Collier's New Encyclopedia (1921)/Postal Savings-Banks

POSTAL SAVINGS-BANKS have been in successful operation for several years in many Old World countries, and public opinion favoring their establishment in the United States, has grown steadily stronger. In the Presidential campaign of 1908 the scheme was indorsed by all the political parties. It had the support of both Presidents Roosevelt and Taft. Postmaster-General Meyer pointed out that 98.4 per cent. of all the savings-bank deposits in the United States are in 14 States, and only 1.6 per cent. in the other 34 States; and that while there was one savings-bank depositor out of every two inhabitants in New England, there was only one out of every 157 inhabitants in the rest of the country, New York State alone excepted. A postal savings-bank system was started in the Philippines on June 30, 1909, which in 1910 had 13,102 accounts and $839,623 on deposit. President Taft's exertions to secure the enactment of a postal bank law were unsuccessful in 1909, in part owing to the opposition to the project raised by the American Bankers' Association; but in June, 1910, the desired bill was passed by Congress. This creates a board of trustees composed of the Postmaster-General, the Secretary of the Treasury, and the Attorney-General. They are to select the post-offices at which deposits may be received. Deposits from one person must not exceed $100 a month or $500 in all. An account may be opened with $1. Interest will be paid at the rate of 2 per cent. Depositors may exchange their deposited money for government bonds paying 2½ per cent., to be issued in denominations of $20, $40, $60, $80, $100, and $500. The post-offices are to deposit 65 per cent. of the money in National and State banks of the vicinity, which are to pay 2¼ per cent. for the use of it, and give acceptable security. Five per cent. of the deposits must be held by the Secretary of the Treasury as a cash reserve; and not more than 30 per cent. may be withdrawn by the Government, at the direction of the President, for investment in Government bonds.

The system was inaugurated at one post-office in each of the 48 States, including New Mexico and Arizona, and in 1911 was extended to the larger cities. See Article United States: Section Post Office.