In 1859 the legislature appointed a committee to examine the various savings banks for the purpose of ascertaining the amount of unclaimed deposits held by each; and again in 1862 a bill was introduced in the Assembly, having for its object the confiscation of these so-called unclaimed deposits. A committee of the legislature was appointed with full power to investigate the subject. The report of such committee was submitted to the legislature of 1863, in which they say: and year "The subject of unclaimed moneys, supposed to be lying in the several savings banks in the State, has been for many years, inside and outside of the legislature, a fruitful source of discussion. The public press has, periodically, teemed with articles on the subject, after year bills and propositions have been introduced into the legislature proposing to transfer these unclaimed moneys to the custody of the State, supposing them to amount to millions. The result of the present investigation fully demonstrates that the public mind has been greatly misled as to the amount of these moneys. Whatever may be the power of the legislature as to the disposition of the money itself, the amount is clearly not as large as it has generally been supposed to be, judging from the tone of the discussion of the question in the public press and in both branches of the legis lature. "No doubt may have confounded the surplus moneys of our sav ings banks with the unclaimed, and to this fact, probably, may justly be attributed the extravagant ideas that have been so prevalent in the public mind upon the subject of the latter." The aggregate amount of deposits unclaimed for a period of twenty years, found by the committee, in all of the savings banks of the State, was $89,227.04. The committee in concluding their report further say: "As to the right of the legislature to appropriate to itself the custody of these moneys, the committee have nothing to say; that question they have not been asked by the legislature to determine, it being simply their province to ascertain the amount of such unclaimed moneys. Able legal men have been found on both sides of this question, and the probability is that it would become a matter of judicial decision should the legislature pass a law on the subject." In 1875 public attention was again drawn to the subject of un claimed deposits through a Senate resolution directing the Superintendent of the Banking Department to ascertain the amount of deposits or balances in the several savings banks of this State which have remained unclaimed for a period of twenty years and upward; also the amount for ten years and upward, and with all convenient dispatch to report the same to the Senate. March 12, 1875, the Superintendent reported the amount of unclaimed deposits held by the several banks to be $854,844.72, of which amount $316,656.60 had remained unclaimed for twenty years and upward, and $538,188.12 for ten years and upward and less than twenty years, while the aggregate deposits held by the several savings banks January 1, 1875, was $303,935,649. Under the present law all accounts of depositors amounting to five dollars or over, and which have remained dormant for twenty-two years, are required to be reported annually to the Superintendent of the Banking Department. (Section 30, Banking Law, post.) A special report was called for by the Bank Superintendent in 1894, but was for amounts in excess of $50.00 instead of $5.00 or over that had remained dormant for twenty-two years. This report showed the so-called "unclaimed" or dormant accounts to aggregate $1,672,458.52 at that time. The whole number of dormant accounts reported to him in 1890, the first year that the law required reports to be made concerning them, plus those that had become dormant between 1890 and the latter part of 1904, was 12,250, and of this total 3,223, or more than 26%, was shown by the reports of 1904 and preceding years to have become active. It may be added that the savings banks which hold dormant accounts have been earnestly at work to trace those to whom they belong, and with decided success. The number of such accounts decreased very largely since 1899. In one savings bank which at that time had over three-quarters of a million dollars of dormant accounts, there has been a reduction in them aggregating more than $600,000, so that the present average of each is but $97.51. Upon this specific showing it would seem to be a safe assumption that the total of dormant accounts in all of the savings banks of the State is under a million dollars, which is six one-hundredths of one per centum of the total resources of these institutions. TAXATION.11 Although the clearly defined policy of the State since the inception of the savings bank system has been to grant general exemption to the deposits and surplus of such institutions from taxation by State or local authorities, yet earnest effort has, on several occasions, been made by individual members of the legislature to impose upon these institutions the burdens of taxation. With few exceptions these efforts have proved abortive. A law was passed April 15, 1857 (ch. 456), entitled "An act in relation to the assessinent of taxes of incorporated companies," section 4 of which is as follows: ... "The deposits in any bank for savings which are due depositors shall not be liable to taxation other than the real estate and stocks which may be owned by such bank . . . and which are now liable to taxation under the laws of the State." An opinion by the Attorney-General was filed in the Banking Department June 12, 1878, in which that officer holds that this section exempt deposits in savings banks