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DEPOSITORS AND DEPOSITS 
81 
so withdrawn, it was said, would not flow back 
quickly to the local banks, because the postal 
savings bank law required local banks to pledge 
as security for the deposit of postal savings funds 
high grade securities supported by the taxing 
power. How could the banks in times of panic 
obtain money to purchase such securities? 
The advocates of postal savings did not take 
such a gloomy view. In fact they declared that 
postal savings banks would strengthen the finan 
cial situation in times of panic. That at such 
times the public might withdraw money from 
other banks and deposit it in postal savings 
banks they conceded, but they said this money, 
as soon as it was deposited in a postal savings 
bank, would be redeposited by the latter in a 
local bank. The net result would be that the 
money withdrawn by timid depositors would not 
be hoarded, as formerly, but would be returned 
promptly to the local banks whence it came. 
From the depositor’s point of view the result 
would be a loss of interest but the securing of a 
virtual Government guaranty of his deposit. 
The local banks would have the same money they 
had before, only the Government would be the 
depositor at 2j per cent interest, instead of the 
individual at a presumably higher rate. The al 
leged difficulty of securing, in times of panic,