Evening star., 1921-07-04
j. S. POSTAL SAVING
PLAN TO Be REVISED
Mr.. Hays Announces Hope to
Draw Out Billion Now
H0arded.
BY the Associa ted Press.

is being boarded in American stockings,
Will H. Hays, Postmaster General, de-
} clared yesterday in announcing plans
for revision Of the postal savings sys-
tenn to make it attractive to potential
depositors.
Through his reorganization plans
Mr.. Hays hopes to draw the boarded
wealth of the country out Of it's hid
ing places and into useful channels.
The present treatment of depositors
in the postal savings bank, he said
tonight, after conferences with middle
western bankers. amounts almost to
fraud" while the government has
profiteered at the expense of the de-
positors to the sum in the last year
alone Of $1.720.000.
His general plan of reorganiza-
tion which will be submitted to
Congress has been approved by
bankers of the east and middle
west at conferences held in Wash
ington. New York. Terre Haute and
at his home here. Mr.. Hays assured
the bankers that he had no intention
Of entering the postal savings bank
in competition with private savings
banks. but rather hopes to make q
valuable feeder as established OF
Congress to make the interest rate
banking institutions. While asking
double the average paid now. he
pointed out it would still be below
the average paid by the majority OF
savings banks.
Has Wide Scope.
Private banks are not and cannot
hope to reach the vast hoardeL
wealth which offers particular field
\ for postal savings expansion, Mr.
Hays said. He pointed out that ~
per cent of the present 5OS,OOO de-
positors are Of ft'eisn extraction,
and that they, as well as Others OF
their countrymen who are accus-
toned to postal savings systems
abroad, will trust no one but the
United States government.
To reach this field Of potential de-
lpositors. Mr.. Hays plans the follow
ing basic changes in the present pos
tai system:
/. Increase the Interest from to
per cent.
2. Payment of interest on deposits
held less than one year.
z. Removal of the restriction
against depositors under ten years
of age: - .-,.,
funds.
banks in $4,000 post offices instead OF
the present $500.
s. Compensation for fourth class
lpostmasters on the basis OF the de-
Iposits they handle.
7. Redeposit Of the funds In loca
banks with more liberal qualification
rules for such repositories:
s. An enlarged board OF directors
Including a representative OF the 1eo
ieral reserve bank, and possibly one
or more civilians.
Common Sense Needed
There is a lot of business in this
Icountry that is really sick. still stag
jeerins under the shell shock of wal
and the debauch of extravaganza
Mr.. Hays said, but there is gooe
deal more than is merely mallnsetlhe
!What we need more than anytnlne
land confidence. There Is. OF course
the greatest era of expansion ane
( prosperity ahead that the world mas
II ever seen. Every one knows tnis
and the only question discussed IL
\ when it will start. Well. 1t is time
| to go out and meet 1t. This we pro
pose to help to do So"
! The Postmaster General declared
that the hundreds of thousands OF
| postal savings depoSitors are prac
tically being defrauded because .te's
per cent interest is paid on deposits
and do not state that nothing Is paid
on deposits held less than one year
Because of this system. he said the
average interest paid on all money
held was one 1k per cent. His state
ment follows:
tines system must be reformed with
a treatment of depositors tnat nas nss
number Of offices receiving deposits
reduced from 1888 in 1912 to 6,3!i
Lin 1920, and with no real enort 70
secure deposits. the postal savings
1 L.
MANY depositors as any other savings
bank in the country and pays less
than half as much interest on de-
posits.
Profit Made In Interest.
with s1e1, 900. 900 on deposit last
year from 50s.00o depositors' ano
with the law providing tnat oyspe Per
ment- because of the system, paid
less than III per cent interest te
those depositors and. by redeposltine
at 2h per cent interest, made a ne!
profit over all interest payments anu
e.9 aThis was sheer proflteering. This
money belonged to the depositors
lThe certificates issued unequivoc1itts ,
pledge per cent interest ana ran -
Iferest being paid If the deposits arr
,,ot left for a year. The government
Stis not in the banking business Ioi
D profit. The government ls IN en'
thanking business to facilitate ana In
crease the national savings ana NJ %
lnromote economy and thrift. IN
Inostal savings has not scratched tnt
surface. Notwithstanding the mag.
lnifcent conception Of public duty thai
INSPIRED its founding.
Not to Compete With BankS.
"Postal savings shall not compett
!with savings banks. We do not wan,
Genositors from savings banks. Bu,
there is a tremendous boarded wealth
in the country, estimated by many
veil inforced at a billion dollars. The
taavings banks connot bring IT out
iThe postal savings has not ye,
drought it out. Nothing can bring !,
out but the faith in the security o,
and a larger interest return on the
deposits, and the acquainting OF tht
holders with our purpose ana tneil
Ionportunity. This we hope to DO.
"If a billion dollars can be brought
Tout Of stockings and closets ant
saved from waste and wild cats Il
will do incalculable good: This mon.
Icy is needed in circulation now.
lwil make general bank depositors ane
tn,t,mate government bond owners on
OF the timorous; it will give smal
CAPITAL a chance for an honest return
the same as large capital: 1t Will fur'
nish the tonic to conclude the busf.
iness conyalescence in the country ane
will help to make economy and thrtf
a national trait which is mucf
needed"
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