Kansas City journal. [volume] (Kansas City, Mo.) 1897-1928, 1897-12-19
THE WEST NEEDS SAVINGS BANKS.

mercial Club should grow in interest and
popularity from year 10 year.
THE WEST NEEDS SAVINGS BANKS.
1t is reported from Washington that
Postmaster General Gary's scheme for the
establishment of postal savings banks VIII
stand 4 better chance in the United States
senate than any. other of the financial
measures proposed, or likely to be proposed,
by the present national administration. At
the same time it Is predicted that a great
deal of hostility will make itself manifest
when the measure comes up for consid-
Grafton. This hostility undoubtedly eman-
ates from the savings banks now in opera
ton over the country. Their managers see
visions of vanishing business, and it is not
I unnatural that they should fight for the
preservation of their private interests.
AND yet. in the opinion Of the postmaster
general. the interests of the private saw
ipgs banks would not be materially affected.
The scheme is one which will not so much
enter into competition with the banks al
ready in existence as that it will furnish
facilities to communities which the private
banks do not and cannot reach-the small
towns and isolated settlements of the coun-
try. Says Mr.. Gary, in his report to con-
gress:
Private enterprise in this country has
left the people of many old communities.
and in a few cases of almost entire states.
without facilities whereby they may pro-
tect and invest their hard-earned savings.
The sole convenience which these people
have enjoyed and are using to-day is the
facility for exchange afforded by the money
order system. of. this department. II ad-
ditional argument IS necessary for the post
al saving scheme, it can easily be deduced
from the operations of this remarkable sys-
TEN. During the current year more than
81, Co., coo transactions were made in the 81
90 offices of this class. and nearly $500 900.
COO was received, transmitted, and paid out.
Millions of money. orders We're bought TO
be used by the buyers as drafts. and GER
titled checks are employed. for safe and
convenient carriage. . 1t must be
apparent, therefore. that as a medium OF
exchange the banks. numerically. fall far
short of the money order system. and
distributively. their failure is even more
pronounced. If, by appropriate legislation
these offices could be converted into say
ing repositories for the people, they would
soon afford infinitely more facility for re
ceiying interest bearing deposits than the
interest paying banks do now. The sys
tenn furnishes the machinery which. in it:
equipment, methods, economy, and compre
hensiveness, could be adapted with tht
smallest possible friction or increase o
agents to the duties of a postal saving!
) depository
Aside from the opposition of the private
savings banks the greatest objection tina
is urged against the postal savings sys
tenn comes from those who are fearful tina
, the general government will not be abb
to pay interest upon deposits without plac
, ing an additional burden OF taxation upol
, the whole people. 1t Is proposed 10y tn
postmaster general that interest at the rat
of . per cent per annum shall be paid
! In England. where the system is in effect
2 the government pays 2i2 per cent. and il
Canada it Is 8 per cent. Mr.. Gary believe
, that there will he no difficulty in %investint
the deposits in gilt-edged securities Whicl
will not only pay the . per cent intcres
1855 49, 'N''N N''~
government to reduce its expenses in othe
directions. The nterest-bearinS debt OF tn
nation is now about s63l e05,0 coo, and all c
it bears 81 per cent or more. If the dc
posits were invested in these securities
is obvious that the government would say
the difference between 2 and 81 per cen
or at least that portion of it not necessar
in paying the expenses of the system.
The postmaster general suggests that ii
might also be made in publ
buildings. In the postoffice departmeI
alone the sum of $780, 900 is annually pal
out for rentals. and this Is equivalent
=, . per cent on So 00, 900 in savings deposit
He further suggests investment in stat
and municipal bonds and in real estai
and mortgages and insists that there
no good reason why the government cal
e not find absolutely safe securities as we
re as the private banks. particularly when
y Will not attempt TO pay or charge SO lar:
h an interest rate as the latter.
81 Most of the opposition TO the propos.
ly scheme comes from the thickly settled Ea
te where banking facilities are plentiful. II
lie plan appeals with peculiar force to t!
1e people of the West and South. where r
sponsihle private savings banks are fe
% and wide apart. Take, for example, t
re situation in Kansas. According TO the ban
O. commissioners report, there are only fl
nd savings banks in the entire state. and, 81
rs guiar 10 say, none of them is situated
or a point whore large bodies of men are
IT. work who Should be encouraged to sa
'iy their earnings. Ten years ago there we
or sixteen savings banks in Kansas. but ee
in en- Of them have quit because the busine
rts was not large enough TO furnish a prof
p The establishment in that state of numt
nus cnynrrrnen, Lnnnsit nrins wk.ra tlno