The proposed law laid before the Chamber of Representatives, proposes
to attach to our General Savings Bank, a service of which the great
importance, the remarkable stability and singular capacity for
development, has been proved by a trial conducted with vigilant
carefulness during thirteen years in Austria and five in Hungary. In
fact the chief part of the unfolding of a project of this kind consists
in the setting forth of the results of foreign experience.
* * * * *
(This part of the explanation relating to Austrian experience is a
summary of the preceding article, to which we refer our readers.)
* * * * *
Returning now to Belgium we cannot fail to recognise first of all
that the institution of the General Savings Bank by the Act of March
16^{th} 1865, is one of the important events of our economic evolution.
History will justly connect the name of Frère-Orban with a work so
perfectly balanced and bearing the imprint of a real constructive
genius.
The solution given to the fundamental problem of the relations of the
Savings Bank with the State, and of which the essential characteristics
were:--making the Central Bank a distinct legal entity, whilst at the
same time surrounding it with the guarantee of the State;--taking
measures so that this State guarantee should not be to onerous,--and
the constitution of a reserve fund,--the conception of the complex and
diversified system of investing the capital in the best way to suit
both the exigencies of its productivity and its disposal;--fixing the
rates of interest and the periodic distribution of a portion of the
reserve;--the accession of all classes of society to the Savings Bank
and the admission of unlimited deposits;--the correctives brought
to bear on these principles by the fixing of differential rates of
interest according to the largeness of the deposits;--all these
elements wisely co-ordinated, give to the work of the legislator of
1865, at once an original physiognomy and a true grandeur.
No one of the fundamental ideas of this edifice is attacked by the bill
laid before the Chamber.
But this work is perfectible and it contains in its constitution even
the principles of its perfectibility. In studying the functions of the
Savings Bank, the conviction is soon arrived at that the authors of
the Act of 1865, conceived them in the most general and simple form
possible, leaving it to time to complete their work. Thus it is that
the investments are above all things regarded and portioned out with
the view of the possible eventual withdrawal of deposits.
The great peril which the makers of the law had before them, was that
of not being able to satisfy a sudden and simultaneous demand for
the repayment of the deposits. As to the various forms which these
investments could take, they were thoroughly recognized and pointed
out by the law-makers, but there were some which were only mentioned
in their explanatory statement, but which must take a more and more
important position.
This has occurred with regard to agricultural investments, which have
awaited a complementary organic legislation. This again is the case
with the investments in land, the importance of which in the economy
of the Savings Bank, Frère-Orban had seen already in 1850, better than
anyone, but which so far has lacked appropriate embodiment by which to
give a real satisfaction to the needs of rural property.
The Acts of April 15^{th} 1884 and June 21^{st} 1894, with regard
to agricultural credit, of August 9^{th} 1889, with regard to
working-class Dwellings, the bill of November 19^{th} 1896, with
regarded to landed credit only develop the thought contained in the
institution of 1865.
The much-regretted Mahillon has profoundly said:
«It is indispensable in order to produce its whole useful effect, that
the Savings Bank should be completed by distinct bodies which regulate
its working. It is by this organic development that the fruitful
character of the genius of our legislators will show itself.»
Our bill tends less to give a larger expansion to these original
functions of the Savings Bank than to set free a new function which
will carry we think according to the words of Mahillon, its useful
effect to a still higher degree.
The Act of 1865 makes no preparation for this putting into motion the
property of the depositors, but then neither its text, nor the spirit
even of the institution excludes it. It has been seen at work in the
examples of Austria and Hungary; such important innovations however
require in themselves real legal sanction.
Thus it is that the two large classes of operations which the new
service proposes to combine, imply the possibility for third parties
to effect at all post offices payments in favour of depositors whose
deposit-books will be kept centralized at the General Savings Bank.
To-day the deposits, like the withdrawals, although they can be
effected at all the post offices, can only be so effected on
presentation of the Savings Account-book, whether this is done by
the holders themselves or by third parties in their names. The Annual
Report of the Savings Bank on these operations gives the statistics of
deposits effected by teachers on behalf of their pupils, by parents
on behalf of their children, by masters on behalf of their workmen.
Teachers, parents, workers, retain the account-books.
According to the proposed law depositors will be able to dispose of the
free balance of their account by payment-cheques or clearing-cheques.
At present the holders of the account books cannot have recourse to the
cheque, nor transfer any sum from their account to that of another on
a simple demand addressed to the Savings Bank. Every transfer resolves
itself into an act of cession which must be signified to the Bank by a
judicial act or notified by a letter bearing the legalised signature
of the ceder. The carrying out of these extra judicial formalities is
evidently incompatible with what is required in a perfect organ of
circulation.
