Cyclopædia of Political Science, Political Economy, and the Political History of the United States
BANKS, Advantages of Savings. Saving does not create capital; it collects the small elements and parcels of it, which, when accumulated, gradually swell to values large enough to be employed with fruit.
—Savings banks are institutions of credit, founded to inspire, facilitate, favor and encourage savings. The savings bank receives the smallest savings of the poor; it preserves and guarantees them; it shelters them from the temptations of the hour and from disastrous risks; it throws them into circulation; and out of the sterile sums, which they were while they remained at the bottom of a box or drawer, makes of them sums productive of interest which serves, month by month and year by year, to swell the amount of a little account current. Lastly, the bank pays back all or part of the deposit, according to the wish of the person who deposited it, and upon his simple demand.
—Savings banks are altogether a modern invention. Inspired by the purest philanthropy, instituted with enthusiasm and generosity by men of the most respectable character, administered with disinterestedness and rare ability, sustained in their benevolent action by the unanimity of public opinion, aided by the indefatigable co-operation of a host of intelligent propagators, and the ever faithful support of the widest publicity, the savings banks in most parts of Europe have grandly accomplished their mission, such at least as it was conceived by the thought which inspired it, a thought exclusively charitable and moral. Surely after considering all these benefits, the economist will not refuse to recognize the great and noble services which the savings banks have rendered since their first foundation. He takes pleasure in praising them; but he reserves to himself entire liberty in examining and judging in what concerns the legislation, organization and progress of these establishments, whose reach would perhaps have been wider and whose results would have been still happier, if the charity which produced them had been found more intimately united to the science which would have given them liberty as a basis.
—Very few raise any objections against the institution of savings banks in itself, but there are a few who do. Their objections are so weak and trivial that they do not deserve a serious refutation. Independently of the very worthy sentiment which first produced the savings banks, and which is a good in itself; aside from the very moral habit of saving, a habit which savings banks have largely extended and developed; they have two important economic results, which seem to us henceforth beyond all discussion: one affects the personal and direct interest of the depositor; the other, which is less apparent, is to the general advantage of society.
—1. The foresight which, according to the expression of J. B. Say, sacrifices actual satisfactions, in order to insure security in the future, is not only a moral quality; necessity imperatively demands it. Labor, which is possible in strength and health, becomes impossible in old age and sickness, not to speak of crises, times of enforced idleness, and the thousand accidents which trouble and disturb even the most favored lives. A prudent man has strength enough to practice privation when he can, and prefers to a passing satisfaction the permanent satisfaction of assuring himself the means of subsistence during the evil days and fatal period of old age. He moreover increases his productive power by having some capital to rely upon, the revenue from which, whatever it may be, increases his daily earnings. Possessed of greater freedom, he is less anxious to offer his labor to others, and more easily discusses the conditions of its sale.
—2. The advantage to society is two-fold. There are fewer unfortunates left to the care of society, in which the proportion of poor people exceeds that of the rich. Then—and it is a great service rendered by the savings banks, which certainly have prompted and favored in many minds the desire to save—these banks utilize a capital, which without their continuous action would remain absolutely unproductive. Very small savings are not invested until they have increased to a certain amount, which varies greatly with individuals, times and places.
—Close observation and investigation in many places, and the very nature of things prove to us, besides, the reality of the fact that savings, small, very small, when we consider the amount saved by each individual, assume in the aggregate proportions of enormous importance, as is shown by the official reports of the savings bank. Society is therefore indebted to savings banks for the enjoyment of a considerable amount of capital, which, without them, would be, like the stone which Horace advises avaricious men to substitute for their treasures, hidden in an absurd barrenness.
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