Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1900-03-24
SAVINGS BANKS.
A Discussion of the Problem
of Taxation.
Edwin H. Lowry on the Present Laws
in Maine.
An Interesting Paper Dealing Ably With a Like
Subject.


cusses the problems Of taxation Of the
savings bank and its relation 10 the
savings of the people.
Mr.. Lawry spoke as follows:
Gentlemen of the Association:-A
writer upon the subject Of problems
Of Taxation" has said that the condi-
tions of an ideal tax law should insure
equal opportunities and prerogatiVes
to assessor and assessed, in the deter
mination and adjustment of values;
that such values shall be equitably
susceptible to advance and dc
cline by conditions ana state
Of markets: that it shall be
free from suggestions of exemption,
partial or entire. unless justified by
condition of individuals and moral
obligations of states ana communities;
ana, above all, that it shall impose no
unequal burdens upon those to whom
taxation suggests. ana of whom it de-
mands. the surrender of common COM
forts and actual necessities.
We may regard the suggestion of Il
law promising such commendable and
bcneiicient results as that Of a vision
airy. ana beyond the reach Of eXpecta-
ton or possibility; but l think we will
agree that a savings bank tax law, ap-
preaching in any measure the ideal.
should. in the methods prescribed for
establishing valuations and rates Of
assessment thereon meet at least the
following conditions:
ID 1t shall be possible for the aver
age savings bank accountant familiar
with the cost and market value of the
assets Of his bank. TO determine with 4
reasonable degree of accuracy the
taxes to be assessed against them for
4 six months assessment period.
Cd Taxes based on values of assets
subject to frequent market changes
shall increase or decrease as such
values advance or decline.
CD 1t shall enforce, neither directly
nor indirectly, no restrictions ana no
determinations which may operate to
prohibit the acquiring of such assets
as will best serve to strengthen the
condition Of the banks ana protect the
interests of the depositors. Ana. con-
versely. no restrictions ana discrimina-
tons which shall in effect suggest in
ducements for the acquiring of assets
of an opposite character.
% 1t shall exact only such contri-
button to the States revenue as fair
income upon the deposits. ana the con-
dition of the depositors ana their
ability TO contribute compared with
that of other property holders and
taxpayers. will warrant and Justify.
We are all agreed. also, that the law
under which the taxes are now
assessed. meets neither Of the condi-
tions | have named.
I have yet to know savings bank
accountant, however cOnVersant with
all the affairs of his bank. willing to
admit that he could guess at the
amount to be assessed against it with
sufficient accuracy to justify a second
attempt.
That peculiar effect of methods en-
plOyed under the present law by which
taxes increase as the assets approach
the least market value. and decrease
as the same assets reach 4 higher
figure. was, | presume, an accident due
to oversight in framing the bill. The
application of the simplest principles
Of mathematics. however, should have
served to prevent a result which may
be considered but little removed from
the ridiculous.
The managers of our banks have
never been, l think. much in sympathy
with that feature Of the law for the
securing Of which the law itself was
originated, and which undoubtedly
assured its enactment. | refer to that
feature which has been styled dis
riminatiVe" and which it was claimed
would assist in developing the indus
tries of the State" and to which laud-
lble purpose it was argued savings
bank depositors should contribute
more literally than in the past. Per
laps we should explain that in view Of
he fact that it did not appear to have
been demanded, of peculiar conditions
-Xisting. and of certain logical results
which might follow its general aDpli-
cation to investments. it did not seem
just, wise or consistent.
From quite careful estimates made
ut the time, it was found that on the
date of the enactment of the law, the
State savings banks had among their
assets. investments in Maine approXi-
mating 81. 900 900. We do not have the
data from which to determine the
amount of similar investments among
the assets of those other institutions
whose character is largely or wholly
financial. nor the percentage which
they. added to the holdings of the saw
ings banks. would bear to the total
available State investments which
would be passed upon as suitable for
funds handled in trust. But it can be
safely asserted, | believe, that the saw
ings banks share was as large as con-
ditions. availability and qualities com
mensurate with safety demanded. The
amount is equal to one-tenth of the
last valuation of the State, and nearly
three times that of money last found
1t interest. fffty-seven thousand dol
lars in bonds included. In this connec-
tion il should be said that those IA
miliar with the effect of the law pre-
viously existing. had easily discovered
that Names excessive taX-rate had
served to force the States best securi-
ties beyond the reach of our own
banks. Illustrating this fact. it was
Vol known that a New York bank
could purchase the bonds of the State
of Maine bearing three per cent. inter
est and with income from Other
sources sufficient to meet expense ac-
count and appropriations for reserve
pay the entire income Of such bonds e