The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1872-01-27

Tu0 SovHn8D 0onx Que9lOu anu tno ENG
Ish System Of Postal Savings Banks.
There can be no filter time to thoroughly
ventilate the savings bank question, and to pre-
pare the way for establishing some sound,
general and perfectly safe system for deposit
iug the savings Of the industrious classes, than
the present. The collapse of some of our
savings banks and the doubtful condition of
others show that the poor depositors run the
risk of losing their hard earnings in these in
sttutions Looking, too, at the extraordinary
increase of savings banks, with no other capt.
tai, for the most part than that furnished by the
depositors, at the lavish expenditure of most
Of them, and at the army of bank presidents,
directors, employees and agents hat live,
flourish and get rich upon the money furnished
by those who make deposits, there is reason
to fear that many of them would not stand the
pressure of financial crisis. In matter of
such vast Importance as giving the utmost secu-
rity to the savings of the working classes the law
cannot be too explicit and stringent. But it is
hardly possible to frame laws to prevent the
misappropriation or mismanagement of such
trust funds in the hands of private companies
or individuals. 1t is in the nature of men to
speculate and to study their own interests, and
| bank officials are too apt to run risks with the
sacred trust committed to their care. TO
avoid the dangers of the present savings banks
government system of postal savings banks
similar to that established so successfully in
England should be established.
The introduction of the Postal Savings Banks
| into England has been attended by marked
increase in the economical habits of the people
When it was first proposed in Parliament to
encourage the poorer classes to become more
provldent by providing for their use places of
deposit Of absolute security, the idea that
good would result was ridiculed by large
class of politicians. There were, however,
sufficient number of representatives who
thought the scheme good one and worthy of
trial; and so law was passed which turned
every Post Office in the kingdom into bank
of deposit for the benefit of the working
classes Profting by the experience Of the
most successful of the private savings banks,
the hours Of business were extended till eight
o'clock P. M, in order to afford every facility
to those employed during the day to place their
spare money in place of security. No high
rate of interest was offered to induce deposit in
fact the rate was rather nominal than real, not
exceeding at any time two and half per cent.
But on the other hand the advantage of absolute
security was offered to the poor which they
could no where else obtain, and which, in their
estimation, was above all others. This had
been the great want of the country; there had
| been at no time q want of places of deposit
where fair interest could be secured even on
small sums, but as the poor felt they had no
guarantee that these banks would not waste
their hard-earned money there was want of
confidence which deferred the thrifty and
/ cautious from imperilling their savings,
Owing to this feeling of suspicion the private
savings banks were almost solely patronized
by the least wealthy of the middle classes or
those who had no absolute need Of such insti-
tutions. The vast body of the people derived
little or no benefit from them, and even If the
working classes had had sufficient confidence to
use them they were too widely separated to
meet the requirement of national savings insti-
tuition, and the cost OF extending this system SO
as to place the benefits equally within reach
of all would have swallowed up all the
profits which could be realized in many years.
In fact, It would not have paid at any time to
have maintained branches at reasonable dis
tances in the rural districts under the old pri
vate organizations, nor would the results have
justified the expense, whatever benefits might
T., At~n Sc
population. These difficulties were estimated
at their proper value by the originators of the
Postal Savings Bank scheme, and they pro-
posed that the existing organization of the
Post Office should be utilized for the purpose of
the savings banks. Postmasters were turned
into bank clerks and every Post Ofice in the
country became q bank of deposit which was
within easy reach of every man in the COM
munity.
| This arrangement had another advan-
tage-it allowed the deposits to be made
with an amount Of privacy that had never
before been secured, and people were enabled
to transact their monetary business with
out attracting the attention of the busy
bodies of their neighborhood. This, in itself,
was a considerable advance on the old system /;
but the chief cause which led to the rapid
advance of the Postal Savings Banks, in
the good opinion Of the people, was the
knowledge that no Spectator could waste
their money, and that every shilling they put
in the bank would always be at their call, SUBJ
ject to the rules laid down for the management
of the institution. The result has astonished
even those who were most sanguine Of the sue
cess Of the project. Men who never thought
of saving shilling under the old system have
| become depositOrs: but Derhaps the most