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Title: Social Comptabilism, Cheque and Clearing Service & Proposed Law
Author: Denis, Prof. Hector, Solvay, Ernest
Language: English
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SOCIAL COMPTABILISM


By ERNEST SOLVAY

THE CHEQUE AND CLEARING SERVICE

in the Austrian Postal Savings Bank

PROPOSED LAW

laid before the Chamber of Representatives of Belgium

By Prof. HECTOR DENIS

                                  1896
    (Extract from the _Annals of the Institute of Social Sciences_)

                               BRUSSELS
                           AT THE INSTITUTE
                        11, RUE RAVENSTEIN, 11

1897


    Bruxelles.--Imp. écon., N. VANDERSYPEN, rue de Trèves, 38.



SOCIAL COMPTABILISM

ITS PRINCIPLE AND GROUND OF EXISTENCE

THEORY OF THE MEASURE OF TRANSACTIONAL VALUE


By ERNEST SOLVAY

Would it be possible, in a society constituted as ours is, to
replace the agency of money by another agency which would have its
advantages without its inconveniences, and which could be considered as
theoretically perfect,--in other words would it be possible to replace
the agency of money by a system which would be the final expression of
possible improvement in this matter and the definitive point to which
social economics ought necessarily to tend? This is the subject which
we propose to consider.

The paper _Social comptabilism and proportionalism_[A] which was the
starting point of the Institute of Social Sciences of Brussels, was
necessarily done in a premature fashion, the subject being regarded
from too general a point of view, so as to be harmful to a true
explanation of «comptabilism» properly so called. It laid itself open
to criticism and lays itself open still; it does not satisfy all those
who wish to go deeply into the question. On these accounts we deem it
our duty, after what the Institute has already published with reference
to it, to return again to the subject, limiting ourselves to purely
monetary and account-keeping grounds, and an exclusively theoretical
explanation of the conception which, connected as it is with the
inductive researches of our fellow workers we have submitted to their
consideration.

In the first place let us examine into the use of money in society, and
to whom it is of use; we will next consider if it is indispensable.

Money presents itself to us as being an indispensable instrument for
effecting transactions which are not mere acts of barter, and it
presents itself also as having rendered possible,--and this is of
capital importance as the sequel will show,--the registering, the
writing down or account-keeping of the transactions, if one may so say,
which barter did not permit.

Money is exclusively of use to those who enter into commercial
transactions. Thus a man who could sufficiently provide for himself
in everything without any such transactions, would not have to make
any use of money; a landed proprietor may have a considerable fortune
and have only a small monetary need, whilst a merchant whose fortune
may be much less will find himself in a very different situation: for
the greater part of his fortune consisting of merchandise, continually
renewed, and consequently engaged in circulation, his monetary need
will be considerable. It may therefore be said that the need of money
is proportional to the need for commercial transactions.

Beyond what we have just pointed out, has money fulfilled, or does it
fulfil any other purpose? We shall see.

If, from the beginning, we could have had a system allowing us to
exactly register transactions, would money have been indispensably
necessary? In a word, is money in point of fact the particular element
in such transactions which caused the writing of them down, or, in
reality does not its use hide an agency entirely independent of money?
Let us examine this.

But we cannot do so without offering as a necessary preliminary a few
words in explanation of the term «transactions», which we have already
used and which will continue to be employed in this paper to the
exclusion of the word «exchanges».

In our opinion exchange properly speaking,--true exchange and free
from the alloy of any foreign element whatsoever, has never been
anything but barter; and as soon as the system of barter was left and
that of money entered upon, the exchange system was rather abandoned
for another system quite different, than that one form of exchange
was simply substituted for another form of exchange. And if we have
continued afterwards to make use of the word «exchange» it is due more
to the force of habit than in order to define the actual condition of
things.

What in reality fundamentally characterises barter, is that it is an
exchange, carried out on the spot, of goods immediately usable by
the two parties, each of them giving one usable thing in order to
enter into possession of another; whilst that which fundamentally
characterises the operation of selling and buying, by means of money,
is that it constitutes an exchange of goods carried out on the spot,
of which one form only can be immediately used by one of the parties,
the other party obtaining not a real thing but an instrument by which
he will be able to procure it. So that the party who has received
the money, the seller, has only thus obtained a _power_ to make
subsequently an inverse operation, that is a purchase where and when
it pleases him. The operation of selling and buying is then nothing
less than the _exchange of a thing for a power_. But can we still make
use of the word «exchange» to define such an operation? We do not
think so, and it is for this reason that we substitute for it that of
«transaction.»

The word «exchange» has continued to be employed after having quitted
the system of barter to enter upon the system of buying and selling, by
means of money, just as the expression «money» has continued to be used
to describe bank-notes, which are only paper having the power of money,
as money is an instrument having the power of «things.» Thus we have
here an example of the general rule, that the evolution of ideas and
of facts, is always more rapid than that of the words which represent
them.

Our opinion with regard to «exchange» will be found all the more
justified since it will be seen later on that the power conferred by
money upon the seller does not exclusively belong to the monetary
system, but that it can be obtained, and that theoretically it always
could be obtained, in quite another way, without exchanging anything,
without having anything to do with money, by simple entry, registering
or writing down of figures on paper which is not exchanged, but which
remains in one's own hands.

Let us now come back to the question.

We proceed to show that the relative value of things is independent of
the unity of value chosen, and that the transactions can be registered,
written down, abstraction made of the real, actual value of the
material support which has served to fix this unity.

In a general way and within possibly narrow limits, very different and
variable according as the case may be, given the existence in actual
society of fortunes and desires of all degrees of importance, one can,
in principle, admit that theoretically, the value _v_ of a thing or
of a certain quantity of goods, is proportional to the average _d_
of the desire to possess it, which the men demanding it have, either
on account of its use, or from any other reason, multiplied by the
number _h_ of these men and divided by the number _o_ offered of this
thing; these three factors _d_, _h_ and _o_ not being probably in other
respects determinable with precision.

We shall then have for the formula of value:

                           _v_ = _u_ × _dh/o_

_u_ being a coefficient of proportionality depending on the unity of
value adopted.

It will be seen that the term _dh/o_ represents in reality the account
of the conditions of the supply and of the demand at the moment and at
the place where the value is determined[B]. In substituting E, we have
a new term expressive of the value:

                             _v_ = _u_ × E.

The relatively fixed value of the precious metals has made it possible
for the unity of value to be determined on and easily represented by
means of a certain quantity of metal, and the actual monetary system is
the result, the value of all things having been henceforth expressed by
means of the monetary unity identifying itself with the unity of value
determined on. But it may in consequence be remarked in looking closely
into this, and it is important to do so, that this result has been
reached not because the thing: «metal money», has made its appearance,
but because thanks to it, a common denominator of the value of things
in general has been employed which did not exist before.

Now, as we shall see, this common denominator does not of necessity
remain invariably tied to the thing, money, or more generally to any
sort of material support which has served to define it at a given
moment. Once fixed it may be considered independently of this support;
becoming thus a permanent quantity in time and space, taking in
consequence the character of a common measure of the transactional
value of things and being employed as a unity of measure of that
value[C].

In reality this hypothesis could only be made when there was no such
thing as money, and a system of barter exclusively prevailing, those
engaged in making transactions might have said to themselves. «Let us
choose a common denominator of the value of things that we may write
down our transactions, and not be any longer obliged to carry on the
exchange of usable things when we do not want them, let us take for
example the value of a kilogram of wheat here at ... to day, the ... as
common denominator and let us calculate directly the value of all other
things by this unity.

»Evidently every other thing would be worth as many times this unity as
we see men would give kilograms of wheat to possess it, and thus the
numerical value of things would be easily established.

»Let us agree further in future always to express the value of things
by this initial value of the kilogram of wheat, _a value which has
only existed during the preceding operation, and which strictly can
only have existed for an indefinitely short time, but which can be
considered as absolutely permanent_, and apart from any necessity of
occupying ourselves with the variation of value undergone in time and
space by the kilogram of wheat itself.»

It will result that if _v'_ is the value of a thing at any period and
at any place of which the originally fixed value was _v_, the relations
will be:

            _v_ = _u_ × E       _v'_ = _u_ × E

  whence:   _v'/v_ = E'/E      and   _v'_ = _v_ × E'/E

that is the value _v_ of a thing at any time and place is equal to its
initial value simply multiplied by the proportion of the terms which
represent the conditions of the supply and demand at the two periods
under consideration.

Let us note, that, as it should do the formula _v'/v_ = E'/E shows that
the unity is eliminated when the point in question is the estimate of
relative values.

It is needless to say that we do not insist on the practical
possibility of the determination of the coefficients E and E', which
intervene in the preceding formula. We have in effect said that the
factors _d_, _h_ and _o_, do not appear to us determinable; we limit
ourselves simply to showing here, the theoretical possibility of the
system.

What is important to remark is that in proceeding, as we have just
pointed out, in all estimates of value and in consequence in the
registration of all transactions, the variation in the value of the
material support, corn, metal, etc. of the unity adopted does not
intervene in any way.

It will be further seen and we would insist on this point, that the
common denominator of the value of things takes in this system, by the
fact of its invariability, the character of a common measure; that it
can in consequence be taken as unity, and considered in an abstract way.

In fact this unity served once in a certain place and at a given moment
to fix the initial value of things. From that moment it separates
itself from the material thing which served to define it, which has
momentarily represented it, and which has served as a support in our
mind to effect the operations necessary to the relative fixing of the
value of things. These operations made, it is of little consequence if
the value itself of the kilogram of wheat varies, as is the case with
the value of every thing else. Its initial value was for ever fixed, it
can be taken as absolutely permanent and immutable,--the fundamental
condition which a unity of measure ought to satisfy.

In like manner original values of all kinds are equally constant
quantities and anyone from among them might be taken as unity.

In due course the actual values of things alter; varying continually,
and it is the same with the kilogram of wheat or with any support
whatever that has served to define the unity. The new values will
always express themselves numerically by means of the fixed unity,
although that has ceased to have a material representation. In
practice the new numerical values will be obtained very easily; from
the theoretical point of view they are fixed by means of the formula
already given:

                           _v'_ = _v_ × E'/E

a formula which by the way, shows that if it happened that for anything
at any moment and at any place, the elements _d_, _h_ and _o_ took
values such that the term (_d'_ × _h'_)/_o'_ should return to a value
equivalent to its initial value (_d_ × _h_)/_o_, the value of this same
thing would again become identical with its initial value.

