SAVINGS BANKS AND THE INVESTMENT OF THEIR CAPITAL 75 



sesses a capital which on December 31st., 1912 amounted to 74,658,662 fr. 

 According to the law, this may consist of : 



(a) donations and legacies made by outsiders ; 



{b) unclaimed deposits belonging b}^ right of prescription to the 



bank; 



(c) profits on investments ; 



(d) the capitalization of the interest on these sums. 



5. Working of savings banks. 



Now that we have shown in detail how the Savings Banks are organised, 

 let us examine the statistics of the working of both t\'pes. The figures 

 will show us the characteristic difference in the deposits made in each group 

 and also the difference between the French system and that of other 

 countries. 



The ordinary banks are of greater financial importance that the 

 postal. This is due to various causes. 



The ordinary banks in 1882, the year of the establishment of the postal 

 banks, had a capital in deposits of about 1,500,000,000 fr. and an endow- 

 ment of 32,600,000 fr. ; now, as every one knows, one of the forces which 

 tend to augment deposits in every country is the accumulation of interest, 

 and of constantly increasing compound interest. The interest on the 

 amount of 1,500,000,000 fr,, already held by the ordinary banks when the 

 Postal Banks had scarcely arisen, has in itself contributed to keep up their 

 financial superiority. There are also other circumstances which help to 

 explain the greater success of the ordinary banks : their higher rate of 

 interest, their position in urban centres, or richer and more populous centres, 

 the restric tion of every depositor to one bank book either in an ordinary 

 savings bank or in a postal bank. This last rule induces many depositors to 

 invest in the ordinary banks, as they prefer to obtain the higher rate of 

 interest. On the other hand, as the ordinary banks are generally guaranteed 

 by the communes, and their capital invested in Government stock, there 

 is no appreciable difference in either type of bank as to the security 

 offered to depositors. 



