Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1920-12-02

There are now 43 savings banks 10
i ing business in Maine with total re-
\ sources amounting to S114.13s.163.so
| as compared with "A institutions
/ Year ago with resources of S107.463!-
351.59 an increase of s6,674.S02.31.
| This shows a remarkable increase Of
| S6.277.799.77 in the total amount of
savings bank deposits as compared
with an increase of $3.50. 576.07 dur
| ing the preceding year. AS already in
Dictated, this annual increase in saw
| ings deposits has never been eQualled
/ in previous years.
There was also an increase Of 1881
| in the total number of depositors. and
the average amount of each deposit
increased from $41s.S4 to s441.07. Dur
| ing the past year the Reserve Fund
and Undivided Profits available for the
protection of depositors increased
from Sc, to ss,2s4,041.o5-an
| increase of s526,6s7.77.
During the past several years we
have come to realize more fully the
| Importance of maintaining our banking
| institutions in a more liquid condition.
LAS the average rate Of interest on
savings banks investments is compare
lively low, it is desirable that the
! banks balance Of idle funds should be
as small as is consistent with its
needs. At the same time, it is impor-
! tant that the bank should maintain an
adequate secondary reserve to meet
unusual Withdrawals in excess of cur
rent deposits. High grade securities
are no longer looked upon as a desir
/ oh In hon ic,
I liable to have occasion to resort to
such reserve at time when securities
can be disposed of only at great sac
rifice.
| i. THE savings banks secondary re-
serve should consist of suitable
amount of assets which yield fair
| rate of return. and at the same time.
are Immediately convertible into cash
without sacrifice even under abnormal
conditions. Bank acceptances. eligible
| for re-discount with Federal Reserve
! Banks. are readily convertible into
cash without material loss even under
depressed market conditions and there
fore make an ideal secondary reserve.
AS the acceptances approach maturity.
they become even more attractive as a
/ iiQ0iu investment anu tic Savings
banks. having occasion to dispose of
them before maturity. can often do SO
at better rate than that at which they
were purchased.
with such reserve in times OF
stress. the savings institutions would
no longer have occasion to liquidate
their long term securities or depend
upon their correspondent banks for
assistance. In this connection I desire
! to call the attention of the trustees of
savings banks to the provisions Of
Chapter so of the Laws OF 1919. This
act of the last legislature permits saw
ings banks to invest in acceptances
which are eligible for re- discount with
Federal Reserve Banks. provided they
/ have been accepted or Endorsed by a
trust company incorporated under the
laws of this State. or a member of the
Federal Reserve System located in
New England or the state of New
York
THE investment of savings deposits
in such acceptances would in no re-
spect lower the conservative standard
established for savings bank invest
ments. In fact. bank acceptances
would be even safer than the deposit
of funds in the accepting bank, as the
acceptance is not only the obligation
of the bank accepting the bill, but also
has the added strength of the drawers
and endorsers thereon. Such invest
ments are not only a safe but also
nearly as liquid as the interest bear
ing deposits held by correspondent
! hanlrc and 10 ratio of vjald xxyould no
much larger than on such deposits.
''At the present time eight savings
banks Of the State have approximately
$780, 900 invested in such acceptances.
1t is earnestly urged that the remain
ing savings institutions give careful
consideration to the advantage Of such
Investments forA secondary reserves
and as means of temporarily absorb
ing surplus funds not available for
long term investments
Trust Companies
1.-The trust companies of Maine also
show a remarkable growth, having in
creased their total resources s17.1S3.-
3S9.41 During the year their savings
deposits increased s9.s33.3I1.30. which
is by far the greatest increase Of saw
ings deposits during any one year
since the establishment of the trust
company system. There was also a
gain of s3.567.775.45 in the amount of
demand deposits and of S1.079, S90.91 In
the amount of certificates of deposit
There was also an Increase of 1864
in the total number OF depositors of
which number 21,224 were savings de-
positors.
1.-The total resources of the trust
companies now amount to $141,723.-
240.26 as compared with resources
amounting to s69, 707.16S.45 in the year
1915. This shows gain Of s72016,-
071.S1. or in other words. the total
trust company resources have more
than doubled during the past five
years.
| Loan and Building Associations
"Since the filing of the last annual
report of this department the total re-
sources of Maine loan and building as
sociations have increased s1,19s. 029.s4
as compared with an increase of
$799.762 during the preceding year,
and an increase of $579,92s.45 during
the year 1918. In fact. the growth of
our loan and building associations dur
ing the past year has been greater
than that of any previous year in the
history OF the loan and building asso-
Citations. The number of shareholders
has increased 2064, as compared with
an increase of 427 during the preceding
year. There has also been a gain of
s2S,680.31 in the guaranty fund and
4 to-, r. q,