurate balance of their depositors' ledgers, and in their semi-annual report to the Superintendent they must state the fact that such balance has been taken.

All the property of any bank or trust company which becomes insolvent, shall, after providing for the payment of its circulating notes, be applied to the payment in full of any sum or sums of money deposited therewith by any savings bank.

The Superintendent shall receive the moneys so deposited with him by the trustees of any solvent savings bank voluntarily closing its business, and all moneys which may be deposited with him by the receivers of insolvent savings banks pursuant to the provisions of any law or the order of any court, and shall receive a receipt therefor, and forthwith deposit the same in some solvent savings bank or savings banks to the credit of the Superintendent of Banks in his name of office, in trust for the depositors and creditors of the closed savings bank from which they were received. The Superintendent shall report to the Legislature annually in his report the names of such closed savings banks and the sums of unclaimed and unpaid deposits to the credit of each of them respectively.

The Superintendent may pay over to the persons respectively entitled thereto the moneys so held by him upon being furnished with satisfactory evidence of their right to the same. In cases of doubt or of conflicting claims, he may require an order of the Supreme Court authorizing and directing the payment thereof. He may apply the interest earned by the moneys so held by him towards defraying the expenses in the payment and distribution of such unclaimed dividends to the depositors and creditors entitled to receive the same, and he shall include, in his annual report to the Legislature, a statement of the amount of interest earned by such unclaimed dividends.

CHAPTER VII.

Trust Companies.

THE important field covered by Trust Companies, together with the fact of their comparatively recent growth, warrants and, in fact, necessitates a rather lengthy treatment of the subject.

By many it is erroneously supposed that these companies are organized to compete for business with banks, both state and national. A careful review, however, of the powers and privileges granted banks, both national and state, including savings banks, must convince the thoughtful reader that such is not the case, and while it may appear at first glance that many small accounts which are now kept in trust companies would otherwise be deposited in savings banks, it must be borne in mind that the restrictions and regulations of savings banks in regard to the drawing out of money, it being necessary for the depositor not only to make out a check but to present his pass-book in person, or hand the pass-book to the person presenting the check, are so irksome, that many of these accounts cannot be conveniently and would not be kept therein. In fact, about the only thing in common between a trust company and a savings bank is that both are required by law to pay a certain per cent. of interest upon deposits. The trust company, as hereafter stated, being compelled to pay two per cent., while savings banks are prohibited from allowing a higher rate than five.