The Greenville journal. [volume] (Greenville, Ohio) 1850-1918, 1910-05-26
POSTAL BANKS
SYSTEM SOUND
House ti.asuTe as Reported
Deals Safe Way.
TAFT'S PLANS ARE ENDORSED

Bill as Framed Will Not Result In |
Transfer of Local Funds to Big
Banking Centers-Features of Pro-
posed Law Explained.
The Republican national platform
pledges the party to the establish
ment of Iostal savings banks for the
people, and President Taft has been
persistent in urging that this prom
ise of the party, as well as others,
be faithfully carried out.
A measure for the establishment Of
postal savings was first introduced
in the senate but there it was load
ed with amendments to such de-
gree as to seriously impair the meas
ure. MANY of these amendments
were fatht red by those who are op-
posed to the project, and who hoped
to have such a bill passed by con-
gress that the president would find 1t
necessary to apply the veto. Some
of the amendments were the product
of sincere friends, but the resultant
| tumble has been such that the house
committee on postoffices and post
roads has thought best to report out
new measure on the subject oil
| postal savings banks, which it is ex-
| pected will have reasonably united
Republican support.
Opposition From Three Sources.
There are three important sources
Of opposition to the postal savings
bank bill. They are.
The banks, which fear competition
The men who regard the postal
savings bank as scheme to relieve
the national banks from the load Of
per cent bonds they now bear and
prevent them from suffering a loss
on these bonds.
Those who fear that the postal
savings system will result in the
transfer of local funds into Wall
street.
Under the house plan the banks.
and this includes the country insti-
tutions, need have no fear of any
competition with the postal savings
branches.
Bill Will Not Affect Is.
Those who feared the sole object
: Of the proposed law was to rescue
the national banks from an embar
RAISING situation with respect to the
per cent bonds they had on hand
sought to prevent this by having the
senate adopt an amendment forbid
ding the investment of any posta
savings funds in bonds yielding less
than "a per cent interest.
r AS a matter of fact, it is asserted
that the rational banks which owl
could do so. They are using them tt
7 secure circulation and deposits.
they sold these securities they woult
have to retire profitable circulation
= There is no heavy floating suppl!
for the Is. On the contrary, tht
+ slightest increase in the demand
sends the price up instantly, as wa
shown recently when securities lega
for savings bank investment In ceI
tain states were ordered replaced b,
government bonds in securing gov
ernment deposits in banks.
Aim Is to Inspire Confidence.
The aim of the postal banks is t
afford an easy and safe method o
deposit for people who hoard thei
money or who are afraid of regu!a
banks. It is proper for the govern
g ment to cffer the facilities of it's pos
Offices to these timid and ignoran
!. people and to be logical, those fund
should not be used to benefit an
particular class, but should be inves
ed In government bonds, and thu
make of tie hoarder a national asse
instead of a menace to the tnancia
:. situation.
Any device to increase the depo
v its of the country banks, a CORE
spending increase must occur in tn
reserve deposits in New York, Ch
cago, Cleveland and Cincinnati. If
:. bank in a small Ohio town finds it
deposits growing. it must, under e.
listing law, increase its reserve in tt
n large cities Of the state.
viii Benefit Small Banks.
d It will, to a far larger extent, {
course, benefit the local bank of til
& small town if all of these hoard
came out of hiding and are deposite
therein, because the question of til
% reserve the country bank carries
comparatively a small matter.
j. 1t is proposed that all of the none
put in the postoffces shall be depo
IS tied in the local banks on its way
the trustees, and that half of it mu
|. remain permanently in the banks.
country bank gets $4,000 depOs
u it must keep a $500 reserve,
which 5000 may be kept on depos
In the reserve city. In other word
% of the whole $4,000 deposited, on
5000 is required to be sent to tt
q large city,
Weak and Discouraged.