This formula shows that the value of things is only relatively to be
taken for it varies ceaselessly, shifting to as great a degree as
supply and demand itself, just as human desire often does,--it is only
mathematically fixed in time and space, we would again repeat for an
infinitely short period.

This being so it is evident that it becomes possible to put down in
writing all transactions by means of the unity determined on. And if
this writing down of transactions can be made under a legal form,
that is, can be carried out under conditions which have the effect
of conferring on the seller a _legal right_, corresponding to what
the thing is worth to him who acquires it, and here we enter into the
conception of «social accountancy», it becomes useless, superfluous and
even harmful to make a material use of the thing representing the unity
of the value adopted.

It is thus that from the beginning, from the very time barter is
abandoned and it is no longer necessary to give a kilogram of wheat to
obtain possession of a thing, that at that very moment a writing down
would confer on the holder of a thing a right representing a value
equivalent to it and permitting him to effect under the same conditions
new transactions.

If things can thus take place, it will be seen how absurd it becomes to
persist in the custom of representing materially a unity which should
be detached from the support which has served to define it at a given
moment, and which no longer appears as anything but an abstraction
permitting in a homogenous manner the arithmetical representation by
figures, of the value of things, relatively and individually. This
abstract unity ought to be detached from every material tie.

On the other hand, it becomes evident that money does not in the least
constitute the indispensable element for effecting transactions. And
if at the distant period to which the introduction of money goes
back it had been possible to tell beforehand that transactions could
be written down in a simple but legal manner, after having fixed as
above indicated the numerical value of things by the use of a unity
essentially invariable, an enormous error in principle would have been
committed if to the unities admitted as estimates of value had been
given, as is actually the case now, a representation of them in gold
and silver,--the franc, the mark, the pound sterling.

The usage of money has taken from the unity of value that character of
invariability which it ought necessarily to possess.

This unity being associated in point of fact with a real article of
merchandise, society has been exposed either to want, or to have
too much of the matter thus become the indispensable element of
transactions, to suffer in fact monetary contractions and dilations,
the results of the traffic which necessarily takes place, results
which, for a nation producing the precious metals, like the United
States does, may possibly end in disaster.

A confusion must necessarily be brought about between the conventional
fixed value attached to pieces of gold and silver money and the actual
variable value of the very matter of those pieces. The conventional
value of a piece of silver corresponds to the value we have called its
initial value, and we have seen it was possible to preserve to that
initial value the character of absolute permanency. But how can its
invariability be assured if a material support is given to it open to
incessant fluctuations of value resulting from all the speculations to
which what ever can be bought and sold is submitted?

The very fact of the association of the unity of value with an actual
marketable article takes away all stability from the base of our
estimates of the value of things. If the price of any commodity,--for
example, some article of food or manufacture,--rises in comparison with
what it was 50 years or a century ago, it is often asked whether the
augmentation is real or only apparent and due to the diminution in the
value of the metal which supports the unity: it results clearly from
what has been advanced that the variation in the value of metal goes
for nothing if, _it be well understood that the quantity of money in
use is supposed to remain exactly proportioned to the needs of the
transactions_. But when monetary contractions take place, the implement
necessary in transactions is wanting, the value of things in general
falls, for those who are engaged in making transactions offer their
goods at a reduced price to get the monetary implement without which
they cannot effect their operations. It would evidently be the same
if this implement instead of being in gold or silver, was in wood or
paper; and still the same if it was represented only by comptabilist
unities.

Directly it is conceded that man must make transactions then, if an
implement is indispensable to that end, be that implement paper or
comptabilist unities, he will make sacrifices to procure it and will
for this object part with some of his wealth, and therefore the value
of things will in a general way fall. While if this implement is
in excess, that is if there is monetary dilation, as excess of the
implement is of no service to the great bulk of those who transact
business, who only want what is necessary to effect their transactions
and nothing more, it will be found that the value of things cannot be
affected by this as it is in the preceding case.

We would say that if this implement is in paper, or represented by
accountancy unities, its excess would do no harm, nor have any effect
on the value of things, when in the contrary case as we have just seen,
this value would fall. But if it is in gold or silver and instead of
being stored up in the iron safes of the banks it circulates amongst
those who transact business, these last will seek to get rid of it, not
because as in the preceding case it is a mere implement of transaction,
but as a valuable metal, and in consequence of withdrawal of this kind
the value of things will be raised.

When we say that the value of things in general would rise in a case
of monetary dilatation occurring in the way we have put it, and that
it would fall in the case of monetary contraction pure and simple, it
is because we are allowing that the supposed want or excess of money
would make itself generally felt amongst those engaged in transacting
business. If it only affected a special class of such persons, if
gold or silver were only wanting or only circulated amongst them, it
is needless to say that the rise or fall in prices would only affect
the commodities in which their special property exactly consisted.
We believe it right to attempt to give as logically deduced from the
preceding formulas this note of precision in a rather complex question,
which, as we think, has not always been rightly looked at, and that, in
consequence of the fact that in money, a marketable article of variable
value, is associated with a unity which ought to be invariable.

In our epoch of exact science and profound insight into phenomena and
things, it is no longer possible to err on the very basis of a question
of an interest so general and so vital as this relating to the monetary
system. The suppression of such a defective instrument as money and
its substitution by a mere simple writing down of transactions,
but legally guaranteed,--a system which we have entitled «Social
Comptabilism» demands the study of every economist who wishes progress
independently of any dogma, doctrine or party. The time is at hand in
which by the force of circumstances it must be carried into effect in
highly civilized countries. Germany, almost entirely educated to-day,
should have no reason to oppose its adoption, if she saw clearly the
advantages which social comptabilism presents and the difficulties and
inconveniences which would disappear on its use. It would be a great
error to imagine that any kind of economic revolution is necessary
to establish it. In Belgium M. De Greef[D], in his «_Essais sur la
monnaie, le crédit et les banques_», has shown how simple, logical
and profitable it would be to approach it by rapid strides resting on
the fundamental principle of «social comptabilism»,--the guarantee
of property. M. H. Denis[E] in his work on the «_Organisation et le
Fonctionnement du service des chèques et des virements à la Caisse
d'Epargne postale de l'Empire d'Autriche_», shows how such comptabilism
has been already approached in what chiefly relates to deferred
payments, in a great country, which although it does not generally lead
the way in progress, seems to have correctly apprehended what relates
to the machinery money masks and wrongly represents.

We shall only add one more observation in justification of the way we
look at the matter, it is that in our country there is in principle at
the present time in the financial organisms patronised and guaranteed
by the State, all that is needed to realize «social comptabilism».
Does not the National Bank of Belgium, as well as the Bank of France,
among our neighbours to the west, issue bank notes,--and from our point
of view, these notes represent unities of comptabilist value--to all
those who offer them sufficient guarantees. In exchange for a deposit
of securities, or for well known signatures, paper is obtained, notes
equivalent to metal money:--this is already on the road to social
comptabilism.

In place of that, let these banks issue notes, counters--only possible
to be used once--or rather bankbooks containing leaves or fractions
of leaves, or squares having a meaning equivalent to that of notes
or counters, or able in some way easily to realize that meaning, and
which would be simply obliterated in case of transactions accomplished
and the working of comptabilism is fully seen although only at the
threshold of the system.

Let the State then enlarge to the utmost degree possible the power
of these banks to issue such notes or cheque books; let these be
authorised to accept mortgages, deposits and all guarantees from
third parties or others, whether directly or more indirectly by the
intervention of other public organisms appointed to the work, or even
analogous private organisms, of a solvency secured beyond all doubt;
let this issue be made for any amounts, however small; let these
establishments be even authorised to issue notes similar in form, but
blank, or account-books to people without means and only usable on the
understanding that all that results in connection with them is at the
risk and peril of those transacting business, and we have arrived at
comptabilism complete and definitive, even to the point of suppressing
the copper coinage.

It is evident that in this way society as it is at present organised,
can demonetize the precious metals and establish social comptabilism
without in principle having to make any revolution whatever in its
present position, it has only largely to increase a portion of its
machinery, already existing and in full swing. To sum up, it is a
question of a simple change in the machinery of transactions and all
society is interested in the realization of such a progress purely
mechanical and functional, which moreover has no connection with any
doctrine, opinion or party, and is no new invention whatever.

In conclusion, and at the risk of repeating ourselves, in order to
explain our idea under all its forms, and to render it accessible to
every mind, we think we cannot do better than to recapitulate it in
formulating some articles which set forth in principle the basis on
which legal arrangements could be made on the hypothesis that the
legislative power should determine suddenly to decree the application
of «social comptabilism» such as we have defined it in basing it on
the guarantee of property, on the employ of account books, with debit
and credit entries, and on the use of a stamp or punch to inscribe or
obliterate figures.

The articles recapitulate the essential principles of the reform
from a point of view wholly general, the only one in this notice we
have proposed to examine, leaving for the present absolutely out of
consideration details of application which have to be studied and which
might vary infinitely.

It is needless to say that we by no means believe that a reform like
this can be realized at once, we rather think that it will come by
stages, as is always the case in every fundamental change relating to
any established order of things.

The intermediary phases would probably be the adoption of the system of
comptabilism already in operation in Austria, principally for defered
payments, as it is explained in the work of M. H. Denis, already cited
(it would be only necessary to add to this system the guarantee of the
State, based itself entirely on the guarantee of individual property,
in order to enter into the plan of «social comptabilism»), and on the
other hand, a large extension of the issue by the State of paper money
for that which concerns current payments as proposed by M. De Greef (it
would suffice to add the system of stamping as equivalent to signature,
the limitation of the use of paper to a single operation, and its
regular return to the Accountant's Office, for to make such reforms
equally a part of the plan of «social comptabilism»).


Articles setting forth the principles of an organic project.

1.--From ... the monetary system shall be replaced by the comptabilist
system.

2.--The National Bank shall become a comptabilistic establishment,
commissioned to deliver to individuals, to societies, etc., account
books, divided into leaves and squares having a certain significance
for the credit, and leaves and squares having a certain significance
for the debit, in which the signification of the transactional
operations effected, and which at present involve the use of money,
shall be stamped[F] respectively to the credit and debit of the
account-books of each of the operators in account unities equivalent to
the actual franc.

3.--The accountant-general will deliver either blank account-books,
or account-books having a certain sum inscribed to the credit of the
account-book.

4.--The transactional operations inscribed in a blank account-book will
be effected at the risk and peril of the operators. Every-one will be
able to obtain such an account-book.

5.--Contrariwise, the transactional operations inscribed in a credit
account-book will be made under the guarantee of the National Bank, but
only in so far as they concur with the sum inscribed to the credit of
that account-book.

