The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-03-06
POSTAL SAVINGS BANKS.
A Banker Wants to knew What
Uncle Sam Would Do With the

To the Editor of the Globe.
l read this morning with a great deal Of
interest your editorial in the first column of
the G O b e. l am sorry to see you, Of all
other editors, advocate this plan, because l
have great respect for your ability, and dis
Ike to see one whose opinions on all eco
nomic subjects carry so much weight advocate
system which am confident can only end
unfortunately.
ton, let me preface what l going to
write by stating that l. in common with all
managers of large savings banks of the mu-
tual kind, am not opposed to the invasion of
the field by the government if it can be
shown that the postal savings bank is prac-
tical. On the contrary, l believe that the
majority OF mutual savings bank officers
would hail with pleasure a governmental sys-
tenn, for the following reason: The most
moving feature connected with the present
savings bank system, which in times of DIS
trust is often the occasion of loss to the
bank, and sometimes of grave danger, is
that portion of the depositors who are timid
ignorant or suspicious, and easily stampeded
We have found by experience that this unde-
sirable element which we would gladly get
RID OF, constitutes about 10 per cent of our
depoSitorS. The probabilities are that the
larger portion of these would go 10 Uncle
Sans banks, and rid US of their dangerous
patronage.
1t is true that the amount of deposits which
would go into the postal savings banks SIS
all necessarily conjecture but have we not
sufficient data on which to base an estimate?
Last year, which was certainly not a good one
the deposits in the savings banks of New York
state increased $50 00O When you con-
slder that such states as Indiana, Illinois,
Iowa, Kansas, Kentucky, Michigan, Missouri
Ohio Except one bank in Cleveland, PennsyI-
vania Except five banks in Philadelphia and
one in Pittsburg), Virginia and Wisconsin
nave no savings banks worthy Of the name,
and are absolutely without safe laws and
supervision, would it be too high esti-
mate to say that these states, together with
the south, Colorado, Nebraska, Oregon, Ten
nessee, Washington and West Virginia would
the first year deposit 500 600 in the postal
savings banks?
If this estimate is not too high. and my
experience Tells me it is not, at the end of
eight years the government would have to
buy every United States bond in existence
II they could purchase them all, including
those held by the national banks, where do
you suppose the price would 50: My ex-
perIence tells me that long before the govern
ment could acquire hold of them, the present
them, the price would go to 200 and over at
Which figure they would net less than 1 per
cent in interest.
Now, after the eighth year, and eight years
is very short time in matter of this kind
what would you do with the money? And we
are taking it for granted that the government
would not reduce its debt, whereas with a
return or prosperity, it might wish to do so
considerably.
In my estimate in the Journal 1 make no
calculation on any transfer of deposit from
mutual banks to the postal banks, as l do
not believe more than few millions out of TIE
whole 81 200, 0000 900 would be so transferred
deposits go to the government.
There are one or two minor points where
you have misunderstood me, but they are of
little Importance.
l cannot believe it would be very difficult
to get the New York law adopted by every
state in the Union If the newspapers and a
few of the influential citizens Of each state
would take hold of the matter.
In 1879 single-handed, against the combined
efforts Of all the savings banks of this state,
winch did not want strict law, 1 obtained
n Mnxry Vn- Io,, l., 1T
state. ana in the face Of many predictions
that 1t was not suited to Western conditions
and that no bank could live under it, the
Farmers and Mechanics Savings banks de-
posts increased nearly 100000 in thirteen
years. f IT. Moulton
Minneapolis, Feb. 26. 1897.
To the Editor of the Globe
The objection to postal savings banks, made
by Mr.. Moulton, of Minneapolis that we
could not find profitable investments for the
posted in them, though 1t has but little force
as an argument against the establishment Of
those banks, serves to show our financial
system in most peculiar light. We are al
ways anxious to secure the favor OF the for
eign capitalist. Any public act of ours that
is likely to induce him to invest his money
with us is looked upon with great favor by
our people, especially our financiers and
business men. 1t is matter Of fact that
nearly all American enterprises our railways,
our breweries, our Touring mills and our
land improvement and mining companies
have been largely built up by foreign capital
Hundreds of millions of foreign capital are
today invested in those enterprises and the
investments are paying good dividends to
people who are not citizens of this country,
while our own people hiding their saw
ings in the cellar, being afraid to entrust 1t
to the banks. Ii the opinions of the press
and the business men of the country can be
relied on, capital is what we want most at
the present time. The field for its profitable
employment is almost unlimited We have
the raw material on every hand, land and
timber and mineral deposits. and we have
thousands OF idle men who are anxious to
be given an opportunity to create wealth
Millions OF acres of land in the arid belt of
the United States could be made as fertile
to construct irrigation works could only be
secured
am not one of those who would raise an
cutlery against foreign capital or foreign
trade. have little sympathy with prohibit
tory tariffs alien labor laws but | believe
the hrst duty OF government should be to
see that the laws do not operate to the dis
advantage OF It's own people. Why we should
be so anxious to attract foreign capital to
the United States, and at the same time be
unable to find profitable employment for the
savings of our own people, is a financial
petent to grapple with. But l have excellent
reasons for believing that If we had an up
to-date banking system instead of the strange
aggregation of shreds and patches that we
are trying to struggle along with at the pres
ent time, home capital would not ONLY he
decoyed from it's hiding place, but could find
safe and profitable employment in developing
our great natural resources and building up
happy homes, in localities which are now the
abiding places Of poverty and despair. Yours
truly A Workingman