2’-£6‘-' /Q02.‘ ,/W2 .GENERAL ' of THE , APPROVED MARCH 11, 1879. _ ' MINNEAPOLB: . JOHNSON, SMITH & HARRISON- 1879. /. WY D SAVINGS BANKLAW ~i SEC. 32. It shall be the duty of the trustees of every such corporation to regulate the rate of interest or dividends upon the deposits therewith in such manner that depositors shall receive, as nearly as may be, all the profits of such corpora- tion after -deducting necessary expenses and reserving such amount as the trustees may deem expedient as a surplus fund for the security of depositors, which, to the amount of ten percent. of their deposits, the trustees of any such corpora- tion are hereby authorized gradually to accumulate and hold, to meet any contingency or loss in its business from the depreciation of its securities or otherwise. P-1'o2>z'ded, however, that the trustees of any such corporation may classify their depositors according to the character, amount and duration of their dealings with the corporation and regulate the inter- est or dividends allowed in such manner‘ that each depositor shall receive the same rateable proportion of interest or divi- dends as all others of his class. It shall be unlawful for the trustees of any savings bank to declare or allow interest on any deposit for a longer period than the same has been de- posited, except that deposits made not later than the third day of any month, or withdrawn on one of the last three days of the month,'may have interest declared upon them for the whole period or month when so deposited or withdrawn. N o dividends or interest shall be declared, credited or paid, except by the authority of a vote of the Board of Trustees, duly entered upon their minutes, whereon shall be recorded, the ayes and nays upon each vote, and whenever any dividends or interests shall be declared and credited in excess of the interest or deposits earned and appearing to the credit of the corporation, the trustees voting for such dividend shall be jointly and severally liable to the corporation for the amount of such excess so declared and credited. And it shall be the duty of the Trustees of any such cor- poration, whose surplus amounts to ten per cent. of its depos- Unlawful to buy or sell exchange, or to collect or protest notes.- I1_it_ei'est or dividends on deposits. Surplus of ten per cent. on the amount of deposits authorized, for security of depositors. Depositors may be divided into classes. Unlawful interest. Dividends to be declared only upon authority of a vote of the trustees. 16 Extra‘. divi- _ dends once in three years. Determination of per cent. of surplus. Compensation of trustees acting as oii‘icers. Reports to be made, when. What shall be stated in such reports. its, at least once in three years, to divide equitably the accu- mulation beyond such authorized surplus, as an extra dividend to depositors, in excess of the regular dividends hereinbefore authorized. ‘ SEO. 33. In determining the per cent. of surplus held by any savings bank, its interest-paying stocks, notes and bonds, _ shall be estimated at their market value; its notes and bonds on which there are no arrears of interest for a longer period than six months shall be estimated at their face, and its real estate at not above cost. Concerning such stocks as bonds or notes, or notes and mortgages, as are in arrears of interest for six months or more, and concerning all other investments not herein enumerated, the Public Examiner shall determine the valuation of the same, from time to time, from the best in for- mation he can obtain, and he may change the valuation thereof, from time to time, according as he may obtain other and further information. SEO. 34. It shall belawful for trustees of such corporation, acting as officers of the same, whose duties require and receive their regular and 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 such majority shall be exclusive of any trustee to whom such com- pensation shall be voted. SEO. 35. Every such corporation shall semi-annually, on or before the first day of February in each year, make a r'eport in writing to the Public Examiner and in such form as he shall prescribe, of its condition on the morning of the first day of January preceding. SEO. 36. Such report shall state the amount loaned upon note and mortgage, together with a list of such notes and , mortgages and the location of the mortgaged premises as have not previously been reported, and also a list of such previously reported as have since been paid wholly or in part or have been foreclosed, and the amount of such payments respect- ively; the cost, par value, estimated market value of all stock investments designating each particular kind of stock; the amount loaned upon the pledge of securities, with a state- ment of the securities held as collateral for such loans; also a list of all notes, with the names of the drawers and eudorsers, 17 the dates when said notes were made, the length of time they ‘ have to run, the amounts for which they are drawn, and the rates of interest they bear, or at which they were discounted; also specifying all notes overdue and