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F.D. 12A.3 6 067.0 No Federal Reserve Bank 71oiva District No. 2 Correspondence Files Division PA Pefa S SUBJECT N. STATE" Corr. ryisS to lau ro 1913 EU I S I 19ILI 'BAK)44. I N3 6{:Z",6-C-0/-Ci. eh' 4-2,7>cf -A.. ADDRESS ALL OFFICIAL COMMUNICATIONS TO THE SUPERINTENDENT. r/o,*0./._APeuiP4-ik BRANCH OFFICE OF Iud CG7e, ceA~, Supepiramdent MAR 7- 52 BROADWAY 191146"6-4( March 6, 1911. Mr. Benjamin Strong, Jr., 47 Wall Street, New York City. Dear Sir:- I attended a hearing on Senator Grady's bill providing for the deduction from aggregate deposits, before calculating the amount of reserve, such deposits as are secured by bonds of the City of New York. As a result of the hearing the Committee declined to report the bill. It it my purpose to endeavor to watch a number of bills which have been suggested, and which in my opinion are inimical to the maintenance of sound banking. Any suggestions which you may be able to furnish me will be very keenly appreciated. Faithfully yours, Sup OHC/LFC. intendent.01000* IT Earoh 1, 1911. Hon. John A. Dili, Governor, St7n of Ne York, Albany, New York. joarSir: , I am taking the liberty of 4. ingwith this copy of letter which I have written today to Er. -../no* Superinteldent of Banks, which I think fully explains atself. ._.... , That portion of the proposeeI lationwhich really should be considered as a whale, whioh refers' ically to the soaarinc of deposits of funds of the 03. 4.1;:. New., rk,will doubtless be considered :' ,othe proposed amendments to the Banking los, in relation to investpent,of' tal and the lmatal money reserve' affect institutions throm?teut: ; state. You will doubtless recall that the cmistinc lawto rosary-es was enacted after most careful carefully by Enyor Gaynor. consideration by a comm ttpe of who cave t-et matter fn11. study- their report, a conservative, nkers, appointed by Governor HuChes, consideration, and as a result of satisfactory amendment to the Banking Law was scoured. Aside from the umwisdom of frequent chaness in the Banking low, the preposed legislation has many serious objections whioh 0 I would be very clad indeed to elaborate further if you would be interested in having me do so. I have no hesitation, howeverp in stating that I believe many conservative bankers in this City, who are thorouchly familiar -with the qtrstions which are considered by the bills referred to, would be apnosed to the enactment of such laws, and would believe it to be a. serious step backwards. I am, Trusting that this matter will have your earnest consideration, Respectfully yours, Eno- STATEOFNEM/YORK EXECUTIVE CHAMBER ALBANY March 2, 1911. Mr. Benjamin Stung, Jr., Bankers Trust Company, 7 Wall et., New York City. Dear Sir: Governor Dix directs me to acknowledge the receipt of your letter of the 1st instant and to say that should the bills which you mention come before him, oareful consideration will be given to the statements you make. Very truly yours, Secretary to the Governor f',41.;;"f ' / 7-25-13-5000 (9-7689) 411"..J ADDRESS ALL COMMUNICATIONS TO THE COMMISSION TO REVISE THE BANKING LAW COMMISSIONERS: tt3E11V,E, A. BARTON HEPBURN CHARLES L. BERNHEIMER LOUIS GOLDSTEIN JOHN H. GREGORY FRANK E. HOWE JOSEPH FRENCH JOHNSON HERBERT H. LEHMAN RANDALL J. LE BOEUF ELLIOTT C. McDOUGAL E. P. MAYNARD CHARLES A. MILLER HENRY MORGENTHAU FRANK M. PATTERSON JOHN HARSEN RHOADES LEOPOLD STERN COUNSEL TO THE COMMISSION: GEORGE W. MORGAN JOHN DE WITT WARNER AUG 2 2 1913 REFERRED i.e OFFICE STATE OF NEW YORK COMMISSION TO REVISE THE BANKING LAW ALBANY DEAR SIR: The Commission recently appointed by Hon. Geo. C. Van Tuyl, Jr., Superintendent of Banks of the State of New York, to revise the Banking Law of the State of New York is desirous of receiving suggestions both from students of banking questions and from those who are practically interested in the operation of the Banking Law with reference to various phases of its work, and for the purpose of obtaining such suggestions a number of blank pages and addressed envelope are herewith inclosed. The Commission will be pleased to have you call its attention to any ambiguities, defects or errors in the present Banking Law. It will also be pleased to receive suggestions with reference to changes in existing provisions relating to such important matters as the amount and character of the reserve to be carried against deposits; limitations upon loans and investments, with special reference to loans to executive officers and to directors; dummy loans; second mortgage loans; loans secured by real estate generally; and the liquida- tion of failed institutions. In various investigations it has been demonstrated that the failures were the result of loans to officers and directors, or to corporations controlled by them, and the successful liquidation of failed institutions has in some cases been rendered almost impossible on account of the large proportion of real estate owned, or of loans secured by real estate, consisting in some cases of second or third mortgages. The question of the desirability of attempting to separate interest bearing deposits in institutions other than savings banks, and compelling the investment of such deposits in savings bank securities, will also receive the consideration of the Commission. Some very important bills affecting savings banks were introduced at the last session of the Legislature, and the Commission will be very glad to receive your views with reference to the merger of savings banks, the establishment of branches and the necessity of creating a contingent or guarantee fund in order to insure depositors against loss; also provision for cash reserve to be carried in vaults, or compulsory reserve on deposit in banks. It is generally conceded that restrictive legislation interferes with the legitimate business of well conducted institutions without effecting its object in the case of institutions whose officers are unscrupulous and desperate. Such men only stand in fear of the provisions of the Penal Law. The Commission will therefore welcome any recommendations for the proper amendment of that statute. N Q Two articles of the Banking Law, one relating to Credit Unions and another relating to Personal Loan Associations, are intended to ameliorate the condition of the indigent but worthy poor, and protect them from the exactions of the loan sharks, and it is possible that further legislation along the same lines may be practicable. The adaptation of our own co-operative savings and loan system or of European loaning systems to the needs of our rural communities will also