be advantageously invested in other investments, and as compared with the other assets of a bank are on short time. It is natural then that they should be among the first to be availed of by the banks when it is necessary to provide the means to pay depositors.

From the annual reports of the one hundred and eighty-five savings banks we compile the following statements:

NOTICE OF WITHDRAWAL.

Almost every bank has some provision in its by-laws requir ing notice of the intention of the depositor to withdraw his deposit; but the length of time required in the notices varies widely in different banks. Since it is undoubtedly true that no institution which invests its funds in mortgages and other time loans can meet all its obligations at a moment's notice, the object of such a by-law is obvious, namely, to enable banks to turn their assets in time of great financial disturbance without loss. In requiring such a notice a bank is enabled to fix the amount of money which will be required to pay depositors from day to day, and thus ample opportunity is afforded to provide the means of payment. During the financial crisis of the summer and fall many banks availed themselves of the right to require notice of withdrawals under their by-laws.

One effect of this action was that it determined in many cases what the object of withdrawal really was. In cases where the money was needed to fulfil contracts, or for actual subsistence, the time limit was not insisted on, and the much-needed relief was furnished without loss of time. In cases where the depositor sought to withdraw his money through fear or for purposes of investment the full time was generally insisted on, and in a very large number of such cases it was noticed that before the expiration of the time limited the notice was withdrawn.

The experience of the banks, however, developed the fact that hardly any two by-laws requiring notice were alike, and that in some cases amendments were required. The suggestion is made whether it may not be desirable for the banks to take some action looking to uniformity in such by-laws, to the end that time limit may be made the same in all the banks.

GUARANTY FUND.

The amount placed to the credit of guaranty fund during the year is $1,197,367.77. The total fund is now $15,743,022.40 or 3.9 per cent. of deposits. Several banks have accumulated this fund until it has reached the limit of five per cent. required by law before it is available to pay losses, and the

question has arisen as to whether it is necessary to add further to it. The Board believes that the object of this law was to create an emergency fund, which should be maintained at five per cent. of deposits and held to meet losses, and that whenever it falls below five per cent. of deposits, whether from the payment of losses or from the increase of deposits, it should be restored in the same manner as it was originally created, by semi-annual additions out of the earnings of not less than one-eighth nor more than one-fourth of one per cent. of deposits. Any other construction of the statute would enable a bank to build up its guaranty fund to five per cent. of deposits and never increase it afterwards. It would be practicable for a bank of small deposits, by persistent effort, to raise its fund to the required amount and never add to it more, no matter how large the deposits might afterwards become. The result would be a bank with large deposits and disproportionately small guaranty fund. This course, however, would not be maintaining the fund at five per cent. of deposits. The limitation in the statute is one which has reference to the time when the funds may be used and not to the limit of accumulation of the fund.

By the terms of the statute this fund cannot be used until it has reached five per cent. of deposits, when it is available to pay losses from depreciation of securities or otherwise. The term "otherwise" is broad enough to cover losses of any kind; but although this fund may be used to pay losses of every description, and without questioning the right of banks to use it at all times for that purpose, the Board believes it to be wiser and better to charge off losses, as far as possible, from the undivided earnings, and to preserve the guaranty fund for extraordinary emergencies. This course has generally been followed by the banks, and its tendency is to maintain the fund and to strengthen the standing of the banks.

Stockbridge Savings Bank.

This is the only bank in the hands of a receiver. The order of court appointing a receiver was passed April 10, 1891, and since that time two dividends amounting in all to fifty per cent. have been declared. The receiver's administration of the

affairs of this bank has been such as to call for much criticism by the commissioners, and in one instance for the intervention of the court. At an examination of the bank in June, 1892, it was found that the receiver had appropriated to his own use $5,130 of the bank's funds, without authority of court, on the ground that it was in part payment of bis services as receiver. The facts were called to the attention of the court and he was informed that such appropriation of funds was a gross contempt of court, and was ordered to refund the money

at once.

In December, 1892, it was announced by the then receiver that a further dividend of twelve and a half per cent. would be declared and paid about Christmas time, and a request was made that this Board would make application to the court for the declaration of the same.

On examining the statement submitted by the receiver the Board found that there were not sufficient funds on hand to pay the proposed dividend, and consequently could not assent to it.

Much of the time since, the commissioners have been trying to obtain information as to the exact whereabouts of the receiver, with a view to an examination of his affairs, but until late in the summer had been unable to place him. In October it was found that he had returned home, and one of the commissioners charged with making an examination went to Stockbridge, but after two days' effort could get no interview with him, and could make no examination. Having tried repeatedly during the summer to get into communication with the receiver without success, and being unable to make an examination of the affairs of the bank, the commissioners were unwilling that sickness, either real or feigned, should interfere further with the progress of closing up the bank's affairs, and made application for his removal. Accordingly, on the twentyfourth day of October, 1893, the application was granted and William C. Spaulding, Esq., of West Stockbridge was appointed receiver in his stead, and an order issued to the old receiver to turn over to the new receiver all the books, securities and other property of the bank. Then began a series of remarkable tactics to delay and obstruct the new receiver in obtaining the property of the bank.

He was

Mr. Spaulding qualified by giving bond on the twelfth day of November, 1893, and immediately made a demand in writing upon Mr. Hobbs for all the property of the bank. met by the excuse that Mr. Hobbs was too sick a man to attend to the matter, and had gone to Boston for medical treatment. Thereupon the receiver redoubled his efforts to obtain possession of the property of the bank, making repeated demands in writing and travelling about in search of Mr. Hobbs, in order to get an interview with him and to make his demand in person. His efforts were without avail, and on the twenty-first day of December, still ignorant of Mr. Hobbs' whereabouts, he was obliged to make application to the court for an order compelling Mr. Hobbs' appearance to show cause why he should not comply with the court's order to turn over the property of the bank to the new receiver. The hearing was fixed for the 29th of December; but not knowing just where Mr. Hobbs was, no service could be made in time, and the hearing was postponed to Jan. 9, 1894. In the meantime service was made, and thereupon appointments were made with the new receiver to deliver up the property of the bank to him, but as frequently broken on the ground of sickness. Finally, on the day before the last appointment was to be kept, the receiver was informed that Mr. Hobbs had been run over, both legs crushed, and that amputation would follow. This statement was made to the court on the 9th of January, and counsel were asked to obtain a physician's certificate of the fact, and present the same to the court on Friday, January 12. No certificate, however, could be obtained, and the new receiver who went to the house with two reputable physicians was peremptorily refused admission to Mr. Hobbs. The court thereupon issued its capias for the arrest of Mr. Hobbs, and he was brought into court on the 16th of January, when it appeared that he was short in his accounts to the extent of $21,000, that the alleged crushing of his legs was not true, and that he had apparently been simulating sickness in order to avoid turning over the property of the bank. He was sentenced to six months' imprisonment for contempt, and is now in confinement.

It cannot be stated with accuracy, at the present time, what the amount of shortage is. The books of the bank are being examined by an expert accountant, and when the amount is