Postal Savings Banks

a savings bank system organized by the government and conducted through the postoffices. Bankers very generally are credited with opposition to the system on the score that ordinary bank deposits would decrease. The chief arguments offered in favor are:

1. SECURITY. As a rule, private savings banks are conducted with care, but the occasional failure occurs often enough and is bruited sufficiently to destroy that degree of confidence which is essential. In 1908 ten American bank presidents, twenty-eight cashiers, eleven clerks, and four brokers, for thus the daily papers state, got away with $10,000,000. Of course there are banks and banks, and there are savings banks; but workingmen are not in position to discriminate. They only know that "Uncle Sam" can be depended upon. Even though governmental affairs are not conducted with an eye single to the interest of the common people, wage earners have more confidence in the stability of the government than in any other organization.

2. CONVENIENCE. We have postoffices everywhere. Depositing could be made as convenient as buying postage stamps. People fall into a new plan if it is easy to do so. No private system of banks can afford to maintain an agency in every hamlet and send agents with carts along country roads daily. At present we have whole counties without facilities for saving the driblets.

3. INCREASED DEPOSITS. Many a dollar is hoarded that would be brought out and put into circulation if the hoarder knew where it could be put and be sure of getting it back again when he wants it. The harder the time, and the greater the need of money to carry on business, the more apt the fearful are to stow it away "in a stocking."

4. FORMATION OF THE SAVING HABIT. It is notorious that Americans are wasteful. The possession of a savings account leads naturally to increasing it. To him that hath comes the desire to have more. A few dollars in the bank means a few pennies saved today and more tomorrow. The people of the United States are making money because of great natural resources. They use soil, forests, coal, that nature has provided. European conditions are coming upon us rapidly. We ought to dig up and revive the ideas of such men as Benjamin Franklin. A national crusade in favor of savings and thrift may avert distress later on.

5. FUNDING THE PUBLIC DEBT. It is believed that if given an opportunity the American people would loan the government enough to take up the issues of bonds now held largely by capitalists. If savings deposits were exchangeable for interest-bearing bonds in small denominations-five or ten dollars-it is believed the entire public debt, Panama bonds as well, would be absorbed.

6. ECONOMY OF ADMINISTRATION. The expense of installing the system would not be great. The present cost of handling money orders is not excessive. Canada has borrowed $500,000,000 during the thirty-nine years of the existence of the postal savings system. The annual expense is $60,000 and the annual loss from all causes is about $640. The government with thousands of postmasters and clerks already under employ can handle savings at far less additional expense for salaries than is possible in the case of private banks.

7. GREATEST GOOD TO THE GREATEST NUMBER. Some writers are of the opinion that strong private savings banks would not be injured; others that they would be starved out of existence. In either case, the national system commends itself because the welfare of millions is of more importance than that of a few hundred bankers amply able to take care of themselves.

As in many other reforms, Great Britain led the way. In 1861 the British people were given an opportunity to deposit their savings in the postoffices. Today ten millions of them are doing so. The plan has been taken up by country after country until it has swept the world. Far off Japan has adopted it; New Zealand is in line; Tasmania, Hawaii, and Finland have postal savings banks. The following is a list of countries having postal savings banks, together with the number of depositors and the amounts deposited:

Until recently there have been no postal savings banks in the United States. In 1910, however, Congress passed an act providing for their establishment and appropriated $100,000 for the purpose. Under the provisions of this act two per cent is paid on deposits. It is believed that the extension of the system to localities hitherto without banking facilities and the fact that the government will be behind the deposits will bring many millions of dollars now hoarded into circulation. Part of the deposits will be redeposited in local banks and part invested in standard securities.

Private savings banks are commercial institutions, established for gain, and they are and will only be placed where they can be operated at a profit. But the people need depositories everywhere. Of such private institutions we have but one to every 67,000 of our population. In some of our Eastern States there is a fair proportion of savings banks, but in eighteen Southern States there are but 120 savings banks and in all the Southern, Western, and Pacific States there are but 700 or actually less than one bank per 100,000 inhabitants. Not one person out of 500 families has the opportunity of patronizing a savings institution except at very great personal discomfort and trouble. Do you wonder at people keeping money in mattresses, in unused stoves and other such ridiculous hiding places or that they do not save at all? Here not ten per hundred inhabitants ever had a savings account anywhere. In Denmark the proportion is 46 accounts per hundred people; Switzerland, 42; Belgium, 41; Sweden, 33; Norway, 29; German, 25; France, 25, and Australia, 23.

We have a total currency of say $3,125,000,000; $1,010,000,000 of it is in the banks, something like $330,000,000 is held by the government, leaving over $1,170,000,000 in the hands of the people, in circulation, or in concealment. It is the concealed funds that we wish to divert into the banks, into commerce, into active circulation-and postal savings would do that. Making every crossroads postoffice in the land a bank, and a safe one, a place that is naturally visited frequently by the residents of that section, presents a constant stimulus and opportunity to save. As it is now, the average man, the country over, has to travel thirty miles before he finds a private institution where he may deposit his savings and the chances are nine in ten that he has blessed little confidence in the stability of that institution when he does find it.-F. W. Fitzgerald, in La Follette's Weekly.