6.--Every-one can obtain credit account-books, for a certain sum,
either in mortgaging some corresponding property in favour of the Bank,
or in offering to it the guarantee of a third party, who should have
agreed to a similar mortgage, or ...

7.--An account-book out of use or obliterated, or of which the
sum appearing to its credit is exhausted, will be returned to the
accountant-general; should such returner of an account-book have a
balance, then the accountant-general will open an account in the
official books, and enter this balance to that account.

8.--Every individual whose account-book balance is to his credit will
be able to obtain credit account-book for a maximum sum equivalent to
this balance, if he offers a corresponding mortgage either as before
stated, on an existing property, or on property he may acquire by means
of the sum thus inscribed to the credit of his account-book.

       *       *       *       *       *

What has preceded shows how simple, unobtrusive, passive is the part
played by the accountant-general.

The books containing the figures signifying what transactions have been
effected either to the credit or debit side, with the figures attached
identifying those who have made the transactions, are remitted to him.

He adds up the credit and debit account and, if there is a balance,
enters it to the account of the possessor of the account-book. That is
all. If he comes across mistakes or errors, he rectifies them, notably
if he discovers that the statements of the account-books do not agree
with the corresponding statements of the account-books of those whose
transactions appear there.

The accountant-general acts as a piece of machinery would act. He is
a recorder of figures, _a registrar of balances_. If there are no
balances to enter he does not even make a registration, and is then
only a _legal witness_ of transactional operations. No more is asked
of him in order to arrive at the suppression, pure and simple of the
monetary system.

But from the day in which the comptabilist system becomes legal to
the exclusion of the monetary system, from the moment in which each
individual has his personal account introduced into the registers of
the accountant-general, his _transactional life_ is henceforth, and
for ever, represented on the one side by the mortgages and guarantees
that he furnishes in order to obtain comptabilist unities, on the other
hand by the balances of his account books that the accountant enters
successively and indefinitely to his account. If the whole fortune of
each person were treated in such a manner, and it is this we foresee
must be the legal situation in the definitely social state (having
for sole tax the succession duty, etc., etc.), it is plain that the
true function of the accountant-general would be that of recorder
of the state, of the shifting social position of each person, the
determiner of the diagram of his active, relatively effective life.
Each individual would thus have the stereotype of his effective social
life cast; each social being would have his effective life formulated,
if one may so speak, _by relation_, always by relations, nothing but by
relations--to that of all the rest, but in figures, and yet again, in
nothing but figures. And herein is seen clearly the fundamental error
or profound confusion of those who believe there can be any other thing
in the social problem which occupies us than what has just been stated;
of those who imagine that capital or fortune must be able at _every
moment_, and not eventually, in the sole end of utilising the metal for
itself, to be represented by its equivalent in gold or silver; of those
who persuade themselves that the words capital and fortune represent
anything else than _relative_ social power of action or enjoyment which
it is sufficient to record, to make public, purely, simply and legally,
as we propose, in order that it may be absolutely guaranteed to each
person.

                                                ERNEST SOLVAY.

FOOTNOTES:

[A] _Annals of the Institute._ N^o 1. June, 1894.

[B] If it is not admitted that the term _dh/o_ exactly represents
the account of the conditions of the supply and the demand, it could
be represented in a more general way by a function F (_dho_) of the
elements _d_, _h_, _o_, which are the only ones which ever can,
according to our view, intervene in the fixing, for even admitting that
things could be regulated to the last point, socialized if you will,
these two elements of supply and demand would at least remain always
existing and dominant.

[C] It is by design that we employ the expression _transactional value_
in order to differentiate it from a value such as would result from a
theory of the measure of value based on work stored up in transactional
merchandise, a theory with which we have not here to occupy ourselves.

[D] _Annales de l'Institut_, 1896. N^{os} 1 and 4.

[E] _Annales de l'Institut_, 1896. N^o 5.

[F] We think we ought here to recall (see: _Comptabilism et
Proportionnalisme social_) that every-one who makes transactions
carries about with him not only his account book, but also a marker
or stamp bearing representative figures or signs, identifying his
personality and by aid of which he inscribes or obliterates the
figures significant of the transactions in the account book of his
correspondent.

It is needless to add, that instead of marking,--an operation we have
always put forward the better to show that all account-keeping can be
done by simple inscription or the registration of figures and without
any «exchange» whatsoever, not even of bits of paper--a system could
be adopted, for example, consisting of having on the credit and debit
sides of the account-books, leaves of stamps more or less analogous to
postage stamps, credit-stamps which the buyer would detach from his
account-book, and which would be fastened into that of the seller,
then the seller would detach from his account-book corresponding debit
stamps to be fastened to the debit side of that of the buyer. These
stamps would carry naturally besides their signification the same
figures or representative signs of the personality of the maker of the
transaction as the marker they would be destined to replace.

The comptabilistic system making use of such stamps rather than of
marks would be applied to defered payments as well as to current
payments, it could be thus used in every case.

The principle of the account-book consists naturally in the book
forming a real account with debit and credit--like all accounts in
ordinary book keeping,--in which is inscribed in a way which would be
regarded as valid, having legal force the sums corresponding to the
transactions effected either by being written out at full length, with
the signature, or by marking in figures, and indicating at the same
time the personality of the party making the transaction, or by means
of stamps as we have just seen, or finally by some other way.

Directly we leave the principle above mentioned to look at some
intermediary form of its application, a host of combinations offer
themselves. The use of stamps for example would permit doing away with
the debit side in the account books. The buyer in this case detaches,
from his account-book, which becomes now only a credit account book,
the stamps corresponding to the extent of the transaction, and he
sticks them in the account book of the seller, which is also only a
credit one: the credit of the seller increases, that of the buyer
diminishes, that is all. If the buyer does not stick his stamps in the
account-book of the seller, these stamps can circulate, they would be
analogous to bank notes which have been endorsed by writing upon them
the name of the first party holding them.



SOCIAL COMPTABILISM

(COMPLEMENTARY NOTE)


By ERNEST SOLVAY

In the last number of these Annals[G], I explained in a manner which I
consider definitive, the theoretical conception of comptabilism.

To this point of view it seems to me necessary to add a few words in
order to throw light on certain points which the first article did not
sufficiently bring out.

We have seen what is the use of money and to whom it is of use, we have
considered if it was indispensable. Gold and silver are not a «real
commodity» except when they take the form of useful objects, utensils,
works of art, etc., the possession of which produces enjoyment. Turned
into coin, they lose this character, they become an instrument, an
instrument recognised so far as indispensable for obtaining a real
commodity, be this commodity material or moral, by an operation which I
have designated under the general term of «transaction». Money is not
then a commodity in the true sense of the word; on the contrary it is
generally obtained by the surrender of a commodity.

It is solely in order to accomplish the «operation» of transaction that
money is needed, because this is the method, the means, the instrument
which custom has consecrated; and if another practicable method, means
or instrument were found in order to accomplish this operation money
would no longer be indispensable. Now, this is what comptabilism does.

It is essential to note here that the comptabilistic unities, francs,
marks, pounds, etc., would be derived from securities, and not, as
with money by the surrender of commodities, that in consequence these
unities would no longer have a value by themselves, but simply by the
things which they represented.

But apart from that, they could be with held or parted with, they could
be borrowed or lent, with or without interest, directly from man to
man, or by the medium of banking houses, exactly as in the case of
money.

And in fact, if the force of habit required, nothing would prevent
their being called money of account or comptabilistic money, since
apart from what has just been said as to the way of obtaining them
and their nature, nothing would be altered in the current methods,
everything would remain as to day both in the organisation of business
and of society. And all that might have been said, written or thought
until now in an opposite sense to the fore going considerations
should be held as contrary to the reality of the facts resulting from
comptabilism.

The conception of the comptabilistic system is one quite other than
that of the monetary system. There is not the smallest trace of this
second conception in the first; it becomes necessary to leave entirely
the one to understand the other. In a word the two conceptions mutually
exclude each other; the one is based upon _exchange_, the other upon
_accounts_, and the two systems derived rest thus on two essentially
different principles.

The examination of the theoretical side of the comptabilistic system
could not be undertaken through the ideas, nor from the point of
view derived from the monetary system. It is necessary first of all
to accustom oneself to think and speak of business, finances, etc.,
abstraction being made of every idea of money and to persuade oneself
that transactions--and by transactions I understand every operation,
whatever it may be, which gives rise at present to the use of money
or its equivalent--when finally analysed, only modify the ratio of
fortunes. If these ratios could be continuously recognised and fixed,
could be officially registered, money would lose its use. Indeed,
money put in circulation by whatsoever an operation is only a means of
granting to the one who receives it, the power to acquire subsequently
its equivalent, the other who has given the money having diminished by
this much this power as far as he is concerned.

Now the comptabilistic system in officially registering this power,
acquired on the one hand and diminished on the other, permits the afore
mentioned ratios being fixed, and realises entirely the part played
by money. Therefore it can entirely be substituted for the monetary
system. And let it be said, in its favour, that the power registered in
this system cannot itself be lessened by the fact of the fluctuations
in price of the metal, as actually now takes place. Moreover, the
necessity which exists at this present moment of surrendering
commodities to procure the monetary instrument indispensable in
transactions, would disappear.

It is evident that it might have been possible _theoretically_ to
pass directly from the regime of barter to the application of the
comptabilistic system, and if one admits that the conception of
this system could have been produced at this far distant epoch, and
have been thus used from the commencement,--which in the presence
of the laws of evolution of the human mind, could only be a pure
hypothesis--it must be immediately granted that the monetary idea
could not then have occurred to anyone--and even admitting, which
is impossible, that it had occurred all the same to someone, no one
would have dreamt of making use of it, so much in the presence of
comptabilism would the monetary system have seemed barbarous by its
illogical and inconvenient character.

Such are the theoretical considerations which it seems necessary to
insist upon.

But if there is a difficulty in comprehending the question from its
theoretical side, this difficulty disappears if approached from the
practical side.

This is what will be seen on examining the system which M. Hector
Denis has gone to study in Austria and which he proposes to realise in
Belgium.

All the post-offices in the Austrian Empire are in connection with
the Savings Bank, the central establishment of which is in Vienna and
which has become during the last few years a thoroughly comptabilistic
establishment, in this sense, that,--independent of its primitive aim,
it keeps the accounts of over thirty thousand who are affiliated and
who annually through this medium do business of which the figures are
above a thousand millions of florins.

The Savings Bank exacts from those persons who wish to transact
business through its medium, a fixed monetary deposit of 100 florins,
without relation therefore to the importance of the transactions which
they can effect; it opens for them an account and delivers them, upon
request, cheque books which serve to effect the payments which they
desire to make. All this is done by the intervention of any post-office
of the Empire.