receive the attention of the Commission. In order to further protect small depositors, suggestions have been made for legislation to bring certain classes of Private Bankers under adequate supervision, and to prevent so-called real estate companies of a certain class, and other questionable investment companies, from exploiting the investors of the State. The Commission doubtless will also consider the advisability of recommending provisions to facilitate the issuance of State bank note currency so as to be ready in the event that Congress in future shall modify the present prohibitory pp per cent tax on State bank notes. If you have suggestions to offer upon any of these subjects, or any others pertinent to its work, the Commission will welcome them. In order that all suggestions relating to the same subject may be easily assembled for the consideration of the Commission, please fill in the blank heading at the top of the pages used by you, keeping all suggestions with reference to a particular subject matter separate, and numbering the pages relating to the same subject matter consecutively. Additional blank pages will be sent you if desired. An early reply is solicited. Yours respectfully, Ca / /IN 'Cksr Acting Secretary to the Commission. STATE OF NEW YORK COMMISSION TO REVISE THE BANKING LAW Chamber of Commerce, 65 Liberty Street Commissioners NEW YORK, N. Y. A. BARTON HEPBURN CHARLES L. BERNHEIMER Secretary LOUIS GOLDSTEIN JOHN H. GREGORY FRANK E. HOWE JOSEPH FRENCH JOHNSON HERBERT H. LEHMAN RANDALL J. LE BOEUF ELLIOTT C. McDOUGAL E. P. MAYNARD CHARLES A. MILLER FRANK M. PATTERSON JOHN HARSEN RHOADES LEOPOLD STERN Chairman A. BARTON HEPBURN January 14, 1914. de -'Si-v .1)Eluo, - EDWIN F. ROREBECK Counsel GEORGE W. MORGAN JOHN DE WITT WARNER GEORGE I. SKINNER °.11'4141 103 jpvt Mr. Benjamin Strong, Jr., President, Bankers Trust Co., New York, N. Y. Dear Sir: At the request of Hon. A. Barton Hepburn, Chairman of the Commission to Revise the State Banking Law, I am sending you under separate cover a copy of proposed ch$knges in the law providing for State Bank Circulation, which have been tentatively approved and. are under consideration by the sub-Committee on Banks of the Commission. Respectfully, Secretary. me' gemOrandvra and ,lnalzpl.IL Ofavgratim,to OM v vie ona Bei;ardinfl Ty:c3A The mole important amendments and relating to trust c mpanies are the following: Form: In the prevent law msny proVisione relating to tryst companiee aro to be fOund, not in the article dealing with trust companies, but in the article containing general provisions relattve to the Banking Department; and the converae is also true. The now law reaodies this defect, while at the enme time oubdividthg and reciasei*Ing many of the leer sections so an to.z;AMe the tez.t a much more workable daawnent. Poyetru These have been enlartIod bjexcressly includin namj pnwern herotofor oxereteod as beinc implied1;; granted. rank 1?ra14149,01 Several of the provisions applic- able under the present law to Braila; or avins Bank, it not to Trust Companies, hrm6 been made by the new law applicable also to Trust Companies; such Cor instance ao those governing the time within which real estate mast be sold, the right to pav out a joint deposit to either or the survivor, the right to interplead other claimants not parties to ma action to recover a deposit, the Interest and usury rentrictione, the annual report of unclaimed dividends and ottlyymits* 1.04415: The new law alters the 1,3'ov1s1one of the present law restricting individual loans, by lielting atd darning the class to which tho maximum loan nag ho made without security, and by other minor Obtlirerie The strictness of the preeent law provisiona agelnet loans to enable a person to pay fOr or hold otack of the trust company, in somewhat temered by the nom law. On the other hand, In addition to the presett law izelvisions prohibitinr and penalising a, director, officer, employee, eLci, from borrowing without the censent of a majority of the dime- tors, tha new law directe a similar prohibition and penalty aealtst the trust =many making eunh loon without ouch contrast, arid an absolute prObibitien aoinet maletag' Say loan (In cities of the lot eines) to any °Moore Ziagieeeaorj The new law materially changes, and apparently relaxes, the requirements of the lyre- sett law as to the maintenance of renervna againet deposits, It also apparently requires a trust company to ancept as do. positary An" its reeervea a bank or truot company desienated by the Superintendent upon application. ApeOuntiert The nom Inv provides oomowhat in detail ,ror caloelation. and entrien of asset values, moon eartinme, net earnings, and surplue Pend mad dividends,. retrerts.a.ed Remordat The new lav requiree in addition to the quarterly muerte to th '3uportatendent required by the present law, special reporte as attwhen requieted by the auperintendente The direetore, report of lie- bilitlee must inelvde liabilities to the trust company of every corporation in whichnny director owns es much as .13C Of the outstanding stooks thus materially changing the preeent law, which specifies any corporation in which any director "in benefloially interested as a etookholder, creditor or otherwise". By the new Iwi records must be preserved until six years from the d;':te.of the last entry. (0)Aallestatetm By the AGN 10.71 the Superintemde ant is required to eeeess any treat oompany for encroeche ments on reserveo amounting to 1% or more of the aggregate demand deposits. (9) Zanii.tvialoyao The provisicns of the present lare are modified so as to prevent national bnks, as well as foreign trust oompanies, from exorcising trust oaepanv powers within the state, except that national banKe may act as fiecal or transfer Agents of the United tats. (10)ilsknaljLetelatis By the new law trust ease panies are allowed to hold stook in, ale maintain reserves with, federal reserve banks to the extant reouirede In addition to those above specified, the new lag contains other legs important amendments and innovations, and numerous awes in wording, form and arrangement. A' last mentioned changes, as well as sone provisions relating to purely procedural matters, regerding notice, publieetion, file lag, etc., are not referred to, either in this memorandum or in the attached analysis. The attached analysis, hewever, indictee the important changes. Under each paragraph amended is given, at the left, the section reference to the prevent law, and at the 4. riOlt tho section rtWeevinoe to the now les* New provisiors are indie.ted as sash, with election referenees to the now law. Per convenience there Is also Atvohed a comparative table of seotien nwnbere ef the present and new laws, so far as conp. Ouse the article on treat (yeimp=lee. 117 MigalpN (re D.11V1* io2". tnoorpttration, (A) Torn of Tlxistc9nce... Limited try present ler to 51 years; allowed by now ima. to bo porIetual, Directors 7 or nom. (180 100). (D) 2.101au:A.Ap.