The Richmond Virginian. (Richmond, Va.) 1910-1920, 1910-06-23

which will return to the Government one-fourth
IofI one per cent per annum its net proht, out
of which to pay the expenses of administration.
No discrimination is made between banks,
whether they be State or National. The funds
are to be deposited in banks in the communities
from which they are derived. The Government,
in addition to the small interest profit, will,
through the purchase of U. S. bonds by banks
as security for Government deposits, and through
the sale of bonds to depositors, be also at
the advantage of widening and making more
popular market for national securities. 1t seems
to us that these provisions operate to give to a
large non-banking class an opportunity of saving
that will appeal to it, and at the same time avoids
doing hardship to capital already invested In
private savings institutions. What has been
attempted III the comInunistic plan OF guarantee
OF bank deposits is made feasible In practice
through the operation of sound business laws and
precautions regarding security.
In the original postal savings bank prospectus
the apparent vice was that the vast accumulation
OF money which will flow to banking system
which is safeguarded by the Government itself
would be used either to withdraw money from
general distribution, or cause it 10 be heaped up
IN favored political repositories in the cities The
Government would by indirection have engaged
strictly in the banking business in opposition to
private financial enterprise This objection
seems to us to have been well met in the bill which
has passed both Houses of Congress. Under the
operation of the law, the faith of the Govern
ment will be pledged as security for deposits
by the mass of wage earners timid of banks.
1t will bring out of hiding millions of boarded
dollars. 1t will afford an absolutely safe de-
pository for the people. And yet the money so
deposited will not be in any sense diverted from
the ordinary course of popular funds. 1t will be
left to the use of the people, through the &C
customed medium of local banks. The banks can
continue to use the savings of the people at a
profit, which, while smaller, will be the greater
| by reason of the stimulation Of the savings habit.
1t is we'll known that millions on millions of
dollars leave this country yearly for foreign
States which maintain these postal savings es-
Establishments. 1t is well known that many other
millions lie in the boards of misers, like fallow
land that has not known the pillow. 1t is we'll
known, also, that there are thousands of peopls
who by nature are suspicious that they will
trust nothing less than the Government. 1t would
seem that the postal savings bank ought to
operate to stop the drain of savings from this to
foreign countries, ought to induce boarded money
to come out of hiding, and ought, under the pro
visions of the bill, to do all this without en-
, barrassing ordinary and established local tinan
cial institutions.
OF course it is very easy proposition for q
skilled politician to take law of this character
and riddle it with sophstries tending to show
that it was drawn in the interest of the great
banks and that its form was in surrender to
; the demands of the money power. Little will
be gained, however, politically from such
course "You cannot argue against success"
and we confidently expect the postal savings
/, bank to prove a success of first magnitude. The
people are becoming intelligent and discrmi-
mating Phrases and battle cries are not nearly
SO effective as formerly. The time is APP
proaching when reason will be more than a some
thing most generally appealed to by those VINO
! know nothing of it. President Taft, Harding
it in the heat of Washington, has folly upon
folly patching a vulnerable armor, without max
ing it necessary to take shot at the one or tive
: points here and there where he is impregnable
1t is very easy to attack the banks but it would
, be sorry world were their service in the ac-
cumulation and direction of scattered capital tic
| be done away with. Slowly but surely politics
is taking the tnge of sense; on that account, ii
will slowly perhaps, but as surely, let alone
the batting OF the banks.