INVESTMENT  OF  FUNDS

113

anee  of  making  deposits  in  non-member  banks
gave  rise  to  much  inconvenience  and  to  an  increase ­
  in  the  expenses  of  administration—evils
which  non-member  banks  were  not  slow  to  bring
prominently  before  Representatives  in  Congress.
Carter  B.  Keene,  Director  of  Postal  Savings,
said  the  restriction  of  deposits  to  member  banks
“resulted  in  the  elimination  of  hundreds  of  State
banks.  In  many  instances  it  was  necessary  to
send  funds  long  distances  to  places  where  eligible
banks  were  located.  This  worked  embarrassment
in  the  expeditious  and  safe  administration  of  the
service,  and  at  the  same  time  defeated  the  dominant ­
  thought  that  controlled  the  finances  of  the
organic  Postal  Savings  act,  that  the  deposits
brought  out  of  hiding  should  be  released  for  commercial ­
  purposes  in  the  identical  localities  where
they  originated.” 14
A  number  of  hills  were  introduced  in  Congress
providing  for  the  reauthorization  of  State  banks
as  depositories,  and  finally  a  hill  (H.  R.  7967,  63
into  operation.  The  Attorney-General  of  the  United  States
has  held  that  the  inhibition  on  depositing  postal  savings
funds  in  non-member  banks  applies  only  to  funds  available
for  deposit  on  and  after  the  date  when  the  system  went
into  operation,  consequently  withdrawals  from  non-member
banks  have  not  been  made  except  to  meet  the  demands  of  the
service.”
14  Com.  &  Fin.  Chron.,  A.  B.  A.  Conv.  Suppl.,  Oct.  14,
1916,  p.  192.