&,.. Cortifio4to mar provide manner in which stock to be transferred and number of directors nocessary to constitute a quorum, (Non - 100). 17/17Ppril. al To discount and negotiate- vro- racoon' noten, drafts, 5tUi of oxahalge and other evidences of debt; "a147 Qui cell oxchance, coin bullion; ;lad rlou--105! (2! To act ao receiver or committee of ostato of insolvent or tvIkru,pt; and (new - 10). (3) To aceept drafts; for future pw- sent, to lexiue letters of credit authorizing drawing of drafts on it Lt sidht 3r on tLmo, not =used one year; mod NW- 105). K) To purchase and hold stoak of f0345)ra1 reserve bad: sufficient to qualify for romberehip in aaah bank. : (N1rm - 1051 (5) /lover of exanininc and innerAx7; titloo to realty in confirmed to thane now paamosinc it, tat other trurt companier ar forbiddmo horeaftor to have or exercise meth r4y4or tIt.714maiarj 4moint- =out. (106,7,0 - 105,6). nrs be appointed by soy state or fs4ere1 court of jurisdirion as oommittec or traatee or reoeiver in inaolvoncy or b(nkraptcy or other promodincs. (Vow - 100,4). In ease of dissolution the present to law provides taut debts due Zrom trust company in fiduciary capacity, "Shall have the preference." The new len Omer ouch debts "priority of payment from the assets.. on an equality 'with any other priority eiven by this chapter." (290 - 130,0). V revisions are taken over fram the article on banks {3ection 663 and the article on mavings bank (0oc- to tion 140) to the offeot that all real estate, purchased shall be con- veyed to company directly by name and invludiately recorded; and must be sold ;:ithin rive years unless its own °fries promisor or unless time extended by Superintendent of Banks, (New - 10)1. VI. Restrictions, Individanl LOMB. The prevent Ima prohibits generally a loan to any person, firm, cornor cori,loration, of rem than p (1) ;resent of the trust ocrIcxq's cc:4ta-1 and surplun. It thou divides, cities into lnrip cities of 1,00'),000 Lnd over and small cities of logs Mon 100,100o, and provider for the ollowinc two exceptions to the :pc: limit: 10;, (1) Amount mo loaned outright msw. reedit 25;, In 'urge cities, and 411 112 snail °Moo, iS sooured 0.1.1 to the whole, or ar to the moose over the 10, limit, by securities worth at least or 15;:: more them the amount secured. PI Amount so loaned by way of discount of papar ray roach 25% in largo cities mad 40;: in smal cities. 7ilo total liability of any person, rim, company or cor- .Potation to a trust company In limited to 25% of the latter's capital and ourplus, but there In excepted from thin limitatien the U. 3., the mtate, and any country or incorporated otty of the state. (Section 27), (2) New Law. The new law makee the follow!Ing ohanges in the above restriction: the dividing line between large and small cities is rained to 2,000,000 population; the exception In favor of the U. S. state, counties and inoorporated ()nine of the state is broadened to include any city, town or village" of the state; other possible creditors are divided into foreign state and nations, municipal and railroad corpor- ations subject to the state public service commiseion, and individuals, partnerships and associations; and corpor- ation' and bodies politic other than thonn In class (a). The total liability of any one of class (a) is allowed to reaoh 251 and 40; respectively, without any requirement as to security. The total liability Of any one in class (b), honever, is allowed to reach 25% and 40; only If either secured raneetively, as in exception 'noil under the present law, or based upon commercial paper of the kind speoified in exception No.I1 of the present law. In computinE such total liability, the new law provides that there shall be Inoluded. all loans =de for the bene- fit of the debtor, and in case the debtor be an individual, all liabilities of, and loan l made for the benefit of, any partnership or asemiation of which the individual is a member. "This subdivision shall not be construed to render unlawful the oontinsiel holding of any securities heretofore lawfully acquired". (New - 190,1). (B) LOans to ?ax pwn =3to0X. (1) &Lunt Law. The present law provides that a trust company shall not lend any money or property to uny person to enable him to pay or to hold shares of its stook either subeoribed for or purchased by (2) 1!v Taw. The new law inserts the modifying word "knowingly" before the word "lond", and adds the qualification "unless the loan is made upon security having an ascertained or market value of at least 15% more than the aunt of the loan". (New - 190,6). (C) Loans to 0ffit7 122.2-0-:AaSOTtIn ?resent Law, The present law oontains a provision prohibiting with penalty any offioer, director, clerk or employee from borrowing from the trust oompany or for a corporation controlled by him, except with the consent of a majority of the board of directors. (27). The TIOW law includes the above pro- vision and adds a new nrovisien prohibiting with penalty the trust oom,-, 5yanv from makInf!, any such loan, ex- Cent upon such oonditi en; or from lending under any circumstances to any officer, where the trust company iv in a oity of the int class. 24nulty applicable only to a person "knowingly" violating the provieicm, (Now - 222., 190,6). VII. ACmount 111P;;f Assets not to be entered in ny name other than that of trust company, or under any designation not truly descriptive. (Nmm 194). 5ecurities to be entered at actual oost, and, for calculation of profits for dividends, at not exoeeding present cost as determined by amortize, tion. (New - 194). (7) Real estate used for business not - L- to br.:1 entored or parried. ozooeQue coat, Olusept with approval of Superintendent o BanIza. (tow-194) VIII.oacria_.. 