The Seattle Star Newspaper, November 30, 1925, Page 7

MONDAY NOVEMBER 0, 1925 Commercial Banks Seek to Reduce Earnings on Savings In All Fairness Should Big Banking Interests Be Allowed to Restrict Earnings of Over 200,000 Member-Depositors in Savings Institutions in This State? 100% Safety Record for Savings and Loan Associations of Washington Two hundred and twelve thousand thrifty people of Washington with more than $70,000,000 in savings placed with the strong, well-managed Savings and Loan Associations of this state, are un- der attack by commercial banking inter- ests, before the present legislative ses- sion under S. B. 59. Why are commercial banks seeking to impair the usefulness of a set of insti- tutions with a record of 100% safety? The answer is so plain even the man in the street can see it. The commercial banks wish to drive back into their own institutions the funds accumulated by the Savings. and Loan Associations, so they may have the use of these funds at the low interest rate of 3%. Savings depositors are en- titled to more than 3%. Furthermore they are entitled to 100% safety. The average rate paid by savings and loan associations in the State of Washington is 54%. This includes mu- tual savings banks as well. Hundred Million In Savings There are more than $100,000,000 in mutual savings institutions of Wash- ington. A difference in earnings of 23% means $2,500,000 per year, or $25,- 000,000 in ten years. To take this away from small savings customers in order to pay large dividends to rich commer- cial bank stockholders would be a tre- mendous economic loss and a body-blow at the general prosperity of the state. The poor man ’s bank is a mutual savings institution. So well are the funds of savings and loan associations safeguarded, and so well are the associations directed and su- pervised under Washington’s excellent laws, that in twelve years since those laws were enacted, not a single dollar has been lost to Savings and Loan mem- bers—A 100% RECORD OF SAFETY! What is the record of Washington’s commercial banks in the same period? The savings and loan associations have merited and gained the full con- fidence of the thrifty men and women of Washington over this long period of years. They should be encouraged to carry forward the splendid work they have under way in the accumulation of savings dollars that go into con- struction of thousands of homes and into the general upbuilding of the state and the Northwest. Now the commercial banks want to limit the usefulness of the seventy-two Savings and Loan Associations of this state, cut down the earnings that are distributed among their members, and force direction of Savings and Loan in- stitutions upon the State’s Supervisor of Banking, an official naturally allied with the commercial banking interests and by that token unsympathetic with the broad accomplishments and aspirations of the Savings and Loan bodies. Why turn the Savings and Loan As- sociations, with their great public confi- dence and their perfect record for safe- ty, over to the control of the banking interests that bitterly fought the enact- ment of the law bringing Savings and Loan Associations into existence in 1913 and ever since have been seekit.g to cripple and injure them? Especially since those banking interests have so much to apologize for in their own re- cent history; Safety for Your Savings Savings and Loan Associations are the savings institutions of. the masses. Their record of solvency surpasses that of any other form of financial institu- tion of like magnitude. All started ina small way to supply! the need of the thrifty for investments giving adequate return upon moderate sums. They rep- resent a neighborhood movement that has become nation-wide in scope—a powerful, constructive influence favor- ably affecting many phases of life. Savings and Loan Associations have been the greatest factor of modern times for enabling the man of limited means to build a home. They are largely re- sponsible for the. fact that America to- day is a nation of home-owners—and in that enviable distinction Washington ranks well up among the states. Considering further the element of safety to the investor in the Savings and Loan Association this comparison is im- pressive: One Egg broken In Thousand Dozen In 1924 the 11,844 Savings and Loan Associations in the United States conducted their affairs so efficiently in the interest of over eight million mem- bers that they handled almost five bil- lions of dollars with a loss of only eigh- ty-four ten thousandths of one per cent —about like breaking one egg out of a thousand dozen. But in the State of Washington even that one egg was not broken, because no savings member lost a single dollar in the Savings and Loan Associations of this state. That year state commercial bank losses throughout the United States were approximately four hundred and fifty times as great as in the associa- tions of the nation. What in all the world could be safer than savings and loan protection for your dollars, while they earn, on the average, nearly twice as much as the savings departments of most commercial banks are willing to pay? The New York Law Savings and Loan institutions and mutual savings banks have come to be recognized by certain eastern states as so fully safeguarding and conserving the savings of the masses, in contrast to commercial banks, that savings business on the part of commercial banks is not encouraged, and New York goes so far as to enact this law: “No bank, national banking associa- tion, trust company or other corpora- tion, other than a Savings Bank or Sav- ings and Loan Association, shall make use of the word ‘saving’ or ‘savings,’ or its equivalent, in its banking business, or advertise or put forth any advertising literature or sign containing the word ‘saving’ or ‘savings,’ or its equivalent, or solicit or receive deposits as a savings bank.” The savings institutions of Wash- ington, performing their functions in good order and with a clean record, do not seek to interefere with the commer- cial banking business of this state, and do not wish to be dominated by the com- mercial banking interests, In this plain statement of facts we have sought to show you what the Savings and Loan Associations are accom- plishing for their members and for the upbuilding of Washington. In our next article we will analyze the provisions of Senate Bill 59, now before the legislature at the instance of the commercial banking interests, WASHINGTON SAVINGS AND LOAN LEAGUE FRANK S. McWILLIAMS, President, Spokane.