The Vermont watchman. [volume] (Montpelier, Vt.) 1883-1911, 1910-05-19
FOR POSTAL BANKS BOILERS EXPLODED
Difficulties Over the Bill
Which is Now Before
Congress
A HOUSE COMPROMISE
Provides for Purchase of Government
Bonds mt $24 Each--Rate OF In
terest Being 21a Per Cent.

bON0S at pGf Ldth--lhNN VI III
terest Being 21a Per Cent.
Washington, May 16.-Probably no
attempt at legislation in recent years
has shown more clearly the necessi-
ty of careful consideration in framing
platforms than the pending postal
savings bank bill
The Republican national platform
in 1905 committed the party to the
establishment of postal savings banks,
The proposition seemed simple and
all agreed that in the large cities it
would prove a very desirable instru-
mentality of government. In those
great centers there are armies of for
eigners who are always confronted
with the problem Of how to care for
their savings. .,
Generally this class of people hands
over its small surplus to some fell
low-countryman who runs what he
calls a bank. Time and again these
places fail or the manager disappears
and the savings are lost. The es-
tablishment of a postal savings bank
would result in the gathering of d
great amount of money in centers
populated by people of foreign birth.
This fact is well illustrated by con-
ditions in the Panama Canal Zone.
There being no safe place on the
zone where money can be deposited,
the employees in large numbers, de-
posn money with Uncle Sam by pur-
chasing postal money orders which
are good for one year. There are also
some country communities where
large numbers of foreigners are to
be found and where such an institu-
ton would be popular and there are
instances in the West and South
where the banking facilities are not
as good, safe and conservative as
those in New England are. So from
many quarters there was an urgent
demand for the establishment of pos
tai savings banks.
But when the task of framing the
necessary legislation was undertake
en- the trouble began. First it was in
sisted by Senators and Representa-
tives from the Middle West that the
money must be left in local banks.
They did not propose to let the Nat
from the community in which it was
gathered But the National Govern
ment is one of limited powers. The
Constitution gives no authority to
Congress to establish a postal saw
ings bank except as an instrumentali-
ty of Government. In fact the only
authority that can be found for such
Legislation is in the power of the Gov
ernment to borrow money.
Probably the great majority of ad-
vocates of postal savings banks have
in mind that the Government would
take the money and invest it in it's
own bonds. Many have urged that
it would be an eXceIIent thing for the
Government to invest the money in
Panama Canal bonds. 1t will be seen
that this is very different PROPOSE
tion from that urged by the Western
ers.
To compel the Government to take
the money of Tom, Dick and Harry
and Harry live and guarantee its
safe return with interest thereon
sounds very much like Government
guarantee of deposits about which so
llluCIl NdS u6dIu Ill Iut last 1GtSlueu-
tial campaign.
The committee on post offices and
post roads of the House before which
the Senate bill is now pending is for
mulating a compromise plan which it
is believed will be accepted by the
House. Whether the Senate will be
willing to substitute it for the bill
which it sent to the House some weeks
ago remains to be seen.
The leading features proposed by
the House committee are these: Each
depositor when he shall have depos-
tied in his post office twenty-four
dollars may purchase a Government
bond for that sum payable one year
from date, and drawing two and one.
half per cent. interest. If the depos-
itor prefers he need not buy the bond
in which case the Government will
deposit one-half of 1T upon proper
securities in a local bank as a work.
ing reserve and will invest the other
half in government securities ant
will pay the depositor two per cent
interest on his money. This plar
would naturally result in the pur
chase by the depositor of a Govern
ment bond every time he had twenty
four dollars deposited, for in that way
he would receive one-half of one pei
cent. interest.
1t is believed that the adoption o
this plan which has the approval o
President Taft would avoid the con
stitutional difficulties involved in thu
Senate bill