80

POSTAL  SAVINGS

In  this  connection  the  experience  of  six  years
of  postal  savings  should  be  described  with  reference ­
  to  the  fear  early  expressed  that  the  existence ­
  of  postal  savings  banks  would  encourage
runs  on  the  banks  in  times  of  great  financial
distrust.  With  such  depositories  for  the  safe
keeping  of  money  everywhere  available,  it  was
urged,  the  timid  would  withdraw  their  deposits
from  banks  on  the  slightest  provocation  and  deposit ­
  them  at  the  post  offices. 21
Opponents  of  postal  savings  said  that  the  difference ­
  between  the  interest  paid  by  the  postal
savings  bank  and  that  paid  by  the  other  banks
would  be  a  matter  of  slight  consequence  in  times
of  panic,  safety  of  deposits  being  the  great  desideratum; ­
  and  that  the  accessibility  and  safety
of  postal  savings  banks  would  encourage  excessive ­
  withdrawals  from  other  banks.  The  money
21  In  1893  there  were  runs  on  the  postal  savings  banks  in
France,  as  a  result  of  charges  that  the  people’s  money  was
being  sunk  in  the  building  of  the  Panama  Canal.  Economist,
LI,  p.  127.  There  were  also  runs  a  few  years  ago  on
some  postal  savings  banks  in  England,  because  a  political
speaker  made  the  assertion  that  the  whole  of  the  postal
savings  bank  deposits  had  been  lost  in  the  South  African
War.  Bankers’  Magazine  (London),  LXXXII,  p.  402.
During  the  crisis  in  England  at  the  outbreak  of  the
European  War,  when  the  joint  stock  banks  remained  closed
from  August  3  until  August  7,  the  postal  savings  banks
remained  open,  and  did  not  suffer  seriously  from  withdrawals. ­
  A.  M.  Keynes,  War  and  the  Financial  System,
Economic  Journal,  Sept.,  1914,  p.  473.