The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-10-21

THE second question, namely, the result
Of the government guaranteeing so large a
deposit does, it seems to me, determine
more than anything else that postal savings
banks are not feasible. 1t is admitted by
all who have carefully investigated this
question that the British system of invest
ment could not be followed in this country
as our public debt, which is only about
O0,000,000 is already absorbed and could
not with any profit be very generally re-
purchased as security for such deposits. On
the other hand, the class of people whom.
1t Is urged, demand this class of deposit
tories are generally opposed to the increas-
ing OF the public debt for any purpose
whatsoever. There are those who are not
practical bankers, but who are imbued with
the idea that the government should en-
gage in this business, that argue for the
investment of these funds the same as the
banks that hold them do now. Fancy. II
~ the 66,725 of the fourth-clasS in the
sparsely settled districts receiving deposits
ana perchance acting as advisers to your
Uncle Samuel in the matter of investments
IN farm mortgages and local securities.
Such a diversion, to be INDUCED in by post
masters chosen for their political influence.
Is not question for any substantial set or
men to consider. 1t appears that the ques-
ton of investment was the question para
mount when this subject was investigated
by ex-Postmaster General Wanamaker. In
his report for 1891 he says i have recom-
mended that all the postal savings funds
received within a State be placed on de-
post with the national banks of that State
IN such amounts and at such rates of in
terest as the secretary of the treasury shall
prescribe. ard l have suggested that such
savings deposits shall by special enactment
be preferred claims against the national
banks holding them. ] do not believe any
better security offers itself in the present
and the unfairness to banks now holding
savings deposits that are not in the national
system undoubtedly settled this question in
the halls of Congress, and prevented the
postal savings bank scheme from becoming
a reality. The making of preferred claims
out of savings bank deposits not only
diminishes the security of all other deposits,
but creates a preference which the courts
of equity and the law of common sense
should not and do not recognize. If the
government is determined to guarantee de-
posits let them guarantee all deposits in
hanks under government supervision which
problem is attracting a good deal of atten-
ton at this time, but had not been solved
to the wisdom of the best thinkers or
deemed practical by those engaged in bank
ing. 1t is pointed out by the theorist who
fayors postal savings banks that there are
much needed public expenditures, such as
government buildings and the extension OF
the postal service, in which these funds
'sThese same men forget what bankers
recognize that with every deposltor there
is to come a day of settlement and that
under the most favorable conditions only
can savings banks make investments III
long time securities, and then they carry
certain per cent. of their deposits as a re-
served fund to provide for unusual de-
mands. The investment of such funds IN
public buildings and current expenses OF
the government would, / believe, open to
the American people a quick road 10 the
bankruptcy of this government.
WIDER DISTRIBUTION OF MONEY.
"The handling of trust funds, the safe in
vestment and ultimate return of that money
with interest, Is too great a responsibility
and too serious a question in all its bearings
to be surrendered to the willy politician, or
to ever be successfully engrafted as part
of democratic form Of government. This
brings us to our third and last question the
benefit that depositors and the business
world would sustain. 1t is written in the
Wealth of Nations that 1t Is not by
augmenting the capital of the. country, but
by rendering a greater part or that capital
more active and productive than would
otherwise be SO that the most judicious
operations of banking can increase the IN
THE logic of John Stuart Mill has been
verified. 1t is not a larger per capita or
money that we most need, but larger dis
tribution and use. The establishing or
system of postal savings banks, II 1t means
anything, means the augmentlng IN the
hands of the government, the enormous
savings of the masses and the encumberlng
it's present free use and wide distribution
with the machinery of the government be-
fore 1t can again be invested IN any loIn
whatever. To change the present system
means that millions of dollars already IN
vested are to be liquidated in short
period of time. collected by the PostotHce
Department and redstributed through
new and different agency much TO the con-
fusion of business and OF loss 10 the IN
government cannot compete with the banks
of to-day in the diversified investments
which are safe, which they are able 70
make nor in the rate of interest now paid
the depositor nor in the better security for
tho deposit of our poor people than that
already furnished by banks except that II
imposes tax for any losses sustained by 1t
upon the whole community. That the say
ings depositor should be encouraged is ad-
mitted, but there is no better way or surer
way than the interest rate such deposits
now receive. The real stimulant behind a
savings bank account Is the fact that
periodically the profits arising from the
business are divided with him, and through
the agency of competition there Is little
doubt but what the savings depositor gets
have learned that it is not necessary to be-
come share holder in banks 70 participate
in their earnings. Banks too literally and
too generally yield TO their ambitions and
interests than the dividends they are able
to pay their shareholders. In the wide dis
tribution of their earnings banks excel all
other corporate institutions to-day. A
friend of the postal savings bank idea up
holds fits necessity as safe depository Tor
the savings of the poor and Ignorant, VINO
are unable to themselves judge regarding
the strength Of our various monetary in
stitutions. If there is any great number or
our people that need a guardian ] most re-
spectfully recommend them to the trust
companies, which are responsible ana or
ganzed and equipped for serving such peo-
pie / can understand how the we'll wishers
of the people desire to see at least one or
the incentives to the habit or saving pro-
vided for the scattered population OF the
South and West which 1t IS now claimed
are in some instances without adequate
banking institutions. but am certainly OPP
posed however great this necessity, to the
government engaging in the business OF
banking to even supply this want when II
can be more profitably done to all concerned
through other and better agencies As
business world we are just emerging from
a depression Of long duration and consider
able loss and If there is any one cause to
which this can be attributed more than all
else ii is the fact that to-day and IN the
past the government is in too many kinds
of business.
PRESENT SYSTEM INADEQUATE.
Most of you are hoping that the coming
session OF Congress will enact some new
legislation modifying our banking system
and above all else divorcing the government
entirely from the banking business. Along
this line should relief be sought to provide
better banks and perhaps more of them
for the use Of the people, but why the ques-
ton of a postal savings bank should be
brought forward as a part of the remedy
for existing evils or supplying better sys-
tenn than the one we now have i cannot
understand / agree fully with the advo-
Gates of postal savings banks that the pres
emf system of banks is inadequate at least
in two respects, viz, the greatest freedom
nfp ffDl nj a cafr f 0r