The Rutland daily globe. [volume] (Rutland, Vt.) 1873-1877, 1877-05-18

states-Massaehus Connecticut and
Rhode Island-being in 1878, three hun
bred aud eighteen millions of dollars, of
which one hundred and seventy-one mill
lions--or about flftY-four per cent.-was
loaned on mortgage.
From these facts, the Tribune argues
that the imitation in the price of real es-
tate, from 1860 to 1878, was mainly due to
this tendency on the part of savings banks
to invest the funds Of its depositors in loans
on mortgages on real estate, because as it
says, "the price at which real estate will
"sell depends almost wholly on the amount
(which can be borrowed on it; and the
conclusion which it attempts to deduce is
that New England savings banks are I'M
safe, because "there is not mortgage
debtor whose real estate has not fright
" fully shrunk, and many man who was
believed to be beyond the reach of
catastrophe five years ago is now utterly
impoverished by the fading away of all
"the margin above his mortgages.
1t is true enough that real estate has
largely deprecated in value, and that where
it was mortgaged for nearly all that it was
worth at war valuation, the mortgagor
has seen his "margin" vanish, and has be-
come impoverished thereby, while the
holders of this kind of mortgage securities
have been compelled TO accept of real es-
tate in liquidation at a deprecated valua-
| ton and have thus partaken of the loss.
But the theory that savings bank deposits
are imperilled by this depreciation, how
ever plausible it may seem, is no more
sound than it would be TO claim that loans
on personal security are dangerous because,
occasionally, man or banking institution
can be found to loan ten thousand dollars
on the personal security of cndorser who
are not worth ten cents.
Indeed, the Tribune shows the falacy of
it's whole theory when it goes on to state
that the savings banks of New York city
have pursued more conservative" course
than those of New England, and have not
| contributed so largely to the initiation of
real estate, inasmuch as, January l, 1876,
| it appeared that only one hundred and
twenty-five millions, or thirty. five per cent.
of the three hundred and fifty-four millions
| deposited in the savings banks of that city
were invested in mortgages 1t is very
| careful, however, not TO mention the large
number of savings banks of that city which
have failed during the past four years sole
| ly in consequence of the depreciation in
the value Of real estate, as, also, to COM
pare them with the very rare failures in
New England. If its theory is correct,
the failures of New England banks should
have been at least double those in New
| York, while in fact the failures in New
York have been ten fold those in New
| England.
The facts in reference to the Vermont
savings banks, alec, show that the theory,
however plausible, Is not sound. Taking
these same ten yesrs, we find that the
whole amount deposited in the Vermont
savings bank in 1865 was something over
one and three-quarters millions of dollars
81, 755, IA. 47-and that about thirty
eight per cent. of this amount SCAT, 1856 ii
was invested in mortgages; while in
1875 the whole amount of deposits had in
creased to 800, 50S.S4 of which about
fifty per cent -$3, 1888, 43S. 27-was invest
ed in mortgages. We find further that in
1865, 1907, 900 was invested in United
States bonds $472, 25O in 1868; aud $780,
249 rs in 1875. 1t may be further stated
thst in 1876 the whole deposits had in
creased by some half million dollars;
the United States bonls nearly two humid
red thousand dollars; aud the leans on
mortgages nearly million of dollars.
Now il the theory is correct, we should
expect to'see, even il there were no failures
of the banks, Il large amount of unpro.
ductive real estate on hand-for where
the real estate is not an adequate security
for the loan, 1t is inevitable that the real es.
tate must come into the hands of the mort.
gagee-but instead OF this, we find that the
whole amount of real estate owned by al
the savings banks in Vermont amounts &c
only sixty-one thousand dollars, or about
three quarters of one per cent. Of the trus
funds held by them, being an average of &
trife over three thousand dollars to bank
and nearly all of this being represented by
banking houses owned and occupied by thu
institutions themselves.
1t may be further stated that almost tn,
only failure of savings bank that ever oc
CURED in Vermont was one which ha(
some sixty-three per cent. of its deposits
invested in mortgages; and that this clas
of investment instead of proving q weak
ness to the bank was almost its only source
of strength, for about all the depositors re
ceived for their deposits was derived from
these mortgage securities. The Tribun
asks "what is the remedy2" A compari
son of the condition of the Vermont an,
| New England savings banks with those o
New York renders it very easy to make Al
answer. Look out for the securities
: Mortgage securities are the very best in tn
, world. for savings banks as well as indi
{ viduals. provided, as is the general rule il
New England, the loan does not excee
, one-half the value of the real estate mort
gagged for security.
. Great Feat.
f Bertha Won Hillern completed walk o
| 100 rntlaa in Waroaofar Moao IA