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The Postal Savings Bank

THE POSTAL SAVINGS BANK.

All nations thrive when the government is a good banker.

It took forty years of agitation before the Postal Savings bill became a law on June 25, 1910.

As a result of this long delayed and bitterly fought act, millions of dollars have been de posited by the people of the United States with the government.

In an address before the American Bankers' Association, Theodore L. Weed, then direc tor of the Postal Savings System, said: On January 3, 1911, the Postmaster-Gen eral opened depositories experimentally at a single post office in each one of the forty-eight states and territories then existing in conti nental United States.

Within a year after the conclusion of four months' experiment with these offices twelve thousand additional depositories were desig nated, including the seven thousand five hun dred post offices of the Presidential class. Ad ditional offices will be selected at the rate of one thousand a month.

The receipts at six thousand of these de positories are being deposited in local banks which also receive the funds from the re maining seven thousand offices situated for the most part in small places where there either were no banks or none willing to qual ify. The total amount to the credit of de positors of the System on September 1st is estimated at twenty-three million, two hun dred thousand dollars. This sum stands to the credit of about two hundred and seventy thousand depositors, or an average of about eighty-five dollars for each account. The figures given do not include one million, three hundred and fourteen thousand, one hundred and forty dollars that have been converted by depositors into postal savings bonds.

It is needless to remark that the deposits are radically influenced by the restrictions con tained in the Postal Savings Act limiting the amount that may be deposited by one person to one hundred dollars a month and restrict ing the total balance receivable from one de positor to five hundred dollars.

It has been already demonstrated that the amount of money which the Postal Savings System causes to be withdrawn from banks is a negligible quantity and that a very great proportion of the millions now on deposit rep resents money that would never have found its way into any bank.

Practically speaking, therefore, every dol lar deposited by the Postal Savings System in the banks of the country is so much gain in deposits. This being true, it is clearly to the interest of the banking institutions to en courage and stimulate this new branch of the Federal Government.

The present limitation of deposits in the United States is much lower than in nearly all of the European countries, although the per capita wealth and average income here are much greater.

Many foreign countries place no limitation on the amount that may be deposited in the Postal Savings Bank; others, although having a limit on deposits, place it much higher than five hundred dollars.

In Italy, Holland, Belgium and Sweden and several other countries there is no limit on the amount that may be deposited, but it is provided that no interest shall be paid on the deposits in excess of a certain sum.

A writer in the American Leader (Septem ber, 1913), thus simply expresses the opera tions necessary for the depositor in the Postal Savings Bank to know : The depositor merely fills out two duplicate certificates of deposit, one of which he keeps himself and the other he gives to the clerk of the postal bank. The postmaster of each branch of the system is held responsible for errors and submits a monthly account of his business to Washington, where it is verified by the inspectors who examine his accounts.

The certificates are engraved in even denom inations, and a new depositor is supplied with a heavy manilla envelope on the outside of which are written his name, address, occupa tion, date of birth, parents' names, and other facts to identify him in case of necessity. The certificate is good only when presented by the person who fits the description and can write the same signature which the certificate bears on its face. It is thus as difficult for a thief to cash one as it is for him to dispose of a travelers' check. In the two years during which the Postal Savings System has been operated, there have not been more than half a dozen cases of forgery, and these were all due to the failure of the postmasters to take ordinary precautions in identifying the signa tures.

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