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Chamberlain's Address

Excerpts from Governor Chamberlain’s 1870 Address to the Maine Legislature

"...The times are different; our duties new...The liabilities which one way or another, grew out of the [Civil] war, have laid a heavy burden on us... The report of the Examiner of Banks and Insurance Companies will suggest matters of unusual importance. It will be seen that our old banks, under State charter, are almost extinct. The policy of the Government is hostile, and we shall probably have to abandon the system...

“There are now thirty-seven Savings Banks in Maine, several having been recently chartered in what we might call our country towns; the chief apprehension regard to which is, that they may not be able to afford suitable security against robbery. The deposits for the past year amount to $10,839,955, by about 40,000 depositors; making an average of something over $250 each. An interesting comparison is shown by the fact that the amount thus laid in store from honest and hard-earned gains is already more than a million and a quarter larger than the whole of our bonded public debt.

“It is urged by some that a direct tax should be laid on savings banks. It is a sound principle that property should share as equally as possible the public burden; and it seems, at first sight, that savings banks should no more be exceptions to the rule than any other banks. But it will be seen upon reflection that the spirit and intent of deposits in savings banks differ entirely from the object and operation of deposits in other banks; and it is a grave question whether this difference is not of such a nature and result as to make the savings banks a positive benefit to the State, which might even entitle them to special grace, practically amounting to a bounty, or premium, if you please. These banks are the special depositories of the poor; treasuries of pittances which could in no other way be so well guarded and made profitable. If not kept here many of them would not be kept at all. Besides the actual saving of earnings, and the positive addition to wealth thence accruing - itself an object worthy of your thoughtful care - there are incidental and even more valuable advantages. The moment he has money in the bank, the humblest feels a bracing up of his self-respect and whole moral force. From that moment springs an incentive to industry, frugality, temperance, enterprise; to all, in fact, which constitutes good citizenship, and advances the character and condition of men. Anything, therefore, which tends to discourage deposits in savings banks should be scrupulously avoided.

"Indeed the mere fact itself of publishing Savings Banks deposits would intimidate and dishearten many whose very struggle and merit it is to keep this pittance from the willful and wasteful hands which would at the same time destroy it and themselves. By the very confidential relations of these banks many a poor woman is helped in her heroic struggle to bear her unequal burden. Therefore it seems to me better even to suffer such evils as we do, than to the attempt to correct them to subvert a far greater good...

“What this state needs is capital - money in motion, whether gold or currency. Our material is stagnant, our industry crippled, our enterprise staggered for want of money, which is power. What makes the sinews of war, makes also the sinews of peace. Maine strikes me as quite different in her circumstances from the other New England States, with her denser population, developed arts and industries, their centralization of forces and accumulation of capital. She reminds me more of the Western States in her condition and needs - a virgin soil, undeveloped powers, vast forests, and vigorous men, but no money. Like them she is trying to build railroads, invite immigration and develop her resources, and perhaps is not so much in love with a high tariff as some of her more cultivated sisters. The elements and powers of nature, and the energy and enterprise of men in order to be turned to account for the great uses of civilization, must wait on capital. Unfortunately we cannot hold our own; we can keep neither our men nor our money at home. Higher rates of interest for the one, and quicker and larger returns for the other, win the game. The result is a double drain which keeps all our channels low. This evil must be remedied or Maine will have to wait a great while for her coronation. What can be done it is not easy to say specifically. We must look to the National Government to strike off some of our fetters and lighten some of our burdens. To me it seems unwise to cramp our energies with duties and taxes in trying to do everything in one day. I have no great pride against letting somebody else help pay the cost of the war...

“If we can do anything that will make labor, skill, talent and capital remunerative, that let us do. People will come and will stay; money will be kept and brought, if we can manage to make it pay. What we can do for money does not readily appear. But we can look over the situation. As I have said, higher rates of interest abroad lure our money away. Money will seek the highest level as sure as water. Argument and entreaty will not change the course of this inexorable law. Capitalists are reluctant. Some scruple to receive an illegal rate and so refuse. Some stipulating for these rates, knowing that they can only trust the honor of the borrower for the continuance, want a better security. But mortgages of real estate, which is about all we have, carry a long right of redemption, and the lender is liable to be kept three years out of the money at merely the low legal rate. The result is he will not accept even the mortgage, but demands an outright deed, and then the borrower must trust the honor of the lender, which in turn may not be very valuable security.

"Two things would undoubtedly tend to make money more plenty. 1. To perfect and make practicable our free banking law. 2. To legalize higher rates of interest. Of course the suggestion of evils growing out of the latter proposal at once arises. But it may be that the example of the General Government which compelled us to suspend specie payments, may also compel us for a time to recognize a rate of interest corresponding with this general practice and sanction."