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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 his 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.

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. He was 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

ascertained some action will probably be taken towards securing the amount of shortage from the bond.

In the meantime the new receiver is making up his schedules and collecting together the remaining assets of the bank, and when sufficient money has been realized to warrant the payment of a dividend, the court will be asked to order the same. No time can now be set, even approximately, when this will be, but the depositors are assured that no unnecessary delay will be allowed to prevent its being paid as soon as practicable.

The strange and headstrong conduct of the late receiver in opposing the commissioners and the court in their efforts to get possession of the property of the bank discloses a wilful and deliberate contempt of the authority of public officers and a shameful lack of appreciation of the rights of the depositors of the bank.

The delay occasioned by the late receiver and his maladministration of the bank has been a source of much dissatisfaction and complaint on the part of the depositors, and the foregoing account has been made thus full in order that the public may know where the blame for the delay belongs. On account of the misappropriation of the funds of the bank and the mixed condition of its accounts the Board is unable to give the usual statement of condition in this report. Not until the expert has made a full and complete examination of the accounts and discovered the exact amount of the deficiency can an accurate statement of condition be ascertained.

TRUST COMPANIES.

During the financial stringency which prevailed during the summer but one institution in the State was obliged to suspend, and this not on account of being unable to meet all its obligations in full, but from an inability to obtain currency to meet withdrawals.

The New Bedford Safe Deposit and Trust Company closed its doors on the fifth day of August, 1893. On an examination of its condition the commissioners found it perfectly solvent and able to meet all its obligations. A temporary injunction was issued restraining it from paying out money, and allowing it to collect and realize on its assets with a view to reopening.

On the fifth day of October, after having been closed for two months, this institution reopened its doors and has been doing business ever since. Its deposits are steadily growing and it appears to have the confidence of the community.

In the opinion of the Board a great mistake is made by some of the trust companies in allowing interest on small deposits.

The commissioners have frequently called the attention of the trust companies to the fact that to allow interest on small deposits is not good business policy, and is not practised by the larger institutions. No considerable gain accrues from such a transaction. The time and clerical help required to keep these accounts far outweigh any profit which the company receives from the use of the money. It is urged by the trust companies that to allow interest on small deposits attracts the small tradespeople to open accounts who would never do so but for the promise of interest. It seems to this Board that the small tradesman could be just as easily induced to place his money on deposit, by holding out to him the security offered by a safe place in which to keep his money and the accommodation furnished him of drawing checks against his account, as by the promise of an inconsiderable sum in interest. The element of safety and business accommodation far outweighs the small amount of interest credited to the account. One of the smaller trust companies has recently limited the amount on which it will allow interest and so far as known has not lost its customers or had any complaint made of the injustice of the action. We strongly recommend, therefore, the adoption by all trust companies of a limit upon which interest is allowed. Such a course we believe would strengthen the companies, entail less labor upon them, and would not be unjust to the customer.

The law relating to trust companies, chapter 413, Acts of 1888, section 18, gives authority to these companies to hold real estate suitable for the transaction of their business to an amount not exceeding twenty-five per cent. of their capital, and in no case to exceed $250,000.

There are but three trust companies doing business under this law which hold real estate under this section, and the question has recently arisen as to what is meant by the expression to hold real estate." One company, with a capital stock of $100,000, has invested $25,000 in a building and assumed

mortgages to the amount of $40,000, which makes the value of the real estate held by the company $65,000. In addition to these amounts, it has invested $25,000 in its safe deposit vaults and $10,750 in furniture and fixtures. Thus it will be seen that although the books show but $25,000 invested in real estate, the value of the same is much larger, while the sums invested in its safe deposit vaults and furniture make the whole amount at stake in this one piece of property more than the amount of its capital stock. The Board believes that the intention of the law was to limit the amount of value of real estate which a company should hold free from all incumbrances to twenty-five per cent. of its capital, and that it should not become liable for further amounts held on mortgage.

The question is of sufficient importance to call to the attention of the Legislature, and it is respectfully recommended that the law be so amended that no uncertainty or ambiguity shall remain.

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