the characters of the savings banks. These will be sufficient reasons for the presumption that savings banks will in general strive to attain the proud and honorable record of having passed uninjured through successive financial crises, always and promptly having paid every dollar which may rightfully have been demanded of them, without ever having suggested to their depositors the necessity of waiting until the money could be collected from outside sources.

It is difficult to determine upon the course which should be pursued by prudent and thoughtful persons concerning their accounts in savings banks in cases of great financial excitement and panic, when moneyed institutions are failing in quick succession, and when the common thought and desire of the majority is to withdraw accounts from the savings banks at the earliest possible opportunities. Upon such occasions it will be necessary to decide quickly; nevertheless it will be necessary to put absolutely to one side the action of the majority, and thus guard effectually against the dangerous contagion of excitement.

It may be stated, as a general rule, that the headlong, rushing crowd goes wrong-does precisely what it should not do -and the part of wisdom will always be the using of one's own judgment rather than of the thoughtless determination of a mob. Prompt, but not headstrong consideration, must be had of all the facts and circumstances which shall be obtainable, and final conclusions must be followed to the letter. The element of uncertainty will always be present, from the fact that the individual depositors have no adequate means of ascertaining the exact financial conditions of their savings banks. In this respect the probabilities are only to be estimated from the general appearances and reputations of the savings banks, from their experiences and conducts upon former similar occasions, and from the business characters of the officers and managers. Perhaps the most natural answer to queries as to what shall be done with accounts in savings banks in emergencies such as are under consideration, will be that depositors will adopt the safe method with regard to their principals, though they may sacrifice parts

of their incomes, if they shall promptly withdraw their deposits from the savings banks, upon all such dangerous occasions. But this, evidently, is the conclusion of the multitudes which crowd the savings banks at the first rumors of danger, and, unless it may be assumed that wise and far-seeing persons will be able to read the omens of danger in advance, and thus forestall the difficulty, the adoption by them of the conclusion which has been mentioned will serve but to place them in the ranks of the multitudes. There are other considerations in the premises which may not well be neglected. Savings banks appear to be the especially protected children of the law. If, then, such institutions are deemed to be unsafe, what other institutions for the depositing of money can be considered less so? Inasmuch as there seems to be no satisfactory answer to this query which will serve the general purpose, the choice must lie between different institutions of the same kind, that is between savings banks. But, upon the presumption that by the application of the suggestions which have been made, the best accessible savings banks shall have been in every case selected, the choice will disappear altogether, and a quandary will remain as the result of an attempt to apply the principles of logic to the practice of financiering. In short, there is obviously no general rule which can be laid down for the guidance of depositors in savings banks under the circumstances which are under consideration. The obtaining of the best results will always require the employment of sound individual judgment and business sagacity. But the rule which appears to come nearest to the desirable general rule, and which, as far as can be ascertained, seems to be best sustained by the practical results, may be stated as follows: If the reputations of the particular savings banks shall be excellent, the selections having been made according to the directions which are contained in this chapter, and if depositors shall be able to observe no direct indications of weakness, their accounts should not be disturbed; if, on the contrary, there are unusual reasons for anticipating the failures of particular savings banks, accounts should be withdrawn with all possible

celerity, and placed in satisfactory savings banks or trust companies, while the depositors redouble their efforts to find substantial investments, which will be out of the reach of danger.

THE

CHAPTER IV

TRUST COMPANIES

HE term Trust Companies, as used in the banking law, has been officially defined by the Legislature of the State of New York as "any domestic corporation formed for the purpose of taking, accepting, and executing such trusts as may be lawfully committed to it, and acting as trustee in the cases prescribed by law, and receiving deposits of moneys and other personal property, and issuing its obligations therefor, and of loaning money on real or personal securities."

The powers which have been especially conferred upon such companies by the New York banking law are as follows:

1. To act as the fiscal or transfer agent of 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, and other evidences of indebtedness.

2. To receive deposits of trust moneys, securities, and other personal property from any person or corporation, and to loan money on real or personal securities.

3. To lease, hold, purchase, and convey any and all real property necessary in the transaction of its business, or which the purposes of the corporation may require, or which it shall acquire in satisfaction or partial satisfaction of debts due the corporation under sales, judgments, or mortgages, or in settlement or partial settlement of debts due the corporation by any of its debtors.

4. To act as trustee under any mortgage or bond issued by any municipality, body politic, or corporation, and accept and execute any other municipal or corporate trust not inconsistent with the laws of the State.

5. To accept trusts from and execute trusts for married women, in respect to their separate property, and to be their agent in the management of such property, or to transact any business in relation thereto.

6. To act under the order or appointment of any court of record, as guardian, receiver, or trustee of the estate of any minor, the annual income of which shall not be less than one hundred dollars, and as depositary of any moneys paid into court, whether for the benefit of any such minor or other person, corporation, or party.

7. To take, accept, and execute any and all such legal trusts, duties, and powers, in regard to the holding, management, and disposition of any estate, real or personal, and the rents and profits thereof, or the sale thereof, as may be granted or confided to it by any court of record, or by any person, corporation, municipality, or other authority; and it shall be accountable to all parties in interest for the faithful discharge of every such trust, duty or power which it may so accept.

8. To take, accept, and execute any and all such trusts and powers of whatever nature or description as may be conferred upon or intrusted or committed to it by any person or persons or any body politic, corporation, or other authority, by grant, assignment, transfer, devise, bequest, or otherwise, or which may be intrusted or committed or transferred to it or vested in it by order of any court of record, or any surrogate, and to receive and take and hold any property or estate, real or personal, which may be the subject of any such trust.

9. To purchase, invest in, and sell stocks, bills of exchange, bonds and mortgages, and other securities; and when moneys, or securities for moneys, are borrowed or received on deposit, or for investment, the bonds or obligations of the company may be given therefor, but it shall have no right to issue bills to circulate as money.

10. To be appointed and to accept the appointment of executor of or trustee under the last will and testament, or administrator, with or without the will annexed, of the estate of any deceased person, and to be appointed and to act as the committee of the estates of lunatics, idiots, persons of unsound mind, and habitual drunkards.

II. To exercise the powers conferred on individual banks and bankers by section fifty-five of this act, subject to the restrictions contained in said section.1

Each trust company organized under the general laws of this State, and having its principal place of business within a county containing

1

1 Allowing them to receive interest at the rate of six per cent. per annum on loans and discounts upon notes, bills of exchange, and other evidences of debt.