Polk County observer. (Monmouth, Polk County, Or.) 1888-1927, 1910-07-12
GLooMY FOR POSTAL BANKS.

(Springheld, Mass, RepuDllcan.)
The postal savings bank bill as pass
ed by the House is not liked by the
insurgent senators for the reason par
ticularly that it gives to the govern
ment board of savings trustees power
to designate the post offices to- receive
deposits. Speaking of this feature Sen
ator Cummins of Iowa says: Il be-
| lieye it to be true that the House pass
ed the bill in the confident assurance
that the board would not establish any
postal savings repositories in New
England. / cannot conceive of more
mischievous and more disturbing or
less satisfactory proposition" Mr.
Cummins adds that terrific pressure
will be brought by the banks in the
eastern cities and other communities
to induce the government trustees to
keep the post offices there closed to
deposits.
He is probably very much mistaken
in all this. What the action of the
trustees would be under their discre-
tionary power to designate the post
offices to receive deposits we cannot
guess; but it can be said that it is a
matter of indifference with eastern
savings banks whether postal savings
are inaugurated in their communities
or not And it may further be affirmed
with confidence that the trustees
would never keep a post Office closed
to deposits where any demand at all
oI,n MI hn n the AaI
for the commercial banks, they are
not likely to fight very hard against
a bill which would permit them to re-
ceive postal savings deposits at IN
or Nv per cent and invest the same
in state, municipal or other public
bonds which can be bought to yield
31a to Az or more per cent, netting
the commercial bank clear profit of
l to 2 or 3 per cent.
The reason why the New England
or other mutual savings banks have
no fear of competition from a postal
system is that they can pay ~ to 4
per cent on deposits, while depositors
in the postal banks will get but per |
cent. 1t is a mistake to suppose that
even the more ignorant of savings |
bank depositors are Indifferent to the
earning power of their deposits They
are in fact very much alive to this
factor in saving, as is shown by the
great reluctance of one savings bank
in a community to reduce its interest
1r dividend rate below what another
savings bank in the same place is pay
ing Some of the New York savings
banks which ought to pay no more
han az per cent have lately been
urging that all the other banks which
,an pay 4 per cent with safety should
90 to az per cent also lest deposits
low away from the 3 " per cent banks.
How rapidly, then, will these deposits
low into post-offices paying only per
,ent? How greatly weighs considera-
ion of safety of the principal under
/ system of state supervision presum-
ID to make all banks safe, when some
avings banks feel obliged to pay more
han they ought to in order to hold
heir deposits as against the per
ent banks?
OtudlOI CuiliilllS apparently inlShl
,roftably give further study to this
The chances are that the pos
al savings system will run into huge ,
earth of business so far as this Sec ,
ion of the land is concerned. Its pat
onage in all probability will be con-
ned almost entirely to hoarders who ,
istrust all existing banks and have
onfidence only in the government. If !
hese hoarders are many the postal
avings system will have some patron
ge; If they are few. as there is every
eason to believe they are where saw
lgs banks exist. and confined almost
together to recent immigrants, pos
Al savings depositors will be few The ,
of the system will be
hiefly of interest hereabouts in help
lg to settle the question whether or
OF there Is much boarding of money