Putnam patriot., 1915-07-23


 | specially favorable to the small de- positor.
 As stated in the report of the ap- praisal of the bank by Messrs. Cutler, Richter and Beadle, "The primary ob- ject of savings bank, and it's greatest function, is to safely guard the princi. pal of deposits received, and to return such principal intact to the depositors when needed" |"
 These appraisers also suggested among the various ways Of bringing ' the bank into a normal condition sleeping the bank closed until the iu- come makes good the depreciation" " ! The trustees have unanimously agreed that this is the wisest course for the bank to follow, the only available al- formative being sealing of deposits.
 Since Oct. 1, 1914, interest on the va rious investments amounting to S99,- 361 .35 has been received with this amount and the S137 ,160 in cas which was on hand Oct. l, 1914, the trustees have been able to make all loans re- quired since that time to towns and cities, and on mortgage loans and on pass.books and have deposited in Ma tional Banks and Trust Companies at the present time s37, ,793.06 at current rates of interest which will meet the present requirements.
 The loan committee believe that the mortgages which the bank holds are all good; also it's town and city notes and municipal bonds and most of its railroad bonds.
 The railroad bonds which are carried on the books of the bank for S1, TIP, ,750 have a par value of S2,0S4,000; at the time they were purchased they were undoubtedly considered among the best of securities. Within the past few years several things have occurred to cause them to lose favor with the in- vesting public. The various require ments of the national and state govern ments, the increase in the cost of labor and nearly all material, with only a small increase in freight rates, and a period of years with gross receipts at a low point, have all combined to reduce the net income of the railroads, with the result that the price of their bonds has been depressed, because the mar gin of net earnings after payment of z. hoe been decreased, as a rule, with the de crease in gross earnings.
 Of the thirty different lots of rail. road bonds owned by the bank all eX- cept two of them have paid their in- terest promptly.
 Ifin forecasling the future we only had to consider our own national prob lens the situation would be somewhat simplified, but with all Europe At war and borrowing heavily from this coun- try, and the uncertainty of the future as to interest rates and the market price for securities, the situation is much more complex. Even If the war ended today il seems probable that this country will be asked to furnish the European nations large amounts Of money and material, for number or years, that they may again rebuild their devastated nations. There is no past with which to compare the pres ent, the future as to market prices for securities and rates of money is largely a conjecture.
 As long as our securities are kept for income purposes and we do not care to sell them, we are not so much affected oy their imarketability. sNow we are approaching time when we;shall want to turn at least part of them into cash, the price at which they can be sold is of the utmost importance to us.
 As stated in an authorized article which was published in the local pa pers on Jan. 2, 1915, sometime this year the trustees of the bank expect if it's securities return in value to at least the basis of the July ?, 1914, appraisal, that the bank will reach sound and solvent condition, showing a surplus, and will then be able to resume It's normal functions of receiving and pay ing deposits, and will from that time resume the payment of interest on de- posits. This statement holds true, and the opening of the bank this fall or releas- ing all or part of it's deposits depends altogether upon the market price of it's bonds.
 The rst duty of the bank to it's de- positors is to put itself in a condition that it can pay every depositor in full if required; after that time it's earnings can be applied to dividends; this has been the aim of its trustees.
 The European situation brought has about the sale of large amount Of American securities from abroad which has had depressing effect iupon pre- vailing prices. Let us hope that the recent prediction made by Judge Gary at San Francisco will prove true" The end may not come immediately, but it will come sooner than expected by many, including some of those who are most actively participating. Throughout our own land We are to have industrial peace, and as a conse. quence greater prosperity than ever before. Success in business has again become popular. Those who attack or