Omaha daily bee., 1909-08-31
Postal Savings Banks.


Since the first Grant administra-
tion the postal savings bank has been
a familiar idea to the American pub
lie. European experience suggested
the practicability and the many ex-
tensive regions in America, where say
ings banks and commercial banks were
few and far apart. made Il seem a
matter OF course. that the postal av-
ings bank would be introduced. At
first the popular mind dwelt only or
chiefly on the convenience to the peo-
pie, also on the benefit Of the habit
Of thrift with small sums which has
since the colonial times been strong
in New England. The public yet
hardly grasps the thought that there
is involved a gigantic fiscal or funding
operation of the government.
A wide difference exists in the saw
ings bank habit between the East and
the West. The savings bank proper
is a trusteeship. The long settled
New England view has made the pri-
vate savings bank a safe institution.
But frequent breaches Of trust, i'm
prudences and losses made it unpopu-
lar in the West.
From that ~unpopularity 1t has
never fully recovered. In 1908 Massa-
chusetts savings banks had nearly
1000, 900 depositors and S7~O6,94O,596
in deposits. New York had nearly
5000, 600 depositors and $1,97s,OOO,-
900 in deposits. Nebraska had only
14,S62 depositors and little more than
$4,000 900 in deposits. The entire
Pacific slope had not a half-million
depositors and little more than $780,
100000 in deposits. The south has
the same indifference to private saw
ings banks. 1t is from the south and
west that a vast influx of money is to
be expected if the postal savings bank
system is adopted. President Taft
speaks of several hundred millions"
The fiscal operation is the invest
ment of the government bonds now
held chiefly by national banks to up
lOlu lhGll CiItuldNiOh VI uObDos II Jul
monetary system is changed to a cen
trial bank of issue or to IN asset cur
rency, something must be done with
the 1871, 0OO, 900 of 2 per cen bonds
outstanding, forced by the govern
ment on the national banks that they
may comply with the law under which
they issue circulation. The banks
would lose at least $50, 900, 900 If they
cashed their bonds at present prices.
The government is about to issue a
great volume of 3 per cent bonds. The
1921, 900, 900 recently authorized Pan
anna bonds are expected to be placed
at 8 per cent. Inevitably, without
some means of absorbing the 2 per
cents, these 8 per cents would dislo-
cate the market for the bonds Of lower
interest which are now barely above
par.
To provide for these 2 per cent
bonds is one Of the great problems of
the monetary commission. 1t is one
of the reasons for the readiness of
congress in 1908 to let the currency
question stop with an emergency
measure and let the main issue go
over until after the election and after
the passage Of a tariff bill.
Everybody sees that if the people
deposit their savings with the govern
ment, at 2 per cent or less interest,
it is not because of attractive invest
ment in income. 1t is the govern
ments' absolute security and the con-
venient locations Of postoffices which
are expected to attract the savings of
the people. If they do to the extent
Of 500, goo, 900, Mr.. Taft's view of
the case shows that the people will
in fact lend the money 10 the gov
eminent and protect the national
banks in the change from a bond-se-
cured currency to the substitute to be
provided when congress agrees on a
sy9fap, 90 o,rranau .oNorYn