Iowa voter. [volume] (Knoxville, Iowa) 1867-1874, 1873-12-11
.o.r.o-.,cv s.v,xss ,.xx.

Posr-orrIcE SAVINGS RANKS.
The events of the past few weeks have awakened
lively interest in plan heretofore submitted Tor
securing the savings Of the great body OF the Peo-
pie by pledge Of the credit and faith Of the United
States. In my reports for 1871 and 1872 urged
the organization Of institutions for that purpose,
under the title Of Post-ofice Savings Banks.
The name was not well chosen. The institu tons
have in view and recommend are not designed,
and should not be permitted. to encroach upon the
They are totally distinct from banks in their scope
and character, in the machinery they employ, and
In the ends they are intended TO accomplish, and
may be more accurately designated as Postal Saw
ings Repositories of the United States.
The financial difficulties in which the country has
been unexpectedly involved, and which still con-
unue TO Cypress it, have demonstrated the necessity
for come means Of maintaining confidence in times
OF threatened disaster and Of gathering and wisely
employing, the immense wealth scattered among
which Inevitably follows in its track. That the
people OF the United States hold the reins Of nan
cal well political power clearly appears from
the tables taken from the public debt statements,
reports Of the National Banks, and from official &C
counts.
IT, therefore plan can be Devised that will af-
ford 10 depositors equal security 10 that afforded
TO note-hoders, but little doubt can be entertained
that general amelioration OF the present condi-
ton viii be effected; the immense SUM Of $780,
0O00 900 held by the people in June last, with the
large accessions since made thereto by heavy drafts
upon the Treasury and the banks, viii be brought
out from its places OF concealment and applied to
its legitimate work OF aiding in forwarding our
crops and products to market and in sustaining
our vast manufacturing and other business in
terests.
In my Judgment, system OF postal savings
repositories would powerfully contribute to this
most desirable contamination. Throughout the
plan for their organization and work two ideas
predomlnate first, the United States Is TO insure
the safe return Of principal and interest whenever
demanded; and, secondly, the extensive machin-
cry Of the postofice is to be used 10 bring its adj
vantages home to the great mass Of the people.
The details would be Simple. safe and efficient.
Money-order offices, as agents of the Government,
would receive deposits In small sums, ranging from
q upward TO the limit fixed by law, which sums
the postmaster would forward at short intervals to
the nearest depository of the United States Treas
ury. certificate, fixing the responsibility of the
Government, would be issued Immediately to the
depositor by the postmaster, and notice thereof
would be sent either to the Department or
some established branch office, to the end
that due entry thereof might be made and
more formal acknowledgment forwarded to the
depositor for the amount No depositor should be
allowed in any year to deposit exceeding $500;
no greater accumulation Of deposits should Be per-
mitted to any one depositor than $1,000; and no
greater accumulation Of deposits and interest
should be allowed than 81 500. Meantime, how
ever, the United States should contract to pay i'm
terest not exceeding four per cent to be computed
from the first day OF the month following the de-
posit and to stop upon the first day OF the month In
which any withdrawal might be made. Interest
and then, II not drawn, should be added to the
principal. Ii would of course be necessary to keep
an exact account OF all such deposits, and OF the
expenses incident TO the management thereof, In
the Treasury Department; also to make provision
for the payment OF the amounts due depositors
whenever and wherever they might desire to with
draw them, and to allow and credit TO such accu-
mutations somewhat greater rate of interest
than that paid depositors, SO that all expenses
might be paid out Of the fund, and the nstituion
made SELF sustaining. am confident that the plan
nfn tom
so amplifed and guarded that the people
could be efficiently served, and the Gov
enmen may s g BE s saysd from al loss
first, absolute security; secondly, the utmost IA
eties for deposits Withdrawals and transfers, and
thirdly, perfect secrecy. -
The extent Of the benefits which will inure to the
people and the Government from the establishment
Of this system will be best indicated by statement
OF the AMOUNTS deposited in existing savings banks
Thus seven States (Massachusetts. Rhode Island.
Maine, New Hampshire, Connecticut New York
and California; had many months ago. 1867 500 de-
positors, and 1923 l85 a07 W on deposit an amount
greater by 3d. $50 than all the deposits including
those Of individuals, the United States and United
States Disturbing officers, held by all the National
Banks OF the United States, numbering 1919, on the
third day Of October, 1872
Objection has been made to the establishment
OF postal savings repositories upon the ground
that they would interfere with and overthrow the
this objection is without foundation. Savings
banks were originally established by the benevo-
lent and philaDthropic to provide safe places Of
deposit for the small savings Of laboring people,
and in the beginning they were conducted without
hope OF either profit or reward other than thst
which comes from the consciousness of doing
good. In so far as they have since been used for
purposes OF rpeculation their managers have di-
vered them from their original design and TO that
extent have abused the confidence reposed in
them. Security Is TO be sought above all other
considerations and hence the spirit OF speculation
should be thoroughly eradicated from their adj
ministration. IL savings banks subjected to
risks and prostituted for purposeso OF gain for their
managers, they should be overthrown. III, on the
contrary, they continue to be well and proftaby
managed, and pay greater rate of interest than
that paid by the Government, they win In no wise
be put to disadvantage, because every depos-
itor will be left free to select his place Of de-
posit.
Nor can the National Banks raise valid objec-
ton. They are organized to afford facilities To
the community by lending money on personal re
curity, dealing in exchange, issuing notes and
ceivng deposits, not for manentinvestnent, bnt
as temporary custodians. Bankers should own the
capital they employ. When they attempt TO do bust
ness on borrowed capital they are operating on a
fictitious credit, and become mere spectators. IL
they succeed In realizing more interest than they
ey above its value. II they do not succeed in 40
doing, then, like other unfortunate spectators,
they fail, and their creditors become their dupes
Hence law prohibiting the payment Of interest by
climate business, and prevent them from assuming
Improper risks. With the Government IL 10 totally
different. Its obligations must be met by resortiDg
either to loans or taxation. And in determining
Its choice Of alternatives the paramount considera.
ton should be the best interests Of the people,
whose agent 1t IL. Sound policy dictates that the
Government should lose no opportunity Of borrow
ing of its own people, at low rate OF interest for
the purpose OF discharging an Indebtedness abroad
or relieving industry and enterprise at home from
the trammels Of taxation. But when the Govern
ment can arrest panic, restore confidence, call
forth the boarded treasure Of the country, and re
vive the pursuits Of industry, by q simple pledge
of the peoples credit for the peoples security who
will say that that pledge should no. be givent
Another objection In the tendency TO centrallza-
ton. To this answer, that, IL to establish postal
savinge repositories would be In violation OF the
Constitution there Is an end Of the matter at
H. on the contrary, such action would not be IN.
constitutional. then the only Question IL whether
their establishment would on the whole be advan.
tageons for the people and the Government
Another objection, more practical, II not more
tenabe, il based alleged increase OF expenses
and public officers. so far AZ the establishment OF
savings repositories would have any effect upon
appointments, It's tendency would be to secure q
better class Of officers In all respects. None but
competent persons could discharge the duties OF
such Institutions and no man or party having
reputation TO sustain would be willing TO commit
interests 80 important TO unworthy hands. The
Government would seek its principal agents and
employees among experienced men, wherever they
conid hp fnuud A numprous fnrca of additional