Each time that a cheque is paid by an affiliated person, the Central
Office at Vienna is advised by post and returns immediately, also by
post, an extract of their account to the two persons concerned. Each
affiliated person's account is thus kept to date, and this as much for
the Central Bank as for the person affiliated.

Here then are thirty thousand persons who could at a stretch do
entirely without money--if their mutual relations were sufficient to
permit them to do so for all the necessaries of life, and this result
is obtained merely by the fact that an official establishment is
willing to undertake to keep the banking account. But it is seen that
these thirty thousand persons are but a select few in the mass of the
population, since the Savings Bank admits them to carry on transactions
merely upon the deposit of 100 florins, thus almost always at the risk
and peril of the transactors, as has always been the case so far in
regard to cheques. And it is evident that if it were desired to make
the system general, it would be necessary to adopt the principle of
comptabilism which would mean that the transactions were guaranteed by
the property of the persons affiliated.

Here then, as I said, has the Savings Bank of Vienna become up to
a certain point a comptabilistic establishment. I may add that the
dangers that might threaten this institution, as far as it actually
works, spring from its being not entirely comptabilistic, in so far as
it still retains the metallic basis.

The deposits received are not left unproductive, they are placed in
funds, public or otherwise.

Let a political crisis occur which should cause a rush of withdrawals
of these deposits from the Bank and it would be exposed to the greatest
dangers. Solely because the institution is based upon current ideas and
not upon the comptabilistic system.

In effect, in this latter system, the individual who is affiliated does
not make a deposit of monetary unities having a value in themselves,
he gives as a pledge a commodity, and according to the value of this
commodity he is permitted to make use of more or less unities.

Here then is the ground on which the institution ought to be based.
Under these conditions deposits are not necessary. The affiliated
person will give a pledge in exchange for his cheque book. The
registers of the Central Savings Bank will declare that he is permitted
to carry on transactions with _x_ unities, and his cheques will be
accepted, as long as he does not go beyond this figure.

In place of a deposit having a value of its own, there is the simply
writing down, the entry of a right, and the dangers of the present
system would be avoided.

The entry and the writing down constitute the ideal realization of
the comptabilistic system. They lead one to understand that the
transactional unities have only a fictitious value, that they serve
solely to measure the transactional value of things, that their system
is thus dependant on the existence of these things.

Ideally speaking, all the transactions, that is to say the changes in
the fortunes of individuals, may be written down, may be entered, for
example in bank books.

But concerning the practical side, although the entry remains the ideal
conception, it may be that the necessities of human relations require
other methods of a more convenient nature. This is a side of the
question upon which we hope soon to set forth some solutions, but which
can be discussed without the theoretical side of comptabilism being
introduced.

                                                ERNEST SOLVAY.

FOOTNOTES:

[G] _Annales de l'Institut des Sciences sociales_, of Brussels.



THE ORGANISATION AND WORKING

OF THE

CHEQUE AND CLEARING SERVICE

(CHECKS UND CLEARING VERKEHR)

IN THE AUSTRIAN POSTAL SAVINGS BANK


By HECTOR DENIS

The accumulation and safe keeping of funds, their investment with
the triple guarantee of security, productiveness and easy and prompt
realization are regarded as the fundamental functions of Savings Banks,
and it is in these directions that their development has especially
been accomplished.

The comparative studies on these institutions, such as the works of
Rostrand and the fine account of Messrs Hamande and Burny testify to
the increasing ingenuity of the means of drawing out and gathering up
savings, and of the great expansion Savings Banks well conducted can
give to divers forms of credit, and will finally be obliged to give
them.

But such is the flexibility of this institution that in carrying the
spirit of reform into the means of assuring to the depositor the most
prompt and convenient disposal of his savings, there ought, in order to
apply it to his payments, to be accomplished in the Savings Bank, an
evolution equally fecund in a new direction.

A savings bank like that of Vienna having at its command the powerful
lever of the postal service, combining in a few years with singular
ability, the centralization of the accounts of its depositors with the
post office functions,--at once receptive and distributive, centripetal
and centrifugal, cannot fail to appear one of the most ingenious,
stable and perfect organs of modern circulation.

There is no need to discover in this functional evolution the
realisation of any new principle--undeniable bonds of filiation attach
it manifestly to the Bank of Amsterdam, whose system of clearing
accounts Adam Smith has so admirably described, and in a still more
distant past to the Bank of Venice, which, more perhaps than the Bank
of St-George, served as a type to the Bank of Amsterdam; only like the
most advanced modern institutions of credit and settling up, it has,
over the primitive institutions, the advantage of perfections of means,
of rapidity, and of an ever-growing importance in its operations, and
of an ever increasing economy of money;--it has as its own peculiar
features conditions of special expansion, valuable means of control and
specially a capacity of adaptation to a system of credit institutions
which can make it one of the instruments of the transformation of the
monetary system.

The Austrian Imperial Government in carrying out the reforms which are
the subject of this paper does not directly pursue the solution of the
monetary problem, but is primarily occupied with the financial interest
of the Savings Bank. As its able secretary, M. Tobisch, has explained,
the law of May 28^{th} 1882, of which the text is given further on,
in organising the Postal Savings Bank, caused no doubt a considerable
number of deposits to be made, but their average importance was so
feeble and they involved such general expenses, that the cost almost
completely absorbed the results of the investments. In order to
distribute these general expenses over a greater mass of monies and
to realise a larger clear profit, that is to cause more considerable
deposits to be made by especially interesting tradesmen and working-men
to have recourse to the medium of the Savings Bank, a notice of the
Minister of Commerce of Oct. 29 1883, authorised the depositors of over
100 florins to draw cheques on the Central Office at Vienna. Originally
the depositor remained the holder of his account-book, but from Dec.
1 1886, the deposit of all such books at the Central Office in Vienna
became obligatory for those who wished to take advantage of the cheque
service. The institution of this service had a considerable influence
on the progress of the amount of deposits; before the reform in 1883
the total deposits amounted to 8,176,889 florins, a year after in 1884,
they reached 56,586,461 florins, of which 46,223,539 was connected with
the cheque service.

The natural corollary of the centralisation at Vienna of the accounts
of all those who adhered to the cheque-service was the organisation
of the service of clearing accounts, for the more the number of its
adherents increased, the more frequently it happened that one depositor
drew a cheque in favour of another depositor. The cheque, up till then
payable in specie, became a clearing cheque realisable by a simple
transfer in writing. This complimentary service which is destined to
become the principal one, was instituted Sept. 1 1884.

The Austrian institution is only at present an element in the vast
modern system of credit and the balancing of accounts and no one is
ignorant that the system entirely rests on metallic money, as Stanley
Jevons, Francis A. Walker and Macleod have elsewhere clearly shown.
Macleod makes the striking comparison of modern circulation to the
movement of a peg top which spins round on a very fine metallic point.

The Postal Savings Bank, as it is organised and works, has not yet
any kind of purpose of freeing circulation from its metallic basis,
but like all other credit institutions, it contributes to this end by
economising more and more the use of money; with extraordinary powers
of expansion, it enables an ever increasing number of respectable
persons, associations or bodies, to effect all their payments without
the least risk, almost without loss of time and without having to
keep any metallic money in their possession. And if one tries to
conceive the future ideal evolution of an instrument so flexible as the
Savings Bank, one may expect as I shall attempt to show in subsequent
papers, that in combining its circulatory function with its function
of investment it will be led into concurrence with the radical
transformation sought by M. Solvay in the definitive elimination of the
metallic instrument.

The sources from which the materials of this account have been drawn,
are the laws, regulations and instructions of which the translation
is appended, the statistics of the cheque and clearing service in the
last official report (Zwölfter Rechenschaftsbericht des postsparcassen
Amtes) the remarkable studies of M. Tobisch, secretary of the Savings
Bank, and finally direct observation. Guided by one of the most
enlightened officials of the Savings Bank, Inspector L. Kotschy, I
have been able to penetrate into the inner life of this admirable
institution. The Vienna Central Postal Bank occupies the old palace of
the University; there, distributed in its antique halls, a population
of 1,300 employés, among them 150 ladies, working after a skilfully
organised plan, pursue silently now for thirteen years, with inflexible
method, an experiment of very great interest for science and for
the economic life of societies. Bound by invisible threads to more
than four thousand secondary organs:--the post offices, which plunge
directly into the torrent of the exchanges,--the Central Office records
each day with extraordinary precision the minutest changes that the
ever increasing number of its adherents accomplish in the social
movement of wealth.

All the operations of which it thus fixes the traces arrange themselves
into two great classes which recur as the two essential aspects of
the rhythmic movement of a central organ of circulation; one joins in
the formation of the property of every adherent of the system, in the
constitution of his credit at the Central Bank; the other leads to
different modes of disposing of his property and to the formation of
his debit.

The services of cheques and account-clearing[H] of the Austrian Savings
Bank enable on the one hand every person to make, under conditions
fixed by law, in any Post Office in the Austrian Empire, payments on
account, or to the profit of all those who participate in the service;
on the other and they enable every adherent to assign by means of
a payment cheque, a part of his property to anyone, physically and
morally, or by means of a clearance cheque to cause the transfer to be
made to the account of another participator in the service.

The Austrian terminology bristles with difficulties, the name of
_cheque verkehr_ is here given to the first of these services,
_circulation of payment cheques_ resulting in the end in the use of
metallic money, and to the second service, the name of _clearing
verkehr_, circulation of _clearing cheques_, which resolves itself, as
far as the Savings Bank is concerned, into the transference from one
account to another, in the substitution of one creditor for another.

The cheque service may exclusively be adhered to, or the cheque and
_clearing_ service.

For affiliation to the cheque service it is necessary to request the
Office of the Postal Savings Bank in Vienna to open an account, to send
a cheque book and a book of _certificates of receipts and deposits_,
of which we are now about to speak. The cheque book costs 1 florin 50
kreutzers, the certificates of deposit 1 kreutzer a piece.

The Post Office can refuse the request without having to give any
reason. If an account is opened to the grantee, he receives cheque
books and certificates, but he is bound within a month to effect a
deposit of 100 florins as security. Neither the law nor the regulations
fix any maximum of deposit. The minimum of 100 florins will remain in
the hands of the administration, without the person entitled to it
being able to dispose of it as long as he has an account open in the
Post Office. The adhesion to the _clearing_ circulation is at once
requested by the Post Office, of adherents to the cheque service.

