Evening star. [volume] (Washington, D.C.) 1854-1972, 1910-03-16
WOULD HURT BANKS
Bankers 0utspoken in 0pposi.
ton to Postal Savings Bill.
10 CHANCE FOR BUSINESS
Government, Declares House Com
mittee Witness, Would Monopo-
lie Deposits at Low Interest.

Opposition to postal savings banks was
voiced today before the House committee
on post offices and post roads by repre-
sentatives OF the American Bankers AS
ISOLATION. Not only did the speakers op-
pose the postal savings bank bill, which
recently passed the Senate and is now be-
fore the House, but they had no hesita-
ton in saying that they opposed the prin-
ciple of the governments going into the
banking business.
z. r. Guerney. vice president of the
First National Bank of Fremont, Neb,
and a member of the executive council of
the bankers association, said that the es-
tablishment of postal savings banks in
Nebraska would cause the withdrawals of
large amounts of money from the bank
OF that state, seriously upsetting business
In general. There was no general demand,
he thought, for postal savings banks in
his state. and certainly there was no need
for it. The national and state banks of
Nebraska were able he said. to take care
of all the banking business there, and are
doing it now.
The matter of the security and safety
of the deposits greatly outweighed the
consideration of the interest paid. said
Mr.. Guerney. and II the government es-
tablished the postal banks and put cards
in the windows of post Offices offering
per cent interest the deposits would come
to them. regardless of the fact that the
state and national banks might be offering
street. Security was what the people de-
manded, he said.
Banks Cannot Compete.
1.-THE banks are only relatively safe"
said Mr.. Guerney, ''but the government is
absolutely safe because 1t has the power
of taxation to back 1t up. For that reason
the banks can never compete with the
postal savings banks, no matter what rate
Of interest is offered.
Regardless of the fact also that the
post Office might redeposit the postal saw
ings with the local bank. the latter is in
jured because it is deprived of the bust
ness of great number of individual de-
positors.
Further. the postal savings bank de-
poSitS would, in a great measure come
from the banks in the first place. The
withdrawal of these deposits from the
banks would cause the latter to call some
Of their loans, pinching debtors and gen.
orally causing a disturbance of the bust
ness community
Mr.. Guerney was closely Questioned
by members of the committee about
the banking business Of his state. He
said that the banks were not being
run Tor benevolent purposes, but were
managed by selfish men, who were
anxious to secure deposits, make loans
and make money"
He said the legal rate of interest
In Nebraska was 10 per cent, above
which amount would be usury.
Get All They Can.
"And it has gotten SO that we hard
ly ever charge more than that now"
said Mr.. Guerney, guilelessly, while
the committee laughed. I'VE generally
charge per cent to the farmer on his
land, per cent to the merchant, and as
to the small borrower we charge from Z
per cent on up to whatever he will
stand"
Mr.. Guerney said there were but half a
dozen savings banks in Nebraska, because
the state law was inimical to such insti-
tutions in the matter of checking accounts
and of security for loans. He added
however. that most national banks there
had savings departments which they oper-
ated under the liberal provisions Of the
national law.