2000sitoi (A) gramtla112. not ere requirorsante of the present lnw 165 in a boraagh of 1.000,000 or overt 113',Z in a horouch of less than 1,00C ,0001 let,Z Such roservos meat confliot of U. S. money, goll or eilvyr certificates, or banXinc aflfloclation notoo or bills, to tho following extents all, In a boraw,h of 1,800,000 or over; 2/3, in a borrow:12 of 1 lani than 1,8°0,0001 504 in a. city of lit or 2nd class 1 30;40 in A city of 3rd class or In a. villw7e. Whore loco than all of each reserves are re qui rvd to 1)0 so c °set] tutod, t 0 balnee muot OrinIti3t 017 rione,715 On deposit stbject to cell. 2,98) The requirenento of Um new law aro as followes ip% In a borough of tst or csvor of *blob lo% must be on hands 13% In a bormt of OD0 million Or avor but loss than two nillionas of whioh S% met be on hands 10% oinewhore; of wbich 4% nuot bo 03 bnre In cities of lot and ;Ind ciace, and 3% malt be on hand in cittoc e 3rd class an villa7oc. colt of pold, gold bullion, cold of snob reserves on hand, Da% nmot coin, U. 3. gold cortifloateo, or U. notoo, and the remaindcr. nay novoist of any form of U. si curroncy, other than redoral resorve notee. Trust companion bocoming members of ?edema roscrve bk cny maintain r000rvo on1:4-.,:od vtith styli rocorve iitzth, portion of total rosortreo '4,74n1z, requirod* (Wm - 197). 17ho nee 14,a7 tak cvor frirtTh cal,- tole on loyIncoBms tc14',ct part of Sect!. on 144 i lowine pagmont of a joint dopoet to either or lso vivor. (Now - 190 The nom Niv tacos over frota the ortiol-o on Savineo itznIto, Soction 145 providinc that in an at to room,- or a dopocit, othl claimants may bo brought into the mtion. VW.. 199). XI. 2rna2. Tho new law tato); over rrom the Irt.n10 on bmilts, tlection 74 rroscrib* 171,7; rates of interest mu% portation tor t.mury. (754,.0.. 743. The nekt 11,AVI tti:i.,:co over fro/ this lel° on banks, Jot ion 75 all 3,1747; '-...lerost to 1;0 chortled on de- r.4,-Ind loans of not loco Van ;',:e,S,C.:r*. co no: ar!rood upon. (5cKti - X11 for ony dividend porttrod ttoky includo the tollootac tom: (1) Actual carnings leas acc mod and totpaid Into:wool; included in lost prtrYit)113 calouloti on A6dit1ons ror amortization to coot of oat:owl:tics boucht below pars (a) Pronto rsmt saes; :Ann received on items vionsly obarr7od aft rald artounto allowed by rouporintondont on aonett) previonoly oharrod offs Acortod ond unpaid interoot up- Ott oollaterally coonted debts on which no default of MIMI+ than one ycar oxisto, and Upon undofaultod corpottat,o oacuriti on and int *mot boating obl rpti ono. (rim - M11)* nvo,,,z,11.2a,wa;Ljte (A) ,er_eztorit Larf* The.prosant Lot provit -7- plus profits" out of which dividends can be made, shall be ascertained by charging to profit and loss and deducting from actual profits: All expenses of business; Interest paid or accrued and uneaid on debts awimee All losses, including debts on which no interest paid for more than one year, or on which judgment unsatisfied for more than two eears. (28.) (b) 1W2Leat The new law, in providing for the calculation of "net earnings" for dividends, chances the above provision as follows: Requires the elimination from (1) of expenses and accrued inter- est deducted at last calculation; Requires also the deduction of amounts deducted for amortization of securities; Changes in (3) the time in which MD interest shall have been paid, to two years, and the period in which judgment shall have remained unsatisfied, from "more than two years" to two years. (New - 202). Surplus Pune. Shall be created, and may be created or increased by contribution, or transfers from undivided profits or net earnings shall be used up to 205, Of oepital, only for payment of losses in excess of undivided profits. (New- 203) Crediting Net 2arninRs. If surplus fund less than 205 of capital, 10% of net earnings to be credited to surp/ue tand, ealanoe, or otherwise, whole, to profit and loss. Net deficit, if apy, to prof- it and loss account available for dividends. While capital and re- serves not impaired, dividends may be declared semi-annually or quar- terly by the directors. Stockholders (Now- 204). Action to enforce liability must be brought within six years. (New - 206). Term does not apply to person hold- ing stock in bona fide fiduciary -6- e capaciV, not appearing on books as owner, unless funds no invested in violation of trust. Wow - 206). No action to be brought by credi- tors to enforce stockholders liabil- ity In any ease until Judgment and unsatisfied execution. (New - XVIII. Mr (Wag's.. Vhesesies set filled by the directors may be filled by the stockholders at sa annual meeting. (lN- 209). Directors shall meet und sleet officers within fifteen days after the annuca stockholders meeting. (New - 213). If not fixed by the oertificate of incorporation or by-laws, directors my fix number nesessary for quorum, which Mall be vet lees than 113 or less than 5. (New - 214). Nay examine into affairs of eanpuey in either Aureh or April and in either 'Aptember or October of each year; instead of only in April and October. (Wm 2115) Report of exesining directors Is required by present law to include statement of liabilities to the trust compaey of every corporatida Ln Whioh any director is "benefiaLally interested ae a stockholder, creditor or otherwise". The present law substitutes for the words 'Meted "owns stock to the anount of 25'7, of the total outetanding stook". (23 - 216). Beeorte. 4narter1y reports to Superine tent of Banks must be publiahel in a newspaper witbta thirty days after filed with Weerintendent of Banks. (New - 219)4, Special reports most be made to Superintendent when and as required by him. (New -.210). -9azperintendent may extond tuas for waking report. (sow G 218). Unolained dividonds and depoilts muet be reported and published annually on or before the 10th of September: analty, 400 per day, (Ilew - 219). xt AQSOMV1014.01, Trust ',;Imapany liable to Ouperintendent rur assessments rode by MIA on acoaunt of eNcroaehmants on reserves, etc. Znch assessment Shall be levied, so lone as an enoroaehmont on total reserves amounts to 1;1 or aggregate demand deposits, at the rate of 0% if oncroachtaxat not over 2% of au& deposits. Sri; on artj additional encroaohments in excese or 2; but not over 3% or such Csposite. 10% on any additional enoroachrents in excess of ;',4, but ao' ; over 4 of such deposit°. WO 12% on saw additional ancroadhmento Upon failure to pay such asseemsents, tuperintendeLt nay apoly on az& payment the interest on securities deposited with him. oreservaIlEasi: aocerlmo (New =, 30 and 34). Mist be prosorved until Iz years fran date of last entry. (Eew 221). XXII. :::rohibition in't other The presont law prohibits .foreiEn ooze____fron doing a trust company bus se within the ABU, except that foreirn trust company may at as testamentary (A) execrator or trustee upon complying With certain requiremerits, provided that a reciprocal law exists In the state of its 1ncor9oration in favor of trust Opmpanies of this state. 