The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-02-10
NEW ARGUMENT AGAINST POSTAL
SAVINGS BANKS.

A new argument against the establish
ment of postal savings banks and, consid-
ering its various aspects, a very strong one,
is presented in the annual report for 1897 of
the bank examiner of Maine Although saw
ings banks are not numerous in the West,
they are an important feature in the East
ern States, and some of the points made in
this report in defense of private savings
banks apply equally to building and loan
associations which prevail extensively in
the West. In the first place, it is argued
that while the primary object of savings
banks is to assist the Industrious poor and
teach them lessons of economy, they also
minister to the wants of the public and pro-
mote private enterprise by carrying a large
portion of the municipal and private indebt-
edness in States where they exist. The
many small sums of money in the possess
sion of individuals are of no special use or
advantage to the public while thus held,
but when accumulated in a savings insti-
tuition and invested or loaned out in con-
siderable sums they become in a sense pub
lie capital for the promotion OF important
enterprises and the transaction of all kinds
of business. If the savings were deposited
in a government institution they would no
longer be loaned out in this way, and would
cease to be useful factor in local enter
prises. The report says:
In this State there are $6S. 9O5, 1886 % in saw
ings, deposited in our various banking insti-
tutions. This is nearly one-fifth much
the entire assessed valuation of the State.
At least so per cent. of this amount is in
vested within the State and employed in de-
veloping local industries and in transacting
local business-nearly $15. 100000 alone being
used by individuals in carrying mortgages
on their farms and homes and in their vari-
Gus business enterprises. The withdrawal
even of the amount loaned to individuals
would most seriously affect the business
prosperity of our people.
Another strong point is made in the state
ment that during the last year the savings
banks of Maine, besides paying running ex-
penses and steady dividends to depositors,
paid in taxes to the State 1892 ,2SS, in addi-
ton to municipal taxes. By the law of
Maine one-half of the amount is set apart
for the maintenance of public schools. Dur
ing the last twenty-five years the banks
have paid taxes directly to the State
amounting to $6.S13,OO2, one-half of which
has gone to the support of the schools. On
this point the report says:
Never before has the national govern
ment proposed to interfere with the in
herent right of the States and the munich
palitieS therein to levy taxes on the prop
erty OF their citizens Deposits in postal
savings bank would, when received, become
a part of the funds of the national govern
ment and must. therefore. necessarily be
exempt from taxation. If all or any portion
of these deposits were diverted from our To-
cal institutions by the proposed postal sys-
tenn. our State would be deprived of ma.
terial portion of it's just income. Moreover
to make up the deficiency for revenues thus
lost other property would be subjected to a
higher rate of taxation. The injury to our
State and the public would be measured by
the success of the postal system
Still another point is made in the loss to
the people of the State in interest and divi-
dends. During the year 1897 they received
in this way $3.50 67, and it is estimated
that under the most favorable conditions
0G0. This amount, then, would repre-
sent the loss to individual depositors by the
substitution of postal savings banks for pri-
vate institutions. besides the loss to the
State in taxes and to the public at large
in the promotion of local business and en-
terprise These points apply to every State
where savings banks exist in considera BILE
numbers, and they furnish an unanswerable
argument against the government engaging
in competition with the people in the saw
ingS bank business.