116

POSTAL  SAVINGS

vetoed  and  in  the  veto  message.  This  amendment, ­
  which  is  the  present  law,  provides  that
“if  one  or  more  member  banks  of  the  Federal
reserve  system  .  .  .  exists  in  the  city,  town,  village, ­
  or  locality  where  the  postal  savings  deposits
are  made,  such  deposits  shall  be  placed  in  such
qualified  member  banks  substantially  in  proportion ­
  to  the  capital  and  surplus  of  each  such  bank,
but  if  such  member  banks  fail  to  qualify  to  receive ­
  such  deposits,  then  any  other  bank  located
therein  may  .  .  .  qualify  and  receive  the  same.” 17
In  this  connection  it  is  interesting  to  note  that
the  proportion  of  the  depositories  which  were
national  banks  was  not  very  much  greater  on
June  30,  1916,  than  on  June  30,  1914,  before  the
Federal  Reserve  act  went  into  effect,  the  respective ­
  percentages  being  63  and  54.
The  first  two  years  experience  with  depository
banks  taught  some  lessons  which  in  the  reorganization ­
  of  1913  led  to  certain  administrative
changes.  The  most  important  of  these  were  the
abolishment  of  the  cumbersome  system  of
“emergency  credits”  and  the  creation  of  a  more
efficient  method  of  handling  “out  of  town  accounts.” ­

17  The  law  as  thus  amended  (sec.  2)  has  been  interpreted
by  the  counsel  of  the  Federal  Reserve  Board.  See  Federal
Reserve  Bulletin,  July  1,  1916,  pp.  331-332.