The citizen. (Frederick City, Md.) 1895-1923, 1910-11-11
Postal Banks Strikes a Snag.

tloil OF lne postal savings system rcmai
to be settled by the board of trustees.
probably will not be before Isnuary
1911, that the government will be read
to give the system its first trial in tn
limited number of second class Offices
one in each State-where depositorie
are to be established for this trial.
Owing to conflicting statements fror
official quarters there has been som
misunderstanding of the situation al
fectlng the starting of operations.
seems that, after all, the certificate O
deposit scheme, which has attracted st
much attention has not been finally an
proved.
While Secretary of the Treasury Mac
Veagh is understood to favor the certifi
cate of deposit plan of Postmaster
General Hitchcock's conception if it b,
found feasible after further investigation
subordinate officials of the Treasury De
partment are holding out for the old
fashioned pass book. At least, they hole
that there are radical features of the new
idea which require careful consideration
before the official formal stamp of an.
proval is placed upon it. These treasury
skeptics are keeping the subject alive.
The principal objections raised to the
certificate plan are four in number. The
points involved are as to the consistency
with the provisions of the postal bank
law itself, the liability to the loss of Ger.
tiilcates IN cases where depositors be-
come possessed of large number ol
them, the tendency on the part ofsome OF
| the depoSitors to cash the certificates
even when necessity does not compel
it, owing to the ease of converting them
into money, and the interest computing
complications which might deprive de-
positors of their Just returns. To start
with, the first objection raised by the
treasury experts is this:
The law provides that no person shall
have an account at more than one post
office, that no person shall deposit more
than $Ioo single month and that he
shall not have total deposit of more
than $500. 1t is argued that under the
postoffice system as it stands at present
it would be hard to keep check on the
person who sought to establish more
than one account. He might buy a GER
tiicate at one office and later buy one
at nearby Office.
The second objection is that a depos-
itor would in time accumulate a large
bunch of certificates of small denomina-
ton; some of them he might carry
around with him; losses would be fire.
quent, and the making good of these
losses through the issuance of duplicates
would be cumbersome.
The most important objection, it is
declared, is the third on the list. 1t is
pointed out that one of the main pur-
poses of the postal savings banks is to
encourage thrift among the working
classes, who ordinarily do not patronize
private banks. The case is cited of the
man who carries some of the certificates
in his pocket, whereas pass books are
usually kept at home except when de-
posts are made.
would be tempted to drop in at the post
Office after working hours and cash one
OF the certificates for no other purpose,
perhaps than to buy cigars and drinks
when he would not thiuk of drawing out
money il the convenient equivalents were
not burning holes in his pocket.
Finally, there is the matter of interest.
The existing scheme provides tor the
issuance of certificates of various de-
nominations, from one dollar up, the
smaller ones being convertible into enc
of the larger denomination. But, it is
pointed out, each certificate shows its
own accrued interest When several
of small denominations were exchanged
for one of larger denomination the inter-
est would date only from the issuance of
the latter. A fifty dollar certificate, for
instance, it is stated, by way of example,
could not very well, be marked to show
just how long interest had run on each
dollar or five dollars of the aggregate.
Then, again, the depositor with a $50
or $Ioo or $500 certificate, if he wished
to draw only part of his deposit, must
take out new certificate, thus losing
back interest on the balance.
That there is a good deal of feeling
between the officials of the postoffice
and treasury department respectivel,
over the situation cannot be denied. Al
the Postoffice Department it is declared
that if there is unreasonable delay ir
putting the postal saving system in oper
alton the fault will lie with the treasur,
officials, who waited until all of the pre-.
liminary plans had been mapped out b,
the committee designated by Postmaster
General Hitchcock before showing an,
interest.
On the other side it is hinted that the
Postoffice Department went ahead pre-
cipitately and that the Treasury De
partment was not invited to have a rep
resentative an the committee that worked
ont the scheme of operations.