ugh the instrumentality of their governmental organization, rather
than depend upon "private enterprise" organized to take advantage of
their necessities for its own profit?

At first glance there might seem to be an objection in the fact that,
while the government was lending money at two per cent. it was paying
on savings deposits interest possibly as high as 2.4 per cent., which
would appear to be an unbusiness-like and unprofitable proceeding. But
on striking an average between the sums on which it was paying that
rate and the large amounts on which it was paying no interest, but
receiving two per cent., it would probably be found that it was
getting the whole at a rate considerable less than two per cent.

A more valid objection to the lending of money by the government at a
fixed low rate of interest, instead of at whatever rates it might
obtain according to the state of the money market, as private banking
institutions would do, might be found in the liability that the
parties to whom it was loaned might reloan it at higher rates, and
thus use the good offices of the government as a means of personal
profit. The measure could hardly fail, however, to lower very greatly
the general rate of interest in the business world. It would be
important, of course, to keep this large sum in circulation, and thus
avoid the evils arising from hoarding. Its utilization for the
regular expenditures of the government would be likely to do this, and
the consequent reduction of taxation would be a great public
advantage. Although the idea of loaning money at fixed low rates upon
certain securities, such as land and staple products, might prove
impracticable from various considerations--such, for instance, as the
injustice of discriminating in favor of any particular classes in the
community, as such a scheme would appear to do--there should be no
difficulty in devising some practicable system for using to the
advantage of the entire public the extensive funds which thus would be
placed at the disposal of the government.

The postal banks would doubtless very largely take the place of
present institutions of deposit. To what extent this would be the
case, it is, of course, impossible to say. For all ordinary purposes,
and for the needs of the average business man, their advantages could
not fail to be great. Their effect would probably be to withdraw from
the market large sums now available for speculative purposes, and
divert th