The Portland daily press., 1891-02-02
TAxATIoN ON SAVINGS BANKS.
Discrimination In Favor Of Homo
Securities.

The question OF taxation which is likely to
receive considerable attention from the
Maine Legislature during It's present session
is OF great importance, not only to the indi-
viduals and corporations to be directly ef-
fected by any radical change from the pres
ent basis, but the prosperity of the people Of
the state, taken as whole, may be promoted
or impaired to a remarkable degree Dy the
policy determined and adopted at Augusta.
One matter of great public interest is the
question Of what change, II any, shall be
made In the method Of taxing the savings
bank deposits. The present tax is three
fourths of one per cent per unnum on all de-
posits after deducting the amount invested
in government bonds, shares of corporation
stocks, such as are bylaw of this state free
from taxation to the stockholders, and the
value OF real estate owned by the savings
banks. Under this statute the state receives
some S3Oo.0O0 revenue annually from tax on
savings deposits, and 1t it seems desirable or
necessary to increase this amount it can aud
should be accomplished in such manner as
will least disturb or best protect the indus
tries and enterprises Of our own state, estab-
home labor.
Already a large majority of the assets held
by our savings banks are western municipal
ponds and western railroad bonds, and with
In the past few years stock in western ma
of our savings institutions. The reason for
this Is plain. Western securities sell on a
lower basis and pay larger income to the
holder than heme investments. 1t Is sug-
sested that the present legislature will In
crease the tax to one per cent. If tnis In
crease Is made the tendency will certainly be
in the direction of enlarging the ratio of
western holding in the banks and displacng
the few Maine securities now owned by
.hem: In order to prevent this unfortunate
result II would seem wise that discrimination
should be made in favor of home invest
ments which would enable the banks to de-
rive as much net income tfrom securities
based upon local enterprises and local prop
critics as they can receive from investments
far away.
Municipal bonds of this state pay the in
vestor about per cent income, while those
OF western states pay Al to per cent. Rail-
roa1 bonds OF Maine pay the holder 4 to
per cent, while those Of the West yield an
income Of st to 6 per cent.
Several OF the Eastern States, In their laws
regulating tax on deposits In savings banks,
discriminate in favor of their own securities.
aud the result Is the savings of their people
Is Kept at home and applied to the promo
ton OF home Industries and enterprises
1AoihO hoo AOt dQOpLcu luis DOUCY. Her
statute says to her savings bank managers
you take the accumulated savings of our
people and go West and loan it to town or
county, or let some Western railroad compa-
ny have 1t to extend Its lines to open up aud
develop new territory" This statute serves
notice upon our ewn borrowing counties.
cities and corporations that they must 20 to
Boston to sell their bonds. The result Is,
the pest municipal, railroad and corporation
bonds OF this state are driven into the vaults
n IN Af
where they are greedily acquired and coyet.
ousiy hoarded, and Maine becomes the mar
ket Tor western borrowers and her savings
banks the receptacle into which Is dumped
the vast accumulation of second-class mu-
nlclpal and railroad bonds which by virtue
of law. are ruled out of kindred institutions
York.
There Is one plain, simple remedy for this
wrong. Let the legislature open wide the
door 70 admit the securities based upon
Maine properties and local enterprises. They
are under the Immediate eye Of our bank
managers. rendering information and inves-
aud without depending upon middle man
for advice.
Then let the statute be so amended that
deposits invested In Maine shall be taxed
but one-half Of one per cent, and those In
tax of one per cent.
This policy will increase the revenue to
the state treasury; will keep at home In the
vaults Of our savings banks the choice Maine
securities now displaced by second-class
Western bonds and driven TO Boston for
market and treasured up by Massachusetts
institutions.
There are no better securities than the mu-
nicpal, railroad and corporation bonds of
Maine. Securities which are good for Mas
sachusetts savings banks are none too good
for our Maine institutions, and such as are
too poor fer trust funds OF other states are
unworthy to be allowed to absorb the hard
earned accumulati0ns Of depOsit0rs In Maine
savings banks.
1t would seem that the policy OF giving our
own securities no preference Is detrimental
to every business interest Of this state and
the fact that a majority of the $4,000 900
savings deposits has been 10 med In the West
Is explanatory of the deserted farms, the idle
water powers and the lack of employment
which sends our Young men beyond our bor-
ders to establish business or an occupa-
tiOn.
If our savings banks find 1t for their inter-
| est to seek ihome Investments. new enter
prises Will develop legitimate use for all
| our savings, and In pace Of western securi-
| ties, the value of which can only be meas
| ured by few, the assets of our banks Will
| consist Of home securities based upon prop
critics and enterprises, the management and
| operation Of which afford employment to the
| intelligent wage earning depositors who Will
| understand perfectly the soundness OF the
| securities behind their deposit books.
| FRED Il. RICHARDS,