The Portland daily press., 1893-01-16

are or should be taxed to their owners.
The savings banks have, besides tiie aooSS-
city and county bonds. railroad bonds ana Dank
stock This is the property OF 9o.4o9 deposltr
Ors. and is but small proportion OF the ely,
county and railroad bonds and cash owned by
the people of Maine. Yet it would be difficult
task, in TACT all imposSiDillty, to ind among all
these securities owned in this state another
$1,000, 900 which is taxed at all, or any other
Sc, 4S9 individuals who pay tax on money in
vested to draw interest.
Whether savings banks bear more than an
equitable share OF the burden OF taxation may
be shown by a single comparison. The aggre-
gate amount OF savings bank deposits is $780,
503, SS9.71; assuming that these deposits are
so invested as to yield all income OF five per
cent per annum, the gross earning, amount to
$l,475, 1884, As. The amount OF state tax paid
BY The savings banks the past year was $780,
Now let us compare this result with some
other corporation; and for no other reason
than its being the largest in the state, we will
take the Maine Central Railroad Company. In
1881 the net earnings of this company amount
ed to SCAT, 1872, and they are not likely to be
less the present year. This company pays the
present year state tax of S2S.156.1S.
Taking the net earnings and tax of the Maine
Central Railroad Company as a criterion by
which to measure an equitable assessment up.
on the gross earnings of the savings banks, and
tax of only S64. 1868.
Besides the state tax Of s1so,os9.3e. the say;
lQSS DduhS have paul pdSt yCdi luuuiCiPdi
taxes amounting to SIC, S61.72.
The General Court OF the Commonwealth OF
Massachusetts, in 1881 reduced the tax on saw
ings bank deposits to one-half OF one per cent.
The responsible Y rests upon the legislature
OF this state to promote habits OF ruganty
among our people, by encouraging the CROWN
of these Accommodations of their savings, In the
repositories which the wisdom of former legis-
latures has provided where they viii continue
to contribute their full share with the funds OF
the capitalists in producing the magnificent re-
smile nE 1nv,in An NO rnc
the business enterprises OF our state.
A reasonable reduction in the rate OF taxa
ton will increase rather than diminish the ag-
gregate amount OF revenue, while policy less
liberal will have a tendency to transfer theS
deposits to the savings institutions OF other
states, or to distribute them among the SO, 600
depositorS, completely beyond the reach OF tax
alton.
The next legislature, influenced no
doubt in a large degree by this argument,
reduced the tax from one per cent to
three-quarters of one per cent, and in his
next report Mr.. Richards showed that
Notwithstanding the reduction the total
amount received by the state had only
fallen off about $14,O 900, and he pointed
to this result as justifying the opinion in
his previous report, that reasonable
reduction in the rate of taxation would
increase rather than diminish the reve-
nue. to the State" He further said that
the t'amount of tax which the savings
banks will pay into the State treasury
next year is likely to greatly exceed that
of any previous year." AS far as the
purpose of the present bill to increase
the tax on the savings banks is concerned
Mr.. Richards argument is sufficient re-
ply.
As to the other purpose of the bill
which>is to ''boom" Maine, it seems to
us that while it is laudable purpose in
itself the method adopted to accomplish
it is not laudable. And not only is it
not laudable, but it is positively vicious.
The essential elements to be considered
in connection with savings bank
investments cannot be better stated
than they are stated by Mr..
Richards in his report in 1882:
tFirst, safety; second, convertability:
third, profit" The effect of offering a
bonus for investments in certain local
ity, for that is what the bill under con-
sideration virtually does, is to re-
verse the order of these three elements
and put profit at the head. 1t would
be absurd for anybody to say
that investments are safer in
Maine than in New York or Ohio
simply from the bare fact that they are
in Maine; it would be equally absurd to
say that investments in Maine will be SUI
perior in the essential element of con-
variability. Indeed it can easily be
shown that in this element they are like
" to be inferior, inasmuch as New York
securities are much more constantly
traded in and therefore much more
easy of conversion than Maine securi-
ties. The point of superiority of Maine
securities under this bill will be their SUI
perior profit by reas on of the lower tax
imposed by the state; and as higher
rate of interest is always strong attrac-
ton to the investor savings bank man
ayers will be under constant pressure to
buy them on account of their increased
profit. 1t is not right for the state by
legislation directly or indirectly to en-
courage the trustees of other peoples
money to subordinate safety to
profit, or to consider the latter
until the former is secured. The
bill proposed will inevitably do this
thing, and therefore it will be pernicious.
The savings bank managers of this state
are disposed now and always have been
to favor Maine investments whenever 1t
can be done without sacrificing the two
essential elements of safety and comverta-
bility. Without any stimulus whatever
they will go in that direction as far as a
proper regard for the welfare of their
depositors will justify. 1t they go
further under this bill it will be because
the mandate of the state and the pres
sure of misguided and thoughtless de-
positors for large rett.rns compel them
t,@.a,