The Toledo chronicle. [volume] (Toledo, Tama County, Iowa) 1873-1924, 1873-05-29

ration OF National Savings Bank
system, all these could have been
avoided, and nearlj if not all OF the
FIVE twenty six per cent. bonds re
tired almost Immediately by the en-
ac,ment of savings bank system,
based on the holding of five or four
and one half, per cent. bonds. The
essential details and practiblllty OF
such system will be at once appa-
rent. The increased protection thus
ensured to the savings OF the people,
AMI tho encouragement to industrl'
Gus and economical habits, would OF
itself be Of inestlmable public benefit
to the nation. Such savings banks
would in their operations cover
much broader scope than would be
possible to individual organizations.
Under the auspices Of the govern.
ment the money order system would
more properly be taken from the
postoflices aud made part OF these
savings banks. Depositors changing
their residence TO other States would
no: need to carry their funds and IN
cur the risk of loss or robbery. The
citizen of foreign birth and connec.
tions could, through such banks, re-
nit the funds needed by relatives in
the cold country" with much less ex
pcnse and greater safety than by the
present system. In word the con
vcnience to depos tors would be
greatly increased.
On the score OF safety, such sys-
tenn would at once demonstrate its
superiority. When it IS remembered
that even the financial legislation OF
the State OF New Y DIRK has, through
all its safeguards, permitted the past
year the failure and insolvency of
three of the principal savings banks
of the city, and the consequent rum
OF hundreds of needy deposltors, and
that ,sachusetts and Connecticut
have recently discovered that their
own Legislation on the savings banks
has left open innumerable loopholes
tor rascality, we may well despair OF
the safety OF all State chartered in
situations of this class. In the West
the necessity for reform IN these
matters is still more urgent
Throughout nearly all the Western
States the 50 called savings banks are
merely private corporations organ
lied tor the pecuniary profit OF the
;ncorporators, and though, doubtless
in good faith cndcavorlng to secure
tho safety OF the depositors, yet by
no means protecting them from all
possibility OF loss, and in fact leaving
them constantly exposed to the pos
sibili,y OF a tedious delay in the ul
innate recovery OF their deposits. IN
a word, the depos.tors IN all western
savings institutions are in precisely
the same position as the unfortunates
who were insured against loss by fire
in the Republic and other insurance
companies in which the contingent
reserve liability Of the stockholders
was the chief basis Of their security
How this contingency llability of tie
shareholders meets the time OF trial
is fully demonstrated just now in
nearly every court IN which the col
lection is being attempted.
1t may not be out OF place to re
fer to the profits OF the present say
ings institutions. Although prom,
ising six per cent. interest to depos-
itors, yet practically, by non pay
mcnt of any interest to those whose
deposits do not remain at least a
prescribed time, the actual average
rate of interest paid by tho savings
banks is but little more than three
per cent. on the total amount of de-
posits. by paying but five per cent
as the regular rate to those who have
complied with the requirements, the
average rate on the total deposits
would be but two and half per
cent. In brief, the eastern savings
banks average an annual profit OF
three per cent, and the western
banks average six per cent. profit on
the total amount of their deposits. 1t
is evident, therefore, that they could
well afford to invest largely in the
national five per cent. bonds. 1t is
to he honed tho suhinct will rooo,y.