1.86) (B) pew T..mr. The new law extends such prohibition to corporatiow st2tAtMEalgpeetic traet companieot with the e :. to foreign trust sem ezoeption +companies, and with a further ez°option to allow fedoral roporve bankn to act co Mos/ ogante of the United 3tates. jIeeorve 2g2,1Mrja, 93t rW7. (41) (223), The prosent law requiree reservos on deposit to be knpt with a bunk Or trust company in the state approved by the Nperintendent Of Banke, and having a oepital of at least 200$000. or a cepitcl avA surp/us of at least C200,000. (B) 116E-WEA (190). The now LW nrovideo that tho Onpor- intondent shall in his discretion on nomination dosignato such deposit- ary which :elan be a bank, trust comany or national banking aesocie. at ion located in the state and having a cohbinod oqpital and surplue of t1,000,000. in a boron.* of tee million two hundred thousand or overt $750,000. in a borowt of ono !sillion or over but less than two ziU ion to hundred thou .4 (a) 5OO,OOO. olsowfwre in state. t no such corporation, if in a borough of two million or over, shall be dosignar ted depositary for any trunt oOmaird having a combined capital and surplus greater than its cm, unless the oombined capital and eurplue of such depositary exceeds 04200,00(. Banking corrorations in GIL/cacao Boston or Philadelphia evu ale° be designated as depositarieo, if haring capital and surplus of 0.2,200,000. or more, and if reporting to, and al/owing oxaminations by Superintend- ent of Iknks. Zsadotturo of (Now - 30). Ay the new law corporate rights aro i:orfeited uniese business is commewed within six months after authorized. (Nea 485). acTxola maatos. qc4iPila.c.,tut ..ection Number 180 181 183 164 185 186 187 108 Correspondence Oectian r_of -eztepait Ru Wholly or Partly New Sections 140.195 180 181 180 183 180 181 182 186,187,188 187,188 183 184 185 186 197 109,187,190 191,194 188 189 190 191 27, 1065193 190 19% 186 193 194 195 196 197 190 199 200 193 202 203 201 205 206 207 200 209 210 211 212 213 139 106 8,45 27 190 192, 144 185 74 75 28 190 199 200 201 202 203 204 31 196, 2, 713 72 206 17 195 195 195 195 195 42 215 216 217 218 219 220 222 194 186 213 214 2.3 23 41 21, 27, 22 30 222 223 485 27 486 467 199 36 186 219 220 406 486 in 466 489 490 492 193 494 495 496 36 37 37 37 37, 39, 40 37 38 January 17th, 1914 Gentlemen : You are respectfully requested to consider the enclosed tentative report and submit in writing to E. F. Roreback, Secretary of Committee to Revise Banking Law, Chamber of Commerce Building, New York City, any comments thereon not later than January 22nd, 1914, in order that such comments may be considered by the entire commission. Yours truly, SUB-COMMITTEE ON TRUST COMPANIES January 21, 1914. E. F. Roreback, Esq., Secretary, Chamber of Commerce Building, New York City. My dear Sir: Replying to your invitatio f the 17 rt of the SubCommittee on Trust the following suggestions in regard Companies: Pa-e 2 instant, I respectfully offer [7-----_:::::71 7th Line from bottom 'ovide orgaaization certificate in the office tf the S copy in the offices of the Secretary of 5 language is a little te for the filing of one copy of erintendent of Banks of the County Clerk. end one The ambiguous as to whether all three originals are to be filed tended that one copy shall be Possibly it is gimp in these three offices. recorded in the office of the Goun Ole! and subsequently filed in the office of the Secretary of State. Pa o.e 3 5th Line Page 5 1231,4AM, L5rd d "025,000." Dollar mar should be omitted. On voze qheona rdeepened. oempllodp Edocoolled. aa.2-zb-,zzgzatj- ?kw have been intovana to implode thn potior purehneo bonan nnd nther oblicntione of eorporotiano gler invoetrrnt. Pooribly The uordn *Ulla of mirth...Ivor tore rennv intended to be "bontlr but If not, the vxvdn tonde and (AMP oblIcoMIono of oorporationir ebonla be naded a! find. it, r, Irrobnalt, act., Searetcry ..., whore in the lie:ort the opociflo povill. t/orterrrod upon truot eftnrtioo to bay corpora% bonde mid ob31 cpti.ons !ho prohibition In tho sow piracer(47h acanot V ie i Mite of bilk to ho oironlatod no nonoy to so keocil no to post:Ably be con- otmed ac includine tho note° of the Fedora Res,ne Banl:o. T.=1.Q. - 3...2.....1Am "eke, viordo artenlmnt to the Baitinc Imo to broherd Gall loan° on 0 9in vritinco should be onittod. N*IeLbsgity panned, ?JIM Intended to q:11/..y #00r) - i'' , -2, , ooMtaral. stach 3.0:-2/0 flre inreely node by mrd of tivOli (jutr,ine written artcractions tiolophofts, and I doubt the neooesi 'y of ro- ..00 the rate of Inborn% ,r-rtio".11rr1u as the rat3 froftzvntly chances aWjilt 4. I, 'sic Utzlar Catratleaabj tolenhon01 184 Pit is pro:2,0°4A that trust co:1)(211os ohz:11 con:allot the bucin000 of indniitsirtitio-TAY.Bol eetato. Thirie I believe, to be an anrriee tad Unooend provision. OorloratiOno of that obasnoter tif1,7 n017 be orcar.ised =dor osnarate Mat vad not ho crafted on to priair174 to sanister kap 12, - 4 and thoco power°, in my opinion, ltutionr, that aro orcaniood boBineee r000yi pootte. IWO hoe 1ontioef4tra fooline atone trtryt oorrytny ofAciale that it mule be vino to onlareeAhe roujr of :,,Lorouatoo md. of tho Evvrorr °omit (1:2 ouch pm/ern aro molielined ij t11t\pour4) oo tbct trunt compatioc nicht be mippointod nilninictraipalts of the 401,1atoo of Intestat.o Tilthout rocnrd to the richt° of no:It of line eraditorc..4°0 It nooestart17 tho O e'o1co of Mos at sOrottort by the rurrecnte, bat the ohmmeter csnd recon't of that Court %mid Potify oonforrine thin p011ir and it vot1ld. probably be nxorciwd the public Interoct. I 0n not quite °uric that the provision° 42plicable to tyab.parnGroehe ono, t770 owl three of 74)01710T1 136o. Md. Arnibriy oub---xtrocr?4.-he oevon oicht arc co dr=o -;o rialto olocr that the tract corpasieo °re not roquirod to Ito P. Tioroback, Bog., secretary Ova bonds Mon orpointod by taw court in fiducivry acpacitico. rAlb.prragraph 6, pat,N1 13, rry amly to all previous 3ect1on:1 of the Act, but tioo Intended, it shelad no state, it seems to no lt les however, intse that the poser should root with the Court to require the &Arc Cr? bararl wtvn thn MIcoasitu arises In/mired condttion f the trnst oonxtrg7 actine, as trantee. throuch za.212: 1)7,0/10r to describe these inventmonts as ."+:,r,"13 "oath ao the clourte --noir-742n e1tie and not by any rule or deoision of initc alit (lees not describe a speoifie .osaracrrph those vilioh clre the ::owts? The lcrImaos used class of isigi.4410 'obi& tne. to the ovelfic steilinte tnn eOcurrxtely eidnorilled by reference ehbrae eln 'Nento me authorized. ttihe word "it" chonld be ,111N, 1a Llatmtal 9 21,11-41zuclin surplus axt nrofite is too isrlonfrients referred to by this 1. st btell12061 130 thinIt Vint 4C5 of capital, crearCcititc, t) smear ion any claw of iretitn, time innrat:r twocured 1 mom wonV entitle The Isetors Tract Oocvez-...71, dollars a por of one concern, ,,lhich in for instance, to bey ton milli fertaka17 too Imola. The wort? "air should follov the wort" Ras, 22martonnir vastiaLM to 'mars of tract eorponioe The specified not in section 100, tht:istLzsii, stand it, in eections 104 and 100, althouds the longtime° refer° to mdbodivteion of "thie section". 