The number of adherents to the cheque service is not identical with
that of adherents to the service of _clearing_. For the thirteen years
that these services have been instituted the first has always taken
precedence of the second, but the divergence which exists between
the two numbers is being reduced and the number of adherents to the
_clearing_ service tends to blend and will finally blend with the
adherents to the cheque service.

The geographical distribution of those who have accounts in the two
services is of much interest. In 1895, out of 28,363 adherents to the
cheque service there were 27,820 in Austria, 353 in Hungary, and 190
abroad,--163 in the German Empire, 5 in England, 1 in France, 3 in
Holland, 5 in Italy, 3 in Switzerland, 2 in Belgium--an interesting
fact.

The twelfth report: _Zwölfter Rechenschaftsbericht des postsparcassen
Amtes_, insists on the important number of Hungarian commercial
firms, affiliated to the Austrian Bank, all of whom have an account
open in the Post Office Savings Bank instituted in 1887 at Budapest;
it announces the approaching inauguration of a direct and regular
service of account-keeping between the two Banks, a service to which
the traders in both countries attach great importance. It will mark a
new phase in the evolution of the institution; and form as it were the
preface to its internationalisation.

It is curious to note that out of 543 residing in Hungary and abroad
who have cheque accounts, there are 434 who are affiliated to the
_Clearing_ at Vienna, that is 79.9%, a proportion very much larger than
is seen in all those in the various Austrian provinces.

The number of those having accounts has successively been:

                In the            In the
            cheque service  clearing service
  In  1883          167
  »   1884        2,520           1,283
  »   1885        6,877           4,733
  »   1886       10,553           7,274
  »   1887       12,981           8,758
  »   1888       14,296           9,836
  »   1889       16,046          11,025
  »   1890       17,808          12,200
  »   1891       19,391          13,331
  »   1892       21,365          14,955
  »   1893       23,471          16,197
  »   1894       25,834          18,250
  »   1895       28,363          20,750

From the above it is seen that the proportion per cent of the number
of adherents to the service of clearing rises gradually in the later
years;--after having from 1890 to 1893 been nearly uniformly from 69 to
70%, it rises in 1895 to 73.2%.

The classification of the adherents from the point of view of
conditions and profession reveals the elasticity peculiar to such
an institution. Advocates, notaries, doctors, even professors
appear in great numbers. Manufacturers and traders united represent
nevertheless more than half the total number of members; 339 bankers
and money-changers, 362 associations for savings and loans, 220
private savings banks, 1,490 associations or corporations,--public
establishments of which 185 were communes and administrative
bodies,--271 benevolent associations, funds, establishments and
foundations, 175 agricultural and forestal associations and 175
religious associations, 266 assurance societies, and 204 journals or
periodicals serving as media for the Savings Bank. The administration
of the State forests and domains have recourse to the Savings Bank in
order to bank the produce of the forestal sales, and the administration
of taxes is now experimenting as to its intervention for the getting
in of duties. This institution thus presents a marvellous flexibility,
invading by degrees the whole domain of exchange and enveloping one by
one all the organs of the collective life.

Let us first explain the modes of operating payments to the profit of
every member affiliated to the cheque and clearing service. In the
first of these modes, the instrument employed is the _certificate or
attestation of receipt and of deposit_ (_empfang erlag scheine_). (Fig.
1.)

Books containing blank certificates are issued by the Central Office
at the low price of a kreutzer the piece, to every person adhering to
the cheque and clearing services; these are books of 10, 20, 50 and
100 pieces, and to meet the needs of various holders they are drawn up
either in German or in some other of the tongues spoken in the Empire.
All these certificates bear the number of the account to the operations
of which they are destined and carry the name and the address of the
account holder.

Each of the certificates presents three parts which are separated
one from the other in the course of the operation: the first, the
counterfoil, remains attached to the book and in the hands of the
holder of the account; of the two others, one, the attestation of the
payment, has to be returned by the Post Office receiver to the person
who makes the payment; the third the certificate of the deposit has
to be transmitted to the Central Office at Vienna, which returns it
to the holder of the account. To make a payment it is necessary to
fill in the certificate of receipt and the certificate of deposit,
and to present them at a Post Office with the sum to be paid into the
holder's account. The receiver of the Post Office will bank the sum,
and will sign the receipt, imprinting on it the stamp of the office,
and will remit it to the person making the payment; he will then
detach the certificate of the deposit and will send it to the Central
office at Vienna with the daily account of his operations. The central
administration will immediately credit the person in whose favour the
payment is made, in the account that it has opened for him, and it will
then transmit to him the deposit certificate with an extract of his
account.

Such is the series of operations which result from _empfang erlag
schein_.

Suppose for example that the holder of an account is a merchant who has
furnished supplies to a customer in the provinces to the amount of a
hundred florins, net. He fills up a leaf of the account book, bearing
a certain number, on which he indicates the amount payable, and which
payment is to be placed to his account; he sends this leaf to his
customer, keeping the counterfoil with the customer's name written on
it: the customer forwards the leaf to the Post Office where he lives
with the sum due: the postal receiver separates from the leaf the
certificate of receipt (_empfang schein_), which he signs and returns
to the customer, he sends the certificate of deposit to the Central
Office at Vienna, where the sum is carried to the account of the
merchant. After which the deposit certificate bearing the name of the
person making the payment is forwarded to the merchant with an extract
from his current account, enabling him thus to exercise strict control.

[Illustration: FIGURE I.

                               [1]Coupon

den ____ 189__

[2]Empfang-Schein

pr. ____ fl. __ kr.

gesendet an:

D. S. Nr. 37 c (15.) ex 94.

       *       *       *       *       *

                                                                 Nummer

                           [3]Empfang-Schein

über eine Einlage von ____ fl. ____ kr., d. i.

fl. _______________

                    auf das Check Conto Nr. 800.000

                    des k. k. Postsparcassen-Amtes.
                           [4]Conto-Inhaber:

                       JOSEF FISCHER, JÄGERNDORF

       *       *       *       *       *

                                        [5]Unterschrift des Postbeamten

       *       *       *       *       *

                        [6]Erlag-Schein  Nummer

über eine Einlage von ____ fl. ____ kr.

geleistet durch. ____ ____

                        auf das Check-Conto Nr.
                                800.000
                    des k. k. Postsparcassen-Amtes.

[7]Postempel:

[8]Dieser Erlag-Schein ist durch den Postbeamten abzutrennen und mit
der Tagesrechnung an das k. k. Postsparcassen-Amt einzusenden.

D. S. Nr. 37 c (15.) ex 94.

       *       *       *       *       *

                                           }Von der Partei auszufüllen.

       *       *       *       *       *

[1] Voucher.

[2] Acknowledgement of receipt of ... fl.... kr. sent to ...

[3] Acknowledgement of a payment of ... fl.... kr. l. e fl.... to the
cheque-account N^o ... of the Post Office Savings Bank.

[4] Holder of the current-account.

[5] Signature of the post office official.

[6] Acknowledgement of a deposit ... fl.... kr. made by ... to the
cheque account N^o ... of the Post Office Savings Bank.

[7] Post Office stamp.

[8] This acknowledgement of deposit is to be detached and to be sent
with the daily account to the Post Office Savings Bank.]

[Illustration:

       Space for notifications sent to the holder of the current
               account (affix a postage stamps of 2 kr.).

       *       *       *       *       *

By means of this acknowledgement of receipt, a payment to the cheque
account designated on the other side may be made in every post office
(receiving office).

The acknowledgement of receipt and the acknowledgement of deposit,
properly filled up are to be presented with the sum in question to the
post office official. This official certifies the receipt of the sum
on the acknowledgement of receipt and returns it to the payer, whilst
he detaches the acknowledgement of deposit and sends it to the Post
Office Savings Bank. The Savings Bank informs the holder of the account
both by extract from the current-account and by the acknowledgement of
deposit, that the sum has been received.

Acknowledgements of receipt or deposit on which are found erasures,
obliterations or alterations of any kind, either in the printed text
or the written sum are not accepted by the post offices. Similarly
acknowledgements of receipt or of deposit which are very dirty or much
torn are refused.]

Deposits can be made by the intermediary of rural postmen to the extent
of 500 florins. In this case the receipt and deposit certificates must
be remitted to them with the sum; a provisional receipt is given which
is replaced at the next round by the official receipt of the district
post-office.

It will be interesting to show the importance to which this mode of
arranging deposits has now attained.

There is at the Central Office at Vienna a printing office which
permanently employs 16 workmen, exclusively engaged in printing cheques
and certificates of receipts and deposits. Six million of the latter
kind of certificates are now annually printed and the number of them
printed since the setting up of this system in 1883 amounts to 107
millions. An office for the verification and control of the printed
matter is connected with this workshop. As to the amount of payments
made through these certificates to the accounts of holders the 12^{th}
Report enables us to give the statistics.

At the opening of the year 1883 the sums paid into the funds of the
account holders, by means of the _Empfang erlag schein_ amounted to
322,284 florins.

They rose successively:

  In  1884  to   43,748,349  florins.
  »   1885  »   217,109,144     »
  »   1886  »   361,466,434     »
  »   1887  »   442,138,414     »
  »   1888  »   446,874,084     »
  »   1889  »   517,734,775     »
  »   1890  »   592,089,250     »
  »   1891  »   663,221,494     »
  »   1892  »   731,325,411     »
  »   1893  »   811,318,663     »
  »   1894  »   889,793,808     »
  »   1895  »   969,479,217     »

The annual growth has been during the later years about 70 to 80
millions of florins. It moves at a regular pace.

I have shown by the example above how by aid of the _empfang erlag
scheine_, the trader can by means of his responsible agent, the Savings
Bank, receive at once the amounts of his invoices, without the money
passing through his own hands. Numerous other applications of the
system are before us: commercial travellers can deposit to the account
of their employers, the sums they have collected in their rounds; they
can even add at the back of the certificate such helpful notes as they
think necessary; the commercial firm which employs them being regularly
and immediately informed of payments by account extracts and the
certificates of deposit being successively forwarded to the firm by the
Central Office at Vienna.

Associations of every kind having accounts at the Savings Bank can by
the same means gather subscriptions from the members: it is enough to
send their members _certificates of receipt and deposit_; each one
makes his payment at the neighbouring post office; the associations
receiving, as the merchants, extracts of their accounts.

Assurance societies can in like manner, effect the payment of their
insurers' premiums without any formality beyond that of sending
to these insurers the _empfang erlag scheine_. And in like manner
subscriptions to journals and all kinds of periodical payments can be
received.


