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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  Association ­
  were  not  backward  in  letting  their  representatives ­
  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  Postal ­
  Savings  Bank  bill  through  Congress.
According  to  the  bill  as  it  stood  a  few  days  before ­
  its  first  passage  in  the  Senate,  the  funds  received ­
  on  deposit  were  normally  to  be  deposited
(except  for  a  small  cash  reserve  fund  at  Washington), ­
  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money  was  not  to  be  withdrawn  except  to  pay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