The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1893-01-27
THE PRESS.
FRIDAY, JANUARY %.
SAVINGS BANK INVESTMENTS.


mating tax of the savings bank bill now
before the legislature is to help develop
the resources of Maine. The argument
is that large sums of money are now be-
ing sent out of Maine that ought to be
kept at home to promote Maine enter
prises and develop Maine resources.
That is a taking argument, and when the
correct application is made of it, it is a
sound argument. Our contention is that
when it is applied to the money of saw
ings banks it is not applied correctly.
We claim that the application of
avings bank funds to investments inside
of Maine that have all the characte istics
which savings bank investment should
have, would as rule not assist in the
development of Names resources any
more than would their investment out
side Of the State.
1t is too obvious proposition to need
argument that when money is placed in
the hands of savings bank trustees their
first duty is to invest it safely. Their
second duty is to invest it so that it can
readily be turned into cash, so that
when the depositor wants it he can get
it without delay. Their third duty is to
invest it SO as to get as much interest as
possible, with the two first conditions
satisfied. There are several classes of
investments which the savings banks
naturally seek. First public funds of
cities and towns, counties and States.
The inquiries in regard to them are.
what is the population of the city, or
Town or county. as the case may be,
is its tendency upward or downward,
what is the character of the people, what
is the valuation, what the existing debt
as compared with the valuation, what
the purpose of the proposed loan, wheth-
er there is any doubt of it's legality, and
what the laws of the State for the pres.
ervation and enforcement of the claims
of the creditor. These questions are all
investigated by the careful savings bank
manager whether the security be located
in this State or in another State, and
unless these questions are satisfactorily
answered the savings bank manager, if
he is faithful to his trust, will refuse to
invest. Precisely the same rules ought
to govern all investments in this kind of
securities, whether in Maine OF out of it.
In the present condition of the money
market in this country, with large sums
seeking investment, all of this class of
securities that can stand the test which
should be applied to them find a ready
market.
The savings bank bill now under dis
cussion, by means of discriminating
tax, undertakes to induce Maine savings
bank managers to confine their invest
ments in this class of securities, as
well as all others, to Maine, the
purpose being to help the State.
In what way would it help the State
for the cities and towns of Maine
to draw all the money they want to bor-
row from the Maine savings banks in
stead of drawing part of itfrom indi-
viduals or loan associations outside of
the State? Suppose every bond of the
city of Portland was held by the Maine
savings banks, would Portland be bene-
fitted one iota by that fact? Would it's
resources be developed any more on ac-
count of it, or its enterprises fostered?
Obviously not No town whose bonds
are secure and of good repute will derive
particle of benefit from having them
held by Maine savings banks. Ii there
are municipal bonds in the State that
are little questionable and which do
not find ready takers, that town might
be helped by such law as is proposed
because the prospect of higher interest
which the discriminating tax holds out
might Induce some weak savings bank
managerto invest in them. But the correct
principle of savings bank investments
would have been violated, and the money