The sun. [volume] (New York [N.Y.]) 1833-1916, 1897-12-28
SAVINGS BANK INTEREST.
IT COME D0Ty IN TbE NEAR
FUTURE WITB0UT DOUBT.

The Poop Are Growing Richer. nnh Arc
peaptnE Money into Savings RnnLS ue-
yond the Capacity or Lenders 10 set = Por
Cent. on n, or Perhaps Even Nh Per 'rnt.
with tho approach OF the first Of the year
and interost.paying time for the savings banks
the talk Of n reduction in the rate of interest IL
revived, as II has been at intervals for the past
two years. Many OF the banks now pay only
az per cent, but n number have continued 10
pay 4 per cent. in spite OF the decline In the IN.
tercst yielded by the Government, state and
municipal bonds in which the banks arc per-
mittod to invest. These banks. however, have
been forced TO consider II reduction in the rate
Allowed by them on deposits, and the matter has
been discussed informally from time to time
among the officers and In the Executive Com
mitteo Of tho Savings Banks Association. As
yet no definite or combined action has boon
agreed TO. The only union OF action likely
would be, Il Is said, q tacit agreement among
tho bankers to make the reduction ut the same
time so that no bank should be obliged to be
the first TO come down. The January interest
: Is fixed, 30 that any change made win not be
folt in interest payments until next July. any.
way.
President John T.. Townsend Of the Bowery
Savings Bank. the largest savings institution
in tho world. said yesterday that the rapid de-
cline in the rate Of interest yielded by invest.
ment securities for the past two or three years
and the great increase In the amount of de-
posits indicated that n reduction in the interest
paid by savings banks to depositors would be
Inevitable as a plain business proposition.
with a lessenine in the percentage of income
and with the amount of money deposited for in.
yestInent augnienting all the time. there could,
In the nature of things. be no other course.
banks here were now paying / per cent. tic
rest paying, 3la. Only those had been, able to
continue the rate at A per cent. which had had
considerable Investments In Ions. term bonds
bought when the rnte Of interest on bonds was
hiGh and their market prtco was low, These;
paying depositors u higher rate than could a
bank Obliged, TO look FOR all ofiIs income TO
duced their net yield Of %interest by u consider
THE Bowery Savings Bank. for instance, had
which paid the higher rates of interest and 50
vtns enabled to make good the 4 per cent. inter.
est paid to dep0sitors. although most Govern
ment. State, and city bonds which il has ro-
Gently purchased bring in only 3}a per cent. or
are fast maturing. The last OF the Government
90 mature IN January. 1899. Some OF them ma.
rs still outstanding. hut they are at an eX.
traordinary premium. The bonds the United
States government mas nss1sd recently Yield
The city 3IEs just sold. while the city pays 3I6
per cent; on them, yield only about 800 per
paid for them. The bonds OF New York state,
which nominally are 3 per cent, yield only
S SSSSas 81 q S Sas ssas; Il Is a md So same on E ssSSer wifS
through the list. The banks here are not per
invest In ali Kinds OF stocks. They cannot, for
instance, buy railroad stocks. Of course, out.
side of the Government, state. and municipal
bonds, there arc bonds and mortgages which
the savings banks have that pay more than 80
per cent. But so1argc q proportion Of their de-:
opinion:of the banKcfs,:when a reduction in the
Mr.. Townsend thought the first reduction
would not be likely to be more than one.half of
S SDow per 3rs sen TSs or bonds TO ss I psr &C. NATURE Ths se ssn 9ssr'
andif they,'knew what deposits were going to be
Il would be easy, he said, TO- tell Somssthins
norma. increase Of deposits which there has been
of late it was difficult to make forecasts. If the
Dob or $4,000 a year a reduction in the rate
of interest on deposits wonld be Inevitable at the
SSons the I poor of p this oS Sn GSns Growing nse p ss,s
Ct ei:k WAS oil bosh'" h s"id' They are growing
said. Vow i we ha 'P Pis.SSS. an S'f inc Seos Of Of
1000: We pay on b January 81. $1,000 Q in
were s5s. 800. ooo., { &idends added. III .Iann:
oTs; l sfN;d they will al apPRFro pro mat Hba So, 40 %
accounts is wrong. (Yrhere are u few, but they
are not worth me,e joining in the agsregatc.
a msae sss and II su tin yg fs in he pfSs anfs :'F TAs ssv' arg
Because of ITS age and place among hanks
tho experience of the BOwery Savings Bank
and the opinions of its President afford a fair in.
dication OF conditions as they affect and are re-
tiected bt savings institutions. Other savings
bank Presidents interviewed expressed similar
opinions. J. Harsen Rhoades, President OF the
~asfeenwich Savings Bank. and also President
Of the Savings Bank Association Of the State,
has been asked to help a movement to lower the
rate generally. President James McMahon of
the Emigrant Industrial Savings Bank, which
for some little time has been paying 3i[ per
cent. expressed the opinion that the general
HAnnanNv yvna fnunrH n Gftl 1nuEnr b h"t 10
thought the reduction would not come this year
OF even peXt.