The New York herald., 1877-09-05
GOVERNMENT BANKING.
A SUBSTITUTE FOR THE PRESENT WEAK SYSTEM
OF SAVINGS INsrIruTIoNs-rHE HERALp's


A SUBSTITUTE FOR THE PhEsENr WEAK SYSTEM
OF SAVINGS INsrIruTIoNs-rHE HERALp's
PLAN SUPPORTED.
From the Chicago Tribune, Sept. g. 18TH
rne closing Of tho State Savings Bank. OF this city,
and the evident wholesale plundsr aud robbery Of
the depositors by the officers oil the bank nave at
acted general attention in all parts of tho country
the insecurity OF the whole savings bank system In
fact. is security for depositors. Even tho
personal character and responsibility OF The managers
afford permanent responsibility or defence Combina.
tons may be made and possession OF controlling amount
Of the stock may be secured and y single day
new management may be installed and the millions
belonging TO the depostors placed in the custody
of deliberate swindlcrs II the Chicago Gaze he
in some respects greater fraud than those por.
pctrated elsewhere it Is only because the operators
were greater Villains and tnoir opportunities bet
ter We repeat what said, several days ago,
that the time has como calling Tor the intcrposi.
ton OF tho government to protect tho many millions
ofcitscns who the 81 0Do, 900 600 ST.
deposited In the savings institutions Of the country
We do not propose that the government shall estaD-
lsh bank and lend out other peoples money; but
we do propose that tho government, which has
100 900, 900 OF gold bonds outstanding, shall offer
to receive tho savings deposits and invest them ts
own obigations The government Is paying SIX per
cent gold interest $S44 600 900 OF bonds Ave
per cent gold interest $780, 900, 900 bonds These
bonds are held all over the world. rhe six per cents
are all subject 10 call, ami may be taken up by the
government at pleasure Wepropose that the govern.
ment shall offer 10 the people o the country TO re-
ceive their deposits and pay thereon interest at tho
rate OF 6a per cent with the money thus deposited
the SIX per cen. bonds called in from time 10 time
may DC either purchased or paid. The govern.
mont would thereby save the difference be.
tween the two rates OF interest," less tho cost OF
agemeuL rhe cost OF management IN England at
present Is less than onehali OF one per so far
As the government Is concerned tho transaction would
be merely change of creditors, with reduction OF
interest from The present rates TO 800 per cent Tho
agency OF the post Offices s the best, because 1t
tends the facllics OF making deposits 10 every town
and village, thereby cnlarsing The usefulness of tue
savings banks and also facilitating the OF in
terest or principal
The ony serious objection madc to this scheme Of
Post Office savings banks is that it will DO the assump
ton of paernai power the exercise oil authority over
tho business affairs OF the people, Lcl how tar
this Is true. The government now borrows money and
pays interest thereon 1t proposed that tue govern
ment shall continue to borrow money subject ~ call,
paying interest such balances may DO lett In IFS
hands. TO borrow money Tor public uses
OF the expressly granted powers and indIspensa-
BILE functions Of all governments. The government
on deposit and has IN its vaults
aye of $50 O00O 900 to 10000 700 OF private money,
subject 10 CALL Tor the custody OF which respon-
sbie and which It receives and pays out without IN
teresL II II can furnish vaults for the safe Keeping
and 10 responsible for issue certificates Tor the
money oil the rich II eau certainly do the samo Tor
the poor The rich make no compen saton ior the
safe keeping aud cost Of banding their deposits In the
Treasury No interest is paid on 1t because the gov
ernment cannot use IT. Inc government receives
money at the post offices and orders
iOr, payable IN any part OF the country. 1t collects
charge The and becomes responsible for tho
money II receives until the order is paid. THIS
business or receiving money and issuing postal
orders therefor amounts In the year 10 many
millions oil dollars. No one has ever mag ned that
this was paternalism or any governmental interference
with private business. The amount OF money sent by
mai through the agency of postal orders very
significant compared with that deposited with savings
banks The oncr Dy the government. 10 receive these
deposits. become Responsible therefor ana ply interest
thereon is but 10 offer secarlty TO the deposItor
winch all experience has shown Cannot DO otherwise
obtained, just the postal orders are protection
against the very common robbery OF the mails. AS per-
may now resort 10 bank drafts postal orders at
their pleasure 50 the people would have the option 10
deposit with the government or With private banks.
The act that tho government offered absolute security
would operate, rs II has IN England, to compel the
private banks to MAINTAIN honest management, lest
their whole deposits bc withdrawn.