THE POSTAL SAVINGS BANK ACT 
43 
factory law, namely, the requirement that the 
moneys deposited in postal savings banks should 
be kept as far as possible in the local communi 
ties where the deposits were received. 
This explanation will give the reader the un 
derlying philosophy of the investment features of 
the act, 30 which were briefly as follows: Postal 
savings funds were divided into three parts: 
( 1 ) A 5 per cent reserve fund to be kept in law 
ful money in the Treasury of the United States ; 
(2) a sum not exceeding 30 per cent of the 
amount of postal savings funds, which “may at 
any time be withdrawn by the trustees for in 
vestment in bonds or other securities of the 
United States”; (3) a sum, which normally 
should be not less than 65 per cent of the total 
postal savings deposits, to be kept on deposit “in 
solvent banks, whether organized under national 
or State laws, being subject to national or State 
supervision and examination. . . .” 31 It was de 
clared to be the intent of the act that this residual 
65 per cent should remain on deposit in the banks 
in each State and Territory willing to receive 
them, 32 and should be a working balance and a 
fund which might “be withdrawn for investment 
30 Act, sec. 9. 
" 31 The word “bank” was declared by the act (sec. 9) to 
include savings banks and trust companies doing a banking 
business.” 
32 The funds received at the postal savings depository