Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1895-02-28
Daily 4enarhse sparnal
MAINE LEGISLATURE.
Continued from I'd page. |

ings banks, am told. hold, today, in
their vaults over a million and half of
water bonds, most of which are water
bonds of companies in this State. You do
not know how water companies in this
State have erected their works; but in
nine cases out of ten, the companies have
built almost entirely upon bonds, and
represent no investment Of capital stock
whatever; or, at the best, only very
small percentage of capital stock invested
SO that the money which has been paid
for bonds has in reality built the works.
The savings banks hold these bonds,
which virtually have nothing under
meath them except the plant itself, and I
make no question but what they are good
securities; / make no question whatever
but what they will be paid, and the inter
est will be paid, and that they are safe in
vestments for savings banks. But the fact
remains that they do hold them; that they
have invested in them and paid for them.
All those two savings banks alone hold of
this class Of securities million and half
dollars. They say that if the State of
Maine is to adopt policy SO that towns
may build and own their water works and
issue municipal bonds for these same water
works, that it tends to weaken public
credit. Will it: Which is better, water
bond representinga water plant which has
nothing under it except the bonds them
selves, or municipal bond which repre-
sents not only the water plant, not only
the structure which was built by the
money paid for the bond, but represents
overy dollar Of every citizen of the town
besides? Especially such u bond when it
is issued only by the authority Of the
Legislature, and when the Indebtedness is
limited to ) per cent. for water works
and per cent. for other purposes.
Who is there who will not say that the
municipal bond is infinitely more gilt
edged, and stronger and better for a saw
ings bank than the water bonds are?
Why, / asked the gentleman who repre-
scnted these two savings banks at the
hearing, If he had any doubt that such
bond would be eagerly sought for, and he
said he had none they would undoubtedly
be good they would be paid. principal
and interest, beyond any question what
ever Aye, so much better than water
bonds are, thatsthey would be floated at
least one or one and half per cent. lower
than the average water bond can he
lloated. So much better are they that
my Judgment is that savings banks could
not SO well afford to carry them because
of the high premium they would have
to nav to get them at all. SO that all this
talk about weakening credit stands Tor
nothing. No savings bank man when he
stops to think of the exact proposition
which we have here now can caNll or ma
fault with it. Every man knows that these
bonds will be safe; every man knows that
when "a town owns water system III Is not
a burden that the income will pay the in
terest and the cost of operation, and IN the
end wipe out the debt itself.
If. however, any other argument were
necessary to show how utterly hoilo" thc
pretence of certain savings banks nave ptch
in this matter. | only need call attention
to their own record, their own history.
Two years ago so said the attorney VINO
nppeared before US at our hearing the 9th
,sr day, two years ago the same attorney
an,s,arcd for the same savings banks be
fore n Maine LEGISLATURE; and what was
his proposition then? what new author
ity then did he seek for the advantage OF
savings banks? 1t was this, and you
will find it in chap. 1915 of the Laws OF
1898. Prior to that time savings banks
in this State were permitted to invest IN
certain municipal securities outside OF
tho State. There were certain states the
bonds of whose towns they might BUY
hut only when the municipal indebted
ness did not exceed per cent. Among
these states were Michigan, New York,
PENNSYLVANIA, Maryland, Ohio, Wiscon-
sin. Minnesota, Illinois, etc. AS the law
was prior to 1898, the limit OF
per cent. included debts OF
all kinds. But in 1898 before our
Legislature, by the same attorney, the
savings banks of this state that have re
monstrated against the constitutional
proposition, procured the following
amendment to the law, namely: Inc
term municipal Indebtedness of any city,
ms used in this section, shall be construed
to be its debt evidence by bonds, con-
tracts or obligations liable to be met by
tax Ieyies exclusive of any such debt
created for a water supply that Is by
their legislation of two years ago.
they excluded from the term mum
cipal debit the water debt OF a
town. They accomplished exactly
with regard to the bonds OF towns
in other states what | desire by
this amendment to secure for the bonds OF
towns in this State. Why did they ex-
cept from the Indebtedness of state It's
debt created for water supply? The an
swer Is obvious; because it is not Dur
den; it did not weaken credit; the water
system itself was an asset self-sustalnlng
and renumerative even beyond the cost OF
maintaining it. And for the very best
reason In the world, the savings bank men,
wise financiers as they were, knew that IL
was perfectly safe to invest in the bonds oil
a town whose debts exceeded per cent, ,
If that excess was represented by water
plant. Why then, should they two years
ago having accomplished that legislation,
come here today and oppose an amend
ment giving the same latitude to towns IN
this State which they have procured Tor
the bonds of towns of other states? DO
not really think they do. do noe really
think they thought of it, really believe
and perhaps without knowing the merits
of the case involved; signed merely De,
cause the two great banks in Portla nj
asked them to sign.
There is one more proof furnished nap
PLY by the savings banks themselves that
the bonds which may be issued by munic-
ipolities for water works viii DC gut