The Detroit times., 1910-10-06
Estimated That Yearly Receipts Will
Total 100000 Large Portion OF
Which Is Now Sent Out of Coun-
try BY Foreign Population
Money To Be Retained in City
Where Deposits Are Made
Details All Worked Out.

pleted, and the department will soon
De ready TO conduct the new branch
. or Its business. The plhns were
worked out by subcommittee OF the
board OF trustees appointed by the
new law, the trustees consisting or
Postmaster-General Hitchcock. Secre-
tary OF the Treasury MacVeagh, and
Atty.-Gen. WickersEam. III. III. Thomp-
son was chairman OF the sub-commt-
tee which has just completed its work.
According 70 the plans proposed. the
deposition will receive certificate OF
deposit for his money, instead OF hav-
ing his deposits entered IN a pass
book, as In the savings banks. These
certificates will be about the size OF
paper currency, will be noItnegotiable
and hence not available as currency
or collateral. For sums under ten
dollars. the certificate will be punched
according TO the amount OF the de-
posit and when ten dollars has been
deposited a ten-do.lar certificate will
be issued. Certificates will also be
Issued for all multiples of ten up to
800. The certificate system does away
with a great deal of bookkeeping In
terest at the rate OF per cent for
i've years will be engraved on the
face of the certificate. SO that the
postmaster will be- relieved OF all
necessity Of computation. When a
certificate is issued duplicate signed
by the depositor, is kept ny the post
master, and the signature on the cer-
tifcate must correspond when a de-
positor wishes TO withdraw money.
Z Interest ON the deposits will be paid
at the rate OF 2 per cent per annum,
and the interest dates will probably
be fixed at Jan. l and July /. Inter
est will not be compounded, but IL
the depositor desires he can draw out
his principal plus the interest money
for another certificate.
Certificates OF deposit can be cashed
only at the Office OF issue. IL Is
claimed that IL Is impossible To make
the certificates payable at any post
office because too much duplication OF
records would be necessary. This Is
conceded to be disadvantage In the
working out OF the system but 1t Is
not the intention OF the Jaw 10 pro-
vide complete banking facilities
through the postofiice department.
. Postal savings deposits are 60 he
redeposited with proper security In
banks and trust companies IN the
town where they originate. and the
law requires that they be put out TO
earn at least Ia per cent II is
likely that through competition high
er rates will generally be obtained
Five per cent of the deposits Is TO
be held as a cash reserve by the Sec
retary OF the treasury. Thirty per
cent OF the total deposits may be in
vested in United States bonds or
other government securities. The re-
naming 90 per cent must be kept on
deposit except in time OF great public
necessity when the president. by spe-
cial order. may Withdraw 1t for gov
crnment use, buying honds that are
unsaeable or for other financial emer-
gencies.
Postal savings accounts are limited
10 $500, but when a depositor has this
sum To his credit an opportunity Will
be given TO invest II in a government
bond, paying 211 per cent.
Ii can be seen from the outline OF
the plans that the postal savings bank
WIFI in no way compete with the 5av-
ings banks now established. except
where public confidence In such In
stitutions is shaken. The object Is
TO give the foreigner accustomed 10
entrusting his savings TO the govern
ment. a place In which To put his
money, and to bring out the great
sums of cash that are boarded up in
some districts where banking methods
are not understood.
IL is also intended to put before the
public generally. a ready aid to thrift
and cultivate a habit OF saving among
classes that have shown little inter
est hitherto. In this way IL will in
directly benefit the savings banks.
For some time 10 come postal saw
ings banks will not be notling more
than experimental. The appropria-
ton of 100000 made by congress
when the bill was passed, is entirely
inadequate TO provide for extending
the postal savings banks throughout
the country. Until congress has made
a much larger appropriation. II is not
likely that results will show the real
merits OF the system. 1t is still In
the development stage and under the
present plan. does not seem likely to
become any large factor In the
finances of the country OF derange 10
any extent the banking methods now
in use.
Supt. j. c. Hudson, of the money
order division OF the Detroit post
office. Is very husiastic over the
prospects of success of the postal saw
ings bank.
According to my observation" he
says, about 40 per cent OF the money
orders that go to foreign countries
20 either directly or indirectly into
the postal savings banks abroad. and
the establishment Of postal banks
here ought to keep practically all OF
that money In the country | believe
that a postal bank in Detroit would
take i'm deposits aggregating $4,000
per year. Estimating on the same
basis Throughout the country the total
deposits would be $30,000,000.
"JustD to show you how the people
feel about the security the government
affords. we have many customers who
buy money orders payable 10 them.
selves and renew them year after
year. not only losing interest on their
money but actually paying us 30
cents hundred for keeping IL for
them. There are many too. who go
over TO Windsor and put their money
into the postal savings bank there.
The results will surprise the financial
interests who could not understand
its use. once the postal savings banks
are in operation throughout the coun.
try -