The depositors in savings banks have a direct legal claim on the bank as a corporation.  The bank’s only means of payment are its assets, consisting of claims upon the owners of such wealth as houses, factories, railroads, electric light plants, good roads, and school buildings.  Thus virtually the depositors have by their savings made possible the building and equipping of these actual forms of wealth, and have an equitable claim upon the usance of them, which claim is met by the payment of interest and dividends to the savings banks.  Viewed in this way the great social importance of the savings function appears, and the importance of developing the savings institutions.

Sec. 7. #Postal savings plan.# In many countries of the world the governments have not only authorized private, corporate, and trustee savings banks, but have provided public agencies where it is possible for the citizens to deposit small amounts.  Thus municipal, and what are called communal, savings banks are operated by many European cities; but the most effective and widely used agencies for the purpose are the national post-offices.  Postal savings banks, or postal savings systems as divisions of the postal service, are now found in all the larger countries of the world, and in many smaller ones.  The United States of America was almost the last civilized country to establish such a system, which was authorized by act of Congress in 1910, and went into operation in a few designated cities in January, 1911.  The number of offices at which it was in operation was rapidly increased, and the number in 1914 was about 10,000.

Any one ten years of age may become a depositor.  Deposit must be made always in multiples of one dollar.  Not more than $100 will be accepted for deposit in any one calendar month, and nothing after the total balance to the depositor’s credit is as much as $1000, exclusive of accumulated interest.  However, amounts less than one dollar may be saved for deposit by purchasing a ten-cent postal savings card and affixing ten-cent postal savings stamps until the nine blank spaces are filled.  Such a filled card will be accepted as a deposit of one dollar either in opening an account or in adding to an existing account.

Deposits are not entered in a depositor’s book, as is the usual practice of savings banks, but are evidenced by certificates issued in fixed denominations of $1, $2, $5, $10, $20, $50, and $100.  These bear interest, from the first day of the month next following that in which the deposit is made, at the rate of 2 per cent per annum for a whole year (interest is not paid for any fraction of a year).  Interest is not compounded, unless the depositor withdraws the interest and redeposits it, but simple interest continues to accrue annually on a certificate so long as it is outstanding, without limitation as to time.