SAVINGS BANKS AND THE INVESTMENT OF THEIR CAPITAT. 73 



The crisis of 1870 was met in another way. A series of decrees 

 (September 17th., October i6th., November 17th. and December 17th., 1870) 

 authorised payments of 50 fr. at a time. The necessary capital was supplied 

 by the Bank of France, from which the Deposit and Consignment Bank ob- 

 tained 40,000,000 millions frs. at a rate varying from 5 14 to 6 Yi %• ^^^ 

 transaction cost the Bank about 844,000 fr. 



As regards the investment of savings, the banks are forbidden by law 

 of 1895 to administer the deposits they receive and are obliged to pay them 

 into the Deposit and Consignment Bank, a State institution. 



With the exception of the sum which must remain available for pay- 

 ments, the deposits may be invested : 



(i) in State or State guaranteed bonds ; 



(2) in negotiable bonds representing capital entirely paid up, issued 

 by Departments, Communes, or Chambers of Commerce ; 



(3) in land bonds or communal land credit securities. 



The sums rot invested as above, which must not amount to more than 

 10 % of the deposits, are placed in current account bearing interest at the 

 Treasury or deposited at the Bank of France. 



The Deposit Bank administers the reserve fund. Every bank must 

 form its own capital out of donations, the difference between the interest 

 taken by the Deposit Bank and that paid to the creditors, and interest on 

 its own capital. This capital may be invested in the purchase of fully 

 guaranteed bonds. Up to the fifth of this capital, and all profits therefrom, 

 the banks may use to purchase local seciu:ities issued by pawn offices or 

 other institutions of public utility and may grant loans to co-operative 

 credit societies or societies for the building of workmen's dwelling houses. 



The savings banks are under the control of the State and a Superior 

 Commission of Savings Banks at the Department of Labour must be con- 

 sulted on all important questions respecting ordinar^'^ or post ofiice Savings 

 banks. 



§ 4. Nationai. savings bank (post office SAVINGS bank). 



The object of this institution is to assist saving by means of the Post 

 Office which is the most widely difiused administrative organisation in the 

 whole country and is most in contact with the people. In the first working 

 year (1882) 6,024 offices had already been authorized to receive savings and 

 the number so authorized at the end of 1911 had risen to 8,124 and by 

 December 31st., 1912 to 12,317. This rapid increase between 1911 and 

 1912 is due to the increase in the number of Savings Banks, even in places 

 where there is no post office, the postmen being authorised to receive 

 and to make pajnnents on behalf of the holders of post office books. In 

 sparsely populated districts in this way communication between the post 

 offices and the depositors has been rendered possible and convenient through 

 the medium of the postmen. 



