The Worcester spy. [volume] (Worcester, Mass.) 1898-1904, 1898-12-13
NO CUT.
Interest Rate
Stands.
OUR SAVINGS BANKS
Fortunate in Their Local
Business Conditions.

The recent decision of some Of the in
situations of savings in New York.
Cleveland and other large cities of the
country to reduce the rate of interest
allowed on deposits from 4 to IL per
cent has created a great deal of inter
est and comment in financial circles
everywhere. Here in Worcester where
the savings banks are Us numerous
and prosperous according to the popu-
lation of the city as they are any
where else in the United States. the
question of reduction in the rate of
interest on the savings Of the people
IS very important one to hundreds of
depositors as wen as to financial men
who clearly foresee the effects of such
an action on the part of the local
| banks.
Among those institutions of other cit
les that have made the reduction are
some Of the Oldest and solidest savings
banks of the country and any action
| OF the kind that is taken by them may
| with fairness be regarded as a legiti-
mate precedent for action by any sim
liar institution in the country There
. IS no question whatsoever of the sound
ness of the banks involved, it is mere
! ly matter of inability on their part
/ to longer conduct business at the old
rates. This being the case, the lesser
banks of the country would seeming
/ ~ nave perfect right to say that they
could not do what their greater con-
/ JempOrartes are not able to perform
and make the corresponding reduction
This has already been done in many
smaller cities. Within the past few
F weeks ho YqI-1 f,F
ucut,' Utica, New York, and numerous
| other places of size similar to that
| or worcester, have entered into a mu-
tual agreement to pay no more than |
IL and in some cases no more than |
. per cent ON their deposits. 1t might 7
reasonably be expected that Worcester
banks would fall into line and their de- (,
positors wake some fine morning to find /
themselves poorer by IL per cent on /
their investments than they were be /
fore.
Whatever may be the result in other |
cltles OF the change in rate Worces- |
Ter unless circumstances now unfore- |
seen come to light, will not have to |
grapple with the problem of the reduc- /
tlon. 1t seems to be the general feel
ing among the officials Of the savings |
banks OF the city, that there will Ger
talnly be no reduction in the rate of |
interest made in this city at least for
considerable time to come. There are
certain local conditions that render
Worcester one of the best cities of the
country in which to do a savings bank /
business, and the present status of the
affairs of the banks of the city is such /
that there seems to be no need WhatsO- /
ever for q change
The effects of change in the rate,
as well as the conditions that make
Worcester immune from the necessity
of Ea 1h1 -sI
all by the men who make a study of /
the banking business and The Spy
man took the opportunity yesterday to
call on the presidents of the various
savings institutions, and asked them
what the prospects We're for an adop-
ton of the policy of a reduction.
The expressions Of all We're to the
effect that no change might be anti
cipated in the near future. The first l.
OF the f1nanciers to be seen by The Spy
man was Colonel E. B. StOddard, pres
ident of the Five Cent Savings Bank.
He spoke as follows;
No, / do not believe that the policy
of a reduction in the rate of interest
will be adopted in this city As far as
I know there is nothing of the sort con
templated at the present time nothing
concerted. at least The only reason
l can assign for the action of the New
York banks was merely the fact that
they could no longer conduct their bus
mess protitably and pay 4 per cent.
Money is so cheap nowadays that they
could not find anybody to take their
deposits at or So per cent and they
could not pay their expenses. The
reason why the thing win not react
in the same way here in Worcester is
the fact that there are certain local
conditions here which will make a re-
ductiOn unnecessary.
So 10, T
the reduction have a good part of their
deposits invested in large mortgages,
say from $4,000 up. These are taken on
the best of security and are usually for
not over so per cent of the valuation,
to make Them absolutely safe. These
investments are so good and so unlikely
to depreciate, that investors are will
ing to take them for as low as 4 per
cent and possibly for even less. These
are taken on a time basis and not on
demand. A bank having it's money tied
up in this sort of thing cannot pay
per cent to its depositors, for it takes
money of course to run the bank
Here in Worcester most of the saw
ings banks hold, not mortgages of this
sort for the most part. but smaller ones.
on small properties of $4,000, $4,000 and
$4,000. These are taken on demand, that
IS, where the holder of the property is
known to be reliable and the security
good, as long as he pays his interest,
he win never be foreclosed upon, and
he feels perfectly safe and knows that
his affairs are in the hands Of men
whom he knows win not deprive him
of his home or small property. For
this feeling of security the borrower is
willing to pay five per cent, and he
does so. This has been the case for so
long that, what with judicious invest
ments in other lines on the part of the
bank officials, all the Worcester savings
banks are in a position where they
could run several years if it was neces-
sary without making any money And
in most cases I think they had rather
do that than to cut the rate of interest.
l suppose that out i'm the rate would
result in the Withdrawal of some de-
posits, and no doubt some would go in
to less secure investments that would
probably ruin them in the end lust as
the Kansas investments ruined so many
a few years ago. But the depostors
that we want to keep, the real savers.
would remain, ! think, even if a cut
were necessary. However l look for
better times in the near future when
there will no necessity for anything
like cut rates of interest.
Hon. stephen Salisbury, the presi-
dent of the Worcester County Institu-
-.
Nhe Easy Food
E{~ss4{f9-D L 49, D.