Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1907-09-25
POSTAL BANKS
OPPOSED BY
BANKERS
BLAME INADEQUATE
LAWS FOR AGITATION
State Control of Savings In
stitutions Urged, Supple
mented by General Super
vision by the Government.


Atlantic City N. j., Sept. PAP.
lie Roy Harwood treasurer of the
Mariners Savings bank of New Lon
don, Conn, In an address today on
postal savings bank at the convention
of the savings bank section of the /
American Bankers association, de- |
clared that the strongest demand for |
postal savings banks comes from sec
tions where improper and inadequate |
state laws have permitted dishonest |
bankers and irresponsible banking in |
stitutions to betray their trust. AS
corrective agency and one which |
might obviate the necessity of estab
fishing a system of postal savings |
banks, Mr.. HarwoOd suggested:
Il have thought for some years
that some sort Of general government
tai supervision of savings institutions
would be a good idea. BY this, l do
not mean that the government should
assume direct charge or supervision
of the banks themselves, but rather a
general oversight and advisory atti
tude toward the state governments
which should, by all means, have the
direct supervision of the banks in
their territory. This would have the
effect, perhaps of bringing about bet
ter and more uniform investment laws
and better examination and supervi- |
sion of the banks where today each
state has its own methods of han
ding this business, some good, some
poor. The expense to the government
would be so small as to hardly be
worth mentioning. The cost to this
government of postal savings banks
would undoubtedly be very great The
savings banks of this country are con-
Quoted at an annual expense of about
one-hfth of one per cent per dollar of
deposits and Il is extremely doubtful
IT this could be matched by the gov
eminent, even after many years Of
operation. A great disadvantage
which has repeatedly been brought to
attention Is the fact that the money
which may be deposited with the gov
ernment Is Immediately taken away
from the locality to which 1t belongs.
and that locality deprived of its use
in development of its business and
property. This, OF itself, is a most
serious objection The western or
southern community to which the
postal savings bank idea would ap-
peal needs all its moneys for its own
development and use This money
should be gathered together and
loaned back to the communities or
mortgages and notes. The rapid de-
velopment Of the eastern states has
been due in no small part to this prin-
cfple, and the west and south should
not be deprived of these advantages
1t Is necessary, therefore to devise
some plan for keeping this money
near home. The mutual savings bank
Of the east Is perhaps considered the
Ideal savings bank and the process of
building up these institutions Is sim
pie in the extreme. We're the work.
ings Of these institutions better un-
derstood, they would no doubt meet
with favor I'm all parts of the country
and a government savings bank COM
mission could be Of great service in
spreading Information of this kind
wherever there seems to be a desire
for savings depOsitaries"
Mr.. Harwood, in concluding his I'd
dress. offered a resolution providin-
that the association appoint a cam
mittee to investigate the question OF
postal savings banks, In a limited ter
ritory and the desirabilty and scope
of a government savings bank COM
mission.
The New Massachusetts Law.
Alfred l.. Aikon. treasurer of the
Worcester County Institution for Saw
ings. of Worcester, Mass, described
the new law passed by the Massachu-
sets legislature permitting the estab-
llshment of life insurance depart
ment by savings banks. Commenting
thereon, he said:
Il am obliged to confess that can
see no merit In II beyond that of in
genuity. Perhaps as a savings bank
official and therefore fairly conserva-
tive In my point OF view. l am tlmld
In welcoming such an innovation. but
Ii seems TO me that II Is very desira-
hla that fha qayinOa haula usbfaia ara
pre-emlnently the banks of the thrifty
wage Garner, should be kept free from
any undertaking that Is In a measure
speculative and experimental as the
savings bank insurance plan even by
It's friends, Is admitted to be. The
entrance upon any experimental field
would be looked upon with great sus-
plcion by all classes Of deposItors and
would create a feeling of. distrust
which has heretofore been conspieu-
Gus by It's absence. My doubts as to
the success Of the plan. would per-
maps be less clearly defined had 1 been
able to find q single life insurance
expert who believed for one minute
that the plan would succeed or had
found the treasurer of single large
and active savings bank who en-
dorsed the bill"
Mr. Aiken said the attempt Of the
British pOstOfnce 70 carry on ltte
insurance business was unsuccessful.
The results there, he said. were posi-
lively laughable TO the Insurance men
and must discourage the optimist who
longs for the savings insurance banks
Continuing he said
"There really can be but one ex-
cuse for this measure, namely, the
hope that II may provide cheaper In
surance for the average wage Garner;
but Il seems to me that there Is no
substantial ground for such a hope.
In all our larger centers of population
and Il Is only there that small insur-
ance companies can live, It viii cost
the insured as much 10 get his pre-
mlum to the banlo by his own EFFORT
as would be his c0ntributive share
In the salary OF the collector pro-
vided by the company.
"Thn Investments OF this savings
bank are restricted Just as are those
of the savings bank proper. The scope
Of tho competing life insurance com
pany nyeatment Is much wider. It's
taxes are about One-half rs great.
With narrower and less. remunera-