The end in view is in fact to place at the disposition of the greatest
number of depositors a permanent intermediary which will enable them to
economise time to the utmost, to reduce risk and expense and to save
money.
The postal administration by the extraordinary development of its
invaluable public service in collecting bills and taking receipts,
the importance of which has tripled in the last fifteen years, and
by the aid which it has given to the Savings Bank in virtue of the
Act of May 30^{th} 1879, in the collection of deposits and in payment
of withdrawals, has realized one part of the operations which the
projected institution includes.
But it is necessary to attain a still higher degree of organisation
taking the Savings Bank itself as the foundation on which to rest.
The point aimed at is how to place at the disposal of its depositors a
regular and continuous service of account-keeping both individual and
collective in character, and to co-ordinate in a permanent manner all
the operations which it embraces; the point aimed at is how to assure
to every depositor the power of causing regular collections to be
made by the mediation of the Savings Bank and the post offices, the
amount being carried to his or her account; the point aimed at, is how
to effect these payments by the same intermediaries without running
the slightest risk, without the least of these operations escaping an
inflexible account-keeping, constantly kept before the depositor's
eyes, and without there being any need for the depositors themselves
directly and personally to handle the funds.
The centralization of the accounts of all the adherents makes it
possible for the Savings Bank to obtain clear and definite results and
to eliminate by means of the clearing of accounts the intermediary of
money in an ever increasing number of transactions, for this service is
by its natural evolution, by the rapid increase of the number of the
adherents destined to preponderate.
Assuredly, the instruments of credit and of liquidation, of clearing
and balancing, which more and more reduce the use of money, have in
Belgium taken an already great importance at the National Bank, in
the private banks, and in the Unions de Credit:--the credit given
and received having, in a quarter of a century attained two thousand
millions of francs at the National Bank alone;--the extent of the
movement being shown by the large figures of the current accounts
upon which it operates, and during the last three years the National
Bank has sought to connect by a sort of clearing the other credit
institutions.
But who can hide the fact that we have yet much progress to make, or
how far we are behind certain nations such as England. We may judge of
it by the collected statistics given very lately by M. Des Essarts in
the Annals of the Statistical Society of Paris. The point to aim at is
to make the more perfect means of liquidation penetrate more thoroughly
into new soil and of bringing them into closer connection with the
social organism. This is precisely the project now laid before the
Chamber, by which it is proposed for this end to have recourse to an
institution like the Savings Bank, the deposits in which rise to more
than 450 millions of francs and are distributed in more than 1 million
100,000 bankbooks, and which has seen these deposits increase, in five
years, more than 100 millions; and to bring this institution to help
to accelerate the general evolution of the community in the fruitful
direction of the gradual economising of the monetary instrument and its
final elimination.
In looking into the official statistics we become convinced that the
one most fixed idea of Frère-Orban is there definitely brought into
operation; that of the common participation of all classes of society
in the Savings Bank.
Out of 100,000 savings-books, if 50% be set on one side as children's
books, it will be seen that the surplus may be divided into nearly
equal proportions between the class of manual workers on the one hand,
and on the other that of the shopkeepers, the heads of industrial
or agricultural enterprises, officials military men, proprietors,
stock holders and professional persons. If to this division according
to the number of account-books be added, the classification of the
account-books according to their total sum, the conviction is soon
arrived at that it is to the members of the working-classes that the
cheques and the clearing of cheques will directly render the least
service. In effect, if one ought to attribute to the working-class all
the account-books of 1 to 1,000 francs, their total importance would
represent hardly a quarter of the sum total of the account-books of the
Savings Bank. This point will be rendered more clear by the publication
of the book of Messrs Hamande and Burny.
However, if putting the consideration of individuals on one side
we consider the different forms of working class associations, the
conviction is arrived at that, in the service of cheques and clearing
they will have a valuable intermediary: the mutual aid societies,
the cooperative societies, the professional unions themselves will
find in this organ of circulation, the same help as the multitudinous
associations of every kind connected with the Savings Bank of Vienna,
the popular banks and the rural Savings Banks, specially carried
on with a view to small industrial agricultural and commercial
enterprises, and in a higher degree the unions de credit, will connect
themselves by organic threads to the service of the Savings Bank; they
will find in it a means of bringing their efforts to a common point.
It may be added that, to the leading idea of the monetary benefit,
is, in our idea united that, of assuring to the workers in this great
movement of association one of the indispensable organs to a general
and truly democratic financial service and a powerful instrument of
economic education, for it will accustom the working-class societies
which connect themselves with it to the invaluable discipline of a
strict and permanent bookkeeping.