11°1-io 20,-,921..a21.1=1.1glal*" The inge ns 741. 'W0171003 druid bo ,trovision" 111100..auwass I Oa not understaid the tinnninc of the sontmos to no offset that fUnde row rmin with a trust cazymynpon the no interest on other aeponits of lihn mount, Met ctioutt deee it refer to? The lanuusge Mem incsnot. POesibln, it °hoed road ,ene ether deponils c,f liko character to book, "ogee Seeretnry the orodit of oirtil.n.r notionor d %giro not to nom prortaion in rocArd, to the ryarcar of tract am/ponies? As I recall, the etrttlitOIT prOVioloa reozereltne the reamer of bortkinc oerporntiono oocuro in mother section of the Aet. The motion respecting rierc:ore ohoold be core oarofully vritton thro pro sent and tibould contain a oleo" statorrnt in rcrord to the rielt of onoessolon to oorporate lisembh The cremation WA" rcoomtly boon mintero, yhottlor anost-_,:ed oormlny onceeede rnlood LIZ) C. recruit oftrust to oortain claseee of tostrrrntary trues, coil fttethorrloro, atoro try be doe.bt 'Tale of real estate conferred by toe/IL-to:lit- as to Thother dineretionary 1)==,,,* Clcove onoceosor i 1vti truetra (low not ordinarfly (*lofted to die ttora eontainod in toctprientery truing ary trusts mad ran to tho , trid I have akw.yo been doubtfeii-or-tvo ability of a nerved trer t eorrear to asboon co co/aft:mod upon one of the erase ouch diecretionory realer quectiono nnv arise 773,th 1nctitation0 rkelett Itarnoet tha respect to willso execute:1d p ITO a appointing a trent oarnany exrcutor be rin Ia puobated unbeetroont to a or trustee or tootricontary mercer, ana them doubts nicht properly lo elininated by a $laitnble errnerrnt the cootion in the 19dn the px.erriaorra of the Stook p character of not ti,in 4rirer of tract eorlorldeee al/don 1octste. ocanietiae ma if a ne0P ammo co-ieP: Rom of the Batall.ne Lay in marl bo the civeninconnection rrith norgere tube the rierjor of tract oontrnloo yore Prepared, the conflict Of the minting statutes mad bo remelt*, by having the notioo provielons refer only to tymot ocrpcmy risrcoro end not to other °Woes of cornorationo cot - The offset in the ehonco in the r000rso section is a roderate rednotion of VOOOM irerntN roach loco roam" than yoald 7)o involvod by the eerotnr: ro Peoraboon, contabod In the roma ilieorios Mt* 06 atIrtAlas of the Ertl° reserve pm tOollaild to think that tho notion no dram, moo co der no In Tlinioe gitor Aulisr thra veggil, nit Ottriribe NV tnotttrtiont) if they doet(loa not to bofxre mix*. rood i, betmeen Deredtttsc ) lx.407.49 Itto orivrontooa do rornfin do dt proem% artd &VOW otatitto redora tiodorvo Om, mem I OM am %ter thed5. efltisiblilliwy ad It tlan to rude Tikizilotibot on rodorvon of Onto Inotttuto statorrnt virertgeod tow rhitad bo trlio %rideable to time, asolminc thdt tho wino to brAtto ao them nor 'proposed tor trt1eitevidloo, awl tilris me irtodt.111 ( von 4 oopy, no folloratt 'ffho ...le loot oentmoo oath reeervo And ',rig rella ti1 Vidal Ztasialf4,.. Moans to odg046141116Ino Iwo of notes of tho mamma Timm Data rocorveo Itor flitete idestIVtiC Alm no I ,v1Iew it 1r udo, von nnalirreblei omesod : tinntriarePto rico to diffteratioe. SP Mao of ftho 1ldra4 Row bp !waver ringablie Bet, dip eadrldomble in °ant of ,*0=4 Mad 103 tuft. Vurthormore, the adore )vo Vddorel nesorve notes ac rose met non-aiiitor Wan, Mot tbrouLhout the orttlrr- 01,Sio 111.1.414 btlatiow Onto IntWitittegoc enidod 17 P0dorn1 Aire,vozy riecludoi. tirlbor Into miritnirdac *146 &bawl, maintaincd perlOan their fonottma dhould 1O4masronorntO leo ' rnillhad tor etaudeetton vould 041Z0a, lug of no ilontit:b 'omit orxy verb t menhor limbo to um or' ritato 7417 voldit diffberot eteraotee rooerroo csontlenev, if "'ratted to 8orrlp,9 fli.oter, of the emelt!? tbe tncit.1 of re F. Seeratar: aftrObaelte it IOC been Irineelble vrIth tirAor of nowt .-,e1.74141 Iceto to Vie Wm. earxresr wettest of th. riostire lea I believe, Ptrotto Weccasti to the mtlzo4.1 of o ItothInc no- cv era.° in thie rterer'; ellottIctoil ip naive el' tho Seporintontlent of id.to welt ritalelt Prnrrvo to etionla ettliorbe ar a (iernitIon vihleh reeervo onlzytono atle tnee, email bo otalo4 deftnItIon bo mitt! eh the Ala rok.rlaVy enttlefetleno ofirlto elvonetor eanbe *Dec t tIna t Dtgrez 91.4111110 24 I malil prefer tbnt ned averSztonleatto tt r$31-12irtit Mak WM:We In streorroatItIre siinboroht-) tile Miami ,14:tooroo rrzot It bet ttlaD proviline that etat of a ototorze litirotr1colti Onotloo arlIono, s-v7 F;tvroro, ma tht Iry WW1 Atto ate ra tom* Suggestions Regarding Tentative Draft of Report of Sub-Committee on Trust Companies of the Commission to Revise the Banking Law. 5i ''filing of-me-40ff of orCiqs)A.1/9 Page 2 - 7th Line from bottom - Provides for tn , ling ganization certificate in the office-of the Secretary of State and-in-the-aftice of the-County-Clerk. It seems Clerk should be sufficient witho language as it now reads ap pass out of the hands o Line The the necessity of filing an original. ently contemplates that all three originals shall the trust company into the various public offices. Dollar mark should be omitted. 125,000." Page 3 - 5th Line Page 5 - 17th 23rd the record in the office of the County to me - " Page 9 - sub-aragraph 9 The word "been" misspelled. "Complied" misspelled. - May have been intended purchase bonds and other obligations of corporations to include the power to for investment. Possibly Fr the words "bills of exchange" were really intended to be bonds, but if not, the word$"bonds0r-and other obligations of corporations should be added as I find no where in the Report the specific power conferred upon trust companies to buy The prohibition in the sane paragraph corporate bonds and obligations against the issue of bills to be circulated as money is so broad as to possibly be con- strued as including the notes of the Federal Reserve Banks. Pase 10 - 11th Line - 54.