THE POSTAL SAVINGS BANK ACT 47 
the law had four distinct merits, which may be 
called respectively legal, educational, political 
and fiscal: (1) The legal merit was that it 
strengthened the constitutional position of the 
bank as an instrument of the Federal Govern 
ment with which to borrow money on the credit 
of the United States. (2) The educational merit 
was that it would encourage thrift by providing 
a safe investment for postal savings bank deposi 
tors when their deposits should reach the limit of 
$500 then fixed by law, and that it would en 
courage the making of investments (as con 
trasted with bank deposits) by offering to the 
poor man perfectly safe bonds in small denomi 
nations which would yield an interest rate larger 
by one-half of one per cent than the rate paid on 
postal savings bank deposits. (3) The political 
advantage was that it would tend to place the 
public debt more largely in the hands of the 
poorer classes, as is the case in F rance, and to tie 
their interests more closely to those of the Gov 
ernment. (4) The fiscal advantages were: that 
it would in time presumably give the Govern 
ment the power to float bonds (not carrying the 
privilege of being used as security for national 
bank note circulation) at a substantially lower 
rate of interest than would otherwise be possible ; 
and that it would open a possible way for the 
conversion of the $63,945,460 three per cent