The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1877-09-06
&oycrnsnentnIS Savings Bank.

/ That the time has come when there shall
! be some governmental interference to pro-
| tcct the industrial classes against frauds
! and swindlcs under the name OF insurance
romuanics and savings banks and kindred
! organizations will readily be questioned.
/ These things are not new. They have been
pract iced in other countries IN times past
! Just rs extensively as here: but other coln-
! tries have long since reached two points:
! !. The extension Of governmental protcc-
ton 10 prevent swindling. ,. The prompt
and severe punishment or such S"lhuilhS
whra it docs take place.
| The recent failures OF savings banks at
! ST, Louis, and series OF failures OF savings
banks in New York and Brooklyn, and in
various parts OF New England. show that
| the whole system on which savings banks
exist in this country affords no protection
| or security to depo>itorS, who are pcrlod-
| callv and almost Systematically robbed. 1T
! j. a special grievance that in all cases or the
failure OF savings banks the loss falls upon
/ the worthy. industrious. economical poor
/ the most deserving of all classes; the class
who have learned and practiccd the most
! difficult cf all lessons. that OF Self-denlal-
! severe saving out OF Scant earnings obtain
cd by hard work.
Savings banks in the United States are
! generally organized without any substantial
responsibility. Dcpostors, a> rule. have
no protection save such as Is afforded by the
honesty and ability OF The managers. II the
affairs OF the bank are badly managed. if
they arc dishonesty managed, il they arc
! illegally managed. the depoSitorS, As gene
raj result, have no redress, and must submit
! to the sore loss, whsteycr it may be. Con-
Silcrinr the vast sum OF money which seeks
safety in these institutions, and the class OF
| ncrsOns who own this money, and that 1t l.
! the saving Of the hard earnings OF labor, the
result Of sacrifice, and the denial OF many
! comforts and even necessities, there should
be some interpoSition OF the law to protect
these funds from the frauds which are inhu-
manly practiced upon them.
The Government of Great Britain several
years since provided for this business. 1t
has made itself vast savings bank for the
protection OF the thrifty, industrious poor.
| The Government, after witnessing the
! failure OF various systems OF savings banks,
and the loss OF tens OF millions OF pounds,
established nearly twenty years ago the
- Post-Oiticc Sayings-Bank Systcm.' The
postmaster at all post-otfices Of certain
class Is made the Government agent OF the
savings bank. He receives all deposits,
giving book or certificate OF entering it
| in Il pass-book, Of the amount received.
The money is forwarded to the general
office, in London, where it is invested i'll
British con>olS bearing per cent. There
| i paid to the dcpositor2t per cent. interest.
| At the end of 1875 there were on deposit
about Sl2G. 900. 900 in these post-otlice banks.
| The difference between the rate OF interest
on the bond and that paid to the deposltor Is
! intended to cover the cost OF management.
| We saw a statement in the London Times
! not lcns ago which reported the amount OF
money at the end OF 1876 deposited with the
! Government at about S140,000.000. 1t would
be much more were it not that the Govern
| ment refuses to receive more than Go, or
| $loG. rom any one person. Al the ehd OF
! 1879 the average amount standing 10 the ue-
| post of each person was SI3, which would
! indicate nearly i1r0 millions OF deposltorS.
| The s2j limit is got around by several per-
sons in the same family opening an account,
| so that an ordinary-siZed family may nave
800 or $500 in the Government Savings
| Bank
Why should not Il similar arrangement be
| possible in the United States? Every post
office authorized to receive registered letters
might be made Il receiving Office for savings
deposits. This money might be forwarded
to the sub-treasury and sold for coin. and
with the coin call in 5-20 bonds drawing
6 per cent. interest, or purchase 5-20s with
currency in the open market, which ever
would be best. With grecnbacks worth 80
or more, there would not be much loss in
b,,ying that class Of bonds which draw high
| interest in gold. ..... .,t.. -.
The Government could afford to pay TO
the dcpositor 3.65 per cent. interest, winch
would leave sufficient margin to pay the
cost OF managing those trust funds. That
! ttut Nf int &c NJ nnnf1tlOn.
is one cent Il day on each 500. 1t IS bali
/ a cent day on $50. and two and 4 quarter
cents Il day on s225. 1t is seventy cents a
week on $1,000. Every depositor could
readily compute the amount OF interest due
| him Il; any moment. In England, as we
have said, there is 4 limit to the sum de-
! posted by any one person, which limit
| is. we think, G25, or S125. the pur-
bose being to furnish safe investments
| for persons Of small means ana OF INDUS
| triots and thrifty habits. We nave no qucs-
| ton that with deposits limited TO SoOo pv
any one person there would IN very
few years be many hundreds OF millions OF
dollars seek this National Savings Bank in
! this country. 1t would be safe beyond all
question or suspicion. The details, OF
course. would be large undertaking, but
every man, and woman, and child deposit
ins 81 or $500 would bave the fullest ASST
rance of safety from loss by delalcat'on, EN-
bezzlement, fraud, or mismanagement. so
| long as the American nation continued TO
exist their depositors would be absolutely
safe, the interest certain, and payment
would be beyond all doubt.
The post-ottce banks in England are NOT
| prollibitory. Private savings banks exist,
and they invest the deposits IN conSolS
which pay 3.35 per cent. interest, and they
pay depositors per cent. At the end OF
1873 the whole savings banks deposit, IN
cludiuc Government post-otfce ana pri-
! waite banks, was about 1868, 100000, OF when
| nearly one half the amount was IN Govern
mcut post-oificc savings banks. Eventually
so far as the small deposits are concerned,
the post-ofticc savings banks will suppressed:
the others. In this country the large rate OF OF
interest hitherto paid by the savings banks
has been means OF fraud, banks when lack
substance and responsibility successfully
attracting customers by offering hlshei
rates Of interest than substantial banks
could afford to pay. The State Savings
OF this city paid q per cent after it was
well known that such interest could moi
be afforded except at a loss. Our people
who make use OF savings banks have been
accustomed to such high rates OF interest