unpaid; the amount invested in real estate, giving the cost of the same; the amount of cash on hand and on deposit in banks or trust companies and the amount deposited in each, and such other information as the Public Examiner may require. SEO. 37. Such report shall also state all the liabilities of such savings corporations on the morning of the said first (1st) day of January, the amount due to depositors, which shall include any dividend to be credited to them for the six months ending on that day, and any other debts or claims against such corporation, which are or may be a charge upon its assets. Such report shall also state the amount deposited during the year previous, and the amount withdrawn during the same period; the whole amount of interest or profits re- ceived or earned, and the amount of dividends credited to depositors, together with the amount of each semi-annual credit f interest, and the amount of interest that may have been credited at other than semi-annual periods; the number of accounts opened or re-opened, the number of accounts closed during the year, and the number of open accounts at the end of the year, and such other information as may be , required by the State Examiner. SEO. 38. Such report shall be verified by the oath of the two principal officers of the institution, and the statement of assets shall be verified by the oath of a majority of the trus- tees who examined the same pursuant to the requirements of section 44 of this act; and any willful false swearing in re- gard to sucli reports or in regard to any reports made to the Public Examiner pursuant to the provisions of this act, shall be deemed perjury, and be subject to the prosecutions and punishments prescribed by law for that offense. SEC. 39. If any savings bank shall fail to furnish to the Public Examiner any report or statement required by this act, at the time so required, it shall forfeit the sum of one hun- dred dollars per day for every day such report or statement shall be so delayed or withheld; and the said Public Examiner may maintain an action in his name of office to recover such 3 State also liabilities. Other items to be reported. Report, how verified. Penalty for failure to report. 18 penalty, and when collected, the same shall be paid into the treasury of the State, and be applied to defraying, so far as possible, the expenses entailed in examining savings banks; but the Public Examiner may, for sufficient cause extend the time for making such report, not exceeding thirty days. SEO. 40. No such corporation shall hereafter be required to make any annual or other report to the mayor or the com- monalty of any city, nor to the board of supervisors of any county, nor to any other officer or authority whatsoever, except as in this act provided and required, nor shall they be subject to the inspection or supervision of any local officer or board, in any matters pertaining to the business and dealings of such corporation. SEO. 41.' It-shall be the duty of the Public Examiner, on or before the first (1st) day of February in each year, to com- municate to the Legislature a statement of the condition of Public exami- every such corporation from which a report has been received I-‘er S1-mu make for the recedin ear also the name and location of savin ‘s lggigldtfifre. ' g y. ’ . . . .g corporations authorized by him during the previous year, with the date of their incorporation, and particularly designating those incorporated at any time which have commenced busi- ness during the previous year. SEO. 42. It Ishall be the duty of the Public Examiner at (-‘;1,.>e;;,1},i,1;,@,;i,,i°ns least once in each year, and as much oftener as he may deem °°"P°“"t1°ns' proper, either personally or by son1e competent person or per- sons, to be appointed by him, to visit and examine every sav- ings corporation in this State. The Public Examiner shall also have power in like manner to examine any such corpora- tion, whenever, in his judgment, its condition or management is such as to render an examination of its affairs necessary or expedient. The said Public Examiner, and every such exam- iner 'shall have power to administer an oath to any person whose testimony may be required on any such examination, and to compel the appearance and attendance of any such person for the purpose of such examination, by summons, subpoena or attachment, in the manner now authorized in re- spect to the attendance of persons as witnesses~ in the courts of record of this State; and all books and papers which it may be deemed necessary to examine by the Public Examiner, or the examiner or examiners so appointed, shall be produced, and their production may be compelled in like manner. 