POSTAL  SAVINGS

fixed  permanently,  but  it  is  determined  from
time  to  time  by  the  earning  power  of  the  deposits.” ­
  In  the  discussions  in  this  country,  both
in  Congress  and  outside,  it  seems  to  have  been
generally  taken  for  granted  that  the  rate  of  interest ­
  would  be  fixed  by  law.  This  plan  appears
to  be  the  more  reasonable  one,  when  we  consider
that  the  postal  savings  bank  was  looked  upon
primarily  as  an  institution  for  the  encouragement ­
  of  small  savings—an  institution  which
would  serve  as  a  sort  of  feeder  to  other  savings
banks  and  to  other  forms  of  investment  where  the
interest  yield  would  be  higher.  Furthermore,
there  were  obvious  political  objections  to  placing
in  the  hands  of  a  politically  partisan  body  like
the  Board  of  Trustees  the  responsibility  of  determining ­
  from  time  to  time  the  rate  of  interest  to
be  paid  on  the  savings  of  depositors  who  presumably ­
  would  soon  be  numbered  by  millions.
The  second  phase  of  the  interest  question  was
that  of  the  rate  itself.  There  were  several  obvious ­
  reasons  for  a  relatively  low  rate  of  interest:
(1)  It  was  generally  admitted  that  the  postal
savings  bank  system  should  be  self-supporting
and  that  the  investment  of  its  funds  should  be
absolutely  safe.  This  meant  that  the  interest  rate
paid  to  depositors  must  be  lower  than  that  realizable ­
  on  high  grade  investments  by  a  percentage