6. Building And Loan Association

Several kinds of building and loan associations are defined in the New York State banking law as follows:

The term, building and mutual loan corporations or associations, . . means a corporation formed for the purpose of accumulating a fund for the purchase of real property, the erection of buildings, or the making of other improvements on lands, or to pay off incumbrances thereon, or to aid its members in acquiring real property, making improvements thereon or removing incumbrances therefrom, or of accumulating a fund to be returned to its members in specified cases.

The term, cooperative loan association, when so used means a corporation formed for the purpose of encouraging industry, frugality, home-building and the saving of money by its members, the accumulation of savings, the loaning of such accumulations to its members, and the repayment to each member of his savings when they have accumulated to a certain sum, or at any time when he shall desire the same, or association shall desire to repay the same.

The term, building and mutual loan corporations or associations, and, cooperative loan associations, shall include every corporation, company or association doing business in this state and having for a part of its title or name the words building association, building and loan association, savings and loan association, savings association or cooperative bank, and every corporation, company or association whose stock is wholly or in part payable by a cumulative fund in regular or periodical installments.

The best building and loan associations are those which loan their money to local borrowers.

7. Mortgage, Loan And Investment Corporation

The New York State law defines this class of financial corporation as follows:

The term, mortgage, loan or investment corporation, . means any corporation other than an insurance corporation formed . . . for the purpose of selling, offering for sale, or negotiating bonds or notes secured by deed of trust or mortgages on real property or choses in action, owned, issued, negotiated or guaranteed by it, or for the purpose of receiving any money or property, either from its own members or from other persons, and entering into any contract, engagement or undertaking with them for the withdrawal of such money or property at any time with any increase thereof, or for the payment to them or to any person of any sum of money at any time, either fixed or uncertain.

8. Safe Deposit Company

The New York State law defines a safe deposit company as follows:

A safe deposit company is a corporation organized for the purpose of receiving upon deposit as bailee for safekeeping and storage, jewelry, plate, money, specie, bullion, stocks, bonds, securities and valuable papers of any kind, and other valuable personal property, and guaranteeing their safety upon such terms and for such compensation as may be agreed upon by the company and the respective bailors thereof, and to rent vaults and safes and other receptacles for the purpose of safekeeping and storage.

A safe deposit company is a valuable adjunct to the business of a trust company and if properly located and managed may be made a valuable advertisement. Very frequently, the vaults of the trust company are rented from the safe deposit company. Many banks in small cities and towns are beginning to realize the benefit that may be derived from leasing vault space and when erecting new buildings or remodeling, are building much larger vaults than their present needs require and equipping a portion of the vault space with boxes to be leased to their customers and others. One bank with which the writer is acquainted nets 15 per cent on its vault investment without any annoyance to its own business, and has a vault which will accommodate its business for the present generation at least.