Nearly all the leading countries of the world now have a system of postal savings banks. Strictly speaking, they are not banks but agencies or adjuncts of the Government which, through its post office department, receives savings deposits, invests them in its own bonds usually, and returns to the depositors a nominal rate of interest. The Postal Savings Bank system of the United States began operations in 1911 after several years of agitation. The system is under the control of a board of trustees consisting of the Postmaster General, the Secretary of the Treasury, and the Attorney General. The law originally provided for the opening of a postal savings bank in each state, but the system has been extended so that there are now about 13,000 depositories where patrons may open accounts. According to the annual report of the Postmaster General for the fiscal year 1913, there were about 331,000 depositors with approximately $34,000,000 on deposit in the entire system.

Any person over ten years of age may make a deposit. Sums as low as one dollar may be deposited, but no-person may deposit over $100 in any month or have a total balance of more than $500.1 In foreign countries a pass book is issued to the depositor, but under our system he receives a certificate of deposit for each deposit. Withdrawals may be made at any time on demand. Deposits bear interest at 2 per cent, credited once a year.

The postal savings funds received at the various post offices are deposited in local banks, both state and national, which pay 2 1/4 per cent on them. Over 7,000 banks have qualified as depositories for these funds. They are required to furnish as security accepted bonds, and the deposits are distributed pro rata among them. Five per cent of the total deposits may be deposited in the United l The Postmaster General recommends that this maximum be raised to $1,000, but that no interest he paid on a deposit exceeding that amount. - Annual Report, 1913, p. 52.

States Treasury as a reserve and 30 per cent may be invested by the trustees in government bonds. It is the intent of the act that the remaining 65 per cent shall be kept on deposit in the qualifying banks, though these deposits may be withdrawn for investment in bonds under the direction of the President.

Reading References

Comptroller of the Currency, Annual Reports. Hamilton: Savings and Savings Institutions. Kniffin: The Savings Bank and Its Practical Work.