absolutely from taxation. He further states that a depositor cannot, therefore, be taxed for such deposits, this statute protecting the savings institutions as well as their depositors. In 1866 an act of the legislature made the surplus of savings banks subject of taxation; in the following year the law was amended by exempting from taxation so much of the surplus as was invested in United States bonds, which exemption was a practical repeal of the statute. In 1868 the question of taxation was again the subject of legislative discussion, as it has been on several occasions since that date, notably in 1880, when a bill was introduced, proposing to levy a State tax on deposits in savings banks of one-quarter of one per cent. This measure attracted considerable public attention and met with very general opposition. The press characterized it as a thrift and frugality," and the proposed law was defeated. tax on September 1, 1879, Mr. Justice BARNARD gave an opinion at Special Term of the Supreme Court of New York that under the 11 See note to section 5219 U. S. R. S. (U. S. Comp. Stat. 1901, p. 3502), post. then existing laws both the deposits and surplus of the savings banks of this State are absolutely exempt from taxation. Again, in 1884, the finance committee of the Assembly unanimously reported an act "to provide revenue for the State by a tax on savings banks and institutions for savings." The bill provided that every savings bank should pay, as a tax on its corporate franchise or business, a sum equal to twenty-five cents on every $100, computed on the amount of its deposits and surplus funds in excess of $500,- . 000 whether such was invested in United States securities or otherwise. So determined an opposition to the bill was at once developed that it was recommitted to the committee from which it emanated, and by that committee reported adversely. Under the existing law (Tax Law, § 4, subdiv. 14, post) all savings banks deposits are exempt. In 1901 (ch. 117) an annual franchise tax was imposed for the privilege of a corporate existence, of one per cent. on the par value of the surplus and undivided earnings of all savings banks (Tax Law, § 189, post); but they were made exempt from the general organization tax, and from the general annual franchise tax (Tax Law, § 183, post). This tax of one per cent. is a step in the wrong direction and should be repealed. This general exemption would seem to be amply justified by the fact that these institutions have proved good educators; and while the State exempts from taxation all school property, both real and endowment, it would seem that both public economy and public morality just as imperatively demand that the means by which our citizens are taught to acquire habits of economy, thrift and enterprise should also be relieved from the burdens of taxation. A tax reduces the surplus, lessens dividends, discourages deposits and impairs the usefulness of these institutions, thus injuring the public far beyond the measure of the tax received. ARTICLE III. MONEYED CORPORATIONS, OTHER THAN BANKS, BANKING ASSOCIATIONS, INDIVIDUAL BANKERS AND SAVINGS INSTITUTIONS. Instead of pursuing the plan indicated in the two preceding chapters of this sketch, of giving a history of the first of the moneyed corporations, mentioned in the heading of this article, beginning with the action of the legislature, etc., it has been thought advisable, saving repetition, to speak in a general way of their respective charters, and amendments thereto, that have from time to time been obtained from the legislature. The subject is divided into four classes, although in several instances, corporations have been created with such broad powers that they may with propriety be placed under all the various headings of this chapter. TRUST COMPANIES. The distinction between trust companies and banks of deposit and discount is not as broad practically as it is in theory. In theory, the latter, subject to but few restrictions, deal in investments of such character as they deem advisable, while the former must have a large capital, which, with their trust funds, should be invested in the best, securities. There must be unquestionable security to depositors, and the interest that may be paid them is wholly of secondary consideration. The history of these institutions clearly shows that the more completely each has approximated its theoretical character as a class, the greater has been its success; and the failures that have occurred are due, in every instance, at least, so far as our personal knowledge goes,1 to the liberal provisions of the charter granted by the legislature. The trust companies, generally speaking, have been created with all of the customary powers of corporations, and in addition authorized to receive moneys in trust and accumulate the same, at rates of lawful interest to be agreed upon and to accept and execute all trusts of every description committed to them by any person, persons or corporation, or such as may be transferred to them by order of the Supreme Court or by a surrogate, or by any court of record. To take and accept by grant, assignment, transfer, devise or bequest, and hold any real or personal estate on trusts created in accordance with the laws of this State, and execute such legal trusts in regard to the same, on such terms as may be declared, established or agreed upon, It may not be out of place to state that the author and his associates made, at the request of the then Superintendent of the Banking Department, the first two annual examinations of these and like institutions. Such examinations were authorized by chapter 324, Laws of 1874. |