_Secondly._

Post Office orders issued to the benefit of any person affiliated to
the cheque-service can, at his request be placed to the credit of his
account. He gives to this end, on forms required by the regulations,
an authorisation at his district post office. On its side the Central
Office of the Savings Bank puts itself in relation with the post
office. Ingenious combinations which are indicated in the instructions
reproduced in the appendix to this paper, cause the order to be
transmitted to the Money Order Office of the Viennese Post Office,
which in paying the amount to the Central Office of the Savings Bank
will at the game time inform of this transmission, the person in whose
favour the order is made out.

The Post Office Orders only take a very secondary position in the
accounts of the _cheque_ and _clearing_ service.

  In  1884  their amount rose to     851,514  florins
  »   1885  to                     6,399,576  »
  »   1886  »                     14,197,234  »
  »   1887  »                     17,702,424  »
  »   1888  »                     17,853,284  »
  »   1889  »                     18,967,659  »
  »   1890  »                     22,349,594  »
  »   1891  »                     25,614,771  »
  »   1892  »                     26,271,893  »
  »   1893  »                     27,230,128  »
  »   1894  »                     28,252,117  »
  »   1895  »                     29,241,933  »

It is stated that the progressive movement is at once slower and more
regular since 1891, than it was previously.


_Thirdly._

The Postal Savings Bank receives in like manner for the benefit of
holders of cheque-books, dividend warrants due from the Austrian public
funds. It records the amount of them to the credit of the holder's
account and receives a fee of 1 kreutzer a piece.

It is the least important of the agencies which feed the credit of the
adherents of the system.

  In  1884 the amount received was  3,310  florins
  »   1885                         44,056  »
  »   1886                        114,684  »
  »   1887                        134,588  »
  »   1888                        147,833  »
  »   1889                        131,944  »
  »   1890                        148,104  »
  »   1891                        167,199  »
  »   1892                        165,139  »
  »   1893                        176,524  »
  »   1894                        223,757  »
  »   1895                        254,497  »


_Fourthly._

The amount of claims to debts and bills rendered payable at the post
office can in like manner be placed to the credit of the adherent to
the cheque and clearing service in favour of whom these bills have been
drawn.

The importance of this agency is more considerable, but its progressive
development is said to move at an irregular rate.

Introduced in 1886, it was absolutely insignificant during the first
two years.

  1886         17,916  florins
  1887         23,370  »
  1888      1,013,478  »
  1889      1,072,812  »
  1890      1,511,822  »
  1891      2,303,012  »
  1892      2,740,125  »
  1893      2,623,893  »
  1894      3,001,165  »
  1895      4,301,265  »


_Fifthly._

When the bearer of a cheque book is at the same time an adherent to
the _clearing_ circulation, the amount of the cheques issued in his
favour is carried to the credit of his account by the Postal Savings
Bank, unless on these cheques is expressly noted: _Outside the clearing
circulation_.

The amount of this service, after that of the _empfang erlag scheine_,
is the most important element in the formation of the accounts' credit.
It has nearly quintupled in the last ten years, moving forward, since
1886, at a steady rate, a proof, as the whole of the facts otherwise
witness, of the progressive penetration of the system into the national
economy.

At the opening of the institution of _clearing verkehr_, in the second
fortnight in 1884, the amount of the sums carried to the _clearing_
account was:

     1884                         1,620,102  florins
     1885                        40,271,880   »
     1886                       102,185,786   »
     1887                       150,479,085   »
     1888                       177,846,958   »
     1889                       216,683,156   »
     1890                       264,262,296   »
     1891                       310,141,924   »
     1892                       360,498,168   »
     1893                       414,342,892   »
     1894                       445,378,270   »
     1895                       482,031,950   »

The last and assuredly the most ingenious of the application of the
system is being made at this very time in the payment of taxes.

The _certificate of the payment of taxes (steuer Einzahlungs-schein)_
is nothing but a special form of _empfang erlag schein_; the Savings
Bank proceeds experimentally by the trial of this mode of collecting
the taxes in the province of Lower Austria.

The document, which costs 5 kreutzers, is divided into three parts: the
_Empfang schein_, the _Erlag schein_, the _Treasury acknowledgement:
Amtliche bestätigung_ (confirmation and official attestation). (Fig.
II.)

The tax payer pays at the Post Office the amount of his tax which
must be paid to the account of the central administration of taxes at
Vienna; the document bears the account number of this Receipt Office of
Taxation. The attestation of this payment of the tax-payer is signed by
the postal employé and bears the stamp of his post office.

The remainder of the document is detached from the tax receipt and
presents at first the _erlag schein_; it is the authentication of the
deposit paid to the cashier of the administration of finances and which
is sent by an employé of the Central Post Office at Vienna. It bears
the name, the profession, the address of the tax-payer, the amount of
the payment made by him, and shows what is the nature of the taxes
received and the number of the account at the ministry of finances.

The other part of the document is the attestation by the ministry of
finances itself of the payment made to its account; this _amtliche
bestätigung_ will be detached and sent to the tax-payer: he will thus
possess in the end a double authentication. It may be easily imagined
how a tax-payer who is an adherent of the clearing service can pay his
tax by a simple transfer of accounts, the ministry of finances having
itself an account open at the Savings Bank.

If the various modes which concur to the formation of the property of
the account holders in the Central Office at Vienna are considered as a
whole the total amount of deposits has successively been:

  In  1883         322,284  florins
  »   1884      46,223,529   »
  »   1885     263,853,687   »
  »   1886     478,190,612   »
  »   1887     610,477,881   »
  »   1888     643,735,637   »
  »   1889     754,590,345   »
  »   1890     880,361,067   »
  »   1891   1,001,448,400   »
  »   1892   1,121,000,736   »
  »   1893   1,255,692,098   »
  »   1894   1,366,649,116   »
  »   1895   1,485,308,862   »

In fixing the proportional relations per cent of all the statistical
data here brought together we see that the factors which concur to
form the credit of the double service of cheques and of clearing, the
payments made by way of _empfang erlag schein_ represent in 1895, 65%,
and the transfers by writing about 35%, while the total amount of the
banking of post office orders, of interest in the public funds and of
bills does not come to more than 3% of the whole.

[Illustration: FIGURE II.

Preis[1] 5 kr. Steuer-Einzahlungs-Schein, Preis 5 kr.

                                                           _N^o 1_

                           [2]Empfang-Schein

über eine Einlage von .. fl. .. kr., d. i.


fl. ____________________

____________________

auf das Postsparcassen-Check-Conto Nr. 809,990

                                  des

                    Städtischen Central-Steueramtes
                                in Wien

                             (I. Rathhaus).

       *       *       *       *       *

Post-Stempel:

                                                     [3]Unterschrift
                                                       des Postbeamten;

D.S. Nr. 120 (1.) ex 96.

       *       *       *       *       *

Post-Stempel

                                                           _N^o 1_

                            [4]Erlag-Schein

                                             über eine
                                            Einlage von ____ fl. __ kr.

geleistet durch: (Vor-und Zuname des Steuerträgers)

                  (dessen Gewerbe oder Beschästigung)

                    (dessen Wohn-oder Betriebsort)

                  Bez        Gasse (Platz); Haus-Nr.

          auf das Postsparcassen-Check-Conto Nr. 809,900 des

                Städtischen Central-Steueramtes in Wien.

[5]Als Grundateuer:

Bezirk (Sleuergeineinde) ___ Besitzbogen-Nr. ___

  [6]Als Hammeclammenutuer:
  Bezirk (Sleuergeineinde)   ___ Conscript.-Nr.

D. S. Nr. 120 (1.) ex 96.

       *       *       *       *       *

                        [7]Amtliche Bestätigung

Der im Checkverkehr des k. k. Postsparcassen-Amtes

  am. ______   ___ 189--entrichtete Betrag
  Pr. ______ fl. ___ kr. wurde verrechnet;

       *       *       *       *       *

  ----------+-----------------+----------------
            |[8]Steuer sammt  |[9]Vereugssinsen
            |     Umlagen     |
            +---------+-------+----------+-----
            |   fl.   |kr.    |    fl.   |kr.
            +---------+-------+----------+-----
            |         |       |          |

       *       *       *       *       *

[10](Baum für Mittheilungen an die Partei.)

       *       *       *       *       *

[1] Acknowledgement of payment of taxes, price: 5 kr.

[2] Acknowledgement of receipt of a sum of ... fl.... kr. for the
cheque account N^o ... of the Central Office of Taxes of the city of
Vienna.

[3] Signature of the post office official.

[4] Acknowledgement of deposit of a sum of ... fl.... kr. made by ...
(surname and Christian name of the tax-payer, his profession, domicile,
district, street (place), N^o ...) for the cheque account N^o ... of
the Central Office of Taxes of the city of Vienna.

[5] As land-tax.

[6] As house-tax.

[7] Official attestation. The sum paid by the cheque service of the
Post Office Savings Bank, on the ... th of ... 189 ..., has been placed
to account.

[8] Tax.

[9] Interest charged for delay in payment of tax.

[10] Space for notifications to the person interested.]

[Illustration:

  POST CARD                             Amount
                                      fl.    kr.

              House-tax

              Professional-tax

              Income-tax

              Costs arising from delay, execution, etc.

  (Space for other advices to the Office of taxes)

  This certificate of deposit is to be detached by the post-office
  official, and to be sent with the adhering official attestation together
  with the daily account to the Post Office Savings Bank.

  2
  kreutzers

       *       *       *       *       *

Instructions for the persons interested

By means of this acknowledgement of payment, the direct taxes indicated
on the acknowledgement of deposit and their additions can be paid in
each post office, but only to the Central Office of Taxes of the city
of Vienna (1. Town-hall).

The tax-payer should indicate exactly and legibly, the sum paid, in
figures and in letters, his name, profession and residence; he should
also write down the tax in the columns designated for it indicating the
kind. This condition not being fulfilled, the payment is not accepted
by the post office.

The tax-payers having a cheque-account in the Post Office Savings Bank
can pay the taxes designated in this acknowledgement by a cheque sent
to the Post Office Savings Bank at Vienna at the same time as this
acknowledgement form, duly filled in. In this case the tax is only
considered as paid on the day on which the cheque is entered in the
books of the Post Office Savings Bank.

Acknowledgements of payment on which alterations or erasures occur are
not accepted.]

The second class of operations of the cheque and clearing service
of the Austrian Postal Savings Bank embraces the different modes of
disposing of the property of the depositors who share in the service.
The cheque is in a general way the instrument to which they recur
under its two fundamental forms of cheques of payment and cheques
of clearing, according as the amount is to be paid in cash or to be
transferred to the account of another participant in the clearing
service. The cheque books remitted to holders serve the double purpose;
it has not been found necessary to print distinct documents, nor even
to give to these two classes of cheques different colours.

