The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1899-01-03

lie Thinks this Necessary In View of
the Decrease I'm the Rate OF Divi-
dends-Other Changes Suggested in
the Lsw-The Affairs OF the Trust
Companies and Loan and Building
Associations.
The annual report of State Bank Eek
aminer mberlake has bsen made public.
In addition to the statements of the
financial condition of the Institutions I'M
der the charge Of the department it con-
tains recommendations for changes in the
law governing their operations in the fol-
lowing and some other minor particulars:
1t is urged that there should he re.
duction in the State taxes. made neces-
sary by the falling off in tho returns
from the securities in which the banks in
vest should no reduction be made 1t is
argued that the depositors, as their divi-
bends are reduced, will withdrew their
III oney and that eventually the State will
be the loser, the money withdrawn escap-
ing taxation altogether, as was shown to
be the case some twenty years ago when
the amounts of deposits were materially
reduced
which individuals may deposit
lie limited to 5000 in all banks
instead Of to $4,000 in any one
bank, and that as penalty the law shall
provide that interest shall be forfeited on
sums deposited In excess of 5000. The
bank examiner would make this rule ap.
ply to trust estates holding that where
they are large enough to use more than
one bank there are other and proper
methods of investment open to them.
Legislation is advised to prevent indi.
viduals making deposits las trustee" in
oas.s where they resort to that plan to
eyade the law.
The aovisability of law by which the
books of depositors should beIsubiect to
ratification once In three or five years is
discussed. If such law should be
passed the examiner thinks It would be
well to attach penalty in the nature Of
a forfeiture of dividends for failure on
the part of depositors to present their
books for veritication.
IhE lNSlllU IlONS.
The institutions under the charge of the
department are classified as follows:
81 Savings Banks S64 1872, 5i2 AZ
II Trust and Banking
Companies 9, 49,, 997 so
81 Loan and Building Asso.
Citations 3,Oo9 99s II
100 Total $40, 1915, 53S 90
This Is an increase of one In the num-
Der of trust and banking companies, and
decrease of one in the loan and build
ing associations, leaving the total the
same as reported in 1897. There Is also
an increase of g., 122, SOS 0S in their aggre.
gate assets for the official year.
The depositors in savings banks and
trust and banking companies and the
shareholders in loan and building asso
Citations, now number l02. 626.
During the year they have paid deposit
tors and stockholders 81, 535, S68. &c in in
teTest and dividends and increased the
amount Of reserve and undivided profits
$22S, 243 10. The average rate of income
paid depositors and stockholders in all of
these intitutions has been s. 55 per cent
for the year.
An equal distribution of these assets at
the present time would give to each per-
son in the State sll5. 81 las against Sil0.si
in 1897.
There are eighty-two national banks
now doing business in Maine with assets
amounting to $50, 909 0sl. S5, decrease
of 81, Az, g7l.2 from 1897. This makes
the total number of banking institutions
in the State lS2, and the entire banking
capital 81 l6, 2s4, o.. being an increase
of IL ,613, 100, 50 during the year.
DIVIDENDS
The average rate of dividends for the
present year Is 3. SO, while that for the
year 1897 was 367. The number OF banks
paying four per cent is but fourteen as
against twenty three the previous year.
Notwithstanding this decrease in the rate,
the amount Of earnings distributed among
depositors has increased ST., 955 % owing
to the increase in deposits.
AS before suggested. interest rates
| every where have been radically reduced
during the past few years. Government
bonds are now selling on q two and one
half per cent basis, first class mun1cipals
at from three to three and one-half per
cent. and nearly all other securities,
proper for the investment of savings bank
funds, At less than four per cent. Savings
banks are therefore able to earn an aver
age of less than four per cent on new in
vestnents and loans within the limit of
the investment law. Out Of these earn
ings. they must first pay state tax of
substantially three-fourths of one per
cent; before declaring dividends they
must pass one-half of one per cent, an
nually, to the reserve fund.- and they
pust meet their general expenses for
management, salaries, rents, etc.,
amounting to nearly one-fourth of one
per cent; they should also set aside
enough of these earnings to gradually
charge off their present premium ac-
counts, aggregating 1851 500 before
their securities mature. If the amount of
these different charges is deducted from
the gross earnings of about four per cent.
the difficulties confronting the banks in
the near future in the payment of ade-
quate dividends become apparent.
savings banks cannot be expected to pay
depositors more than they earn. The in
evitable result therefore. must be
further reduction in the rate of dividends
This condition Of affairs is not confined
to our state alone. Everywhere, mutual
savings banks are face to face with this
serious problem, upon the solution of
which largely depends the future success
of this class of quasi benevolent institu-