The Barre daily times. (Barre, Vt.) 1897-1959, 1908-11-23
THE INTEREST RATE.
And It's Relation to Hoarding Dis
cussed.

And It's Relation to boarding Dis
cussed.
| The Vermont legislature has had I'M
der consideration suggestions from the
savings banks relating 10 changes in the
laws affecting those Institutions There
is much complaint OF the state tax on
savings deposits, and an effort is being
made to have this lowered The presi-
dent Of the Capital City Savings Bani;
and Trust company Of Montpelier, T. j.
Deavitt, writes to the chairman Of the
joint legislative committee on banks;
Consider II the state has not such a
duty in maintaining the interest rate on
deposits at 4 per cent as to warrant
cutting down or cutting of the state
tax. The average deposit in the VeF-
mont savings banks is about $500, af-
f0rding an income at per cent. Of SIG
year; and the state tax is $3.50. By
reducing the tax one-half to seventeen.
tieths, probably every bank in the state
could continue to pay 4 per cent. TO
its depositors."
That is to say, the state tax on saw
ings deposits is now seyen-tenths Of !
per cent, which is pretty heavy when
viewed from the Massachusetts, stand.
point. Our savings deposits are taxed
only half of | per cent, and this is
subject to deductions which bring ii
down to only about three tenths of
per cent. Hence, if the Vermont legis-
lature should reduce the tax there by
one half, as suggested it would still be
higher than the Massachusetts, tax on
savings deposits as, actually levied
In addressing the committee on this
subject, Mr.. Deayitt treats of the rela.
ton Of interest rates to boarding and
oilers some curious observations and III
cidents;
with an the millions Of money in
the banks OF this country, there is at all
times more money in the hands Of the
people than in the banks. A high rate
Of interest draws this money from the
people. When in Washington. d. c.
last year, visited fine great banks that
paid a low rate OF interest for deposit,
and their business in renting deposit
boxes wes brick Ex-Judge Hughes told
me- that before the war with Spain he
put S25 GOO in gold In q deposit box and
it had remained there ever since; that
a friend OF his at tho same time put
$50. 600 in a deposit box that had re-
maired there. he said the Washington
banks we're Specializing in New York
City and ne feared they were not very
safe, and paid so low rate Of interest
that he had chung to his gold. which was
good at any time. Every time our bank
las raised the rate on deposits, we have
seen money come out Of our deposit /
boxes. and 80 on deposit in the bank. |
The increase Of deposits attracted by a
high rate Of interest gives large sum
Tor the state to tax
Presumably he was in Washington I
when the panic was under way. and /
hat would explain the brisk business
N renting safe deposit boxes without /
zoing further afeld for explanation. I
Conditions wore far from being normal
But what can be said Of the two I'M.
stances gwen Of evidently intelligent /
nen hiding away their money, not alone
Turing the panic, but for years previous,
when for the most part popular conf
ienee in banking Institutions was at tho
highest, when conservative investments
yere never more secure and whsn tire
interest rate thereon was steadily ris-
ngf Clearly a lew rate Of interest viii I
ct explain such hosrding as that, and !