Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1908-09-01
Lewiston, Nc, Aug. g. 1903.
William r. Pattangall. Editor Water

Lewiston, Nc, Aug. -, 1903.
William r. PattanGall, Editor Water
vile Sentinel, Watcrville, Me:
Dear Sii-Permit me to call your atten-
ton to a statement relative to the con-
duct of the affairs of this department
made by YOU in the course of your adj
to ask that a correction be made. | would
not take the matter up. II 1t We're not for
the tact that any false statement concern
ing either this department directly or the
savings banks in general. Is too likely
to create Il lack of confidence that will
do injury to these institutions.
You stated in substance that in the fall
of 1906 the Portland Electric Co, d hold
ing company Orga niZed to take over the
various electric light and power conf
panies of Portland, put out an issue of
its bonds and that nearly Il million dol
lars of them We're sold to the savings
banks of this State. You stated further
that they were not n legal investment.
because the holding company which put
them out, the Portland Electric Co, had
not complied with the provisions of that
section Of the statutes which stipu.atcs
that such bonds are legal investment
only when the company issuing them has
earned and paid annual dividends Of FIVE
per cent. on its capital stock. You then
bank examiner was negligent in the per
Torrance of his duties in permitting this
to he done.
If your premises We're correct. vour
conclusion would be inevitable, becaus
Icame into this Office July 20, 1906. and
have since been responsible for its con-
duct.
The facts. however, are otherwise.
The savings banks of this State do not
now. and never have. owned one dollar
Of these bonds You could have readily
ascertain"d this fact by reference to the
detailed reports of their holdings for 1901
| and 1867. 10th of which have at all times
beer readily accessible to YOU
1t is true that the Portland Electric Co.
was organized as holding company. and,
as YOU say offered an issue of consol-
dated mortgage bonds subject to FIRST
mortgage underlying bonds of some of the
constituent companies which the banks
had previously purcha sed and were legal
~ holding in the fall of 1906. These bonds
We're offered to the savings banks and
one or more Of them contracted to take
blocks, subject to the approval of the
bank examiner. l went to Portland and
had a consultation with the president of
some of the bonds l went carefully over
the matter with this gentleman. who Of
fer"d me every facility for informing
myself concerning them.
In order that there NAV he no chance
for future nuibhling relative to these
various issues of bonds and no future
necessity of explaining the action of this
department when the above mentioned
underlying bonds We're purchased under
my predecessor, l will say right here that
they consisted of two issues. the CONSOLE
dated Electric Light Co. and the Port
land Lighting and Power Co. The first
mortgage. AZ per cent bonds of both of
these companies were held by the banks
and to show that they We're strictly le-
gal investment within the provisions of
the law. have only to saw that both of
these companies have paid 5 per cent. div
iden1s on their ca,lital stock for more
than five years. The holding company
which you spoke of, the one offering its
bonds in 1906. is the Portland Electric Co.
These bonds. the ones you charged the
savings banks with illegally buying are