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  communities ­
  where  the  deposits  were  received.
This  explanation  will  give  the  reader  the  underlying ­
  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  lawful ­
  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any  time  be  withdrawn  by  the  trustees  for  investment ­
  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  declared ­
  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fund  which  might  “be  withdrawn  for  investment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