The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1877-12-06
shall We Have United States Postal
Savings Bankss

this can be secured by authorizing the de-
post of small sums with any postal money
order Office in the United States and the
issue of government certificates convertible
on demand Of the holder into four per cent
bonds OF the United States Of such char
acter, description and amount as will en-
able and induce prudent persons to con-
vert their earnings into public security
of stable value. By this means he
believes the great body Of our public debt,
reduced to it's smallest possible burden,
would be distributed among our own peo-
pie. He refers to the eight or nine hundred
millions deposited by about two millions
and q half OF people in the savings banks
of the country; to the heavy losses that
have been sustained through the insecurity
Of such institutions, and recommends that
authority be granted to issue certificates for
small deposits convertible into four per
cent bonds now authorized by law, the
proceeds to be used solely for the fedemp-
ton Of bonds bearing higher rate OF in
terest and now redeemable at par.
These suggestions and recommendations
seem to contemplate only the encouragement
of the investm ent of small savings in four per
cent government bonds and to fall short OF
upholding the desirable system Of postal
savings banks. But we can scarcely sup
pose that Mr.. Sherman designs any such
halfway M easure. The people who deposit
money in savings banks do not seek perma-
nent investments. They desire to accumu-
late their little savings in places of security.
where they will draw interest instead OF
lying idle, and to be certain of receiving
them back whenever they may need them.
If Mr.. Sherman simply proposes that peo-
pie shall deposit their money in
post Office and receive certificates which
they can exchange at their will for
four per cent bonds he does not
offer them any particular favor. If such
bonds are issued in small amounts why
should not those DESTROYS of investing in
them buy them directly without going
through the form of receiving certificate
which, SO far as Mr.. Sherman's statement
can be understood, would not draw interest
until exchanged for bonds? IT, however,
the Secretary means that there shall be post
Office savings banks which will receive the
peoples money, paying four per cent inter-
est therefor, and returning their deposits or
any portion thereof on demand, the invest
ments he contemplates can no doubt be
proftably made after paying the expense OF
conducting the business. In 1873 Mr..
Creswell, then Postmaster General, urged
the adoption of this policy with much
earnestness, and having carefully ex-
amined the subject presented some strong
arguments in its favor. He claimed that it
would base the security of depositors on
the foundation stones of the Republic;
that in times Of panic the people, instead
of Withdrawing their money from the de-
positories and locking it up, would be the
more anxious to lodge it with the Post
Office savings banks, whence it would find
its way back into circulation through the
medium Of the government investments
that it would encourage habits of saving
among the great mass Of the people by
home to them through the extensive ma
chinery Of the Post Office, and, finally, that
while benefting the depositors it would be
profitable to the government
Government postal savings banks are not
a new experiment whose success is profile
NAUTICAL. The system was adopted in Eng
land at the elise of 1861, and SO satisfactory
has been the result that the system has
been introduced in Australia and Canada.
It might be supposed that the con-
slant withdrawal of money by depositors
would embarrass investments by the gov
eminent, such MS Secretary Sherman con-
templates. But the savings banks statistics
show that the gross amount of deposits
maintains n remarkable steadiness Not
outstanding the savings bank panic in
1876 and the insecure feeling that prevailed
among depositors the total amount of de-
posits in the New York State savings banks
on the first day of the present year was
only about two millions and half less
than on January 1, 1876, or 1915, COO 600,
against 1919, 100000 In England, on De-
posts only s3OO, 900 remained in the hands
Of the Postmaster General uninvested, and
the proportion has been about the same
in each subsequent year. Is such system
in conflict with our constitution or likely to
embnrrass the government?
There con be no more constitutional OBJ
lection to post Office savings banks than to
postal money order Offices. The govern
ment in both cases receives the moneys of
private persons and guarantees their safety.
In one case it pays the deposit over to an
other party than the person depositing it
and at another place. In the other case it
pays back the deposit, or portion Of it, to
the person making it whenever he demands
it, in the same place where it is received or
elsewhere, rs the case may be; for
one Of the good features OF the postal
system is that q poor man milking n
deposit in New York can draw his money in