SAVINGS BANKS AND THE INVESTMENT OF THEIR CAPITAL 



8l 



Somewhat differents result are given by the table showing the distrib- 

 ution of the capital belonging to Private Savings Banks which is largely- 

 invested in real estate (28 %), and, to a much less degree than in the 

 case of the postal banks, in Government securities. 



TabIvE VII. — Employment of the Capital of Private Savings Banks 

 on December 2^st., 1911. 



Nature of Investment 



Stock (purchase price) 



Real Estate 



Government Stock, or Stock Guaranteed by Govern- 

 ment 



Commxmal and Departmental Bonds etc 



I^and Bonds 



Cheap Dwelling Houses 



I,oans for Building Ch ap Dwelling Houses .... 



Other lyocal Investments 



Current Account in the Deposit and Consignment Bank. 



Total . . . 



From all this it appears that the Deposit and Consignment Bank has 

 availed itself of the power granted by the law to invest deposits in other 

 securities besides Government stock. 



This system of investments has been criticised by many French econ- 

 omists who advocate the granting of liberty to every savings bank in re- 

 gard to the choice of its investments ; a liberty which, within wider or nar- 

 rower Umits, exists in some foreign countries, as in Italy, Germany etc. 



To the French system many inconveniences are attributed, political, 

 economical and financial. 



From a political point of view, it is clear that the savings banks constitute 

 enormous accumulations of capital, whence the State may easily draw funds 

 for public expenses, which, great as they are, may thus be readily increased. 



From an economical point of view, it is complained that the Govern- 

 ment in a sense drains away capital from all parts of the country, where 

 savings are formed, in order to centralise it in the Deposit and Consign- 

 ment Banks, and thus to keep it at its own disposal. This does great 

 injury to small commerce, manufactures and agriculture. Eugene Rostand, 

 ex-president of the Savings Bank of Marseilles, has for a long time carried 

 on a vigorous propaganda and combated on various occasions in favour 

 of the Savings Banks being granted liberty in regard to the investment 



