New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1910-07-05
WILL BRING OUT HOARDS
Effect of Postal Savings Bank
Discussed in Bank Circular.
u. S. TREASURY benefited
Bonds May Be Refunded-some
Possibilities Suggested by
Central Bank Plan.

The July circular of the National lily
Bank In discussing the possible dement's u
the federal Treasury of the operatioh u
the new postal savings bank law says
In its hearings upon Treasury affairs the
new postal savings bank law Is pIaci; ~ nne
a government finance bill. Inc laW .o - :
which will operate in various dlreCtiot.ii'
if its workings prove meaSuIaory Con-
fable of the theory on when IL We Ted
structed and on which it was aoVocoeSdu
BY the President and members Oh the o
ministration. .st I'LL be
It is expected that it's first effect VIII b pe
to call from it's hiding places coliSi Sersons
Who have not vet learned to have conn
dence in the established banking ihs tite,
tions of the communities in Wnicn my my
i've There is every reason to be1eve thaI
the aeqreeate of such sums reaches Wen
into the millions Whatever the sum, nee,
~ all this money VIII DC viii constitute
g. new source of banking deposlts; lH eos e.
requires that per cent Oh t .io Lifted
savings funds shall be held In the Uhi !t5a
States Treasury as a reserve, perhills lIIe
investment of 80 per cent III COVE. alIU
bonds or other securities ana speci di,1In
declares it's intent to keep the reili1ii ma
e. ner cent on deposit in the national . a;,i
state banks of the communities Oh VI y,t9icb
although there is a provision uluel mr'aT
even this may be invested III COVE 1 LIZ
securities rpon the decision by the RES
dent that the general welfare OF 4. tlio ~
terests of the government denlauu ~ T.,
But there are several distinct WdyS ~
which the accumulation of postal SavIhSs
may serve the United states Ileasu aSca O.
times when financing operato1IS dIS r o ~ 9
Sary For some months the Iredsui ~
haan sailing very close to the wind, VIII
the prospect of having to face an Issue VI
bonds or other securities at amos any
time By careful work ana VIII iiie 10
sistance of the corporation tax, WIlicH 10
now coming in, 1t Is expected . NC a :,
financing operations will be poSlPoleu o.
least until fall, after tne g eneid nroner out
of consideration. the postal savings palin
law affords a source of relief Whlch IL llUss
seems probable will be utilized as se 9aioS4
the new system has provided a Su1lcient
amount of funds. The new law autloL , liTo
a special issue of ~ per cent ooLuo, WIZ NJ
Wnuid hardly give them an investment
basis, but it is provided that the P1st ,s,
savings funds may be invested III Ilie fl-
Under this provision the way lies open LOT
the reimbursement of the treasury ioI
these heavy canal expenditures as soon a.
practical means Of relieving the treasury
which the new law AFFORDS. ooa ooo
Another possibility IS that the 564UG.uVo
If 2 ner cent 19O8-'1S bonds now outstanding
might be refunded by the new 212 per
cents. The IS are payable: anu tue new a,w
outstanding bonds are subject to can Ihey
may be replaced by the new authorlzeo -7a
per cents. ,,,,, nov ,-e+
third possibility is one which may yeI
have a profound effect on the nationdi
banks of the country. In attempting TO es,
tablish a central bank one of the first ana ana
most difficult problems to be soiueo W bIIit
he that of providing for the national od!lh
notes no efso now Outstanding In order to make
satisfactory provision for them some means can
must be found for taking care or the soo2,-
nno on of . ner cent bonds now pledged by
then the national banks as security for circu-
iation and public deposits. The new law
authorizes the investment OF poStaI saNlns0
ing ipatof these bonds from national banks for
account of the postal savings system COZ
Tesnonding national hank circulation would
he retired and the way would be paved Tor
the issue of that amount OF notes by the
new central bank.