Second Memoir on Pauperism, Post 10

The savings banks are an excellent means to cultivate in the poor the idea of thrift and to profit from interest on their savings.  But these banks cannot safely and indefinitely be the only place for the poor to deposit their money.

Let us succinctly examine these two questions.

I do not pretend to search for and certainly not indicate all the improvements that could be introduced into the savings bank system.  It would go beyond the limits of this article.  I only want to point out the general principle which, it seems to me, should be adpoted and one of the easiest applications of this principle.

The government, instead of trying to attract as much of the yield of the savings banks towards the Treasury and the public funds, should try as hard as is in its power to place these public funds, under its own guarantee, to local use, which minimizes the state's exposure to universal and sudden recourse.  That is the principle.

As for the implementation, here is what I have to say:  There exist today in all the cities of France, pawnshops that offer loans on collateral called "monts-de-piete".  These pawnshops are very usurious establishments because they generally lend without risk at 12% rates.  It is true that the money that they accumulate in this way serves to finance hospices, in such a way that these pawnshops could be considered as charitable establishments in which one ruins the poor in order to prepare for him a refuge from misery.

This simple situation is self explanatory.  It is obvious that, in the interest of the indigent classes and in the interest of order and public morals, we must make haste to find different sources for hospital funds.

From the moment when the tie that binds the pawnshops and the hospitals together is broken, nothing is more natural than to connect the pawnshops to the savings banks and to make of these two things one and the same enterprise.

In this system, the administration will receive savings on one hand, and receive remittances on the other.  The poor that have money to lend will deposit it into the hands of an administration that, requiring security, will disburse it to the poor who need to borrow.  The administration will only by an intermediary between the two groups.  In reality, it will be the poor thrifty person who will lend his savings with interest to the poor spendthrift or unfortunate.