The Washington times., 1919-12-27
Meets Many Requirements.

and easy amortization of loans, thus
! giving protection against any absence
of the usual safeguards. The success
| of these institutions has been re-
markable, especially in the older set
tied parts of the country. <
l The banks, and especially those
! which handle the savings of our mil
: lions of smaller capitalists, including
! the wage earners, have about five
! billion dollars or even a greater
! amout loaned on mortgage security.
! They have found a type of security
/ better adapted to the dividend re-
! quirements of their depositors than
I loans on real estate. They have found
that such loans furnish such degree
of security and certainty of liQuida-
! tion that their dividends can be main
tained at or above the rates usually
paid upon Government bonds.
Rest On Demand Basis.
But it must be remembered that
deposits in savings banks practically
rest upon a demand basis. There
fore, the managers of savings banks
| must limit their investments in mort
, cages to such a proportion of their
| assets aS will enable them at all times
| to meet lie requests of depositors and
! at th> me time have their funds
earn the largest amount compatible
with safety. Savings bankers are
trustees, not spectators.
While savings bankers are esnc-
cially charged with the promotion Of
, thrift and the encouragement of small
but systematic deposits. their work is
never TO be regarded as charitable
or philanthropic.
There are various steps which
might be taken in order to ease the
present mortgage market, and to in
crease the facility with which loars
might be obtained.
Long term mortgage loans in the
last analysis are to be derived only
from savings, both small and large.
The accumulation of savings in
banking Institutions and otherwise is
now impeded by the burden of our
war debt, by competition from the
Government in it's propaganda for
placing savings in Government chan
nels, and on the other hand by max
ing it Improbable for private invcs-
, tors TO purchase taxable securities.
Congregational Bills Criticised.
In conclusion it is worthy of note
that no remedy thus far proposed in
, ''huo III l4It o'-
gree to improve the present system
of mortgage finance or provides any
facility n now possessed except
that of pyramiding credits through
redlscounting mortgage loans at the
cost OF tax eXemption-in other words.
at the expense of Government credit
and to the ultimate increased burden
TO general taxpayers.
l.
iclcS should and must be adopted with
a view to 10th increasing deposits
and making available a larger fund
Tor long term investment. AmortiZa-
ton of mortgage loans. although not
a plan which can be applied by all
lending institutions or under all cir
cumstanCes, is imperative under pres
ent conditions of financial Initiation.
Savings bankers have special obliga
tions which must be recognized and
the occasional dry rot in methods
must be eliminated
But as to the need for radical re-
form in our present system OF mort
gage finance we must not be led
aStraN by alleged derects or by the
attractivcnpss of proposed RENE
dies'-the first of which has not been
second appears thus far to be econ
omiCally unSouud. Ii would be far
better to modify some of tho out
grown restrictions under which saw
ings banks operate.