Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1888-10-26
THE STATE REPORiS.
Inspector OF Finance Page on Nermont's
savings Banks and Trust Companies.

Inspector OF Finance Page on vermonts
savings Banks and Trust Companies.
An abstract Of the annual report of the
inspector of finance, giving the figures per-
tanning to the resources and liabilities of
the savings banks and and trust companies
iu the State, with the amount of dividends
paid, amount of deposits and number of
depositors has already been published in
these columns. Mr.. PAGES rec)mmenda-
tons relate almost entirely TO the subject
OF western mortgages. The amount of
these securities held by the savings banks
of the State has increased in the last 10
years from Sl,21S $685. G3 to 50 563, 191 4s
Toe recommendations or the inspector are
as follows
The savings banks of Vermont are in
most respects models o financial manage
meut. With scarcely an exception they
are in the hands OF our most conservative
and substantial business men. Ihey have,
as they deserve to have, the confidence of
our people to sucn an extent tnat the
average amount to the credit of each de
positor is larger tnau IN any of the other
New England States, or New York, with
the exception of Rhode Island, in which
State there Is not, rs IN Vermont, a limit
! to the amount which may be received
| from any one individual. | should, how
ever, come short of what | believe to be
my duty, were to terminate my official
| relations with the savings banks of We
mont without giving expression to M
| we'll settled conviction that trustees,
their anxiety to pay their depOSltOrs !
! eral dividends, are in too many Instance
! allowing the quality of their assets to tall
| below the hign standard which should be
maintained. The large rates of interest
which western borrowers are able TO offer
I.are too attractive for the ord dlnATV investor
] u
| fine LIKE of government and municipal
! bonds which have beeu maturing during
/ the pass few Years, have been relnVested.
| in by tar too many ius .auces i'll western
! mortgages. Now, whatever may be
claimed III benait of western mortgages,
the time has certainly come when we
should apply to this matter, the homely
maxim whibh teaches that we should not
put too many eggs III one basket. 1t Is
/ true that these Investments enable our
! banks to declare larger dividends than
! they otherwise could, but We slOuld not
! lose sight OF the Well-known principle
which should always govern savings
! banks, that large dividends are of second
AIRY importance As compared with aOsO-
/ lutte safety. Confidence IN Our entire sys-
TEN OF savings banks Is all important to
! the eud that Our WurklnGmen ana middle
classes tor whose benefit thty were more
| especially established. may use them more
| and more extensively. DIS tster to any Of
! them utllcts an injury upon all and is n
! shock 10 pubic confidence which causes II
I teparaule injury TO the general welfare OF
the STATE. Experience demonstrates
clearly and cOuclusrVtly that high rates
/ OF interest are not the attractive feature
/ oi sa Wings banks III the eye OF the depCst-
| tor, rut rather absolute freedom from any
mlsL wings or uheasinesS with reference
| to tue safety OF the principe The banks
! paving the largest dividends are not those
I wnlcn show the most healthy growth.
! But even II he reverse were true, stlll the
| State owes II - the general welfare OF all
10 see that sucn policy Is pursued as
! snail prevent, its far as may be, the possi-
| bllity Of disa:tef to any There are several
sayIug - banks in Vermont viii; believe
should nave dlNlGed fully one-hAlt per
! cent less per Hnuum TO their depusltors,
during the last tour years, investing the
extra malt per cent in premiums uuOn first
/ elias municipal bonds, bonds ut clIles and
/ counties whose credit ranks so high that
/ III case of any tiuaucll stringeucy they
/ would be readily convertible Wit out sac
/ ritice. To do otherwise Is TO invite run
! upon the wea~ er institutions upon the
/ slightest indication OF approaching imam
cial disturbance. Let those who prefer
! high rates TO absolute safety withdraw
| their funds from savings institutions.
! Trustees should cheerlully welcome such
Withdrawals rs being tor the good OF them
INSTITUTIONS. 10 try 10 attract dep j-lts by
Il
which savings banks were established,
ana in my judgment Is little less than
crime.
IL is my well settled convction that the
laW allowing Investments IN western
MORTGAGES should be SO amended as to
permit only 40 per cent Of the entire assets
OF any savings bank or trust company to
be invested therein, and The law with
refereu { TO dlVideuds SO changed rs 10
prohibit the declaring of more thHn 4 per
cent per annum, until a net reserve OF at
leHst 10 per cent, without including turnl-
ture, fixtures, premiums or uucullected
interest, be accumulated and that until
a net reserve OF at least q per cert ne Hccu-
mulated the dividends be restricted to- per
ceuJ would further recommend tnat
the law with reference 20 municipal bonds
ne 50 amended rs To permit Investments
in the county bonds, and in the bonds OF
cities ot 10, 900 population or more, IN the
States of New York, Ohio, Minnesota and
| Michigan, where such bonds were not
,s-uei IN the and OF IA lruads and where
Toe iudrbt edueSS of the county OF city
lOes not exceed per cent OF the as. ssed
valuation OF suCh county or city. Uuder
-XlsUlng laws no municipal bonds of any
sud is,ued bv the cities or COuutI-s OF
ANY ot these : ates can be held OA Nei-
mont SAYINGS b'nks. | uellrye there are
jIArr,it and county bonds which might
safely De added % the list OF those III
which our swings banks may invest.