Cheque books containing fifty pieces are remitted to participants by
the Central Office at the charge of 1 florin 50 kreutzers; this sum
means 50 kreutzers, expense of paper and printing and 1 florin stamp
duty. They are printed on the premises of the Central Office as are
the attestations of receipts and deposits. About 2,500,000 of them are
now annually reproduced and more than 23,000,000 of cheques have been
issued since the official presses were first set up at Vienna. They
are prepared either in German, or in any other language spoken in the
Empire. Before sending them to the holders of an account the Office
prints on each of these vouchers the number of the account for which
they are to be used, as well as the name and address of the holder.
(Fig. III.)

Expressed in ordinary terms, the cheque states, that the Savings Bank
will pay, on the voucher being forwarded, the sum of which the amount
in florins has been written out in full. It bears the signature of the
person drawing it. To avoid frauds in the statement of the sums to be
paid, the Savings Bank has adopted moreover an arrangement so ingenious
and sure that up to the present time no fraud has been noted.

The cheque bears to the right four series of figures going from 1 to
9. The first set corresponds to thousands, the second to hundreds, the
third to tens, the fourth to units; the four series united together
can express the sum of 9,999 florins, beyond which no cheque can be
drawn, so that if this part of the document is left intact, the amount
of the cheque will be 9,999 florins, provided always that the written
statement agrees with the series of figures. If a lower figure is
stated, then the number of the thousands, hundreds, tens exceeding
the amount desired must be cut off with a pair of scissors. Suppose
for example the cheque is to be for 782 florins; the column of the
thousands is to be cut off, figures 8 and 9 in the columns of the
hundreds, the last figure in that of the tens and the last seven in
the column of units. It is evident that by this ingenious method
of control, it will never be possible to raise the amount of the
cheque; it will be of no use to alter the written statement of the
amount in order to augment it, for it will never be possible to make
a corresponding alteration in the arrangement of the figures to the
right; by this process of cutting off, the cheque can only be reduced
in value but never augmented. And if the agreement between the written
figures and the combination of the figures resulting from this way of
cutting them out is not perfectly exact, the Central Office at Vienna
rejects the voucher as possibly fraudulent, at any rate erroneous.


_Firstly._ (_Cassa-checks._)

The cheque (of payment) can be payable to bearer at the Postal Savings
Bank at Vienna. In this case it is delivered to the person who ought
to receive the amount without the drawer having to transmit it to
him. This party can either bank it himself immediately at the Post
Office Bank at Vienna, or put it in circulation: this circulation
is authorised for fourteen days, but the voucher cannot carry any
endorsement. The cheque will be paid by the Office up to the time that
the credit account of the drawer is sufficient to meet it.

If the cheque has been delivered to a person affiliated to the
postal-service of cheques and clearing, he can have the amount put to
his credit instead of receiving it in cash.


_Secondly._ (_Zahlungsanweisungen des postsparcassen-Amtes._)

The customer of the Postal Savings Bank has the right to cause the
amount of the cheque to be paid into the hands of a particular person
in any one of the Post Offices; in this case he writes on the back of
the cheque the address of the person for whom he intends it.

[Illustration: FIGURE III.

                                Coupon 0

  _Datum_ ..........

  .... _fl._  .... _kr._

  _an_ .............

  ......................

  ......................

  ......................

  ......................

                 0   [1]_Conto-Inhaber_: JOSEF FISCHER

                                                   _in_ JÄGERNDORF

                                            [2]_Conto Nr._ 800.000

       *       *       *       *       *

  ........................ _den_ ...................... _189.._

[3]_Das_ =K.k. Postparacassen-Amt in Wien= _zahle gegen diesen_ =Check=
_den Betrag von_:

_Fl._

                              [4]_öst. W._

                                       [5]Unterschrift des Ausstellers:

_Gulden_ _kr._ _öst. W._

       *       *       *       *       *

  [6]Tausender 1 2 3 4 5 6 7 8 9
  [7]Hunderter 1 2 3 4 5 6 7 8 9
  [8]Zehner    1 2 3 4 5 6 7 8 9
  [9]Einer     1 2 3 4 5 6 7 8 9

       *       *       *       *       *

[1] Holder of the current account.

[2] Number of the current account.

[3] The Post Office Savings Bank at Vienna is requested to pay as
against this cheque the sum of....

[4] Austrian Standard.

[5] Signature of the drawer.

[6] Thousands.

[7] Hundreds.

[8] Tens.

[9] Units.]

This cheque will be sent by him to the Central Office at Vienna. There
are special envelopes for the transmission of these advices which are
sold by the Office to the possessors of cheque books. The Central
Office will immediately transmit to the person designated an assignment
of payment and the cheque will be paid to him on his returning this
assignment, signed by him as a receipt. He will detach from it, in
order to preserve it, a portion on which is noted the amount of the sum
he has received, who the holder of the account is, the said portion
bearing also the stamp of the Postal Office at Vienna.

A notice to the post office where it is payable will have been sent at
the same time, giving authority to pay the cheque. (Fig. IV.)

Everyday 4,000 to 5,000 of these authorisations to pay cheques are
issued. Ladies write out these authorisations by means of type-writing
machines: their fingers work the machine with astounding rapidity.
According to the data given me each of them prints every day 400 to 500
assignments of payment to the persons designated and authorisations to
the post-offices to pay; and the hours of work averaging seven, they
write about one a minute.


_Thirdly. (Postanweisungen.)_

The cheque can be drawn in favour of a person living in Hungary or a
foreign country. It is enough that on the back is noted:--«for the
issue of a post office order in favour of N ...», and that it is
signed. The Central Office at Vienna will send immediately a post
office order of corresponding import. The telegraphic order can even be
used.

Statistics distinguish these three categories of cheques and enable us
to follow their movement.

Payments effected

                                      By cheques
              By cheques         to particular persons     By foreign
           payable to bearer       paid at the Post        Post Office
           (Cassa checks)[I]          Offices[J]            Orders[K]

  1884         13,639,555             25,791,497               83,834
  1885         78,375,622            132,053,520              777,914
  1886        141,052,319            220,198,781            1,420,668
  1887        178,365,871            278,559,689            1,583,098
  1888        180,295,982            280,241,673            1,705,948
  1889        223,060,247            303,720,753            2,008,593
  1890        271,660,264            335,293,896            2,469,268
  1891        318,239,728            361,727,429            2,611,044
  1892        347,410,842            398,456,797            2,558,398
  1893        386,027,972            437,492,243            2,590,614
  1894        433,377,459            472,345,574            3,028,639
  1895        463,540,198            524,212,798            3,781,586

It will be seen that in the last ten years the movement of the cheques
payable to bearer has been more rapid than that of cheques paid at the
post offices; the amount of the former has more than tripled.


_Fourthly._

The possessors of cheque books can cause purchases to be made by the
Post Office in the public funds up to the amount of their account. The
order ought to be explained by the transmission of a cheque of a value
corresponding to that of the stocks to be bought. The rights acquired
by the Post Office will either be sent on to the purchaser of the
stocks, or at his request kept by the Office and under its guarantee.
The Office banks the dividend warrants on their payments and places
them to the credit of its client unless he requires them to be sent to
him or the money remitted.

[Illustration: FIGURE IV.

[1]K. k. Postsparcassen-Amt in Wien

                                [2]Aviso

                      über eine Zahlungsanweisung

                       _N^o_                ddto

                                  per

[3]zahlbar an

[4]bei dem aus der Aussenseite bezeichneten Postamte.

                                                         [5]Ausgezahlt:

[6]Ohne Büchel auszuzahlen.

D.S. Nr. 8 II (21.) ex 96



  ------------------------------------------
  Coupon |
         |
         |                     für Rechnung
         |
         | von der Partei
         | abzutrennen.

[7]K. k. Postsparcassen-Amt in Wien.

                         [8]Zahlungs-Anweisung.

_N^o_

                         [9](2 Monate giltig.)

[10]Das k. k. Postamt

                                    [11]zahlt gegen diese Anweisung an:

                                                     [12]den Betrag von

  ======================================================================
                 | [13]Ausgezahlt:     | [14]Den obigen Betrag empfangen
                 |                     | zu haben bestätigt:
                 |                     |
                 |                     |
                 |                     | [15]Datum.
                 |                     |
                 |                     |
                 |                     |

  ----------------------------------------------------------------------

D. S. Nr. 6 II (21.) ex 96.

       *       *       *       *       *

[1] Post Office Savings Bank.

[2] Advice with reference to an order for repayment.

[3] Payable to....

[4] In the Post Office designated on the back.

[5] Paid.

[6] To be paid without Savings Book.

[7] Post Office Savings Bank.

[8] Order for repayment.

[9] Valid during two months.

[10] The Post Office.

[11] Pay on this order to....

[12] The sum of....

[13] Paid.

[14] In acknowledgement of the receipt of the above sum.

[15] Date.]

The importance of these payments is not considerable as is seen by the
following figures:

  1884         99,942  florins.
  1885        374,697   "
  1886        445,338   "
  1887        844,978   "
  1888        887,037   "
  1889        955,019   "
  1890      1,274,607   "
  1891      1,091,839   "
  1892      1,149,872   "
  1893      1,685,791   "
  1894      1,697,270   "
  1895      1,865,919   "


_Fifthly._

The Postal Savings Bank pays in the same way on account of the
adherents of the cheque and clearing service, bills, signed bonds,
accounts admitted and approved. Bills of exchange are settled at the
Postal Office at Vienna. In order to realize their payment, the holder
of an account draws a cheque for the amount of the bill and writes on
the back: _for payment of the bill herein refered to_. He indicates the
date of its falling due and puts his signature below these remarks.
This cheque is sent to the Postal Office at Vienna before the bill
falls due. It can be addressed also to the possessor of the bill, who
will present it at the date it is due to the Postal pay Office with
at the same time his claim. If the possessor of the bill is himself
affiliated to the cheque service he can have the bill put to the credit
of his account.

The degree of importance of this branch is indicated by the following
figures:

  1885        406,451  florins
  1886      1,522,404   "
  1887      1,877,602   "
  1888      3,053,419   "
  1889      2,823,845   "
  1890      3,436,795   "
  1891      4,564,179   "
  1892      6,183,954   "
  1893      7,343,438   "
  1894      7,917,723   "
  1895      8,818,997   "

From this it will be seen that during the last five years the movement
has so accelerated that the amount has in the interval nearly doubled.


