The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1909-08-26
His Message TO Congress Viii
Speak Of Need Of Banks
MONEY FOR GOVERNMENT
President Taft Believes That Immense
Sums Can Be Realized for Use
of Government Through
Postal Banks.

Beverly. Mass. August 25-President
Taft indicated in talks with callers to-
day that in his message to Congress next
December he will strongly urge the early
establishment of postal savings bank
system. The President realizes that there
is strong opposition to such legislation at
this time, and while he does not propose
to rush Congress on too many matters at
once, he will ask that the platform dec
laration of the republican party in favor
of postal banks be fulfilled as speedily
as possible.
Influential men of both the Senate and
House are urging that the matter be left
over until the monetary commission has
made its report and ensuing financial
legislation has been disposed Of 1t has
even been said that the relation between
the subjects to be dealt with by the mon
etary commission and the postal banks
together.
President Taft believes that several
hundreds of millions of dollars would be
placed at the disposal of the government
through postal savings banks. 1t is sug-
gested that this money might well be
employed in taking up the $500 900 or
s70O,0O0,OO0 of government per cent bonds
which are outstanding, and which have
given much concern to the treasury de-
partment officials Already the per
cent bonds are selling below par, and
there is fear of further depreciation in
view of the per cent issues which have
been authorized and which soon may be
placed on the market.
Money from Hiding.
The money which postal banks would
draw. the President believes, is that which
is sent abroad each year by foreigners,
who insist that the governments guar
antee shall be back Of any bank in which
they place their hard-earned savings, and
which is secreted in stockings and mat
tresses and not sent to any bank at all.
The President believes that the postal
banks would appeal only to those timid
persons who are afraid to trust the ordf-
nary banks, and who would rather get
the per cent or less interest which the
government would give than to place
the money in the regular savings banks,
where it would draw from to per cent
interest each year.
By placing the interest to be allowed by
the postal banks at less than 2 per cent
Mr. Taft is convinced that no harm would
be done to the ordinary banks of COM
merce, for discriminating persons who
now place their money in these banks
and are appreciative of what these banks
are doing for the community would not
ernment care at half the interest offered
by the ordinary savings banks.
Solution of Problem.
The money obtained through postal
banks, the President and several OF his
closest advisers believe. would offer a
happy solution of the per cent bond
problem Idle funds would be placed
at the disposal of the government at an
extremely low rate of interest. The
governments guarantee, it is believed
would check the steady flow of gold
across the Atlantic to foreign banks
under government control.
President Taft expressed himself to-
day, as he did so often during the cam
paign Of a year ago, as unalterably OPP
posed to q guarantee of bank deposits.
Mr. Taft said he did not believe i'll
making one set of bankers stand re-
sponsible for another set, and he does
not think the national government or
the states should undertake to extend
a guarantee to institutions which are
not under government control and
direction.
As to the charge of paternalism re-
feoted in the postal bank idea, Presi-
dent Taft, in stating his position today,
declared he thought it rather far
fetched. He cited the instance of the
postoffice department itself and said
the extension of the postoffice system
to include field of banking which Is
not now covered by private institu-
lions, could not be regarded as too
paternalistic step.
Conference To Be Held.
Tomorrow afternoon the President
will have a conference with Senator
Aldrich, chairman of the Senate finance
committee, and Secretary MacVeagh of
the treasury. The postal banks will
have a share in the discussion.
The President has number of sub
jects to take up with Mr.. Aldrich. First
of all, he wants to know when the
monetary commission expects to have
it's report ready for Congress and just
what will be the scope of its inquiries
and recommendations.
Mr. Taft also wants the advice Of
Senator Aldrich in connection with ad-
ministrative features of the Payne BILL
which are now giving concern to the
treasury department.
Mr. Aldrich practically wrote the en-
tire section of the tariff bill dealing
with the maximum and minimum and
other administrative provisions.
Secretary Nagel of the department
of commerce and labor, is expected be-
tween now and Saturday to dispose of
the remaining vacancies on the list Of
census supervisors.