-eeems-ttr-m;The words "in writing" shouli be omitted. This amendment to the Banking Law, when originally passed, was intended to apply fAt_ Such loans are nade by wqrd 61-ir,5 AO* L---outtoari theze ii ru1l as eeaMon to requireaf to brokers' call loans on Stock Exchange collateral. A of mouth a__-ei4 over the telephone, and written instructions toevidence the rate ofinte eat, particularly as the rate da46 au. 1.7 frequently changesi-eweer4er,- http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis A to 4 'cc at -2- Page 11 - Under Section 185, it is proposed that trust companies Shall conduct the business of insuring title to real estate. This, I believe, to be an ?MLA' / 71,61.0 Corporations of that character ehea4d be organized e ,Le Jite4f,c) Allot Arnt Et0,0 14, ww under separate statutory provisions and notygrafted an to the business of unwise and unsound provision. A 9- 41 institution&that ills organized primarily to administer trusts and receive deposits. Page 12 There has long been a feeling among trust company officials that it wouii be wise to enlarge the powers of Sit.Surrogattfand of the Supreme (Jourt(if such powers are exercised by that Court)so that trust companies might be ap- pointed administrators of the estates of intestates without regard to the rights of next of kin, creditors, etc. It necessarily implies the exercise of wise dis- C4mOtt, Aa) tar cretion by the Surrogate, but the record of the Court would justify conferring this power and it woull probably be exercised in the public interest. I am not quite sure that the provisions applicable to sub-paragraphs one, two and three of Section 186, and similarly to sub-paragraphs six, seven and eight are so drawn as to make clear that the trust companies are not required to give bonds when appointed by the Court in fiduciary capacities. cTh , Sub-paragraph 6 - Page 13 - May apply to all previovs Sections of the Act, but so intended, it should so state, it seams to me. It is, however, wise that the power Should rest with the Court to require the giving of bonds when the necessity arises through an impaired condition of the trust company acting as trustee. Sub-paragraph 7 - Page 14 - Is it proper to describe these investments as "such as the Courts recognize" ? Are not the investments referred to by this paragraph those which are fixed by statute and not by any rule or decision of the Courts? -3- - The word "it" should be "if". Sub-:paragraph 9 - Page 14 - Line 3 Sub-paragraph "B" - Page 16 - I um inclined to think that 40% of capital, surplus and profits is too great a latitude to confer upon any class of institutions in Trinking unsecured loans. That would entitle the Bamirers Trust Company, for instance, to buy ten million dollars of paper of one concern, Which is certainly too much. Page 20 - Paragraph 15 - Line 2 - The word "at" Should follow the word "amount". Page 22 - Section 189 - The reference is to powers of trIptccmpanies specified not in section 189, but as I understand it, in section$186, although the language refers to sub-divisions of "this section". Page 23 - 8th Line from Botton Page 25 ...Riddle of Pape The word "proviso" should be "provision". - I do not understand the meaaing of the sentence to the effect that funds may remain with a trust company upon the same interest as other deposits of like amount. What amount does it refer to? The language NFovinto ter inexact, te-sev-ibtrer1Hmmrtr Possibly, it should read "as other deposits of like character to the credit of similar actions". Page 29 - Following Section 195 - Should there hot be some provision in regard to the merger of trust companies? As I recall the statutory provision regarding the merger of banking corporations occurs in another section of the Act. The section respecting mergers should be more carefully written than at present and should contain specifically a clear statement in regard to the right of succession to corporate and personal trusts. question has recently_keen raised as a resuit czatokr 114,0,4.4t of mergers as to Whether -*like merged company succeeds4d0 testamentary trusts and ornet,/ f.;,,Tut 10146-1L, as to the power of sale of real estate furthermore, Alf-144awaiuesd,iimir= The siicessor trustee does not ordinarily, as I recall, succeed to these discretionary ewers contained in testamentary trusts, and there has always been doubt in my min in the case of the merger of trust mampanies as to whether such discretionary powers may not lapse. /some of the running to the merged company. h4v - provisions of the Stock Corporation Law and. the Barking Law in regard to the character keitobte of notice, publication, etc. to be given in connection with mergers a, ma- Pottn:snr., .ftiam--the are conflicting and if the-olaase m-. merger of trust #N, companies were prepared, the conflict of the existing statute5would be remedied, by having the notice provisions refer only to trust company mergers and not other classes of corporations. Section 196 - The effect reduction of reserve in the change in the reserve section is a moderate requirements, much less radical than would be involved by the adoption of the same reserve plan as Act. contained in the Federal Reserve On the whole, I am inclined to think that the section as drawn, goes as far asi.s now safe - and farther, that it would not operate to the disadvantage of New York institutions if they decided compromise, as I read it, between not permitting to become member banks. This the statute to remain as at present, Zwirvo 7i 6-8 and adopting the Federal Reserve plan, ieviiimmeeso, about as satisfactory as it can be made. 4. The last sentence on Page 29 should read as follow: reserve fund may and at least ten fifteenths must" Section 196 . - Seems to contemplate thew() of notes of the Federal Reserve 'Dank as reserves for state instituionn. program as "The whole of each - I am unalterably opposed to any such I believe it is unsound and will ultimately give rise to difficulties. Otatine It has been impossible with the limit of time to consider quite a number 4 of possible additions to the trust company section of the Banking Law, which woul0e4mb improve the Act .as-a-whole-very materially. made if time is permitted. Suggestions of this character can be For instance - nothing now appears in the Report in regard to the method of computing net deposits upon which reserve is calculated. This should either be specifically authorized by ruling of the Superintendent of Banks or a definition of net deposits upon which the-reserve caloulationSier- 4ra, Itigoinketibt 6/57-nni made, should be olneladoe,in the Act, and I would prefer that the Superintendent's Old aerervivel definition be authorized as it will permit more Istituto 14-daaling-s444:4sa-ltat.i.ons-whielt-besente dd,o members et the Federal Reserve System. gtfeALA be enacted without Puvtloptir Acknlitill) Veirwr)1 institutions Joe bob& gold bullion and foreign epo specified by law to-seams-4er reserveYforpasers: It is unwise that this legislation should snacIfift authoxi.tiy-for state gold coin of This is the a standard to be practice 0;4040;;, in Europe and in time of gold novomont-would /Welty- facilitate the-hand-14%-cdt_012-140rIation. Srue4.