The Republican journal. [volume] (Belfast, Me.) 1829-current, 1922-01-05
Our Savings Institutions.

oA ouNhSS AhSututiouSs
Fred F. Lawrence of Skowegan, State
bank commissioner, in his annual report
which has been filed with the Governor
and Council, says that under the prevail
ing conditions of liquidation and deflstion
1t is q matter of qualification to be able to
point to the generally excellent condition
of institutions under his supervision.
There has been no failure in any State
banking institution during the year and
no developments involving substantial
impairment OF assets. The laws of Maine
have thrown such safe guards around the
deposits In its banking institutions that
public confidence in them is in the high
est degree justified, and the fact that saw
iugs accounts have slowly increased dur
ing these times OF shrinking net incomes
and relatively high living costs testifies to
the continued thrift of our citizens.
much, however, needs to be done by
way of education to impress upon the
public the fact that general prosperity and
/ Individual welfare alike are served by de-
| posting savings in banking Institutions.
The public should be shown that invest
ment is science requiring constant study
and supervision, and that no institution
can perform that function SO satisfactory
/ y as the bank, operating under public
control, strictly regulated by law and
| having the opportunity for Investigation
of investments which is denied to the or
binary individual. Under such conditions
the depositors receives the highest rate of
interest compatible with safety, accompa-
MED by that lnestlmaole privilege which
an investment affords, the right to his
deposit in fuli with accumulated interest
on demand, or at most, after a brief no.
tice, which in practce is almost never
required.
During the recently prevailing abnor-
NAL interest rates 1t was undoubtedly true
that opportunities were afforded with rela-
! relatively slight risk to secure relative
ly higher yield than that afforded by
banks. The essentially abnormal anu
temporary character OF this condition,
however, has been strikingly demonstra-
ted by the almost phenomenal increase IN
the price of high class investment bonds
with correspondlngly reduced yield.
"For the first time In the history of the
State the interest rate on deposits In saw
ings banks is uniform one, per cent.
per annum, four institutions having in
creased their rate from "a per cent and
two from 3 1-2 per cent. during the year
This policy of uniformity has dlstlncl
{
ing interest rates Is tnadvIsable.
-Four per cent. under normal condition:
must be recognized as representing tn,
maximum of safe yield on deposits pract-
Ically subject to call, and Maine institu
lions are TO be congratulated upon thel
refusal to follow the less conservativ,
dividend policy of some out of state instr
tutions The rate OF interest should obvl'
ously not fluctuate with changing tenn
porary conditions. 1t is true that the In
situations are mutual In character, but ex-
cess earnings afford protection to every
depositor through the Increased reserve
and where good management or good for
tune increases such earnings above nor
NAL, they can be dlstrI buted, when occa-
sion requires, In the torn OF extra dlvl-
dends.
Complete audits of banks under our
supervision are OBVIOUSLY impossible, but
in view of the fact that the ordinary ex-
ANNA ton does not permit OF verifying
the deposits liza bllIties, the policy of peril
/ odlcally checking up this important Item
has been IN force for some years and at
/ fords deposltors practical protection of
great value. In practice the work is &C
/ complished through taking group OF IN
/ situations, savings banks and trust COM
panles alike. in certain section OF the
state, and making use of the entire force
at the command OF the department. On
certain days the deposlLors are asked,
through tn , public press, to oring IN their
books for vertlcation.
"a gratifying percentage of the total is
always secured. This is followed up by
sending out slips to the other deposltors,
asking for information from their pass
books, and these when rec lived are COM
pared with the books of the bank. The
Iesults are such as to reach, so far as hu-
namely possible, verifcation of this
most important item of liability.
"At the present time there are in Maine
43 savings banks with resources or
SIG, 264, 289 u, So trust companies, 81
trust company branches and eight trust
company agencies with Resources of
sI45, 429, 372 90. SO loan and building asso-
Citations, with resources of Sl0 ITO. 9a8. 38,
two loan companies with resources OF
$727, ia II and one Industrial bank with
resources OF S270, 843 81 Last year at this
time there were AZ savings banks, with
resources of STA, 1873, lo5. 90, 90 trust COM
panIes, rs trust company branches IND
SIX trust company agencies, with resour-
ces of SAL, 1872, 240 90 so loan and building
associations, with resources OF s9, 14o, you.
81, three loan com anles with resources
of $9l5. TOO "a and one Industrial. bank,
with resources of S227, 800 go. 1t will thus
be seen that the resources of the state IN
situations increased So OLA. GO 20 during
the past year.
cit appears that the increase in resour-
ces of the national banks IN the state has
been approximately at the same rate as
that Of the state institutions and that the
combined banking resources of the state
now amount TO $685., 142 57850
"The confidence OF the depositor in the
specialist in the savings inyestments-the
mutual savings bank-continued to ne
justified by the results of the faithful ana
conservative management of these lnsti
tutionS