The age-herald., 1898-03-11
SAVINGS BANKS
 IN AUSTRALIA

banks in this colony. The Victorian goy- ernment had been maintaining postal saw ings banks and trustee savings banks sido by side for many years. On October 1 a new act of parliament went into effect amalgamating the two under the authority of the trustees of the latter, and so remov- Ing the whole from the direction of the poSltoffice department. The condemnation is still a government institution with the machinery of the posbofices employed in large measure for the conduct of the busI- ness, but the deibaiis are under indepen- dent management. This ds a reversal of the policy of the neighboring government of the colony of New South Wales which is moving toward an ama1gamatbon of the postal bank and the trusbee bank under the authority of the former. In New South Wales the older bank is to be merged dnlto the younger, which has a much greater volume of business. In Victoria the younger yields ito the older, which has been the larger institution.
 The postofTice savings bank of Victoria was established by act of parliament in 1865, and so far as its system of business
 is concerned it has no particular points of difference from its colonial nelgrlbor If grew in popularity, was to be expected With the government security behind it. In the early days, when things were rush. ing after the fashion of pioneer countries the bank was able to pay pretty high rates of interest, but of late years the rate has been reduced gradually until it has coma down to just about the point of the Eng helh rate. During 1895 the bank paid per cent For tfas next year the rate was made 2ls per cent on the first 100 pounds and per cent on the excess of 100 pounds up to 250 pounds, which was the linit on which interest was allowed. At the time of the amadgamation a month ago the depositors dn the postal savings bank numbered about 13OOO0, and the total amount to their credit was nearly 3,0G000O pounds.
 The Commissioners savings bank is the name of the amalgamated insititution, and was the name of the original one, estab- lished in Melbourne in 1S41. New chanters of revislons were made by parliament in 1865 and in 1890, but it was not until 1893 that it became actually a government in- sultut1on. As "a part of the Legislation passed at that time to relieve the distress of the frightful Australian panic, com pared with which the panic in the Limited States was but a trifinS furry parliament assumed the obligation of guaranteeing the deposits in the trustee bank, and conse- quently transformed it into a real gov ernment institution.
 MT. George E. Emery the secretary of the consolidated banks who is in effect the absolute manager explained to me thS workings of the remodeied institution. as it differs from the postal system proper. Instead of keeping all the accounts in Mel bourne, there are number of district cen- ters established where the accounts for the districts are kept, and to which applica- tions for withdrawal of funds are sent. These centers are numerous enough that none of them is more than one days jour ney from any point within its district, SO returns may be made very promptly an1 it is seldom that a deposbbor has to wait more than two days for his money df n- deed he is net a resident of one of the twenty important places named as cen- terS
 "Of course we have not eliminated the postoff1ce from the business of the bank" said Mir. Emery flor its functions are al- togeither too valuable. We are permitted by the amalgamation act to establish either center or branch bank in any postofffce dn Victoria, paying the postoffice department whatever sum is agreed on for the services of its employees, the postmasters, in handling the bank business as a part of their duties. Most of the district centers are in bank build ings of our own, not connected with the postofffce. Under the act of amalgamation parliament has defined the form of invest ment of the funds deposited. One-tenth or less must be kept in cash dn the bank for a working fund, or deposited with approved banks to be payable on demand; of the remainder, threeItenths may be invested in mortgage loans on real estate held in fee simple in the colony or in loans to mu- nicipal corporations; the rest Is to be in- ves6ed dn Victorian government stock de- bentures, treasury bonds treasury bslls or mortgage bonds, municipal defbenturts, or debentures issued by the Melbourne board of works, to be deposited in the treasury at Melbourne No money may be lent to any commissioner or trustee of the bank, or to any company of wllach such commits sioner is a director, or ito any firm of which he may be member. Of course in a single month we have not had time to judge of the particular effects of amal- gamation, butw believe 1t will be stimu- Jus to the business and result in a larger volume of deposits than the total of the two banks before.'
 The rate of interest paid by the Com- missioners' savings bank has been the same as that padd by the postal bank. At the time of amalgaanation the former had deposftors to the number of more than 215,0OO and tcltal balance to their credit of about 1, 900 pounds There was no limit on the sum that would be accepted for deposit, but interest was not allowed on any surplus above 250 pounds. The rate of gross profits tor the last year whose figures are completed, upon the whole of the funds after deducting doubtful arrears, was a trifie more than 3.4 per cent. This rate was sufficient to pay interest to de- pOSitOrS and all expenses or mam9g cement and leave surplus of .65 of l per cent for contingencies. Expenses of management for the year was .65 of per cent, and this in a bank which did not have the advan- tage of free postal service to help 1t econo- mze. The net profit for the year, carried to the contingent fund, was 26, ,666 poundss
 The excellent condition represented in the foregoing is all the better when one remembers that considerable portion of the funds of the bank was loaned on real estate mortgages in Melbourne and the country districts of Victoria prior to the panic of 1893, and that very large amount of that property has come into the possess sion of the bank by foreclosure. Within the year the commissioners sold property that had been surrendered to them under the mortgages to the amount of more than 15,000 pounds, and as the market is im- proving they are much encouraged at the prospect. If it reaches even approximately it's old condition their surplus will be ma teriaily increased within the next few years. In order not to make fictitious showing of prosperity, within the same year the sum of 34. 300 pounds was written off the value of the assets, and the interest