The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1893-08-17
The HAWAIIAN POSTAL SAVINGS
BANK.

The following editorial appears
in the Planters Monthly, for Aug
ust, and is well worthy of perusal ::
We note with pleasure the inn
provement in the condition Of the
Postal Savings Bank, which has
branches in every village of the
group. For the past two years
there has been, among a portion of
the people who use it as a deposit
tory for the safe-keeping of their
earnings, a want of confidence in
it, which has led many of them to
withdraw their deposits. Probably
most of these had no immediate
use for their money, but were in
duced to give notice of Withdrawals
from a fear that something might
happen which would result in loss.
Happily the change of govern
ment, and the marked improve
ment in the conduct of public af-
fairs, is restoring confidence in the
bank, and deposits will in conse-
quence increase.
In prosperous times, when the
government treasury has con-
siderable surplus on hand to meet
the ordinary wants of those who
wish to draw out their balances
from the bank, everything works
smoothly. 1t is only in panicky
times when a feeling of insecurity
pervades the community and
money becomes scarce, and the
treasury funds run low, that the
defects of our postal bank system
become apparent. The bank is
supposed by most of its depositors
to be able to repay them their
money as agreed at the end of the
required notice, even to the extent
of the whole amount on deposit.
The Withdrawals in ordinary
years seldom exceed five or six
thousand dollars a month, which
are expected and readily met; but
suddenly the demands increase to
twenty, forty or fifty thousands a
month, for which no provision has
been made, and if the treasury sur
plus is exhausted, the result is that
the postmaster, the finance minis
ter and the depositors are all seized
with trepidation. To meet such
emergencies the postal bank has
not been provided.
When the bill authorizing the es-
Enlistment of a postal bank was
under discussion in the Legisla-
ture nine years ago, attention was
called to this very point-the ne
cessity of having portion of the
funds invested in securities that
might be available whenever want
ed, and the suggestion was made
by the writer, then postmaster-gen-
eral, that they might be invested
in some other than Hawaiian bonds
perhaps United States bonds, or
California, state, city or bank
bonds. But the reply was that no
occasion would ever arise when the
government treasury could not
meet all the demands that would
be made, and there was no necessi-
ty for investing the funds abroad.
Late experience has shown that
times will come when the bank is
called on to pay out in short
period half million dollars more
than its receipts. Fortunately the
demands have all been met with
no serious consequences. But the
same experience should teach us
to guard against its return, and
that portion of the deposits
should be invested in securities
more available as cash than the
treasury bonds now issued to the
Postmaster-General. This can be
done by authorizing the invest
ment of part of the deposits
perhaps one-half-in California
State or other equally safe bonds,
drawing six per. cent. interest,
which can always be disposed of
there or here without loss to the
bank, within thirty or sixty days.
These securities should be kept in
the treasury vaults, and could
always be saleable for cash as re-
mittances.
In correspondence some years
ago with the director of the postal
savings bank of Demerara, British
Guiana, which is very similar in