The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1910-07-08
P[ANF0ROPEN|NG !:
OF POSTAL BANKS
MILLIONS WILL POUR IN WHEN
DEPARTMENT BEGINS.
From Thursdays Daily.

The first step toward the establish
ment of the postal savings banks will
be taken by the administration this
week. The board of trustees created by
the law and consisting of the post
master general the secretary of the
treasury, and the attorney general, will
hold u meeting to formulate the regu-
lations for the receipt, transmittal,
custody, deposit, investment, and re-
payment of the funds which may be
deposited at the postal offices.
In itself the preparation of these
regulations will be a tremendous task.
The government is blowing in an entirely
new field. The experiene of Great Britain,
France, Germany, and other countries
with postal savings will be studied
and used as guide so far as possible.
great deal of the preliminary work
must be performed before the post
offices are in condition to receive any
deposits. The government must supply
the various postoffices with the pass
books to be issued to the depositors
wherein must be written the entries
of all receipts and Withdrawals.
Must Prepare Postal Cards.
No account can be opened for less
than 81, but in order that the smaller
accounts may be accumulated for de-
post, any person will be permitted to
purchase for ten cents a postal savings
card, to which may be attached specially
prepared adhesive stamps. The Chi
eago Tribune continuing says: Thou
sands of these cards and postal savings
stamps will have to be printed.
1t will be necessary, also for the
postmaster general to prescribe the
rules and regulations for the issue sale,
and cancellation of these aids to de-
posits. The board of trustees must de-
fine the relations of the federal govern
ment and the banks receiving the de-
posits. Five per cent of all the postal
savings funds must be withdrawn and
kept with the treasurer of the United
States as reserve. Thirty per cent of
the remainder must be diverted to
Washington, and the rest will remain
in the banks in the communities where
the deposits were made.
The board of trustees must deter
mine which banks shall be designated
as the repositories. These banks must
protect the government from loss by
placing in the national treasury pub
lie bonds or other securities supported
by taxing power. The board will
confine the securities it will accept to
government, state, and municipal
bonds. The banks must pay not less
than two and one fourth per cent in
terest on deposits granted them, and
if the conditions justify, it, the board
will ask for more.
Millions Will Pour In.
1t is the expectation of the members
of the board that as soon as the post
offices are in condition to receive
savings millions of dollars will pour in
to these repositories. 1t is proposed
to apply the first $63,OOO,0O0 of the
saving turned over to the government
to the redemption of bonds to this
amount when are outstanding and
which bear interest ut a rate of three
per cent per annum. This is an excel
lent investment for the postal savings
since the latter will bear interest only
at two per cent.
There is no intention TO redeem any
of the two per cent Panamas, which
were the bugaboo raised by some OF the
insurgents. Ii these bonds were to
fall to point below par, where the
interest rate would justify their prrr-
chase, undoubtedly the board of trus-
tees then would consider the advisable
ity of buying them.
There is no question that the govern
memt needs money, especially for the
construction of the Panama canal The
deficit for the present fiscal year
amounts to $45,0O0,0OO, of which
S34 100000 is on account of the work al
Panama. Secretary MacVeagh does not
propose to issue any new two per cent
Panamas, hoping it will be possible tt
prevent bond issue until next year, by
which time it is believed that congress
will have sufficiently increased the in
terest rate of these bonds to make the
tlotation possible above par.
May Issue New Certificates.
If the treasury should need none.
this fall, Secretary MacVeagh intend
to issue three per cent short time GER
tifcates These operations, of course
will be for the purpose of taking carr
of the ordinary expenses of the gov
eminent, including the Panama canal
In the closing days of the last session
the president was authorized to issu
certificates of indebtedness for the com
pletion of certain irrigation projects.
The bankers of the country are OPP
posed to the government borrowin,
money during the movement of crops
1t may be expected therefore, that tn
treasury department will do nothing
toward the issuance of the irrigation
certificates until late in the fall.
The question of the Panama cana
bonds and the irrigation certificate
has, of course, only remote connnec
ton with the postal savings problem
These securities, under certain condi
tions, might be regarded as suitabl
investment for postal savings.
Under the postal savings law, deposi
tors may acquire United States co,l
pons or registered bonds of denomina