Pnncipal Features of the Postal Savings Law and Regulations.—The organic Postal Savings Act of 25 June 1910 created a board of trustees for the control, supervision and administration of the postal savings depository offices designated and established under the provisions of the act, and of the funds received on deposit, consisting of the Postmaster-Gen eral, the Secretary of the Treasury, and the Attorney-General, acting as ex officio. The board was empowered to make all necessary and proper regulations for the receipt, transmit tal, custody, deposit, investment and repayment of the funds deposited at postal savings de pository offices. This provision of the original act was somewhat modified by the Act of 4 March 1911. As the matter. now stands the Postznaster-General is charged with the desig nation of post-offices as postal savings deposi tories, the supervision of postal savings busi ness transacted at depository post-offices and the conduct of the central administrative office at Washington. The board of trustees is charged with the management and investment of postal savings funds after they leave the custody of postmasters. The Treasurer of the United States is treasurer of the board of tnistees.
Any person 10 years old or over may open a postal savings account in his or her own name by depositing one or more dollars in any post office authorized to accept deposits. No per son may at the same time have more than one account either at the same office or at different offices. The account of a married woman is free from any control or interference by her husband. Post-office employees are forbidden to disclose to any person except the depositor the amount of any deposits.
A person may deposit any number of dol lars, and at any time, until the balance to his credit amounts to $1,000, exclusive of accumu lated interest.
Accounts may be opened by the intending depositor in person, or through a representa tive. A person residing at a post-office not au thorized to accept postal savings deposits may open an account at a depository office by mail, through his local postmaster.
After an account has been opened deposits may be made either in person, through a repre sentative, or by mail. Deposits are acicnowl edge by certificates, issued in fixed denomina tions which are made out in the name of the depositor and serve as receipts. These certifi cates are not negotiable or transferable, A depositor may at any time withdraw all oi any part of his deposits, upon demand, from the post-office where the deposits were made. Withdrawals may be made in person, through a representative, or by mail. Postal savings cer tificates bear simple interest at the rate of 2 per cent a year. Interest begins on the first day of the month following the month in which the certificate is issued and becomes due and pay-able at the expiration of each full year from the day interest begins as long as the principal remains on deposit. No interest is paid for a
fraction of a year.
Amounts less than $1 may be saved by pur chasing postal savings cards and stamps at 10 cents each. A savings card with nine stamps affixed will be accepted as a deposit of $1 either. in opening an account or in adding to an eiusting account, or it niay be redeemed in cash.
A depositor may exchange the whole or a part of his deposits for registered or coupon United States postal savings bonds, bearing 21/4 per cent interest, issued in denominations of $20, $100 and $500. When bonds are issued in exchange for postal savings deposits the bal ance to the credit of the depositor is reduced accordingly, and he may malce further deposits until his account reaches $1,000.
Postal savings bank funds in most countries are invested in the public debt. In establish ing postal savings depositories in the United States a radical departure v;as made in this respect. The organic law, as amended by the Act of 18 May 1916, prescribes that the funds received at postal savings depository offices in each city, town, village or other locality shall be deposited, in the order of precedence here inafter specified, in solvent banks located therein, whether organized under National or State laws, and subject to National or State supervision and examination, willing to receive such deposits under the terms of the act and the regulations made by authority thereof, and the sums deposited shall bear interest at the rate of 2% per cent. The law requires that 5 per cent of the postal savings funds shall be withdrawn by the board of trustees and kept with the treasurer in lawful money as a re serve. The word Thank') as used in the law includes savings banks and trust companies doing a banking business.
If one or more member banks of the Federal Reserve System exist in any city, town, vil lage or locality where postal savings deposits are made, such deposits are required to be placed in the member banks, provided they qualify- to receive them, substantially in propor tion to the capital and surplus of each bank, but if the member banks fail to qualify, then other eligible banks located therein may qual ify. If no bank eligible to qualify exists in any city, tolkn, village or locality, or if none where such deposits are made will receive them on the terms prescribed, then the funds are deposited under the terms of the act in the bank most convenient to the locality. If no bank in any State or Territory is willing to re ceive the deposits on the terms prescribed, then they are required to be deposited with the treasurer of the board of trustees, and counted as a part of the reserve.