The Dalles times-mountaineer. [volume] (The Dalles, Or.) 1882-1904, 1897-09-18

ID INSTITUTIONS would, to great ex-
At, interfere with the system of pri-
[ vate savings banks, to which that
paper is partial; but the reasons which
it submits as argument against this
proposed innovation in American
banking are by no means founded.
Its principal obje.tions to the
| system are that it is pOpulistic: !:
that the government could not pay in
terest to depositors; that private saw
ings banks would prove such sharp
competitors that they would attract
the accumulations of all depositOrs.
and that there are not sufficient
amount of certain securities in exis-
| tence available in which the deposits
may be invested to insure the payment
of any interest whatever.
Neither of these objections is ten
able. 1t matters not, if the system will
encourage thrift and frugality, whether
| it is popuiistic or sccialistic. If it will
provide safe depository for the earn
| ings of depositors where a small rate
of interest may be earned, it is of no
consequence by what tname it is called.
The contention that the government
cannot pay interest on deposits without
burdening the people With taxation,
and that there are not available secure
ties for Investment is failacious. The
government is at present paying in
terest upon $3.50, 900, 900, of this amount
$3.50, 100000 are held by national
banks, leaving $500, 100000 available
for investment of moneys accumulated
through postal savings bank. These
bonds command such a premium that
the interest rate to the holder amounts
now to about 81 per cent, and as it
is proposed TO allow only per cent on
deposits in postal savings banks. there
could be 10 loss from investments in
such securities, nor any necessity of
increased taxation to maintain the
system. B sides there are hundreds #
millions of dollars of city. school dis
trict and state bonds available that
which would supply perfectly safe
securities.
As to the competition of private
savings banks. if all such institutions
were conducted honestly and depositors
could be convinced that they were
perfectly secure, it would be so great in
commercial centers and large cities
that it could not be met, for private
institutions that conduct business up
on speculative basic. and deal in Sc
curities that are not absolutely safe,
can pay higher rates for the use of
money than those that deal only in
paper whose payment is guaranteed
beyond question But there are localf-
ties that cannot be reached from the
large cities and commercial centers.
and in such postal savings banks would
find many of their clients. More than
this, were the government to enter the
markets as purchaser OF securities on
which 1t had to guarantee only 2 per
cent interest, it would be able to offer
such premiums for giltedge paper,
that In short time interest charges
would be reduced, and public corpor'
ations would be able to float
their bonds at 81 to per cent, whereas
they are now paying from 5 to 8 per
cent. AS result the large holders OF
money who now seek public bonds for
investment would be driven out of
that field, and would look to personal
securities. In consequence the rate
on call and time loans would fall.
Those who are compelled to borrow
would get money at lower rates, and
the holders of wealth would have to-
be satisfied with less incomes, or to in.
vest their money in enterprises outside
banking and brokerage.
The establishing of a perfect postal
sayings bank system by the govern
ment would in time act as an equaliz-
ing agent to bring the incomes of the
capitalist and the producer nearer on
level. The former would get only
what it's capital is worth for its use,
while the latter when compelled to
hire from the capitalist would only be
required to pay actual .vllue for it. /
Then is it q wonder that paper whose
interests are allied with those OF tho |
money lender should oppose the system
and denounce it as the outsrowth OF
misgoverDment?