Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1910-07-10
Postal Savings BOgiss.

an assured fact, as result of the leg
islation enacted by congress urged on
by the president, the agencies that
we're most active in endesvoring to
head of the postal savings bank bill
are continuing to picture the dreadful
possibilities II may have in store. From
reading one of the financial journals,
published near Wall street, it's chief
apprehension seems to be that the pos
tai savings bank may prove a success.
In one breath we are assured that the
offer by the government OF per cent
interest will not be SUFFICIENT to tempt
people to become deposltors. and GER
tainly not to induce them to transfer
any funds from present repositories
that pay higher rates, and in the next
breath we are warned what havoc
may be wrought by piling up a large
volume of money withdrawn from cir
culation. and perhaps invested in
United States bonds,
It is possible. under the law, we are
told, to convert 80 per cent of the saw
ings bank funds into government
securities, and after setting aside a
per cent reserve to make the SO per
cent deposited in local banks subject
to withdrawal at the discretion OF the
president, and SO long as this is posi-
bic the Wall street bankers cannot en-
joy undisturbed sleep. What different
disposal of the funds would be made
II the savings bank deposits were put
in the existing private banks in the
first instance is not disclosed. The
actual cash reserve would. perhaps, be
little larger, but there would be alb
solutely nothing to prevent the banker
from investing the remainder in
United States bonds, although it would
more likely be loaned on less desirable
security at higher interest. II is GER
tain, at any rate, that the small saw
ings accounts given over to the gov
eminent will not be so easily trans
ferred to Wall street as call loans to
share the winnings of stock exchange
speculation.
Again, we are told, that should the
volume of deposit mount up to great
magnitude, as some of the advocates
of the scheme think will be the case,
other embarrassing possibilities might
ensue. The per cent cash reserve
would produce further accumulations
in the treasury vaults which ought to
be in circulation. The fact is over
looked, however, that not only the s
per cent reserve, but large per cent
of the total, would otherwise be in
hiding or boarded, and not in circula-
ton at all. tN
Another fear is that. period of dis
tress might lead to a sudden and gem
eral withdrawal Of deposits in the pos
tai banks, in which event the 6 per
cent cash reserve would be plainly in
adequate 1t is a'safe guess, though,
that period of distress that would
pull deposits away from the govern
ment would also pull them away from
private banks and the. government
would. at the worst, be no more EN-
barraa4ed than the other bankers.
There Is this consolation Youchsafed
Us. also, quoting from the same finan-
cial authority, that these are mere
possibilities. and in our estimation 1t
is not probable that they will occur. ("
But q further and much more likely
possibility is that with the advent of
troublous times some people might lose
confidence in the existing savings de-
positories and transfer their moneys
to the bookkeeping OF the government.
whereby money would be flowing to
government vaults at a time when par
ticularly needed in the channels of
trade. Fortunately, however, this
possibility may also be. met by the gov
eminent In turn, relieving the banks
by redepositing or reinvesting In gov
eminent bonds, thus putting the
money back into circulation through
the very banks from which It was
withdrawn.
Despite ali these postal savings
bogies which the bankers persist in
conjuring up, the much more probable
expectation is that postal savings will
not only encourage thrift and bring
boarded money out Of hiding places,
but will serve to steady the monetary
situation and operate as a safety valve
for the commercial banks and private
savings institutions.