thorized investment for the moneys of savings banks, but the Bank Superintendent may, in his discretion, require any savings bank to sell or retain such bonds or stocks of these cities as may have been brought before this indebtedness." This enlarged scope of investment has been further extended by subsequent amendments to include bonds and stocks of other cities, and the first-mortgage bonds of certain classified railroads in this State, and certain named railroads of other States. The last enactment of this nature was chapter 581, Laws 1906, and is contained in section 146 of the present revision.

While the deposits in these institutions annually increase at a rapid rate, the range of investments tends constantly to diminish because of the maturity and payment of Federal, State and municipal bonds, and it will presumably become necessary from time to time to enlarge the classes of securities in which these banks and institutions may invest their funds.

DIVIDENDS.

An investigation of the subject of dividends to depositors is of interest. A customary provision in the charters granted by the legis lature was in these words:

"It shall be the duty of the trustees to regulate the rate of interest to be allowed to depositors so that they shall receive as nearly as may be, a ratable proportion of all the profits of the corporation after deducting the necessary expenses.'

An act passed April 23, 1831 (ch. 154), entitled "An act concerning the Bank for Savings in the City of New York," authorized the board of trustees of the bank to regulate from time to time the interest to depositors, so that the interest allowed to depositors having $500 or more deposited with the bank should be at least one per cent. less than the interest allowed to others.

Section 5 of "An act relative to savings banks or institutions for savings in the city and county of New York and county of Kings," passed April 15, 1853 (ch. 257), provided that "No such savings bank or institution for savings hereafter to be incorporated shall receive from any individual depositor a larger sum than $1,000, or a larger amount than $3,000,000 in the aggregate amount of deposits, exclusive of its banking-house; and the rate of interest on all deposits of $500 and under, shall be one per cent. per annum greater than shall be allowed on any sum exceeding $500." The steady growth

of these institutions is shown in the schedule below.10 The present be found in section 143 of the Banking Law, post.

law

may

SURPLUS MONEYS.

Another source of legislative discussion was the surplus moneys which had accumulated in the several savings banks. Chapter 254 of the Laws of 1831, passed April 23, entitled “An act concerning the Banks for Savings in the City of New York," provided for the accumulation of a surplus fund as follows: "The board of trustees of the Bank for Savings in the City of New York are hereby authorized to accumulate gradually and hold invested a surplus fund not exceeding three per cent. on the amount of deposits, to the end that in case of a reduction in the market price of the public stocks and securities, held or to be held by the said bank, below the par value thereof, any loss to the depositors by reason of such reduction may be prevented or made good by means of the said fund.”

Chapter 178 of the Laws of 1836, passed April 23, amended the charter of this institution in reference to authorized surplus, as follows: "The board of trustees of the said savings bank are hereby authorized to accumulate gradually, and hold invested, a surplus fund not exceeding ten per cent. on the amount of deposits, to the end that in case of a reduction in the market price of the securities or public stocks, held or to be held by the said bank, below the par value thereof, any loss to the depositors by reason of such reduction may be prevented or made good by means of said fund."

A general law, passed May 6, 1839 (ch. 347), made the following provision: "The board of trustees of the said savings banks are hereby authorized to accumulate gradually and hold invested in like securities, as authorized by the act incorporating said banks, a surplus fund not exceeding ten per cent. on the amount of deposits in said banks, respectively, to the end that in case of a reduction in the market price of the securities or public stocks, held or to be held by the said banks, or any of them, below the par value thereof, any loss to the depositors by reason of such reduction may be prevented or made good to them by means of said surplus fund."

An amendment to the constitution was adopted November 3, 1874, conforming all charters of savings banks, or institutions for savings, to a uniformity of powers, rights and liabilities, and all "charters hereafter granted for such corporations shall be made to conform to such general law, and to such amendments as may be made thereto.

And no such corporation shall have any capital stock, nor shall the trustees thereof, or any of them, have any interest whatever, direct or indirect, in the profits of such corporation; and no director or trustee of any such bank or institution shall be interested in any loan or use of any money or property of such bank or institution for savings. The legislature shall have no power to pass any act granting any special charter for banking purposes; but corporations or associations may be formed for such purposes under general laws." Section 4 of Art. VIII, Const. N. Y.)

As directed by the foregoing amendment, the legislature passed the General Savings Bank Law of 1875 previously mentioned. Chapter 256 of the Laws of 1877, passed May 10, amended the General Savings Bank Law by reducing the rate of interest, which savings banks were authorized to pay depositors, to five per cent. It further authorized the accumulation of a surplus fund of fifteen per cent. and required the trustees of savings banks to divide such surplus among depositors when the same shall amount to fifteen per cent. of the deposits held by the bank. The basis on which such surplus was estimated was changed so that the interest-paying stocks and bonds held by a savings bank should not be estimated above their par value or above their market value if below par. All the foregoing provisions are retained in the present law (Section 153 and 154).

PAY OF TRUSTEES.

The first savings bank charter in this State said: "The trustees or managers of said institution shall not, directly or indirectly, receive any pay or emolument for their services." All other charters prior to 1850 contained a like provision. Indeed, in some charters. trustees were prohibited from being depositors except as guardians or trustees for others. The first authorization of trustees to receive pay, when acting in any capacity, is found in an amendment to the charter of the Troy Savings Bank (ch. 216, Laws of 1850), where it was enacted: "It shall be lawful for the managers to pay to the president of the institution such compensation as they shall deem reasonable for superintending the business and concerns of said corporation, either wholly or with the aid of such clerk or clerks as the managers may, from time to time, appoint. Again in the year 1858

the law was changed, making it lawful for trustees of institutions for savings in the counties of New York and Kings, and in the city of Buffalo, "to pay to their respective presidents such compensation for their services as shall, in the opinion of such trustees, be reasonable,” (ch. 136). In 1863 (ch. 476) the legislature amended the charter of the Poughkeepsie Savings Bank by authorizing its trustees to pay the president of that bank a reasonable compensation out of the surplus earnings.

The law now provides that no trustee of a savings bank shall have any interest whatever, direct or indirect, in the gains or profits thereof, nor as such, directly or indirectly receive any pay or emoluments for his services, except as thereinafter provided. Another section provides that it shall be lawful for trustees of such corporation, acting as officers of the same, whose duties require and receive their regular faithful attendance at the institution, to receive such compensation as in the opinion of a majority of the board of trustees shall be just and reasonable; but it shall not be lawful to pay trustees, as such, for their attendance at meetings of the board. When appointed, however, as a committee to examine the vouchers and assets, or to investigate and report on investments in bonds and mortgages, they may receive such compensation as a majority of the trustees may deem just and reasonable. (Section 155, Banking Law, post.)

Bonds to guarantee the fidelity of the officers and clerks may be accepted from approved surety companies, and the premiums may be paid by the bank, and will be allowed as a necessary disbursement.

UNCLAIMED DEPOSITS.

The impression that the savings banks of the State hold a vast sum, in the aggregate, of money for which there are no claimants, has quite often afforded a prolific theme for legislative discussion, and numerous measures have been introduced having for their object the transfer of such unclaimed deposits to the custody of the State for its benefit. In the year 1853 a bill was introduced which required savings banks to transfer to the board of supervisors of their respective counties the moneys of all depositors whose accounts had not been added to by new deposits or diminished by drafts during the preceding twenty years. This bill failed to become a law.