Vermont phÅ“nix. [volume] (Brattleboro, Vt.) 1834-1955, 1888-10-19
Savings Banks.

Letter to ia" Montpelier Daily Journal
Eddor D1jiy .Joumai Il notice that both
Governors Ormsbee and Dillingham; follow
in the wake of Finance Inspector Page in
urging more stringent legislation regarding
savings banks, such as further restrictions
upon their investments, increased taxation
of their deposits, etc, etc. viii you allow
one who has had some experience in say
ings bank management to say few plain
words on this subject through your col
umus
lll Savings banks and trust companies
should be divorced. They ought never TO
have been classed together. Trust compa-
mes are institutions for private gain to
their managers aud stockholders. while saw
mg- banks proper are benevolent institu
tipus, solely for the benefit of those sup.
posed to be incapable of wisely investing
aud properly caring for their own money
whose curporatOrs and trustees serve with
out compensation, and none of whose Off
GERS have any private money interest in
them whatever, except to the extent of re
celvng very moderate salaries for cuntinu-
Gus services performed The trust compa
ny Is run solely to make money for its of
iicerS and stockholders, whose pockets are
directly Interested in securing investments
hearing a high rate of interest: while to
savings bank managers high and hazardous
rates of interest offer no personal tempta
ton, or advantages, their predominating
aim being safety first, and after that the
earning of As large dividends for their de
positors as is consistent with safety. And.
by the way, many people appear to think
that the money of the poor and helpless
that has accumulated in our savings banks
ought, under the compulsion of law in the
guse of solctous guardianship. to he loan
ed out to the rich for the poor cannot Dor
row at less than the current rate of inter
est. Experienced savings bank managers,
1t is safe to assume, have no sympathy with
this theory.
(2) 1t is claimed that six -tenths Of one
per cent is less than the average rate of
taxation in this state and so it is on the
appraisals of sworn officers and the state
ments of sworn property holders but if
every dollar of the taxable property was
set in the list Mt its full value, as are the
deposits of savings banks, how much more
than six tenths Of one per cent tax would
have to be levied to secure the aggregate
sum now raised Real estate is now ap.
praised, on the average, at little if any
more than 20 per cent of its real value
while no observant man believes that any.
thing like one half of the taxable personal
property is represented in the grand list as
now made up. Ii is hid away where the
keen eye of the law cannot, or does not.
find It but every dollar of the money in
the savings banks responds to the tax gath
erer. There is no evasion or hiding away
here. Besides, the legislature limits and
diminlshes the earning capacity of savings
bank money by restrictions upon its in
vestments, which it cannot and does not
undertake 10 impose upon the money of in
dlvidual citizens, and thus furnishes a
strong argument founded in simple Justice
as well as sound public policy, why money
in savings banks should be under, rather
than over, taxed in comparison with other
property.
90 1t is urged that still further restric
tons should be placed upon the investments
of savings bank deposits, especially at the
West. While no intelligent savings bank
trustee objects to any legal restraints that
are needful to secure safety, he does insist
that such restraints should be based upon
knowledge that comes of experience. and
upon principles of equity and sound public
policy, rather than upon UUopian theories
No savings bank in this state has vet
reached the limit of investment in western
mortgages now permitted by law, and not
a dollar has been lost, so far as is known
and believed, ON any such mortgages for
many years Indeed, it is notorious that
the interest and principal of such invest
ments have been paid with very near ap-
proach TO absolute promptness and fidelity.
The losses of Vermont savings banks for
many years if any, have been on the home
investments, Indeed, all such losses of any
considerable amount, from The start, have
been ON loans within 200 miles of the doors
OF the banks that made them. Besides, if
further restrictions are TO be imposed, where
will savings banks find safe investments
for their money Take Windham county.
Tor instance, with over 81, 600, 900, or near.
ly one third of all the deposits in the state.
where there is no local demand with good
security for even one fifth of this money.
and where all such local demands have al
ways been promptly met to the exclusion
OF all other investments. The banks there
VIII he driven to invest in municipal and
other bonds at low rates of interest. and
no safer than well placed western mort
cages in Kansas and Minnesota and states
tins side, and their earnings and dividends
Tor deposits will be correspondingly de
creased the obvious results of which will
be large Withdrawals and nineteen dollars
out OF every twenty Of such Withdrawals
Will he sent directly west through other