Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1894-03-31
MIME BANKS.
What State Examiner Written Say.
in Annual Report.


The annual report Of the State bank ex'
aminer, Hon. Charles r. Written, is ready
for distribution. This is the 37th annual
report Of this department.
In the introduction Mr.. Written says:
1.-THE past yesr, especially the last siz
period for our banking institutions; but
am pleased to report that only one bank
has been obliged to petition tie court fol
relief, and but one has passed into the
hands of receiver, and neither of these
conditions were brought about by the fnan-
cial stringency, but were entirely due to
local causes.
"While there have been heavy withdraw
ais of deposits, all demands have been
promptly met on presentation or at the ex-
pirAtion Of the legal notice, with the excep-
tons shove mentioned.
Taking into consideration the expert
ence Of other sections of the country, more
especially in the West, the stagnation of
our manufacturing industries and the great
depreciation in the market value of indus
trial and railroad securities, we have every
reason to congratulate ourselves that oul
banks passed the trying ordeal so success
fully"
Mr.. Written gives an outline Of the cir
cumstances connected with the Mechanics
Savings Bank at Auburn. He attributes
this failure largely to the failure of the
John F. Cobb Shoe Company. He adds
my predecessor tells me be repeatedly
called the attention of Mr.. John F. Cobb
the president Of the b,nk, to the fact thai
these loans were too large, and requested
him 10 see that they were reduced.
"The statutes say that no such bank OF
institution shall hold by way Of investment,
or ~ security for loans, or both, more than
one-fifth Of the capital stock of any cor
poraticn. The capital stock Of this corpor-
alton was $50. 700, and while direct loan
to corporation msy not come within the
letter Of this law, believe it should be
held to include direct loans to corporations
as we'll Is on its capital stock as security
Mr.. Written then refers to the closing
Of the Richmond Savings Bank. Regarding
this he also says:
ut is no more than just to state
that at the time the loans we're made
the management claim they had every rea-
son to believe them safe and for the inter-
est of the bank to accept"
"On the 25th day Of November last the
total deposits in our savings banks amount
ed to $53, POI 1903 90, making loss tor the
year OF 1922, 1888 OF. Deducting from this
amount $50 ,482. 10, being the amount of
the time of going into receivers hands,
A. ho lev
"TakinR into account the fact that the de-
posits Of the Mechanics Savings Bank
were scaled Sl09 ,848.4l, and that from the
first day Of May to the second day of Sept
enber there was net loss to the bank in
deposits of 81, 1872. 1919, this showing is
very gratifying.
THE total number of depositors on the
above date was l53 1922, decrease of 26O
for the year.
1.-THE total amount of dividends declared
was 81, 069, 1876 33, an average of 3 80 per
cent.
1.-THE Legislature of 1898 amended the
law relating to the taxation of savings
banks by requiring the banks to make semi
annual returns to this department, and the
bank examiner to fix market value on all
securities and transmit the same to the
State assessors for the assessment of the
tax.
"Under tie new law the reserve fund
and profit account are il cluded with IT.
deposits as basis for taxation and dis
elimination made in favor of nome invest
ments acquired subsequent to January LIST,
1898.
Zone Of the strong arguments in favor
of this law was that it would have ten
dency to increase the holdings Of the banks
in Maine securities. 1t is too early, as yet.
to express any opinion as 10 whether or not
it will accomplish the desired result There
il one result. however, that l do not be-
ljeve the trainers of this law anticipated,
and that is, the lower the market value of
securities and the less they may be worth at
the time of assessing the tax, the higher the
/, tax to the bank; the higher the market
value, the greater the deduction and the
leas the tax. This 10 just the reverse OF
whst it should be-"
In connection with his remarks upon in
vestments. he has this to say 'The whole
sale reduction or railroad earnings and the
passing of some 20 railroads into the hands
Of receivers the past year, makes the great
eat care necessary in the selection OF rail
| n "A honda The law provides that only