19 SEO. 43. Whenever it shall appear to the said Public Ex- aminer from any examination made by him, or from ‘the report of any examination made [tol by him, or from the report made by any such corporation, pursuant to the requirement of sec- tions thirty-five (35), thirty-six (36) and thirty-seven (37) of this act, that any such corporation has committed any violation of its charter or of law, or is conducting its business and affairs in an unsafe or unauthorized manner, he shall, by an order under his hand and seal, direct Ethe discontinuance of such illegal and unsafe or unauthorized practices, and strict conformity with the requirements of the law, and with safety and secur- ity in its transactions, and whenever any such corporation shall refuse or neglect to make any such report as is herein- before required, or to comply with any such order as aforesaid, or, whenever it shall appear to the Public Examiner, that it is unsafe or inexpedient for any such corporation to continue to transact business, he shall communicate the facts to the ' Attorney General, who shall thereupon institute such pro- ceedings as the nature of the case may require. The proceed- ings instituted by the Attorney General, may be for the re- moval of one (1) or more of the trustees, or for the transfer of the corporate powers to other persons, or the consolidation and merger of the corporation with any other savings corporation that may be willing to accept of the trust, or for such other or further relief or correction as the particular facts commu- nicated to him shall seem to require. And the court before whom such proceedings shall be in- stituted shall have power to grant such orders, and, in its dis- -cretion, from time to time to modify or revoke the same, as the evidence in the case, and the situation of the parties, and the interests involved shall seem to require. SEC. 44. It shall be the duty of the trustees of every sav- ings bank on or before the first day of January in each year, to thoroughly examine the books, vouchers and assets of such savings bank and its affairs generally, and the statement or schedule of assets reported to the public examiner for the first of January in each year, shall be based upon such examina- tion, and shall be verified by the oath of a majority of the trustees making such examination, but nothing herein con- tained shall be construed as prohibiting the trustees_of any Duty of public examiner when corp_ora- tion has v1o- 7 lated its charter or law. Attorney general shall institute pro- ceedmgs. Trustees shall make exami- nation an- nually. Proceedings when savi. gs banks beet me msolvent. Unlawful for certain banks to solicit: deposits. Number of trustees may be reduced. 20 savings bank from requiring such examinations at such [other] times as they shall prescribe. SEO. 45. All the assets of any savings bank or association now or hereafter organized, that shall become insolvent, shall be applied [by] to the directors, assignee, or receiver thereof, in the first place to the payment in full of any sum or sums of money deposited therewith by any savings corporation, but not to an amount exceeding that authorized to be so deposi- ted by the provisions of section 28 of this act; and the fore- going provisions of this section shall also extend and apply to trust companies receiving deposits of savings corporations as authorized by this act, subject, however, to any preference in payment declared and provided in the charters of such trust companies respectively. SEO. 46. It shall not be lawful for any bank, banking association, or individual banker, except savings banks, to advertise or put forth a sign as a savings bank, or in any way to solicit or receive deposits as a savings bank; and any bank, ‘ banking association, or individual banker, who shall offend against these provisions. shall forfeit and pay for every such offense the sum of one hundred dollars for every day such offense shall be continued, to be sued for and recovered in the name of the people of this State, by the district attorneys of the several counties, in any court having cognizance thereof, for the use of the poor chargeable to said county in which such offense shall be committed. SEO. 47. It shall be lawful for the board of trustees of any savings corporation, by a resolution to be incorporated in their by-laws, a copy of which shall also be filed with the Public Examiner, to reduce the number of trustees named in the original charter of such corporation, to a number not less than the minimum named in this act, such reduction to be effected gradually by the occurrence of vacancies by death, resignation or forfeiture, until the number is reduced to seven, or to such greater number as shall be designated in the afore- said resolution; or the number of trustees may be increased to any number designated in a resolution for that purpose where reasons therefor are shown to the satisfaction of the Public Examiner, and his consent in writing is obtained thereto. 