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36 
POSTAL SAVINGS 
legislation. Local communities throughout the 
country under the leadership of local bankers and 
of the Postal Savings Committee of the Savings 
Bank Section of the American Bankers Associa 
tion were not backward in letting their represen 
tatives in Congress know that, if postal savings 
banks were to be established, they desired the 
deposited funds to be kept at home, and at all 
costs to be prevented from flowing to Wall 
Street. (5) The investments must take such a 
form as to make the postal savings bank system 
constitutional. In the light of these postulates, 
let us consider some of the salient points in the 
progress of the investment provisions of the Pos 
tal Savings Bank bill through Congress. 
According to the bill as it stood a few days be 
fore its first passage in the Senate, the funds re 
ceived on deposit were normally to be deposited 
(except for a small cash reserve fund at Wash 
ington), at not less than 2J per cent interest, in 
banks situated in the locality where the deposits 
were received, “substantially in proportion to the 
capital and surplus of each such bank”; and the 
money was not to be withdrawn except to pay 
depositors when demanded. These deposits were 
to be secured by such indemnity bonds as the 
Board of Trustees might prescribe. A bank 
might deposit acceptable collateral in lieu of an