The New York herald., 1877-09-07
SAVINGS BANKS
Economic Questions for the People and
the Government.
LESSONS FROM THE RECENT FAILURES
Propositions for Safe Substitutes ss-Ths Plan Of
Postal Savings Banks
From the Chicago Tribune. ]

which any person can deposit savings In small sums
TO an aggregate not exceeding $l25 Tor each person.
This money ~ forwarded to London, invested in
three per cent government bond and the depostor s
allowed two and onehaf per cent interest his do
pos The purpose Of the law is TO conane its bene-
fits to the wages who had been repeatedly plum.
dered by private institutions II furnished absolute
security to the depostors. The United States have
outstanding over $500, ,00O, 600 OF six per cent
gold bonds which are mostly subject to call
on demand. Tho United States could receive
these deposits. employ the money In the purchase OF
these fve-twenty bonds and pay the depostors g. 65
per cent interest their money. Tho difference be-
tween the rate of interest paid to deposors and the
rate Of interest the redeemed fve-twenty bond will
pay all tho costs OF management, and reduce the
average rate OF interest paid the debt about that
Of four or four and half per cent bond. Muutudcs
OF people who deposit money in savings banks will
soon ioarn that absolute security worth mucn and
that a65 per cent interest savings with the security
oil the nation ITSELF is better Investment than higher
or interest and absence of security. In
England the Post Office savings banks, despite tho
limitation Of deposits TO SI25 TO each person. havo
grown In fAvor that they have now nearly
one-half the saving deposits OF the Kingdom. The
savings IN the Unilod Statos a numerous as
In England, and their savings are larger ana II such
national establishment was made IN this country tho
aggregate savings that would thus seek investment in
absolute security would count up into the hundreds OF
millions of dollars
various economical reasons, supplement the Post
ONCE savings banks with another measure to reach all
that class or OF moderate means who would be
excluded from the savings banks or who would prefer
their money IN an Immediately available form;
pns sonSs %sh S'F
thereof having ninety-nino years 10 run, aud
bearing 3.65 per cent interest; these bonds 10 DO
issued " par IN exchange tor ereenbacks or national
bank notes. THIS would be popular loan II would
offer 10 all persons OF moderate MEANS having 500 or
$1,000 or any other sum OF money TO spare, the OPP
currency. Tho difference between this bond and the
per bond lately offered is that the latter had
to be paid for 10 gold. The holder Of the currency
had to sell It for gold, paying LOG or more IN green
backs for IT, rnis premium on the gold was equal 70
cishtecn months interest the bond Since
then the premium has iallen to lO4, and
every purchaser OF the four per cont gold
bond iees that he has lost six months interest IN
his purchase, and this creates great dissatisfaction
The 10 bond will be excLangcabe at par Tor cur
rency This, however, Is not 10 be confounded win
the 3.65 inorconvertble bond That would absorb all
the currency and produce contraction In this case.
purchase the ve..wenty gold bonds winch subject
CALL to the purchase OF gold and tho redemption
Of called bonds. There would be no imitation of cur
rency; there would be traction OF currency, be-
fast received 1t could DO paid out again Tor
per cent bonds. II The government made the 305
per bond interconverble then 1t would have TO
keep the greenbacks in its vaults received for
the bonds; wheroas, by not making them intercon-
verble the government could pay out the greenbacks
in purchase Of hve-twcnty bonds thereby change
It's high interest gold bonds into low interest currency
bonds. Is not extravagant TO assume hat IN very
years the depOsts IN the Post Oce savings banks
and the money invested directly In the ninety nine
yoar 65 bonds would enable the government to recall
the greater part II not the whole OF tho outstanding
per cent gold bonds, and place that part OF the
debt the hands Of own people permanently and
ut low rate OF interest. Arc not these objects
worthy OF tho consideration OF craftsmanship
popULAR SUBSTITUTES FOR SAVINGS BANKS.
[From the Chicago Timoal
What shall take the place OF savings banksS gov
orn ment twenty dollar bond earning four per cent
obtanable without mddlemen's percentage or syndi-
cate tax at tho United States deposit
tories, and, in the cities where there neither sub
treasury depository at the money order depart
meut OF the Post Office There could be more in
convenience difficulty in delivering such bonds than
in selling stamps. John Sherman should make the
Issue of the popular bond one OF the prominent
features OF his policy. No opposition will be
offered to 1t In Congress- Our people Will be glad to
take government securities If they cal get them in
don ominatious within thor roach, and tney have
right permitted to obtain as the roward OF their
truguity and sct-denial the interest now shipped
abroad Let the popular bond as one remedy
OF the evils OF the present savings
bank system and protection for the thrifty poor
There Is not single good reason why the rich man
alvne should be allowed TO invest In national securi
ties. The workng gmon OF France are glad TO buy ten
dollar from their government and tho gov
ernment ~ glad sell. twenty-five dollar lour per
cent will Ue good an accom- modation Tor our labor
ing people, aud should be placed within thai reach
as soon as pTacticaCe.