Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1924-01-02

qualification or for advertising pur-
poses, ana to insist that every d.
rector in the absence of some COM
polling reason shall at all times take
q sufficient degree of interest In the
affairs Of the bank, to have q gen.
eral idea of the character OF, its
MANAGEMENT, its investment policy,
its principal lines of credit. and the
character of the service 1t Is render
ing.
use of the funds of bank has been
given by requiring presidents as well
as treasurers to give fidelity bonds,
the minimum in each case being at
least $4,000 and personal sureties
being no longer accountable.
1.-THE system of verification OF saw
ings accounts. adopted some years
ago. as an additional safeguard in
the examination of trust companies
and savings banks, has been extend
ed to loan and building associations.
The wisdom of this step was made
evident from the fact that among
the first associations in which this
work was undertaken a defalcation
of a considerable amount, covering
a period of some years, was discov-
cred.
"Other new provisions in the re-
vised law to which attention might
be called are those providing for the
partial support of the banking de-
partment through am assessment on
all supervised institutions; provi-
sion that closed banks may be liqui-
dated through the department when
deemed expedient by the court; a
prohibition against the opening OF
Joint or two-name deposit accounts
unless the person opening the ac-
count signs a statement to the eff
feet that the transaction is not IN
tended to transfer properly after
death or to avoid the Inheritance tax
laws; a requirement that the owner
ship of 10 shares of stock free of en-
cumbrance is necessary to qualify
as a director: provision limiting
the borrowing capacity of trust COM
panies. except for the purpose or
meeting Withdrawals or TO prevent
loss by sales of assets. to the capital
stock, surplus and undivided profits;
and the granting of authority to
loan and building associations to is
sue shares on the permanent, as
we'll as the serial plan.
1.-THE combined balance sheets of all
three types of institutions under the
supervision OF the department show
notable increase in mortgage loans.
indicative OF increasing use of funds
for building purposes and a sharp rlsc
in the value of real estate. In the
case of institutions in the larger GEN.
tiers of population. notably in Port
land and Lewiston, the demand has
far exceeded the supply of loanable
funds 1t is to be regretted that the
machinery is not at hand for divert
ip,r Il in
State into this type of investment.
which has such an excellent record
for safety and yield. but investing in
which a single institution is restricted
both by law and banking practice to
a certain percentage of its assets.
1T is not entirely to the credit of
our banking machinery that some saw
inSs banks should be loaning on real
estate mortgages nearly TO the Statu-
tory limit of 60 per cent. of their de-
posts and being obliged to constantly
refuse applications for loans for home
building purposes. while other institu-
tons in communities where demands
of this character are relatively small
have less than 10 per cent. of their
funds loaned on mortgage and are
sending surplus funds out of the State
ut is gratifying to note that the
strain upon the banks, felt severely in
many sections of the country through
an accumulation of frozen loans dur
| ing the period of agricultural and bust
ness depression, was experienced in
| Maine only to n limited extent. and
| that where is was most severe, as, for
| example. in Aroostook county, several
| factors have contributed to relieve the
situation. conspicuous among which
| have been the resort to newly created
! financial agencies of the federal gov
| eminent. the use of State funds avail
| able for farm loans, and an abundant
! crop of excellent quality which is APP
parently being marketed at a fair price.
|. zone source of protection to our
| banks which is too often unappreciat-
| ed is our Blue Sky law. During 1922.
newly promoted companies which were
refused the privilege of Offering their
securities in Maine were capitalized at
moro than $100.o00.000. This figure
does not include many of the most au-
! dacious and far reaching swindles vic
| timizing citizens of other states, the
promoters of which did not attempt to
secure the privilege in Maine