The Portland daily press., 1888-12-01

1ne otaLute provides tnaL the savings
banks may invest their deposits in the stock
Of any dividend paying railroad in New
England. Under this provision several Of
the banks have comparatively large holdings,
and few have among their assets shares in
railroads located outside the territory
covered by the law regulating invest
ments which have been acquired through
foreclosure Of mortgage bonds, or as
bonus to original subscribers for bondss
Mr.. Richards points out that this statute
was enacted years ago when railroads were
managed with more regard to the interests
OF stockholders and before annual reports
were prepared to obscure rather than make
plain the condition Of the roads, Now, saws
Mr.. Richards, 'the fact that railroads are
dividend paying" Is no longer an assurance
that they are dividend earning" and until
uniform system Is adopted, by which
stockholders can obtain Information upon
authorities, outside and Independent of the
corporations own accountants as to its
assets and liabilities, its earnings, fixed
charges. and contingent expenditures, rail-
road shares may well be regarded by con-
seryatiye managers OF savings banks as too
unstable an investment for deposits. The
tendency OF legislation in Massachusetts, and
Connecticut Is In the direction Of such State
supervision as will, when perfected give
the public reliable information of the fnan-
cial, as well as the physical, condition Of
their railroads"
OF Western farm mortgages the report has
a word to say also. Maine savings banks are
not allowed to invest in these securities,
and futile attempt was made to change
the law in the last legislature. The call for
q Grange In law comes, Mr.. Richards saws.
from two sources: from the mortgage com
Danies OF the West who look with longing
eyes upon the $4,000 Of Maine savings
banks deposits as an opportunity 10 broaden
their markets. and capitalists of our own
State who, in evasion OF law, 20 from bank
to bank with their money and deposit in
each the maximum sum allowed any single
depositor in the same bank. and then open
accounts In the names Of several mem-
6ers OF their family with two thousand
dollars to the credit OF each"
These men would like to get higher rates OF
interest. and think that II the savings banks
could invest in Western farm mortgages
higher rates on deposits could be paid, These
capitalists would reap the higher rates, but
on the hrst appearance OF danger would has
lilly withdraw their deposits leaving the loss
70 fall on farmers and labOrers who had not
been SO well Informed Of the danger Mr..
Richards does not say that Western farm
mortgages are necessarily danger.
Gus investments. He merely dis
tSe savSe1 e% rOs the sssnSon;
money" he says, upon Western farm mort
cages, Is business which requires knOwl.
edge and experience not now possessed or
likely to be acquired BY the trustees who so
ably conduct the affairs Of the savings banks
or the state under our present statute regu-
lating Investments that losses are not fre-
quent. Their experience has taught them
that convertibility Is an essential element for
assets OF savings banks which Western farm
mortgages do not possess"
Mr.. Richards fortifes his position by cit
ing from reports OF the bank examiners of
New Hampshire and VermOnt-States that
sanction the investment-who advise their
bank managers to "go slow" In making AL.
ditlonal investments Of this kind,
speaking generally Of savings bank invest
ments, the report says that thene are savings
banks In this State today as well or better
prepared to meet the emergencies Of great
financial crisis as any kindred institutions
to be found In the United States; so strong
are they that the most serious depreciation
oi values following a financial panic for
which there has ever been q precedent In
this country could not impair their ability TO
pay every deposit0r In fun as rapidly as the
money could be legally demanded. without
drawing from or reducing the
Mr.. Richards does not say that there
are others not so strong, though Of course
there must be, as every bank has its charac-
teristics and all are not managed alike and
could not be expected to be alike in their
conditions. THE strongest savings banks.H
says Mr. Richards, ''are those which have
Invested their deposits in the choicest Secnr-
titles, such as are best known, have the
widest market, and are the most easily con-
verted into cash whether the rate for the use
OF money is high or low. The banks which
have made the best records have charged OF
TO profits and loss at the time Of making each
Investment the high premiums they have
neen compelled to pay for such securities as