21 SEO. 48. Whenever a majority of all the trustees of any such corporation shall, by a resolution to be entered upon their minutes, express a desire and purpose to change the name of such corporation the same may be effected in the fol- lowing manner, to wit: Notice of intention to apply to the Public Examiner for leave to change the name of such corpo- ration, specifying the name thereof, and the name to which it is proposed to change the same, shall be published as required in section five of this act. After such publication. application may be made to the Public Examiner to change the name of such corporation to such name as has been agreed upon in such resolution and publication, evidence of which must be made satisfactory to the Public Examiner, together with such application. If it shall appear to the Public Examiner that it is expedient and proper that such change of name be made, he shall by an order, under his hand and seal of office, direct and authorize such change of corporate name to be made, and designate some day in the future, not to exceed thirty days from the date of such order, when the said change shall take effect. Such order shall be executed in triplicate, one filed in the ofiice of the Register of Deeds in the county in which Change of name, how eifected. Order author- izing change of name, where to be such corporation is located; one copy shall be transmitted to med the corporation affected thereby, and one copy shall be filed in the oflice of the Public Examiner. Thereupon, from the date designated in such order for such change of name to take effect, such corporation shall be known and described by the name designated in such order, and by such name shall have all the rights and powers to which it would be entitled if such change had not been made; but no such change shall in any manner lessen or impair any liability of such corporation iii- curred or existing at the time such change of name shall be made. SEO. 49. The powers, privileges, duties and instructions, conferred and imposed upon any savings corporation by whatever name known, by its charter or act of incorpora- tion, are hereby abridged, enlarged or modified, as each par- ticular case may require, in such manner that each and every such charter or act of incorporation shall be made to conform to the provisions of this act. and to such amendments as may be made thereto ; and each and every such savings corporation Provision to conform charters of savings cor 0- rations to t iis act. 22 Existing investinents protected. Evidence of deposit. Mi_snom_er not to impair any instrument. Banks in existence before the passage of this act to be exempted from its provisions. shall possess the powers and privileges and be subject to the duties and restrictions and liabilities conferred and imposed by this act, anything in their respective charters or acts of incorporation to the contrary notwithstanding. But nothing in this act shall be construed to affect the legality of invest— ments heretofore made, or of transactions heretofore had pur- suant to any provisions of law in force when such investments were made, or transactions had, nor to require the change of investments for those named in this act, except as the same can be done gradully by the sale or redemption of the securi- ties so invested in, in such manner as to prevent loss or em- barrassment i11 the business of such corporation, or unneces- . sary loss or injury to the borrowers on such securities. And the inveslnent hereafter in any such securities not named in this act, or the amendments that may be made thereto, shall be deemed a misdemeanor on part of the trustees authorizing or otlicers making the same, and such trustees or officers shall be subject to the prosecutions and punishments prescribed by law for that offense. SEO. 50. All certificates or other evidences of deposit made in pursuance of the regulations and usages of any such cor- poration shall be as binding upon such corporation as though made under its common seal. SEO. 51. The misnomer of any such corporation in any deed, grant, contract, conveyance or other instrument, shall not vitiate or impair the same, if the corporation be sufli- ciently described therein to ascertain the intention of parties. SEO. 52. This act is hereby declared to be a public act and shall be construed favorably for every beneficial purpose therein contained, but no portion of this act shall apply to savings banks now in existence and operation in the State of Minnesota, which banks may be continued under the laws ap- plicable to such banks before the passage of this act, unless they or any of them desire to organize thereunder. SEO. 53. All acts and parts of acts inconsistent with the provisions of this act are hereby repealed, save so far as they may apply to the banks now organized. SEO. 54. This act shall take effect and be in force from and after its passage. Approved March 11, 1879. The Farmers and Mechanics Savings Institution OF MINNEAPOLIS-. A Snonr EXPLANATION on THE Punrosns non wnrcn ORGANIZED. Irs FUTURE Anus, AND MANNER or CONDUCT- ING nrs Busrxnss. Before explaining the aims and purposes of this Institution, it will be well to accurately define what a Savings Bank is. Many of the readers of this pamphlet may think such an explanation unnecessary, but the experience of the writer teaches him that except among people from New England and New York State, there is a great deal of confusion, not to say ignorance, regarding the subject. This confusion in the public mind is somewhat nat- ural from the fact, that in all the Western, Middle and