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Show COURTAPPROVES jifrajpuif) Decision It Rendered in Case Involving Issuance of Compo Thrift Bonds NRW YORK, Aug. I Ta enable national banka and trust com pan lee ta uaa legally the I'nitad Htatea government a theory and practice prac-tice of pramotlag- thrift and hebtte oi aav. Ing la the effect of a decleioa bended 4ow In tha federal oourt for the aouthera die-trict die-trict of New York by Judge A. N. Hand. Tha decision was rendered in a case Involving Involv-ing the Issuance of Com pa thrift bonds by a national bank. The dec 1. Ion nettles a salt brought V J. R. Adams of Ellaabeih, N. J., a stockholder In the Maybrook (N. Y.) National bank, asalnat tha bank and the Compo Boat, corporation cor-poration of New York City. Jointly. He souarht ah injunction to reatraln both Inett-tutlona Inett-tutlona from eelllng- Compo bondo, alleging that the laeuance of an Instrument of una type conatltuted borrowing by the haiika and tha tasuanoe of a long-time obl'teilon and waa not epeclflcaily authorised by tha national banking act. In reply, the bank and tha Compa eoe-poratlon eoe-poratlon contended that Compa bonda were a form of time certificate of depoalt, that they had been aa- elee4ftet tor ?omptr. ter -of the Currency Crleainger, sad that, aa each, they were a legal form of laue f.r nntlonal baaka, Tha decision austains thsir contention. Tba Compo bond Idea la aa nwtgrowrfff of tha thrift and eavlnga plan that haa been uaed aucceaefully by the government In War aav ing a stamp and certificates. It ta a form of aevlng uaed particularly by small Invea. tore who deal re 10 let their money aoewmu-late aoewmu-late aver comparatively long periods. The bond a are bold by national banka and other financial laatltutlona to thsir depoaltora, -and the preaent decision, which haa been awa.it. ed wtth great Intereet In banking otrslea. rem ov. a tha only gal ebotaola to tha ae of this form nf sAvlnga. Compo thrift boada are leaned by bank and trust eompamee for caak depoetta, and they conatltute tha promise of the teealng lnetltatloa la pay te the holder a certain sum of money after a opacified pert' d of lime, thla earn to equal the amount on ha). ly paid for tha bond plus interest compounded compound-ed eemlaaaually daring the Ufa of the la-atrainent. la-atrainent. Tha heads are leaned la varying amounts from I0 up to 11000 and for different pe. rMda of time. A twenty-year Compo bond haa a redemption value at maturity of twle tha amount originally paid for It. The Saaiurtty values of Compo bond a of longer er ahurter Urtlis vary from tha purvheao pries according te the leagUi OC tiine they arc ta rua. proviatoa la wiada whereby tha holder ef a Cnmpo bond may borrow oa them at. tha bank of lea we pad also may rsdeem litem st any lime. It la also provided tht. In-eaaa In-eaaa af emergency, the leeulas bank can call the bonds for redemption at any time by glvlos elstp daya notice to tha holder. If tha holder wlahe to redeem the bond before maturity, the laaulng bank mar demand de-mand Maty days' notice. If It dee I re. When redemption Is mads before maturity, by. the holder, tha value of tha bond h computed as tha amount af ths purchase price puis a certala rata of In ts reel, which rat gradually grad-ually Increases the longer tha bond Is held. When tha bond la called fnr redemption, by the bank the principal, plus tha full rate of Intereet, la paid by tha bank up to the date of redemption. The Value of the bond 1 at any time la glvoa ia a table .aa tha back of each bond. |