-.4.44valtAG177441, Benjamin Strong, Jr. ; STATE OF NEW YORK COMMISSION TO REVISE THE BANKING LAW Chamber of Commerce, 65 Liberty Street Commissioners Chairman NEW YORK, N. Y. A. BARTON HEPBURN CHARLES L. BERNHEIMER LOUIS GOLDSTEIN JOHN H. GREGORY FRANK E. HOWE JOSEPH FRENCH JOHNSON HERBERT H. LEHMAN RANDALL J. LE BOEUF ELLIOTT C. McDOUGAL E. P. MAYNARD CHARLES A. MILLER FRANK M. PATTERSON JOHN HARSEN RHOADES LEOPOLD STERN JERIEMIAi T. 7.L'I.HONEY A. BARTON HEPBURN Secretary January EDWIN F. ROREBECK 21, 1914. Counsel GEORGE W. MORGAN JOHN DE WITT WARNER GEORGE I. SKINNER )1, JOHN J. POLLEYN c5tvto Mr. Benjamin Strong, Jr., JAN REFERRED To OFFI CE President, Bankers Trust Co., New York, N 2 101! Y. Dear Sir: I wish to acknowledge with thanks your letter of the 21st inst., making suggestions for dna es in the draft of Article 5 of the proposed Bahk- ing Law. I have handed ypur letter to the Chairman of the Committee on Trust Companies and have sent* copy to the Counsel who is revising the rough draft. - \Very truly your (9 f\O--tax--,e,Kr Secretary. 4," e ADDRESS ALL OFFICIAL COMMUNICATIONS TO THE SUPERINTENDENT. agtei1:tlArdsly441tipeZtVaar _O 4 OVititt ruary 28,1914. Superintendent. T) Mr. Benjamin Strong,Jr., President, Bankers Trust Coznpany, #16/Wall Street, New York,N.Y. 7:2) Dear...S.1a.; ' Your lett of February 27,1914/with reference to the kinds of currency to be permitted for Oe reserves on hand of ! State Banks and Trust Companies, is at. hand. As the question of excludirkNational Bank notes from that portion of the reserves on hazid not required gold, gold bullion, gold certifiOates to be kept in or United States notes was very fully discussed by the/Commission on several different occasions, I am of the opinion that it would be fruitless to again call this matter to its attention, and I do not feel, under the circumstances, that to forme it would be proper for me to attempt amend the Commission's bill in this respect. There was a very decided inclination more conservative members of the Commission to the reserves on hand should coin,United States gold consist certificates of gold, on the part of the provide that all gold bullion,gold or United States notes. It was believed,howwver, if all the reserves on hand of State insti Mr.Benjamin Strong,Jr. #2. tutions were kept in gold, that there would be a considerable drain upon other institutions. It was also believed that there would not be a sufficient supply of small bills of this character to afford coulter ozrrency for banks and trust companies in manu- facturing cities where there are large pay rolls, and that in order to meet the demands of this character, these institutions would be compelled to carry reserves on hand largely in excess of those reqdred of other institutions not so located, or not having the same kind of demands made upon them. There seems to be some justification at least for the latter argument. It was also believed by the members of the Commission that the ultimate tendency under the Federal Reserve Act would be to retire the bond secured currency Yours very r Superinte ADDRESS ALL OFFICIAL COMMUNICATIONS TO THE SUPERINTENDENT. TI-Vantiht terpartntrat March 13,1914 ,42/1"1/ Superintendent. Personal. Mr. Benimin Strong, Presidentr Bankers Trust Company,. 16 Wall Street, New York,N.Y. My dear Mr. Strong: I inclosing for your inforzation a copy of letter which I have sent to the president of the Trust Companies Association of the State of New York.. Very respec (1 Inclosure) Superintendent of B Ac t014. F. dwin :Arti esident, ew York tAte rust Comp Any \soocintion, New York,' ky de-tr .r. I Irmo thouGht it proper to inform you. A Li . rouident of therust CompAny %soociltion of the 3tAte flif New mrk, of A con. 4P ion thathls Arleen with reference to tlio proposed rcvilon of the blnking Llw. You Are of course AwAre or the fact thrit the reserves whiCA Al t1nl iArlks will be compollel to e,irrv undcr the ?edeTra . tly redeeed oo thAt in the Li L,oC eu York e.ervketwivre sith mnre nolrly 1c rust COmpAnicz1 .,111 b NetionAl ol;s An upon tat; ;Viue plAno AO to reserves, while AtionAl :Anko Arc iven certain spcciAl privilegee under the ',Pederti. ".oserve Ust. (Niue the uring t.4.1e se3c1on(4 of the .i;oirglijaion lAnlarr, 2,3w it was of course ilored thAt the reserves required U4 t2 reduction of :trate Ituakc clhould be reduced to carreonend :his nore nelrly TIproximAtes in the reserves of VAtional (), tho reservcs required of trust coupAnies. L,Awithotliding this reduction in their o',4n reserves, tle reprecentAttees of the but I pon the l omlission Araued nAt the trust compAnico ould Mr,-dwin Aerrill in the revision be compelled to crry tie enme reserves ee and .Ante ,Janks. The fact that the cneh reserves required of per centum lees trust companiee in Vew York City were made two than the reeerve reclure of banks has been e ,ecielly critici ks A result, it is believed,of th feeling created by contentions over theee cauparatively trivial mattere,representatives of the State j:Jankers' Aesociation the other day opposed the immediate pas3age of the revision, AlthouRh criticieing no feature of it, notwithstanding their Attitude tatives of the 6tate Banks and upon the Caramiesion, the repreeen- of riany of the been inclined to resent the attitude of 501110 ],ational Boinke have of the menbere of the State Legislative Committee Rnd are wagin,e pni6n to procure the immediate passnge of AM actiee cam- the bill, in order that l3tate institutions may immediately be authc,rized to join the Vied- eraleserve system, at tiley gee fit, And may, in Any event, obtain so far ns reserves are concerned equal advantagea wit: the Nntional Banks. Inasmuch as te attitude of the A.ate ankers' Amu 1- cintion, whether aut,,orized or ot, seis to hAve been the result of the contentions to which I have referred, and the Legiulative ComAittee of the Trust Compeny kssociation appeared in support of the bill, thoueent it best to call your attention Lo the situation, in order that there mirJet be organized throte:h- out the :Ante an eneretic euppot of the position taken by the eeislative Comuittee of the 'rust Compeny AasociAtion, if Mr. dwin G. Merrill. #3 deem such support proper and wi3e. I am sending a copy of this lettr to the menbers of the Legislatitge Committee of the Trust Company Associltion. Very respectfully yours, 3uperintendent.