The Yakima herald. [volume] (North Yakima, W.T. [Wash.]) 1889-1914, 1910-03-09
POSTAL SAYINGS BANKS.

There seems no doubt that postal
savings banks would encourage thrift
In some sections where there are at
present no banking facilities, but
with the increasing effort of banks to
secure savings deposits even that is
open to argument. There is, however.
sufficient reason in that view to
justify careful consideration of the
subject. The loud outcry for the
postal banks, however, is only one
or the manifestations of the prevail
ing national hysteria Not one in a
hundred of those yelling loudest for
postal banks would ever put a dollar
in them.
The puzzle is as to what the gov
eminent will do with the money, for,
regardless of the need of postal banks
or the present intent of anybody to
deposit in them, there is no doubt
that in the course of time the banks
would have a large accumulation of
funds. The sum of 100000 900
which has been suggested as likely to
be accumulated within a few years is
not unreasonable. The depositors will
expect interest regularly, com
pounded every six months. The gem
out of their own pockets, and the
puzzle is how the government is to
make the money earn the interest
which it must pay, together with the
cost of administration.
The proposition has been to deposit
the money in the national banks
nearest to the place of deposit at "a
per cent interest and pay the de-
post per cent. 1t is possible that
one-fourth of 1 per cent would pay
cost of administration, although GER
tainly it would not do so at first. A
fourth of 1 per cent on $500, 900, 600
is $1,250,000 which would spread out
pretty thin over the wnoIe Unfed
States. But there is worry about that.
The national banks may not want the
money. There is burning indignation
among the state banks, commercial
and savings, that the national banks
should have the preference. The OPP
posite trouble is that the postal de-
posits will be permanent, fact
which might justify the 2 u per cent
interest, and it would not be long be-
fore 'the people" would protest
against donating such enormous sums
to "the banks" A worse danger is
that the banks could come to consider
the deposits really as gifts, and in
vest them in ways not desirable for
a bank. OF course the government
deposits would be secured, which, in
case of trouble, would make it all
the worse for other depositors.
Another proposition is to invest in
government bonds. That is a direct
IN mr. Jnh
Two per cent bonds would no more
than pay the interest, leaving the gov
eminent to pay cost of administra-
ton. Bonds bearing a higher rate
would still further discredit the 2 per
cents now held by national banks,
which have already lost by their de-
probation millions upon miliians of
dollars. And we should pay off ma
tional debt instead of mourning more,
and certainly do not wish to get into
a position where the nation must
borrow money in order to issue bonds
to absorb savings deposits. The gov
eminent has no machinery for loan
ing on mortgage. although ii might
invest savings deposits in municipal
or railroad bonds
All these propositions, however, in
volve taking the money from the To-
cality of deposit where it is most
most needed and concentrating it in
securities. If deposited in banks, it
would be sent to New York every
summer to be used in speculation. Il
is unfortunate that we cannot let
economic nature take its course. The