POSTAL SAVINGS 
fixed permanently, but it is determined from 
time to time by the earning power of the de 
posits.” In the discussions in this country, both 
in Congress and outside, it seems to have been 
generally taken for granted that the rate of in 
terest 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 encourage 
ment 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 deter 
mining from time to time the rate of interest to 
be paid on the savings of depositors who pre 
sumably would soon be numbered by millions. 
The second phase of the interest question was 
that of the rate itself. There were several ob 
vious 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 realiz 
able on high grade investments by a percentage