The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1910-07-07
THE POSTAL SAVINGS LAW.


uncertainty with regard to some of the
provisions of the new postal savings
bank law. Great hopes are being en-
tertained by the friends of that law
that its provisions will draw forth from
those who distrust the ordinary banks,
large sums of money that are now sup
posed TO be boarded because of that
distrust But the Government only
pays two per cent on deposits, while
the ordinary savings bank pays four,
and this difference will be a powerful
deterrent upon those who might be dis
posed to place their money in the post
Office banks. But it will be a good while
before the regulations are issued and
the Postoflice Department is ready to
accept these deposits.
When the postoffices open for deposits
the law will come into play which re-
quires that 5 per cent of the funds de-
posted shall be held In the United
States Treasury as a reserve; 80 per
cent of the money to be invested in
Government bonds or other securities,
and 65 per cent to be deposited in the
National and State banks in the locali-
ties of deposit. But the law seems to
be silent as to the form of securities
which these local banks are to give
for these savings deposits. And then,
if it is unsafe for the depositors to put
their money In the local banks, why
is it not unsafe for the Government to
deposit the money of those timid ones
in these very banks after it gets their
money?
| However, there is a further provision
with respect to this 65 per cent of de-
posits that are primarily expected to
go into the National and State banks in
| the locality where the deposits are
made, which allows the President to
take that money, either in whole or in
part, and invest it in Government se-
curities. 1t is not even required that
there shall be any special emergency,
any crisis, or war, which will spur the
| President on to remove these deposits
and put them at the service of the Ma
tional Treasury He can take the mon
ey merely of his own volition, and in
vest it in Government bonds 1t may
be the underlying purpose to issue the
Panama Canal bonds, some $500 O00,0 900
of which are authorized at per cent,
for these postal savings deposits. If
so, the Government would not be re-
quired to pay the per cent which Con-
gress has authorized on these bonds, but
only the 2h per cent which the postal
savings law establishes as the rate
upon which the Government can lend
these deposits. IL so, we shall have a
$500, 100000 issue of Panama Canal
bonds before very long, carrying 2H
per cent interest
Undoubtedly when the Postoffice De.
partment comes to put into effect this
cumbersome and hodge-podge law, many
practical questions will arise that will
puzzle those who undertake it's admin.
istration. But it looks now as though
the Government would probably have
to take those postal deposits for its own
use, of course, standing good for the
same, and affording absolute security
to the depositors, If this should be the
way the law will finally turn, the eff
feet Will be practically the same as the
system in vogue in France, where the
people take the Government bond issue
in small denominations and at low rates
U OF interest. There would appear to be