The New York herald., 1877-09-07
Postal s.vInss Banks.

teen years worked successfully in England,
has been widely noticed by the press OF the
United States and almost as widely IN
dorsed. We present extracts in our news
columns and call attention to those from
the leading journals of Chicago. The press
of that city takes lively interest in the ques-
ton in consequence of the recent disgrace
full collapse of the State Savings Institution,
and has discussed the general subject with
ability and intelligence The Chicago
Tribune is strong advocate OF the postal
savings banks, but the Times and Inter Ocean
prefer the issue by the government of bonds
for small sums as q safe investment for the
savings of the people. These plans do not
differ in principle, but only in methods
They alike assume that it is proper for the
government to adopt means for protecting
the laboring classes against the mismanaged
and swindling institutions by which they
have been SO shamefully robbed. On this
fundamental point they agree with one
another and with Secretary Sherman, who
has indorsed the HERALD's proposal and
also favors the issue of small bonds as an
investment for savings. The objection
to what is called paternal government
applies with as much force to the proposed
bonds as to postal savings banks. 1t is
preposterous objection in relation to either
There is no country in the world where the
paternal theory is so little liked as in Eng
land, and yet it is in England that the ex-
pertinent Of postal savings banks has been
successfully made. AS to the benefcence
Of such banks and the absolute security
they would give to the poor against the loss
of their savings, there can be no question.
There is no objection to their constitution
ality which can stand discussion.
AS to the two methods proposed for ac-
complishing the same purpose the balance
Of advantage is entirely on the side Of
postal savings banks. The issue of bonds,
even for so small On amount as the Chicago
Times proposes, would not serve the con-
venience of the great mass of depositors
Working people, who are able to save but a
few dollars out Of their weekly wages, need
a safe place Of deposit while their savings
slowly grow to q sum sufficient to purchase
small bond. And besides, they wish to
have their money available in case Of sick
ness or unforeseen wants. The advantage OF
good savings bank is that the money de-
posted in it is completely within the dis
posal OF the owner and yet Sc
cure from thieves, from fire and
from his own carelessness. In most
cases it is impossible for him to see what
proportion of his deposits will be perma-
nent Facility in getting his money back
whenever he wants to use it is one of the
chief inducements to deposit all he can
spare after paying his weekly bills. 1t is in
the savings bank that he lays by the means
Of meeting his landlord on rent day, Of
buying his wife new silk dress when she
wants it, of paying for the winter or sum-
mer outfit of clothing for his family when
these seasons approach. Too often he hns
no money at all to lock up in per-
manent investment. and even when he
has surplus he has to think Of
the possibility Of falling out Of work,
of sickness in his family, and even
of death, which, as it comes to all, may not
spare his modest household, and may
burden him with the expenses Of funeral.
1t is, therefore, convenience to have his
money where it will earn interest and still
be at ready command for unforeseen oc-
casions.
The proposal to issue small bonds as re-
ceptacle for the savings of the working
classes ignores the habitual wants Of their
daily life. 1t assumes, contrary to fact,
that the mass Of their deposits in savings
banks consists of money which they are not
likely to need for long time, and that they
are in a condition to make permanent
investments. We understand the reply
which may be made to this argument. 1t
may be said that fifty dollar
government bond drawing three sixty
five-one-hundredths per cent interest
could always be sold by its owner, or that
if he did not choose to sell it he could
pledge it us security for loan. This is
perfectly true, but it is not valid answer
If the owner of bond bearing SO low
rate of interest is under q sudden necessity
of selling it he will have to sell it at such
n discount as would more than cancel
the interest for the preceding year.
Getting less money for his bond
than he paid for it his invest
ment becomes source of loss If,
instead of selling it. he pledges it as
security for loan, the case is not bettered.
On the loan he would have to pay the legal
rate of interest and the seven per cent
sxacted of him would, in one year, devour
the small interest on the bond for nearly
two years. He could neither sell his bond
nor borrow money on it without positive
loss. But under the postal savings bank
system he could always have his money
when lie needed it, and would get back
without shave or discount, and without
running hither and thither to find a pur-
chaser or lender, the full sum that