New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1877-09-07
GoTERNMLAr S4IINGS BANKS.

Some savings banks are ill-managed there
fore let Government take charge OF the savings
of the people. Such is the easy logic by which
many reach the conclusion that system of
postal savings banks is desirable. To oljec-
tons on the score OF excessive Capitalization
Of power, they reply that Great Britain is at
least sufficiently Jealous of paternal super
vision by government, and yet the system
has been adopted and has worked well i'll that
country. Vast differences in territorial extent,
in the habits of the people, in the Civil Ser
vice Of the two countries, and especially in
the demand for capital, are not taken Into ac-
count IN these reasOnings
Shall the Government 90 into the business
of lending money! Some lunatic, of the soft
money school desire this, but sane men have
generally perceived insuperable objections. II
is hardly necessary to say that, our system OF
government being what it Is, the power OF
lending or refusing to lend public money
at pleasure would make the postmaster or
other local official an exceedingly import
ant person. As proposed the scheme does
not contemplate u change 50 eXlraOrdlna
~. But it is said that certain por
ton of the public debt could thus be paid
II,
Government could hold would be lis creditors,
instead of capitalists abroad. In short, then,
the present system contemplatcs the substitu-
ton Of domestic for foreign loan-the en-
ploymcnt of certain domestic capital for uses
TO which we are now enabled to apply foreign
capital. This would be excellent policy, doubt
less, if the nation had surplus of capital
winch, in ordinary times sought employment
i'm vain But, inasmuch as we borrow foreign
capital because we need it, and have not
enough of domestic capital to serve the same
purposes and to supply other needs, it is at
least doubtful whether it would help us to
curtail by 81 900, 10000 the aggregate sup
ply of capital at our command.
The savings banks perform a very import
ant part in our industrial and financial system.
They gather from millions of stockings and
pockets, and other reservoirs which other or
binary banks do not reach, the surplus savings
of millions of workers. Each depOsit0r con-
tributes a sum small by itself. But the aGgre-
gate is not small it exceeds $1,000. O0O, 600,
and that sum is so loaned by the savings
banks that it supplies the place of other cap
ital required for development of our resources,
movement of the wheels of industry, and the
expenses of exchange of products. Not "A large
proportion is loaned upon commercial or man
ufacturing paper directly, but Il very large pro-
portion goes to relieve either the banks or
private capitalists of a necessity OF providing for
such loans, which, if not thus relieved, would
press hungnly upon the supply of available
capital, and push up the rate of interest.
In brief the savings banks supply Il use for
the small hOardngs which in less civilized
times, individuals kept within their reach.
Such savings, thus employed, add largely to
the available capital of the country for new
enterprises, reduce the rate of interest at
which such enterprises and ordinary CONNER
cial transactions can borrow money, and in
crease very greatly the rapidity of develop
ment of our resources. 1t is "A noteworthy
fact that, in every country in which such
banks have been largely employed, rapid
growth and solid prosperity have resulted. In
England, with its great supply of unemployed
capital, such savings are not greatly needed
for the ordinary operations of commerce. In
this country, they are of incalculabe benefit,
and it is a most rash and daring proposition
to stop the accumulation of such funds through
private channels, and divert to the support of
the public credit whatever funds may be in
trusted to banks controlled by government
Apart from the very important question as