130

POSTAL  SAVINGS

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shown  that  postal  savings  funds  come  largely
from  hoards  and  from  accumulations  that  would
otherwise  be  sent  abroad  by  our  foreign  born.  As
previously  noted,  87  per  cent  of  the  postal  savings ­
  bonds  purchased  are  in  the  registered  form
and  presumably  for  permanent  investment.  All
this  seems  to  indicate  that  postal  savings  funds
are  more  nearly  capital  funds  than  current  business ­
  funds.  Yet  our  depository  system  puts  the
great  bulk  of  them  into  commercial  banks.
Should  the  system  not  be  changed  so  as  to  divert
a  larger  part  of  these  savings  into  savings  banks
where  they  will  be  feeders  for  society’s  more  permanent ­
  capital  equipment?
At  the  present  time  this  question  is  particm
larly  opportune,  for  the  evidence  is  strong  that
the  next  few  years  will  witness  a  substantial  increase ­
  in  interest  rates.  This  increase  will  bear
heavily  upon  our  mutual  savings  banks  whose
assets  in  the  form  of  long-time  bonds  and  mortgages ­
  are  likely  to  decline  in  value  at  just  the
time  that  the  higher  interest  rates  payable  on
securities  will  be  attracting  funds  away  from
savings  banks  into  fields  that  appear  to  be  more
remunerative;  for  example,  small  denomination
bonds.  A  more  liberal  use  of  savings  banks  as
depositories  for  postal  savings  funds  would  assist
these  worthy  institutions  to  tide  over  a  trouble-