ITALIANS HAVE THEIR OWN FINANCIAL CENTER AND LABOR MARKET IN BOSTON
In some cases the sums paid are fifty or even twenty-five cents a week, and the shares may be $100 instead of $200. Among some groups shares are taken in the name of each of the children, and the investment constitutes an educational fund. There are those, however, for whom the building and loan has not provided adequate opportunity for deposit and safe investment. It is probable that the building and loan has proved most efficient for the income group $1,500-$1,800. For the group below that, home ownership is for the time impossible. As a device for saving, for both the lower and higher income groups, who come from countries familiar with similar devices, the postal savings banks are supposed to offer efficient, honest, and convenient service.
POSTAL SAVINGS BANKS
These banks were established under an act that went into effect June 25, 1910. Under this law, as amended May 18, 1916, persons over ten years of age may deposit any amount, providing the balance to the credit of one depositor does not exceed $1,000. Two per cent interest is paid on deposits, and there is provision for exchange of deposits for United States bonds of small denominations.
The facilities thus provided were immediately taken advantage of by the foreign-born groups, and the postal savings banks became almost banks for the foreign born. That is, in September, 1916, 375,000, or 80 per cent, of the total number of depositors were persons of foreign birth, and they owned 75 per cent of the deposits. In proportion to population the deposits were in 1916 about eleven times as great as those of the native born (due allowance being made for the age of the two population groups). The Greeks, Italians, Russians, and Hungarians, all coming from countries in which there are postal savings arrangements, found it especially easy to make use of them.
The department felt, however, that the facilities could be greatly extended, even among the foreign born. Therefore, circulars describing the organization, methods, and advantages were distributed. They were written in the following languages: English, Bohemian, Bulgarian, Chinese, Croatian, Danish, Finnish, French, German, Greek, Hungarian, Italian, Japanese, Lithuanian, Norwegian, Polish, Portuguese, Russian, Ruthenian, Serbian, Slovak, Slovenian, Spanish, Swedish, and Yiddish.
In spite of the fact that this system is characterized not only by security, but also by certain democratic and convenient features especially serviceable to many foreign born, there are certain limitations to which Professor Kemmerer has called attention in the following statement:
As a matter of fact, the interest rate paid is so low that it makes a very weak appeal to the class of people who deposit in the postal savings banks. Their motive is primarily security. The government is now realizing large profits from the postal savings system—for 1916 the estimated profit was $481,816—and this profit is coming from a class of people in the community, the thrifty poor, from whom it is bad social policy to take it. Of course it would be administratively impracticable to pay interest to depositors on average daily balances—no savings banks do that. Would it be expecting too much, however, to ask for our postal savings depositors the allowances of interest on half yearly or even quarterly balances? Moreover, is it unreasonable to ask the Board of Trustees, in view of the nomadic character of our foreign-born population which patronizes the postal savings system most, to devise a simple system of transfer by which a depositor who is changing his place of residence may transfer his postal savings account without forfeiting his accumulated but yet undue interest?[30]
Not only should the postal savings bank law be amended, rendering it more flexible and more attractive, but there should also be enacted in those states in which no such legislation is yet on the statute books, laws regulating the conduct of banks, steamship companies, and all agencies receiving deposits or otherwise performing banking functions.
It is clear that the foreign born, during the early years of their residence in the United States, encounter all the difficulties of others whose incomes are inadequate and precarious, and are also the easy victims of special forms of exploitation. In addition, they find themselves unfamiliar with the standards and customs connected with the great events of family life. In the matter of weddings and funerals and other ceremonial occasions there is no reason to expect them to be wiser, more economical, and farsighted than the native-born group.