The Washington times., 1920-08-30
Pay yGoUernnentFunds
To the People and Not
ToBanks, Urges Meyer

/ gene meyer, Jrs former managing di-
| rector OF the War Finance Corpora
tion, told the Senate Special Commit
tee on Rsconstruetion and Production
a, hearing held Friday In the En-
ginesrs' Club.
BY financing It's necessities through
tho sale OF Treasury certificates 10
banks the Government Is putting IT,
self under tremendous unnecessary
expense that could be dispensed with
by expanding the postal savings sys-
TEN, he declared,
The actual direct saving TO the Gov
ernmsnt and the people OF the nation
through expansion OF the postal saw
inGs system would amount 10 at least
81 900, 0oo.o 900 = year, Mr.. Meyer esti-
| mated.
URGES 4 PNR CENT INTEREST.
He urged that as soon as cansress
rsoonvenes the necessary legislation
| should be passed increasing the inter-
| est payments on postal savings 20
per cent and permitting all post
Ofnces and sub-stations throughout
the country to receive deposits, BY
so doing, he said, the people would be
| encouraged 10 save ana the Govern
ment could use the funds for its re-
auirements. instead OF issuing certif-
| Gates st a cost OF over 8la per cent,
Mr. Meyer pointed out that Treas
ury certificates pay per cent inter
| est TO banks, and In addition carry ex-
emption features that ultimately
bring the cost OF the Government ito
well over ga per cent.
He estimated that II bill was
passed to expand postal savings de-
posits would increase to such an ex-
tent that the entire floating debt OF
the country. amounting to $1,000 900, =
900, could bs paid OF inside OF a year,
This floating debt is made up OF
Treasury certificates, and the Gov
ernment could redeem them from the
funds received at 4 per cent This re-
the price Of Liberty bonds OF form
to 10 per cent
PAY OFF VICTORY LOAN.
Mr.. Meyer expressed the opinion
that under proper handing deposits
| in Postal Savings could be increased
TO such an extent as to cover in u
large part, IL not all, the Victory
loan. amounting to over 100000.
maturing In 1923.
In his testimony, Mr.. Meyer gave
. detailed account OF the causes of
existing economic conditions He
said in part:
Immediately after the armistice,
the country was to . great extent
engaged in war work and war con-
tracts Coming as 1t did, contracts
were broken for European nations as
we'll As for our own army and navy,
and 1t was not Immediately possible
to return from war operations to
peace work. Construction work
could not be resumed at that time OF
-
"As a result, from the signing OF
the armistics to late in tho spring, a
great deal OF time was lost that
might have been profitably used doing
work. As sprinE went on II became
apparent that prices were not COM
ing down, labor was getting scarcer
and consumption proceeded on such
large scale that shortages developed
in goods and materials. and people
who had hesitated to buy and pro-
ceed with their enterprises. woke up
suddenly and everybody together
started in to buy at once.
CREATIND BUYING STAMPEDE.
rThat created what think was the
biggest buying stampede ever seen in
the history of the world. These con-
ditions continued from June. 1919, and
through the fall and wei Into last
spring. As a result prices went high
er, labor was short and. a large pay
ment was necessary for capital.
The big problem of the country
and the fundamental question at pres
ent is to get larger savings through
increased production of necessities
and essential construction work, and
reduced consumption OF luxuries. This
is to be gotten II at all from the great
body of the people.
THE surplus OF the wealthy classes
il going to pay Government expenses
80 that the surplus for investment
has to come from the great mass or
people in the country.
ITO state my conclusion so as that
you may know what Is In my mind,
my idea Is that the way to collect a
large amount OF saving from the
great mass Of the people is by ex-
tension and expansion of the postal
savings system of the United States
Government. Savings banks of this
country have total number of de
positors amounting to about eleven
and a half million. The number of
depositors in the postal savings sys-
tenn Is 565.00o.
WILL PAY OFF DEBT.
with the proper Organization and
adninistpatioa a the Postal Savings
SyWtem the Government could gain
savings deposits within q year suffi-
eient 10 pay Off the floating indebted
noss Of the United States Government,
now approximately o2,sO0 600 900, evil
denced by Treasury certificates.
'Subseane~tly with proper handling,
deposits co1Id be Increased TO such m
extent a. to cover In addition = large
part, IL not all, OF the Victory Loan,
amounting to over $4,000, 900 900,
which natures in .102S. That 10, !
firwsly believe, thst through the Pos
tai SavinGs the Government could re-
deem practically Of this issue on Its
maturity In three years.
while the Government has pro-
vided q Federal Reserve system to
furnish financial assistance to bank
ers and Industries Of the country, not
enough has been done by the Govern
ment to furnish ba nix ing acilities to the
great body Of the common people. The
development and enlargement of the
Postal Savings system would fill this
purpose.
"Thc Postal ssvisgs law should he
amended to authorize the payment Of