Postal Savings Bank

Performed by William H. Taft
Recorded August 5, 1908

The Republican platform recommends the adoption of a postal savings bank system. The government guarantee will bring out of hoarding places much money which may be turned into wealth producing capital and will be a great incentive for thrift in the many small places in the country having now no savings bank facilities which are reached by the post office. It will bring to everyone however remote from financial centers a place of perfect safety for deposit with the interest returned. The pending bill for such banks provides for the investment of the money deposited in national banks and the various places in which we’ve gathered or as near thereto as may be practicable. This answers the criticism contained in the Democratic platform that under the system the money gathered in the country will be deposited in Wall Street banks. The system of postal savings bank has been tried in so many countries successfully that it cannot be regarded longer as a new and untried experiment. The Democratic platform recommends a tax upon the national banks and upon such state banks as may come in, in the nature of enforced insurance, to raise the guarantee funds to pay the depositors of any bank which fails. The proposition is to tax the honest and prudent banker to make up for the dishonesty and imprudence of others. No one can foresee the burden which under this system would be imposed upon the sound and the conservative bankers of the country by this obligation to make good for the losses caused by the reckless, speculative and dishonest men who would be unable to secure deposits under such a system on the faith of the proposed insurance. Because in its present shape, the proposal would remove all safeguards against recklessness in banking… and in the end, probably the only benefit would accrue to the speculator who would be delighted to enter the banking business when it was certain that he could enjoy any profits that would accrue, while the risk would have to be assumed by his honest and hardworking fellow. In short, the proposal is wholly impracticable unless it is to be accompanied by a complete revolution in our banking system with a supervision so close as practically to create a government bank. If the proposal were adopted exactly as the Democratic platform suggests, it will bring the whole banking system of the country down in ruin. And this proposal is itself an excellent illustration of the fitness for national control of a party, which will commit itself to a scheme of this nature without the slightest sense of responsibility for the practical operation of the law proposed. The Democratic party announces its adhesion to this plan and only recommends the tried system of postal savings bank as an alternative if the new experimental panacea is not available. The Republican party prefers the postal savings bank as one tried safe and known to be effective and as reaching many more people now, without banking facilities, than the new system proposed.