Southern States there are a number of Banks called Savings Banks that are only such in name. In fact in many States, the so-called Savings Banks are illegal organizations, conducted on the worst possible principle, and are less safe than the regular discount banks. This evil practice, of business banks usurping the name of Savings Bank became general during the war, when wages were high and money very plentiful, at which time, a certain class of bankers, finding the name popular with the people, took the title in order to attract the deposits of the saving class, which were then used in discounting notes and sometimes in all kinds of wild speculation. Such a course of deception is wrong in the banks, but the chief responsibility lies with the legislatures of the different states, which are criminally negligent in allowing such a dangerous practice to exist, when proper legislation would speedily put an end to it. To return to our subject of what constitutes a Savings Bank, the definition is as follows :——It is a corporation managed by a board of disinterested trustees, who receive and invest, in the safest secur- ities, for the sole benefit of the depositors, the savings of those who are unable from any cause to invest their own money. The original Savings Banks, those organized fifty years ago, were all of this character; they were a public benefit, conducted by public spirited men, without any gain or compensation to them- selves, for the general good. Under such a system, the Savings Banks flourished, the best men felt themselves nonored when selected to serve as trustees, deposits increased, until in 1870, they amounted to the enormous sum of 550 Million Dollars. This vast sum was held by 500 mutual Savings Banks in New England and New York, and was safely invested by trustees who attended to their trust simply from a sense of duty. Besides safely taking care of this enormous sum, the banks paid to their depositors in profits over 250 Millions with a total loss of less than two hundred thousand dollars. This record is a wonderful one, and one that no other financial system can boast of. After 1870 a great shrinkage took place in real estate, government bonds a11d other securities, and losses nec- essarily followed, but in spite of all the depression and hue and cry that has been raised against Savings Banks, deposits have constantly increased until they are now 1,000 Million Dollars. While the losses have been much heavier than before 1870, the record is still one the Savings Banks may well be proud of. Holding one thousand million dollars and paying their depositors over fifty millions a year in profits, the Mutual Savings Banks have lost in the past sixty years less than eight million dollars, or about two months’ interest. No doubt part of this loss might have been avoided had all Savings Banks adhered to the original idea of being purely mutual and carried on simply for public good and not for general banking and speculation. It is the aim of the Farmers’ and Mechanics’ Savings Institu- tion to return to the safe and conservative plan of conducting the business adopted by the original Savings Banks. The trustees, not desiring to make any profits for themselves out of the trust funds confided to them, will invest their depositors’ money only in the safest securities, and will under no circumstances, transact any general banking or take any risks of any kind. All profits, after deducting expenses, which will be kept as small as possible will be divided among our depositors, so that every depositor becomes in fact a shareholder or sharer in the profits of the Institution, and as such, interested in its success. The better to accomplish this result, the Trustees last winter secured the passage of a model Savings Bank Law, which ensures a careful, conservative method of conducting the business and affords depositors every possible security. A copy of this law may be obtained at the Bank. This law requires Savings Banks to be managed for safety and not for profit, confining the investments to mortgages, bonds and well secured notes. No general banking is allowed; the trustees are required to attend personally to the investment of the funds, and once a year, a detailed statement is made, so that depositors may see each and every investment held by the Bank. In fact nothing is left undone to make Savings Banks Trust Institutions, perfectly safe under all circumstances. The Trustees will not only endeavor to carry out this law in its spirit and to the letter, but will manage the affairs of the Bank on the fairest and broadest principle, loaning the funds on real estate at a low rate if necessary so as to secure norie but the best security, and paying as high a rate of interest as is consistent with safety. We believe that what is demanded at the present time by all Bank depositors is absolute safety, and that interest is a secondary consideration. We therefore pledge to our depositors that their money shall be safely loaned and if we cannot pay a very high rate of interest we will take good care that the principal is safe. ‘ ws.. ~ “P/we Xi