Omaha daily bee., 1897-03-14
POSTAL SAVINGS BANKS.

The postal savings bank scheme attracts
a great many people who think it safer to
trust their money to the government than
to private individuals. Most of these people
possess no further ideas about 1t. They
haven't any suggestions as to what use the
government shall make of such funds for
example, for IL interest Is to be paid on the
deposits the government must invest them
to reimburse itself.-The American Banker.
If there are any people In America
who think it safer to trust their money
to private individuals than to the gov
eminent they should either have a
guardian appointed over them OF be
confined in an asylum for the feeble
minded. The best proof that the people,
including the bankers, have greater con-
fidence in the government than in any
individual or corporation is that the
United States government car borrow
money at lower rates of interest than
any individual or corporation. The ad-
vocates Of the postal savings bank sys-
tenn may be cropping in the dark as to
what use the government shall make of
postal savings deposits, but they are
sufficiently informed concerning the
workings of such banks in other coun-
tries to know that they are feasible and
beneficial.
1t Is not absolutely essential that the
government shall reinveSt the money on
which interest is to be paid. 1t is now
paying interest on bonds held by heavy
capitalists and it would be at no greater
risk in paying interest on money Dor
rowed from the working classes, who
constitute the great majority Of savings
bank depositors. The government could
advantageously make the postal savings
banks the repositories of the bulk of the
greenbacks, which have in recent years
proved a troublesome element of our
currency. If all postal savings deposits
were payable in greenbacks the
OF the endless chain would be removed.
With 100000, 900 Of greenbacks dis
tributed through thousands Of postal
savings banks the opportunity for pre-
senting millions at the treasury for re-
demption in gold would no longer exist.
The great source of profit to the bank
ers is the earning of money by reloan-
ing other peoples money. 1t is not pro-
posed by the advocates of the postal
savings bank system that the govern
ment shall embark in the m~oney-lend-
ing business, hence there would be no
danger Of loss by bad loans Or Had
vised speculation. The bugbear of break
ing the United States treasury by politi-
cal banking through favoritism in loans
is therefore wholly imaginary. The
American postal savings bank modelled
after the British or French system would
limit individual deposits within the
bounds of savings accumulations, leav-
ing commercial banking exclusively to
private concerns. With accounts linn
tied to from 5000 to $500 the postal saw
ings banks would not seriously inter-
fere with existing savings institutions.
The highest estimate of present savings
banks deposits in the United States ag-
gregates $1,500, 100000, and it is not
likely that the government would alb
sorb more han one-fifth of this amount
for many years to come. The reason
is o~bvious-the postal savings bank GER
tificates would draw less than 8 per
cent interest, while private institutions
pay 8 to 8 per cent.
The advantages of postal savings
banks must be apparent to every intel
ligent person. Quite apart from the
vital question of safety, the postal say
ings banks would stimulate the wage
working class to habits of economy and
thrift, which would be invaluable to the
nations welfare and future prosperity.