Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1913-12-17
POSTAL SAVINGS
system failure
LOSING PROPOSITION FOR GOV.
EMINENT UNDER PRESENT
REGULATIONS.
NET LOSS OF MILLION
slNcE ESTABLISHMENT
Cost Of Handling Small Deposits md
Low Rate Of Intsrsss Paid BY Estab.
partmsnt Wrestling With Problem Of
How to Make System Pay.
Especial Correspondence


Washington. Dec. 17.-How to pu,
the postal savings bank system on q
paying basis il the problem which IL
now being considered jointly by the
postoffice department and the house
committee on postoffices and posi-
roads. Popular impression to the con-
trary. the postal savings system ID
not the success that it might be. The
service has cost the country $1,4s6.0 900
Against this the government has re-
ceived in interest from banks selected
as postal savings repositories $537,932
There has been, therefore a net loss
of nearly ST. 0 900.
The seasons for this loss are very
simple. In the first place, the limit
CT $500 which it is permitted any in
dividual to deposit is too low. The
tendency Is steadily toward larger and
larger deposits. In 1912, for instance,
the average deposit was $50. The
1913 figures show that the average
las risen to $1O2. and ds steadily going
up. In fact, accounts are frequently
turned away because the law forbids
the acceptance Of more than $500 in
a single deposit. The postmaster gen.
eral. 1t is understood, will in his first
annual report recommend that the linn
1t be removed altogether.
Interest Rates Improbable.
The second reason for the failure
OF the postal savings system Is that
the government does not secure profit
able rates Of interest from the banks.
According to the law interest at the
rate Of ~ per cent is collected by
the government for postal savings
money deposited with local banks. The
banks. however. loan the one out at
interest rates Of from 6 to 8 per cent.
Banks which pay 3 and 4 per cent on
savings deposits, the postmaster gen.
eral believes. could we'll afford to pay
3 per cent on deposits Of as perma-
nent a character as those of the post
office.
The department. IS considering the
proposition of raising the rate to be
paid by banks to 8 per cent BY re-
moving the limited deposits It is reck-
oned that a double quantity Of money
can be handled by the present post
Office force without Increasing office
expenses. The raising Of the limit
plus the charging Of half a per cent
more Of interest from the banks. will.
1t Is hoped, urn the postal savings
deficit into q profit.
Used by Foreigners.
The postal savings system is over
two years old, and. according to those
in Washington who are most familiar
with its actual operation, the follow
ing results are apparent:
That the postal banks have not
pulled money from local banks to n
extent:
That the bank Is chiefly used in cit
les having a large percentage OF
foreign-born population, while In small
rural communities scarcely any use
Is made Of It:
That the money deposited IN 1t Is
chiefly savings that were formerly
boarded:
That the money deposited has not
been sent away to foreign countries to
any extent.
That the 2 per cent bonds offered to
postal bank %depositors have not proved
to be a popular investment.
seamen's Bill Has Inning.
The seamen's bill, which has been
the football Of politics and the steam
ship companies for something in the
neighborhood Of twenty years, is
again being threshed out before the
house committee on merchant marine
and fisheries. The hearings began this
morning and are scheduled to continue
for some days. Representatives of the
steamship companies are present in
large numbers.
Representative James Mammalian. Of
Minnesota, whose hair Is red and
whose reputation as a prosecuting law
yer began when he got after the Pull
man company and forced them to re-
duce their iniquitiously steep berth
rates, has taken up the cudgels in be-
half Of the bill as It passed the senate.
Mr.. Manahan may Of not succeed In
what he Is after. but at rate he
will have caused, before he concludes a
great deal Of work for the steamship
companies. The steamship companies
claim that they can not afford to have
the LaFioller.e bill become faw-thati it
would cost them too much to comply
with it. Mr.. Manahan intends dras
out into the light the facts and figures
upon which this assumption is based.
In the very first instance. that of Mr..
John r. Sherwood, Of the Chesapeake
Steamship Company, Mr.. Manahan
was successful. From the witness he
CLEANED the Information that the pas
Of the LaFellette bill would cut
the number Of passengers carried IN
the most crowded trips to BIS. The
witness testified that on not over three
or four trips during the year does his
line carry more than 375. and that the
limit Is 400. The oGs TO the company
therefore. would be several times the
amount Of profit for each passenger.
The amoun OF profit Cor each passen-
ger was given a. IL That the loss for
each boat annually due to passengers
VINO coui not bs carried because. TN
der the LaFollette bin there would not
be life boats enough to accommodate
them, would come to $225, or for the
boats Of the line, to q total Of $3.50.
The witness squirmed a good deal
when these figures were brought out,
but he stood by his guns and Mr..
Manahan stood by his. Before the
hearings are done Mr.. Manahan will
have similar figures for all the steam
boat lines which have representatives
in Washington protesting against the
LaFoliette bill.
Chamberlain Cough Remedy has no