The actual constitution of our savings banks then is a hindrance to the Treasury. Does it offer to the poor themselves, or to the nation in general all the desired guarantees? I don’t think so.
What use can the state make of these sums that people deposit in its hands from all corners of France?
Can it use them to provide for the daily needs of the Treasury? But the needs of the Treasury are limited and the increase of the savings banks is not. There will come a time when the state, receiving more funds than it can spend, will be constrained to let large amounts of unproductive capital accumulate in its hands. It is what we have lately seen. When the last law on savings banks was presented (in February, 1837), the Treasury had in the bank 64 million on which it was paying 4% to the owners and that produced nothing, entirely excluded from circulation, always an undesirable situation.
This is what induced some people to say to one of the orators that participated in the discussions having to do with the last law; that it was necessary to create expenditures to use up the capital, an idea that was developed by some speakers who spoke of large public works that would be financed by the savings of the workers. As these public works would not be or could not be productive for the state, all this would definitely result each year in burdening the majority of taxpayers with interest on the sums that the poor deposit in the public Treasury. It would obviously amount to nothing but the poor tax under another name.
If the state does not use the money in the savings banks to provide for the Treasury’s daily needs, the state must place the money in such a way as to bring in interest. But it is easy to see that there is only one suitable allocation, which is the purchase of income earning securities. The state can only hold onto the funds in the savings banks on condition that it is returned to the depositor on demand, therefore, it can only place the money of the depositors with the same condition, that it retains the ability to withdraw it to pay the depositor. But there are only negotiable securities available that offer this possibility. The state, whether it is represented by the Treasury or by the Bank of Deposits and Consignments, cannot place the money of the poor except on incomes. There are many serious problems with this, in particular this one: when the poor deposit, one continually buys securities at a high price because one buys in quantity; when there is a panic or a crisis and the poor ask to withdraw their money, one must sell the securities at a low price because one sells in quantity. The state is then in a deplorable position that it must always buy expensive and sell cheap, that is, sustain a loss.
This really is what happens and I do not think that anyone here will contest it.
So the money deposited by the poor in the hands of the state is or can easily become very onerous to the state, and, what is worse, it can impose charges on the state, the extents of which are impossible to foresee.
That is not all. Is this to the advantage of the general interest of the country and its security? From the economic point of view, I think that it is harmful to ceaselessly attract toward the capital city all the small amounts of capital available from the provinces, which could go towards developing the local economy. I am aware that a part of this capital go back to the provinces in the form of payments to local officials, public works… But the return of money from the center to the extremities happens slowly and unequally; the largest sums are often spread throughout the provinces that sent the least to the Treasury and that, being poorer and more in debt, are more in need of new roads, new canals…Besides it is always only a part of the savings of the poor that return to the poor in the form of salaries or social improvements. Most of it, especially after this new law, will be lost in the public funds and will stay in the hands of commerce and the wage earners of Paris.
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