POST OFFICE SAVINGS BANKS.

Dominion, Volume 3, Issue 743, 16 February 1910, Page 6

POST OFFICE SAVINGS BANKS.

In our issue of February 2thero vas published a cable message which ita'ted that the American Bankers' Association had allocated £200,000 'or a so-called campaign of educa;ion to defeat the proposed estabishment. of Postal Savings. Banks. Chis appears to be a very important juestion. in- the United States,-.and t came up. for consideration at'the: innual:convention of the American Bankers' Association held'.in Ohi:ago in September last. ■ The report 'urnished. the committee entrusted :to ■ deal with the subject. afiords interesting reading.; The comnittee reported that Postal, Savings Banks had caused deficits in many ioreign countries. ~.lt was contended ihat there was considerable danger ,n taking from intelligent-and projressive citizens the sayings, banks )usiness' r of the country and placing ts control in the hands. of. any;.of-, ice-holding : ■' class. . ; Banking- • in, America is not - the perfect; system" .t ;is ',in\ Great .Britain, but. :the imoricah's.'.claim to" .possess the ;reatest. banking; resources in the vorld. i The Bankers': Magazine of London Recently published' an arti-: ;le on British - and American bankrig and gave the' following' Companions:— .' :..'• ■ ,■'';:. ■V, ■;'•■ v.-' .;. British.: '-..American.' fo. of Banks.. , _ 70,. .25,000 "■•■ ■ ■'-' ■ ■ £ .. - ; - £ ■ '. v lapital, .:.......:.■ 80,307,000" -. ■, 365,761,000' {eservea ....... 48,213,000 - .'.'■-,358,894,000 deposits- ,;.....- 904,352,000 2,618,153,000 .;'■:;' ) '~..; 1,032,902,006!;,3,342,808,000 [he average resources 'of the British >anksare,£l4,7sß,o4o, and of ...the Imorican .banks-£133,752,', but.-, .the American' total 'is three, times'.that if the United : Kingdom. ■ The '.com--jarison, it is contended, by one auihqrity, is not a' fair one, inasmuch is: the American total includes the lepdsits 'of private, savings banks md trust companies, while the' ;Bri-, ;ish total', is-'r exclusive - of : the--6215,500,000.: in. the Post Office -and >the'r. savings banks, alsd the deposits n ■ such institutions as the; Berbeck, Sank, : the' National Discount Company, the Union Discount Company, md' other'' .financial'."institutions, >utside purely banking-'concerns; Moreover,' all/the deposits : in; .the Jnited' Kingdom; of all-the' colonial md ■ foreign .banks with London; ofices aro also, excluded. :. There ,is ilso a difference" in the-class of busj-' iess-transacted'.:A London deposits' taken at call,' or ;thfce, 'or' seven,, >r fourteen-, days,, generally at .low' rates, '■ and- almost entirely. )f ; floating;.:'balances.;.' 'American )anks take money up to six months',' md pay>': high ■ rates., for it.' . Thus nuch of/the 'deposits; they, attract lire in the nature, of investments. ■■-- -Mr. ; .Meyee, -formerly Postmasterjeneralfbf.i the 'United .States,-be-; lieves-that "millions of ..dollars :,are sent 'to Europe which, might be; regained if .immigrants, were conzinced that ; the banks' were safe, and ihereis a good deal of truth-in .this. The American system of banking, is jrude.. ' The- gold locked up as ! a reserve for .note, issue,; which; the Statisi : terms 'currency waste,- is. jnqrmousV The hoarding; of gold. Por such ipurpbses. is not only costly io the'nations that follow,that practice, 'but is at times highly, embar-. passing ; to the world 'in general. The United States alone has paner issues, of £458,798,000, against which £306,720,000. in gold is held.: The Americans do not make as full.uso, Df the. cheque as .do ; the .English;: hence the enormous circulation with its attendant hoard ; of gold. The American banks, ..with veryfew exieptions, are not safe—riot, as safe is.the general fun .of British.banks.' In 1907 the American banks were: so strongly suspected by their own public of having made indiscreet' use of;. their opportunities and capacities, that the public preferred to take, care, of its own money.;' And American'bankers met the situation by refusing to meet demands at call. American banking has not yet distinguished solvency after an interval and ; readiness to meet _ demands at once and without' question. There appears to be an idea that they have:done all that can bo ex-, pected of them if they hold securities that will ultimately, if given time, bo'icapable'of' realisation.,;'_ No doubt a great deal 'can be said against Postal Savings Banks, but taken broadly, if fun ! on - proper lines, they serve a very.; useful purpose. They afford a safe; repository for the small, sayings 'of the people. They deal withpennies while the commercial- banks prefer -pounds, and the thrifty find them extremely useful and convenient, There is no one more, suspicious than the jn: dividual'with small savings,'but he indulges in no misgivings, harbours no suspicions when .dealing with the, Post; Office Savings Bank .because he knows the State is. at the back of it..,': The utility of such an institution '. to ; the community in general is that it collects the small money of'the' small people, and so adds, to the national stock of capital available for exploiting the resources and stimulating the industries -of the country.'. Objection arises' when they. attempt to attract deposits of a-non-substantial kind or when they .are misused, in other ways. The Post Office Savings Banks are pretty certain to. come in the United States, notwithstanding the American Bankers' Association and its campaign of education. '"'■'.