The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-12-25
DUE TO RAISED TAXATION.
Last Downward Step in Steady De.
cline of Five Years-A Lesson
for Men of Means.


their earning power, or, In other words,
their interest will have dropped to very
poor minimum.
The savings banks have, with common
accord, decided to reduce interest on all
deposits on January 2, 1896. Not only will
this change take effect in San Francisco
but every savings bank in California must
by force of circum stances, take like action
if they intend to continue in business with
any degree of prosperity.
The lowest rate of interest to be paid in
| San Francisco will be $50 per cent on gold
coin of the United States deposited in saw
ings banks. Nor will there be any remarka-
BILE deviation from this rate, as all savings
banks find they cannot pay much more
than $50 per cent, at least so long as
present conditions prevail in political
financiering in all departments of State
and municipal government. The little
furry in the East on account OF war talk
has no bearing on the stand taken by saw
! ings bank managers in San Francisco.
That point was expressly mentioned by
bankers yesterday, so that no misunder-
standing might go abroad regarding the
cause.
Times that have been comparatively
dull were admitted to have had some inhu
ence upon the interest paid savings bank
depositors, but over and above all else the
tremendous increase in taxation was said
to have depressed money in those institu-
tons to 81 per cent
The Hum boldt Loan and Savings Society
on Geary street has announced that the
semi-annual dividend will be 4.32 per cent
per annum on term deposits and $50
on ordinary, payable on and after Janu-
airy 2.
The Hibernia Bank will announce div
Idend of per cent.
The Mutual Savings Bank of San Fran
cisco has declared a dividend of 4.2O per
cent on term deposits and $50 on ordinary
for the last halt year.
The San Francisco Savings Union has
announced that it will give 4.32 per cent
on term deposits and 3.6 per cent on
ordinary deposits.
The German Savings Bank will de-
clare a dividend of 426 per cent and
3.55 respectively, on term and ordinary
deposits.
All notices are accompa nied with the
information that those new dividends are
made free of taxes.
At the German Savings Bank it was
stated that increased taxation over the
state, as well as in San Francisco, had
rendered it absolutely necessary that re-
duction be made in dividends. California
taxes were higher than those of Eastern
States.
what effect will this decrease have
upon deposits?' was asked.
at is hard to tell" was the reply. est
will certainly affect them to some extent,
how much no one can tell. A man who
can make more with his money will draw
it out of bank, but people who have no
business Judgment of their WI will leave
deposits in the bank"
In 1891 the average interest on savings
bank deposits was $40 per cent on term
and 4.50 per cent on ordinary. In 1892
there was reduction to $40 and 4.25; in
June, 1894, the dividends went down to
5 and 1-6; in June, 1895, to 48O and 4,
and now comes the drop to 4.26 and 355
per cent-a steady decline. The same con-
dition precisely has prevailed in other
savin rs banks.
Lowell White, cashier Of the San Fran
cisco Savings Union, gave striking view
OF the situation.
at is due to the tax levy" he said
''This year we pay 1866, 900 in taxes
against an average OF $215,000 on the same
amount Of taxable assets in former years.
At the term of the June dividend we anti
cipated an advance in taxation, but did
not dream it would be SO high, conse-
quently our provision for high taxation
was only partial. The depositors of this
| half year are not allowed to suffer for that
reason. We make provisions otherwise.
| "With the present rate of taxation of 2
per cent the savings banks can't pay more
| that 4.32, which we are now paying: it
| isn't in the business. Ever since the new
constitution was adopted the banks have
| been paying something more than one
| fifth of all amounts of interest on real es-
tate loans, etc., in taxes. This year its
taxes in San Francisco are one-third OF tha
interest received.
"The rates of dividends would have re-
coded somewhat at n time like this, ire
spective of taxes but the large part of the
reduction is chargeable to taxation
| What causes this raised taxation? ?"
of the public business was conducted as
| economically as the business of individuals
or of corporations the average tax rate
would be reduced 1919 Per cent. 1t is the
! extravaganza, loose way of conducting bust
| ness. In public offices the work requires
| two men, while in well-ordered manufac-
turing concern, or bank, or insurance CON-
pany, one man could do it. There are men
in public Offices on the payroll who per-
form no service. Here the public is con-
sidered a goose to be plucked, and q man
does not suffer the loss of prestige of char
acter by filching from the public purse.
Offices are sought for what can be made
out of them. 1t is notorious that men will
spend more money to secure an Office than
the emolluments for the whole term.
Every man who has money is directly
interested in having good men in Office.
If they don't feel that way, nevertheless
they are interested
The venerable financier closed by say
ing that depositors in savings banks were
having the lesson of extravaganza Govern
ment brought home to them directly in a
very tender spot-their pockets-and that
these same people would be receiving
-