New Ulm review., 1910-07-20
Millions TO Be Put Into Clcu-
Iati0n Again.
POSSIBLE EFFECTS NUMEROUS
Peoples Fund Under New Law May
Become Financial Prop Of National
Treasury In Times of Necessity-Re-
funding Of Current Bond Issues Is
Discussed by Bankers.


bank in discussing the possible bene-
fits to the federal treasury Of the op-
Grafton of the new postal savings bank
law says:
In its bearings upon treasury affairs
the new postal savings bank law is
practically a government finance bill.
The law is one which will operate in
various directions if its workings
prove measurably justifable of the
theory on which it was constructed
and on which it was advocated by the
president and members Of the admin.
istration.
1t is expected that it's first effect
will be to call from it's hiding places
considerable money that is now hoard.
ed by persons who have not yet learn.
ed to have confidence in the establish
ed banking institutions Of the commu.
mites in which they live. There is
every reason to believe that the ag-
gregate of such sums reaches well into
the millions.
Vast Sum to Appear.
Whatever the sum, nearly all this
money will be put promptly at work
under the new law It will constitute
a new source Of banking deposits The
law requires that per cent of the
postal savings funds shall be held in
the United States treasury as a re.
serve, permits the investment of 80
per cent in government bonds or 9TH
er securities and specifically declares
Its intent to keep the remaining 65 per
cent on deposit in the national and
state banks of the communities of
origin, although there is a provision
under which even this may be invest
eel in government securities upon the
decision by the president that the gen.
eral welfare or the interests of the
government demand it.
But there are several distinct ways
in which the accumulation of postal
savings may serve the United States
treasury at times when financing op-
eratlons are necessary. For some
months the treasury has been sailing
very close to the wind, with the pros
pect OF having to face an issue of bonds
or other securities at almost any time
by careful work and with the assist.
ance OF the corporation tax, which is
now coming in, it is expected that any
financing operations will be postponed
at least until fall, after the genera
elections. With an issue of cana
bonds proper out of consideration the
postal savings bank law affords &
source of relief which it now seems
probable will be utilized as soon as the
new system has provided a sufficient
amount Of funds
The new law authorizes a special is
sue Of 212 per cent bonds, which BY
specific provision do not carry the cir
culation privilege This rate of inter
est would hardly give them an invest
ment basis, but it is provided that til,
postal savings funds may be invested
in them. Under this provision the wa,
lies open for the reimbursement of th.
treasury for these heavy canal expend
ltures as soon as the postal banks
have attracted sufficient deposits. Thi
! is the most material and practica
| means of relieving the treasury whic]
| the new law affords.
| Refunding Is Possible.
Another possibility is that the Se4
100000 of 3 per cent 19OS-19 bonds nov
outstanding might be refunded by th
new 2119 per cents. The threes are pay
! able, and the new law specifically pro
yldes that whenever any outstanding
bonds are subject to call they may b
replaced blythe new authorized 21b be
| cents.
A third possibility is one which ma
yet have a profound effect on the ma
tional banks of the country In al
i tempting to establish a central ban
one of the first and most difficult prot
lens to be solved would be that of prc
| Viding for the national banknotes nov
outstanding. In order to make salts
factory provision for them some mea n
must be found for taking care of tl
6S5,O0O,00O Of 2 per cent bonds nct,
pledged by the national banks as sc
curity for circulation and public dc
! posits.
The new law authorizes the invest
ment Of postal savings funds in the
per cent bonds. By purchasing thes
bonds from national banks for accoun
OF the postal savings system CORE
spending national bank circulatio,
would be retired and the way woul,
be paved for the issue Of that amour
Of notes by the new central bank.
Windsor canada's Front Door.
/ Consul Harry A. Conant calls Wind
sor the front door into Canada fron
the United States. The number o