The Washington herald., 1909-02-14
FOR SMALL SAYINGS
Thrift-prOmOting Systems in
France and Germany.
BANKS SERVE POOR PATRONS
Relation Exists Betweea
Financial Institution and the PeO-
pie which Makes Their Invest
ments Safe-OuIy One Savings Bank
Ever Failed In Germany.

An anonymous writer contributes to
the Saturday Evening Post an interest
ing summary Of the methods employed
by Europeans Of small means in invest
ing their savings Speaking generally,
he remarks that the average person in
those countries is less speculative than
the average person here, for which rea-
son he usually keeps what he saves
While the resources Of our own cOun-
try are much larger than those of France,
our investment power is much smaller.
The writer makes a comparison between
the savings-bank statistics Of the two
countries:
IN the United States there are approx
imately S.5SS.o depositors in the savings
banks. Their total deposits are S3.5so,
O8a03o. France. on the other hand, has
I2-5o0.000 savings bank depositors- Their
deposits only amount 10 Ss54, ,0oa. 600. how
ever. The striking fact is that France,
where the average wage is lower than
the United States, has a great many more
savings-bank depositors.
Banks Watch Investments.
The average French investor suffers
less loss. perhaps, than any other in
vestor. Why is this? He is not better
qualified 10 judge Of the merits Of an in
vcsfment On the contrary, many French
investors are peasants and workmen, and
lack the educational opportunities af-
forded Americans. The reason is sim
pIv that there is a close and Conhden-
tiaI relation between the bankers and the
people. The investments Of the great
mass Of the French are controlled by
the Paris bankers and their local agents
scattered throughout the republic. These
hanks take the responsibility Of putting
their. smah customers into a great many
Investments While they do not guaTan-
tee the investment. they do all in their
power 10 safeguard it The result is that
when the French banker says 10 his
client. You buy this. the man usually
buvs without hesitation A well devel-
oped relation Of this kind in the United
States would so a long way toward en-
CouraEing safe investment and eiiminat-
ing the unscrupuloUs financial promoter,
who often masquerades under the title OF
banker
Bays Rentes and Bonds
The French investor buys. in the main,
two kinds Of securities: rentes. which are
the government bonds. and the mortgage
bonds Of the Credit Foncier- The word
rente means income. These bonds may
be bought in denominations as low as
100 francs CS20). The usual interest rate
Is per cent
"The Credit Foncier Is a hugh mort
gage bank and is the largest mortgage
bonds to-day amount to 3,0G0.e0o Go
francs. Il enjoys many special privileges
from the French government, and is a
sort Of national institution The com
pany i vast lender Of money on real
estate mortgages. These mortgages are
pooled and bonds issued against them.
The bonds Of the Credit Foncier run
for seventy-ive years, ard thus afford
a lifetime investment for the holder They
may be had in denominations OF 100
francs and upward. The usual interest
rate is per cent. IN France they are
+ regarded as safe as government bonds.
and, in many quarters, they are preferred
I 10 rentes. for the reason that they DO
not fiuctuate in value. A war scare viii
E send rentes down During the Franco
I Prussisn war there was little change in
/ the price Of the Credit Foncier securities.
/ One reason Is that the security behind
T them is land. which usually retains its
value"
Germans Invest in Three Ways
The saving habits and investments OF
I the Germans are thus described:
IN the main, the peoples money is
invested IN three ways: in savings banks.
I IN real estate mortgage bonds, and IN
: government and municipal bonds. Over
( each OF these the imperial government
! has some sort Of guardianship.
"As in France, the savings banks have
developed at a remarkable rate Ger
many has more different kinds OF saw
! ings institutions than France. and this
/ accounts fer the fact that to-day there
are 100000 savings passbooks in the en-