THE GENERAL BANKING LAW.

Chapter 115 of the Revised Laws (formerly chapter 118, P. S.) was referred to by the commissioners having charge of the recent revision of the statutes, as follows: "Many of the provisions of this chapter are antiquated and not adapted to present modes of business, and the chapter requires revision by a legislative committee on banks and banking before being enforced."

In view of the fact that the charters of many of the national banks are soon to expire, the present would seem to be an opportune time to consider whether or not it is desirable to have a system of State banks in this Commonwealth, inasmuch as some of the national banks are considering the expediency of reorganizing under a State law, - did a satisfactory one exist.

Should such a law be enacted, it ought effectually to prevent the continued application for the incorporation of trust companies in the smaller cities and some of the towns of the Commonwealth. Most of the trust companies recently incorporated are misnamed trust companies, and are, in fact, simply State banks.

There is at present a foreign banking corporation doing a general banking business in Boston, and, on the question of admitting such institution, the Attorney-General, in an opinion addressed to the Commissioner of Corporations, referring to the statute above mentioned, says: "Whether a law should be permitted to continue upon our statute books, which is inoperative so far as it relates to domestic corporations, but which may be taken advantage of by foreign corporations in the manner in which it has been by this corporation, is a question for the determination of the Legislature."

It is the opinion of this Board that, whether the existing law be allowed to stand on the statute books or not, provision should be made to prevent, or at least to control, the admission of foreign banking institutions; for, although the one herein referred to is in good repute, others may not be, and yet, if they desired, must be permitted to file their papers and transact business without any supervision, either State or national.

INCREASE IN BUSINESS OF THE BOard.

During the past ten years there has been an increase of 56 in the number of institutions under the supervision of the Board, the assets increasing over $300,000,000 during the same period, while the clerical force of the Board available in the examinations remains unchanged.

In view of the constantly increasing number of institutions, as well as the enormous growth in assets, necessarily involving more and more time each recurring year in the examinations, it is felt that the time has arrived when the services of another permanent clerk are absolutely necessary to enable the Board to give that measure of time and attention to the discharge of its duties which seems desirable, and which the public undoubtedly expects.

Formerly, when there were but two commissioners, some of the work of examination of co-operative banks was delegated to the clerk of the Board; but, as there appeared to be no legal authority for this action, it was subsequently discontinued, and all the co-operative banks are now visited by a commissioner.

The examination of a co-operative bank differs from the other work of the Board, being largely clerical, and in most instances could be efficiently performed by a clerk, acting under the direction of the Board.

The Board respectfully suggests the desirability of legislation to enable it to delegate to its clerical force the performance of the duties above referred to, and also the creation of the office of third clerk, believing that the adoption of the two measures would afford to the commissioners the much-needed time and opportunity for more extended and thorough examination and inspection in directions which they deem essential to a full and complete performance of official duty.

TRUST COMPANIES.

The 36 companies, including the Massachusetts Hospital Life Insurance Company, transacting business on October thirty-first last, held deposits in their banking departments of $142,629,778.81, with other liabilities of $31,575,546.46 and total assets of $174,205,325.27.

Of the 36 companies, 15 have established trust departments, the liabilities in which were $15,564,294.48.

The following companies have not yet been organized, viz. :· City Trust Company, Boston,

.

incorporated Feb. 14, 1900.

Copley Square Trust Company, Boston, incorporated Feb. 4, 1901.
Waltham Trust Company, Waltham,

incorporated Mar. 21, 1901.

Two companies have recently increased their capital stock, and in so doing, what appears to be a defect in the law was developed, inasmuch as no provision is therein made as to the manner in which the companies may increase their capital.

In the instances referred to the companies adopted the course prescribed by the statute relating to corporations generally; but it is conceded that special provision should be made by statute as to the manner in which the capital of trust companies may be increased, as is now the case in certain other corporations under the supervision of State officials; and this Board suggests legislation on this point at the present session.

Another matter on which legislation may be required arises in the fact that within a few days one trust company has established, at some distance from its main offices, an office for the receipt of deposits and payment of checks, a course which does not meet the approval of this Board, and for which the Board claims there is no legal authority, and which is contrary to the policy of the Commonwealth as evidenced in its banking laws. The counsel of the trust company claims there is no legal objection to the action, and the Board has asked the opinion of the Attorney-General on the question.

The question of a trust company purchasing and holding stock of another trust company is an important one, and legislation may be required on this matter.

Also, upon the question of a trust company holding real estate other than as provided in section 35, chapter 116 of the Revised Laws.

TRUST COMPANY IN HANDS OF RECEIVER.

Suffolk Trust Company.

This company has been in the hands of a receiver since Sept. 3, 1891.

Near the close of the calendar year the long-delayed report

of the receiver was presented to the court; in this he asks for authority to dispose of the remaining assets (of little value) at private or public sale, and to declare a final dividend to depositors. This dividend will probably be at least 8 per cent., making a total of 38 per cent. which the depositors in this unfortunate concern will have received on their claims.

The annexed statement shows the receipts and disbursements of the receiver during the year past. An examination of this statement will refute the oft-repeated declaration of parties interested in the management of the company before its failure, - that such failure was caused by the company's investments in western mortgages; inasmuch as the uncollectible loans in its banking department exceed the total uncollectible items. growing out of its western mortgage business.

CONCLUSION.

The succeeding pages contain a balance sheet and condensed statement of the several savings banks, also balance sheet of each of the trust companies, in both their banking and trust departments; also —

A consolidated balance sheet of the savings banks, and another of the trust companies.

The usual table, giving the number, condition and progress of the savings banks in each year since 1834, is also given.

The Appendix contains the laws relating to savings banks and trust companies, as embodied in the new Revised Laws, chapters 113 and 116.

STARKES WHITON,

WARREN E. LOCKE,
JAMES O. OTIS,

Commissioners of Savings Banks.