Norwich bulletin. [volume] (Norwich, Conn.) 1895-2011, 1915-07-20

specially favorable to the small de-
positor.
Aims of Bank.
AS stated in the report of the ap-
praisal of the bank by Messrs. Cut
Ter, Richter and Beadle. The primary
object Of savings bank, and its
greatest function. is to safely guard
the principal of deposits received, and
to return such principal intact to the
depositors when needed"
Trustees Approve Suggestion.
These appraisers also suggested
among the various ways of bringing
the bank into a normal condition
keeping the bank closed until the
income makes good the depreciation"
The trustees have unanimously agreed
that this is the wfsest course for the
bank to follow, the only available al
tentative being a scaling of deposits
Since Oct. 1, 1914 interest on the
various investments amounting to
$S9.361.35 has been received; with
this amount and the $137,160 in cash
which was on hand Oct /, 1914 the
trustees have been able to make all
loans required since that time from
towns and cities and on mortgage
loans and on passbooks and have de-
posted in natioal banks and trust
| cocpanies at the present time $37,793-
06 at current rates of interest which
will NEE the present requirements.
Why Securities Depreciatei.
The railroad bonds which are car
ried on the books of the bank for
$1.772,750 have a par value of $2.eS4,-
goo; 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 investing public. The vari-
Gus requirements of the National and
a a
the cost of labor and nearly all ma
ter1al, 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 fixed interest charges and taxes
has been decreased, as a. rule, with
the decrease IN gross earnings
Twenty Eight Pay Promptly.
OF the thirty different lots of rail-
road bonds owned by the bank all
except two of them have paid their
interest promptly.
Time of Uncertainty.
If in forecasting the future we had
only had to consider our own Ma
tional problems the situation would
be somewhat simplified but with all
Europe at war and borrowing heavily
from this couutryi and the unc srtain-
ty of future as to interest rates and
the market price for sscui tiles the
situation is much more complex. Even
If the war ended today it seems prob
able that this country will be asked
to furnish the European nations large
amounts of money and material. for a
number OF years. that they may again
rebuild their devastated nations.
There is not past with which to COM
pare the present; the future as to
market prices for securities and rates
fror money is largely a conjecture.
AS long as our securities are kept
care to sell them, we are not much af-
fected by their marketability Now
we are approaching a 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.
All Depends on Prices of Bonds.
As stated in an authorized article
published in the local papers Jan. %,
1915, some time this year the trus-
tees of the bank expect, If its Sc
curfties return in value to at least
the basis Of the July 2, 1914 ap-
praisal, that the bank will reach
sound and solvent condition. showing
a surplus, and will then be able to
resume its normal functions Of re-
ceiving and paying deposits, and will
from that time resume the payment
Of interest on deposits. This state
ment holds true, and the opening of
the bank this fall or releasing all or
part Of its deposits depends alto
gether upon the market price OF its
bonds.
The first duty of the bank to its
depositors is to put itself in a condi-
ton that it can pay every depositor
in full If required; after that time its
earnings can be applied to dividends;
tbs has been the aim of its trustees.
Hope for Peace and Prosperity.
The European situation has brought
about the sale of a large amount Of
American securities from abroad