The articles of the proposed law only reproduce the general conditions
of this new institution as they result from experience.
The cheques and clearing service ought to have a distinct existence,
its accounts being kept separate from those of the savings service,
understanding the term savings in the sense which the law of 1865 has
given to it.
The Austrian law of November 19^{th} 1887, the complement of the law
of May 28^{th} 1882, has laid this down. This condition is bound up
with the liberty and spontaneity which ought to characterise the
association; nothing can oblige the depositors in the Savings Bank to
give their adhesion to this service, to run the risks, small though
they be, of these operations, to submit to the working out of its
special conditions. Its utility ought to be freely appreciated and the
Savings Bank will on the other hand have to fix the regulations which
the adherents must satisfy.
Thus those affiliated to the service will not be necessarily confounded
with the whole mass of the depositors in the Savings Bank. In carrying
out this law it will be necessary to fix a minimum deposit enabling
anyone to become a participant in the institution and to have an
account; and until the withdrawal of the depositor he will not be
able to dispose of this sum; this is the fundamental guarantee the
Austrian law imposes and it is a legitimate one: the risks are in other
respects insignificant; however it is wise to render this guarantee
complete by the formation of a reserve fund; all those who adhere to
the service will participate in it; the mode of its formation, and
the amount will be fixed by subsequent ordinances. Thus the stability
of the institution will be completely assured. Free to adhere to the
service, the depositor ought to be free to withdraw from it, only the
regulations will have if this occurs, to determine the consequences of
withdrawal, from the point of view of responsibility.
The working of the system absolutely requires the complete
centralisation of the accounts of the adherents.
The account-books ought to be preserved as well as the accounts kept
at the central office of the Savings Bank. What enlargement will be
required in number of persons employed must be left to the future.
This centralisation is the absolute condition of the regularity of the
entries, the certainty of the control and of the preservation against
error and fraud; without it the transferring of the entries and of
the clearing could not be carried out; by it alone the exact state of
the balance of every adherent can be known at any moment; by it alone
exact information can be had at each operation of the situation and
consequently of the extent of the capital which can be disposed of. The
secret of the way in which the surplus is employed will moreover be
kept from the knowledge of outsiders.
Experience has proved that the central service of bookkeeping can,
without any disturbance, be placed every day in relation with all the
post-offices, and the accounts be kept to date notwithstanding the
apparent inextricable complexity of all this correspondence and of all
these various operations.
The instruments intended to facilitate the two classes of operations in
which the Savings Bank and the Postal administration will intervene in
the interest of the adherents:--the collection on behalf of the latter,
the payments in or the payments in discharge are the object of special
bye-laws. In this direction still, and in this direction especially we
shall be able to learn from experience. Perfected instruments, as the
_Empfang Erlag Schein_, the certificate of payment in and of deposit,
the cheque-books of payment and of clearing with the ingenious
measures taken to baffle every fraud have been well tried in Austria
and Hungary and there would be no longer any peril in adopting them.
A metallic reserve sufficient to satisfy all immediate wants ought to
be secured. Experience has proved that this condition is to be realized
without difficulty.
The establishment of a service of cheques and clearing may lead to a
more considerable flow of capital to the Savings Bank.
This has been the result in Vienna and has been in fact the very thing
the Viennese legislation wished to bring about. But, on the one hand
the investments continue without ceasing to increase: for example, the
extent of the advances connected with agriculture and land which will
be solicited of the Savings Bank or in which it will participate cannot
be measured; on the other hand it is possible to exercise regulative
and limiting action on the deposits in making a difference in the
rates of interest given to depositors; it is possible to go the length
of suppressing all interest; to this end special arrangements with
reference to deposits belonging to the cheque and clearing service will
be made in carrying out the law.
Such is the economy of a proposition in itself modest and simple,
which we have no hesitation to submit to the Chamber. If we make an
effort to conceive what in the future will be the evolution of an
apparatus so marvellously flexible as the Savings Bank, we may fairly
expect from a combination of the service of cheques and clearing with
that of investments, of the association of special organs,--such as
Mahillon speaks of,--with the central organism of the Bank, a powerful
co-operation in the legitimate effort to eliminate metallic money from
our circulating system. But without inquiring, now, what may occur in a
future perhaps alas still remote, in only occupying ourselves with the
production of present good, it has seemed to us in the general interest
to solicit the Chamber to establish a service of which decisive
experiences have fixed the essential conditions and shown the efficacy,
and of which the link is as manifest with our democratic evolution as
with the higher forms of credit and circulation.