Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1882-02-04
POSTAL BANKS.
Details OF the Postal Savings Bank System
pran,red nv Mr. lanes

Washington letter to the New York Herald
While still Postmaster of New York Mr..
James warmly advocated the establishment
of postal savings banks in the United
States. As Postmaster General ne gave
the subject much attention. Besides the
brief but earnest recommendation IN his
recent report, he caused to be prepared the
outline of bill which has been presented
to the attention of Congress. Being asked
for his views in detail on the matter, he
referred the Herald representative to La
Rue Harrison, Inspector of the Money
Order system, who, he said, was fully in.
formed on the proposed system, and whose
opinions as to the best manner of putting
the system in operation were substantially
his own. MIR. Harrison was asked for the
main provisions of the bill ALREADY intro
ducedl. 1t was, he said, subject to further
changes before Congress would be asked to
act upon it, but it would provide, first, that
the Postoffice Department should be au-
thorlzed to establish postal savings banks
at It's discretion second, that the system
should be self sustaining, no appropriation
being required third, that the credit of
the United States be pledged for the repay
ment to the depositor or his legal repres
sentatives of every sum deposited in accord
ance with the provisions of the Act fourth,
that the rate of interest to the depositors
shall be two per cent. per annum, the de-
posits being loaned to the United States at
an interest of three per cent. per annum,
the one per cent. difference to be for the
payment of all expense of whatever nature
under the system, and the surplus, if any,
to be turned into the general fund of the
Postotfice Department.
THIS BILL
Will further provide all the necessary pre-
cautions for the safe keeping of the money
deposited until it can be turned over to
the central depository at Washington for
investment for protection against fraud
on the part of depositors for the easy
withdrawal of deposits at the option OF the
depositor, and for the detail CT the neces-
sary inspectors and clerks. As at present
agreed upon, each person can deposit not
more than $500 in one year. nor can have
on deposit at any one time more than
81, 800. Bills presented in Congress
heretofore have provided for the invest
ment of the surplus over 81, 500 of any one
deposit in United States securities for the
benefit Of the depositor. This provision is
omitted, for the reason that it would in.
terfere with the simplicity of the system.
1t is proposed to open an account with a
depositor, with the above limitations, on
any sum of S. or or 81 but plan which
was suggested by Mr.. Harrison before its
in Great Britain for receiving
smaller sums will be incorporated in the
bill. a card, properly prepared, will be
given to the applicant, who will buy post
age stamps to the amount of his
PROPOSED DEPOSITS.
These stamps will he cancelled and pasted
on the card. When the aggregate sum
reaches s. the depositor will be given de-
posit book with the credit, and an account
will be regularly opened with kim. All de-
posit accounts are to be kept at the central
depository ; thus no depositor can exceed
the sum allowed him. Provisions for the
transfer of depositors account from one
depository to another for the loss of de.
posit book /; for the transfer of deposits to
legal heirs, and the usual detail of savings
bank management is made in the bill. Mr..
Harrison explained that the purpose of the
Government, as in the establishment of
postal savings banks in Germany, Switzer-
land and Great Britain, would be solely to
provide for its citizens widely instituted
and an absolutely safe depository for their
savings, and thus to encourage habits of
thrift and economy. The system is in.
tended only to reach those people who have
not access to savings banks or who are not
with the security offered by
CHARTERED INSTITUTIONS.
The low rate of interest would not tempt
away those depositors who patronized or
had confidence in the regular savings
banks, and as many such postoffices as
would come under the privileges of the pro-
posed law are in parts of the country where
it would not pay to establish savings banks,
practically every person in the United
States would be thus enabled to obtain the
benefits of investing his or her savings. In
illustration he quoted the report of the
Comptroller of the currency, by which it
appears that in 1876 there were AL savings
banks in the Eastern States, 100 in the
Middle, % in the Western, only three in
the Southern and nine in the Pacific States
and Territories. Under the provisions of
the proposed law every postoffice in which
the salary and fees of the Postmaster
amount to $500 per annum may be estab
lished as postal savings bank. This would
secure the establishment of such an insti
tuition in nearly if not every settled county
in the Union. Mr.. Harrison has been long
and prominently connected with the man.
agement of the postal money order system.
From his experience he gave it as his opin-
ion that
MILLIONS OF DOLLARS
Are boarded away by persons, particularly
in the Southern and Western States, which
they would be more than ready TO put into
savings banks which were accessible and
had the guarantee of the Government. In
Great Britain the system was established
twenty years ago. At the end of the first
year there were 1855 postal savings banks
with over $40. 600 coo of deposits. Now
there are over 6 600 postal savings banks,
with over 800, 100000 of deposits. Mr..
Harrison said, in reply to question, that
the deposits in the regular savings banks
had also steadily increased in the mean.
time. 1t was impossible to say whether
they had increased in proportion, but, go
far as estimates conld be made, they had
not been effected by the establishment of
the Government institutions.
''What additional official patronage
would the Postoffice Department secure IN
der the proposed system ?" Mr.. Harrison
was asked.
"We do business in the postal money
order system" he said, ''of about $780,.
600, 600, and the entire additional clerical
force in Washington and throughout the
country necessary under it is not above
TWO HUNDRED EMPLOYEES.
II we should establish 8, coo postal savings
banks the increased force necessary would
not be over two hundred clerks, inclusive
of the force at the central depository.
The increase over the present official pat
ronage would be practically nothing. The
plan will be, as in the postal money order
system, to pay Postmasters say one fourth
of one per cent. of the money paid in,
with some incidental fees, for their serv.
ices and expenses. II the expenses of the
system should amount in the aggregate to
over five-eighths of one per cent. after the
first year would regard it failure, but l
have no fear that it will. The Postmas-
tiers in all the smaller towns and cities
would be able to attend to the business of
the postal savings banks without extra
help. Even in New York the extra cleri-
cal force necessary to attend to the postal
money order business is only forty-five
men; in Boston, Philadelphia and st.
Louis it is ten men each.
IN THE SMALLER CITIES,