The Portland daily press., 1872-01-11
The Savings Banks.

ton OF our Legislature, Is tfat conhecleo WIFI
savings banks, the taxation of their deposits,
their management &c. 1t is hoped that these
questions will receive candid investigation, and
that judicious legislation will be OF beneht 10
them rather than the reverse read WIFI IN
terest the view of the matter as set forth III 'le
editorial in your columns; and also the reply W
the same under the signature of ID, winch
was worthy of careful perusal and candid con-
sideration.
Savings banks were first founded in Ham,
burg in 177s. in Switzerland in 1857, and in
ENGLAND in 1899 They were intended for, and
restricted to, servants, mechanics, sc. Par
lament in England first made savings banks
subject of legislation in 1917. They are now
under the control of the commissioners for the
reduction of the national debit and their de-
posts are required to be invested in national
securities. Similar regulations exist in France
and other continental governments. Security
for the depositors in these countries seems to
be the principal requisite not high rates OF inter
est The average rate of interest paid is about
four per cent The first savings banks in this
country commenced in Philadelphia in 1916, in
Boston in the same year, and in New York in
1919 AS institutions for the deposit OF the
savings of the poor and middle classes they
have been remarkably successful both in Eu-
rope and this country. The only failures in the
| system in this country have been in the expert
ments in finance attempted in some of our cit
| les by the organization of what was termed
| "joint stock savings banks the deposits of
| which were used in the most apparently profit
! able speculations which offered, fancy stocks,
mercantile paper, railroad bonds, and all that
| class of questionable securities which promised
high rates of interest were dabbled in. When
reverses came, however, the depositor was sure
| to suffer
| Savings banks now have far outgrown their
original purposes and designs. While continu-
ing to receive deposits from the frugality of the
poorer classes, the larger amount of deposits
are from those who use savings banks as places
| of investments. Ten or twenty years since in
| almost every country village or farming town
| in this State there were to be found more or
| less individuals of moderate means, who, as the
| saying is, chad money to LETT ON good security
| at per cent. Mortgages were favorite securi-
| ty with that class Of persons; their neighbors,
| farmers, mechanics and traders were often &C
| commodated by them. But now all such class
of small capitalists deposit their moneys in saw
ings banks relieving themselves from care and
| anxiety respecting their investments, and re-
| ceve their dividends regularly. 1t is where
their neighbor, the assessor, cannot discover it;
and the bank managers give no information
| about it, The competition among saving banks
to attract this class of depositors, by the pay
ment of larger dividends, in its results is very
injurious to the best interests of our State
In the communication from 3D." it is argued
| that any taxation of savings banks different
| from the present (Which is none at ally will OPP
| crate injuriously to their interests. He as
sumes that the bulk of depositors are of class
| on whom tax however slight would prove a
| burden Sc. and quotes from the report of a
committee of the Massachusetts Legislature
| who reported adversely to taxation in support
| of his point But Notwithstanding the adverse
report, Massachusetts does tax depositors and
deposits in their savings banks, much more
| than it is proposed to do in this State. The d.
rectors by law are required to return to the as
SCISSORS of towns, the names of depositors living
in those towns, and the amount of their depos-
| its over 5000, and State tax of one-fourth per
| cent on the amount of deposits is imposed be-
Sides Notwithstanding these taxes imposed
upon the ''poor and Industrious, benevolent So
cieties widows and Children the savings
banks deposits continue to increase and now
amount to the sum of $163, 1000, OOO-an increase
during the last year of $4,000, 900, and in the
| language of the report quoted by Cd"
1.-THE growth and development of the Saw
| ings Banks of Massachusetts is one result of
our institutions of which we may feel proud.
1t is without parallel in history, that such a
spirit of economy and thrift has been stimulat-
ed among a people and such large sums of
money have been cared for by men under the
| pressure of no responsibility, except that of
public opinion, at 50 small an expense and with
| such almost unexceptionable integrity. Nearly
one third of all the population are to-day de-
| positors and there is not woman, a child or a
| foreigner however ignorant, that does not I'M
derstand our Savings Banks, their advantages,
their security, and their liberality. They have
become the chief, almost the only place of de-
posit for all the industrious working classes,
and have proved one of the most effeetiuA raAth-
DDS ever devised for the benefit of the poorer
| classes.
AS to the bulk of deposits in the Savings
Banks in this State being held by persons of
small means, sc: The Bank Commissioners, re-
port for this year shows that it is quite the re-
verse. Will slight tax by the State have the
effect to cause any diminution of the deposits
in the Savings Banks in this State? We have
the result in Massachusetts as a safe precedent
to ,llow The persons of small means who de-
posit in our Savings Banks do not do so
with the wish or expectation of receiving large
dividends. The security of the deposit is the
principal consideration which causes them to
put their small savings in the Bank.
AS to the second proposition the restriction of
Savings Banks in their investments to certain
classes of securities, it is said by the opponents
of the measure that as no privileges are grant
ed by the State to Savings Banks except grant
ing them a charter, that the State has no right
to exercise any control over them, and any law
restricting the banks in choice of investments
would be 'injudicious and perhaps ultimately
ruinous" This statement is gravely put forth,
Notwithstanding the fact that savings banks
in the matter of their investments have been
under governmental control and legislative di-
rection, nearly ever since their commencement.
And in those countries and states where the
most care is exercised in that direction, they
have prospered the most largely. And in this
State even, the Legislature of 1869, upon the
recommendation of the bank commissioner,
enacted a law ('restricting the banks in
choice of investments'') prohibiting them from
loaning money on notes of individuals without
any other security. Has such legislation proved
injurious? But believe that the State should
have control of the savings banks in the mat
ter of their investments, and exercise it, if for
no other reason, than for the safety and pro-
lection of the depostors Are the twenty-five
millions of money now deposited in the saw
ings bank of this State and constantly increas-
ing, to be left entirely in the matter of invest
ments to the discretion and management of
, Boards of Trustees and Directors, no matter
how respectable and of how high standing they
may be in the community? Financial irregu-
larities are getting to be quite common among
those who occupy the highest positions of trust
and confidence. 1t is too great a temptation
to any men to have the exclusive control of
such large sums, without being under any re-
sponsbility. In some cases in this State saw
ings' banks are closely connected with National
banks having the same officers and both hay
ing the same place of business In others,
bank officers are among the trustees and mana
gers. The depositors of savings banks have no
votes in the election of their officers, or control
in the m IF tbair e.,