_Sixthly._

Here the system presents to us its highest degree of interest: the
possessors of account books, adherents of the clearing service, can
discharge their debts one to the other by the transfer of accounts. It
is sufficient to write at the back of the cheque: to be carried to the
credit of account N^o ..., with the name of the holder of the account
and his address. In this case the amount of the cheque is placed to the
debit of the person who issued it and to the credit of the person in
whose favour it is drawn.

The two holders of accounts at the Savings Bank are immediately
informed of this transfer by the sending of the extract of their
accounts.

The cheques which have this destination are properly speaking clearing
cheques not intended to be paid in species; but it may happen that a
cheque destined for a member, adherent to the clearing service has in
an exceptional case to be paid in money; the person who has issued it
will in that case have to make a note at the back of the document:
_Outside the clearing circulation_.

The statistics show the growing importance of _clearing cheques_.

  1884        1,620,102  florins
  1885       40,271,880   "
  1886      102,185,786   "
  1887      150,479,085   "
  1888      177,846,958   "
  1889      216,683,156   "
  1890      264,262,296   "
  1891      310,141,924   "
  1892      360,498,168   "
  1893      414,342,892   "
  1894      445,378,270   "
  1895      482,031,950   "

It will be seen that in the last ten years, the amount has nearly
quintupled. The pace of the movement is here more rapid than in cheques
payable in cash.

The proportional relations of all the modes of disposing of the credit
of the adherents of the cheques and _clearing_ service show that in
1895 on a total of liquidations or payments of 1,484,251,488 florins,
32% were occasioned by transfers of accounts, 32% by cheques to
bearer (_cassa-checks_), 35% by cheques to appointed persons, and the
remainder by the other modes indicated.

The progress of the figures taken all round is as follows:

  1883            213,239  florins
  1884         41,234,429   "
  1885        252,260,083   "
  1886        466,807,297   "
  1887        611,693,909   "
  1888        643,718,457   "
  1889        750,898,892   "
  1890        877,975,829   "
  1891        998,376,144   "
  1892      1,116,258,031   "
  1893      1,249,482,460   "
  1894      1,363,744,935   "
  1895      1,484,251,448   "

All this formidable account keeping is done strictly day by day.
Three hundred employés are working at it constantly. Special employés
who have acquired an extraordinary ability, verify the signatures
on each occasion. The type signatures are classed alphabetically.
Current-accounts are drawn up on loose sheets and not in books: this
is considered a real progress for books are soon in tatters. On each
occasion an extract of the account is sent to the party interested:
every transfer entails the sending extracts to both parties interested.
Envelopes with their names and addresses printed are classified in
pigeon holes so as to be easily found. I join to this explanation some
extracts from typical accounts. One shows a banking made by a post
office, the other a transfer made between adherents to the _clearing_
system. (Fig. V.)

The centralisation of all this vast account-keeping at the Central
Office of the Savings Bank at Vienna is the basis of the system, the
pledge of the regularity of the service and of the certainty of the
control. Notwithstanding the inevitable complexity of operations and
accounts, this complexity does not entail any really prejudicial
delays[L]. The increasing figure of the operations is a proof of the
growing favour of the public and is a testimony to the usefulness of
the institution beyond all argument. The coefficient of error has been
very slight and fraud has not been as yet able to succeed in causing
trouble in the working of this admirable machinery of circulation.

The Central Office is put every day in relation with 4,000 post
offices, which transmit to it packets containing the _empfang erlag
schein_, the claims and all the documents which have been brought
them. The unfastening of this immense correspondence is simplified
by machinery. All these documents are enclosed in large envelopes of
uniform dimensions so that they can be opened by packets, in cutting
off their edges by means of large knives working mechanically. (Fig.
VI.)

The Postal Office of Vienna prepares annually the list of all the
possessors of cheque books who are adherents to the clearing service;
this list is printed and can be obtained by subscribers with the
supplements published at irregular intervals for one florin a year.

[Illustration: FIGURE V.

[1]Nummer des Checkbüchels: [2]_K. K. Postsparcassen-Amt._

=805503=

                            [3]Conto-Auszug

                       [4]=N^o 75 vom 14/9 1896.=


  +----+-------+---------+---+---+---+---+---+---+----+---+----+----+
  |[5]_Nr. des Erlagscheines oder Checks_
  |    |[6]_Einlagestelle bezw. Zahlstelle_
  |    |       |[7]_Name des Einzahlers bezw. Empfängers_
  |    |       |         |[8]_Einlagen und Gutschriften_
  |    |       |         |       |[9]_Rückzahlungen_
  |    |       |         |       |       |[10]_Lastschriften im_
  |    |       |         |       |       |_Clearingverkehr_
  |    |       |         |       |       |       |[11]_Guthaben_
  |    |       |         |       |       |       |        |[12]_C. C.[A]_
  |    |       |         |       |       |       |        |_Folio_
  |    |       |         |       |       |       |        |    |[13]_Fact.[A]_
  |    |       |         |       |       |       |        |    |_Datum_
  +----+-------+---------+---+---+---+---+---+---+----+---+----+----+
  |    |       |         |fl.|kr.|fl.|kr.|fl.|kr.|fl. |kr.|    |    |
  +----+-------+---------+---+---+---+---+---+---+----+---+----+----+
  |    |       |[14]     |   |   |   |   |   |   | 524| 27|    |    |
  |    |       |Uebertrag|   |   |   |   |   |   |    |   |    |    |
  |    |       |vom 13/9.|   |   |   |   |   |   |    |   |    |    |
  +----+-------+---------+---+---+---+---+---+---+----+---+----+----+
  | 75 |Wein   |         | 20| 25|   |   |   |   |    |   |    |    |
  +----+-------+---------+---+---+---+---+---+---+----+---+----+----+
  | 41 |Inglan |         |   |   |   |   | 76| 08| 468| 44|    |    |
  +----+-------+---------+---+---+---+---+---+---+----+---+----+----+
  |    |       |         |   |   |   |   |   |   |    |   |    |    |
  +----+-------+---------+---+---+---+---+---+---+----+---+----+----+
  |    |       |         |   |   |   |   |   |   |    |   |    |    |
  +----+-------+---------+---+---+---+---+---+---+----+---+----+----+
  |    |       |         |   |   |   |   |   |   |    |   |    |    |
  +----+-------+---------+---+---+---+---+---+---+----+---+----+----+
  |    |       |[15]     |   |   |   |   |   |   |    |   |    |    |
  |    |       |Fürtrag  |   |   |   |   |   |   |    |   |    |    |
  +----+-------+---------+---+---+---+---+---+---+----+---+----+----+

[A] _Colonne zur eventuellen Benützung der Conto-Inhaber._

                                             D. S. Nr. 4 b (21.) ex 96.

       *       *       *       *       *

[1] Number of the cheque book.

[2] Post Office Savings Bank.

[3] Extract of current account.

[4] Number 75 of the 14th of September 1896.

[5] Number of the acknowledgement of payments or cheques.

[6] Receiving office (pay-office).

[7] Name of payer or of receiver of money.

[8] Deposits and entries to the credit of current account.

[9] Repayments.

[10] Debit entries in the clearing service.

[11] Balance in hand.

[12] Page.

[13] Date.

[14] Brought over from 13. 9. 96.

[15] To be carried over.]

[Illustration:

[1]Nummer des Checkbüchels: [2]_K.K. Postsparcassen-Amt._

=805043=

                            [3]Conto-Auszug

                      [4]=N^o 151 vom 13/9 1896.=

  +----+-------+---------+---+---+---+---+---+---+----+---+----+----+
  |[5]_Nr. des Erlagscheines oder Checks_
  |    |[6]_Einlagestelle bezw. Zahlstelle_
  |    |       |[7]_Name des Einzahlers bezw. Empfängers_
  |    |       |         |[8]_Einlagen und Gutschriften_
  |    |       |         |       |[9]_Rückzahlungen_
  |    |       |         |       |       |[10]_Lastschriften im_
  |    |       |         |       |       |_Clearingverkehr_
  |    |       |         |       |       |       |[11]_Guthaben_
  |    |       |         |       |       |       |        |[12]_C. C.[A]_
  |    |       |         |       |       |       |        |_Folio_
  |    |       |         |       |       |       |        |    |[13]_Fact.[A]_
  |    |       |         |       |       |       |        |    |_Datum_
  +----+-------+---------+---+---+---+---+---+---+----+---+----+----+
  |    |       |         |fl.|kr.|fl.|kr.|fl.|kr.| fl.|kr.|    |    |
  +----+-------+---------+---+---+---+---+---+---+----+---+----+----+
  |    |       |[14]     |   |   |   |   |   |   |2941| 95|    |    |
  |    |       |Uebertrag|   |   |   |   |   |   |    |   |    |    |
  |    |       |vom 12/9.|   |   |   |   |   |   |    |   |    |    |
  +----+-------+---------+---+---+---+---+---+---+----+---+----+----+
  |    |Taxe   |         |   |   |   |   |   | 98|    |   |    |    |
  |    |de     |         |   |   |   |   |   |   |    |   |    |    |
  |    |manipu-|         |   |   |   |   |   |   |    |   |    |    |
  |    |lation |         |   |   |   |   |   |   |    |   |    |    |
  +----+-------+---------+---+---+---+---+---+---+----+---+----+----+
  |    |Provi- |         |   |   |   |   |   | 05|    |   |    |    |
  |    |sion   |         |   |   |   |   |   |   |    |   |    |    |
  +----+-------+---------+---+---+---+---+---+---+----+---+----+----+
  |    |       |         |   |   |   |   |   |   |3023| 24|    |    |
  +----+-------+---------+---+---+---+---+---+---+----+---+----+----+
  | 69 |Lies-  |         | 82| 32|   |   |   |   |    |   |    |    |
  |    |ing    |         |   |   |   |   |   |   |    |   |    |    |
  +----+-------+---------+---+---+---+---+---+---+----+---+----+----+
  |    |       |         |   |   |   |   |   |   |    |   |    |    |
  +----+-------+---------+---+---+---+---+---+---+----+---+----+----+
  |    |       |         |   |   |   |   |   |   |    |   |    |    |
  +----+-------+---------+---+---+---+---+---+---+----+---+----+----+
  |    |       |         |   |   |   |   |   |   |    |   |    |    |
  +----+-------+---------+---+---+---+---+---+---+----+---+----+----+
  |    |       |[15]     |   |   |   |   |   |   |    |   |    |    |
  |    |       |Fürtrag  |   |   |   |   |   |   |    |   |    |    |
  +----+-------+---------+---+---+---+---+---+---+----+---+----+----+

[A] _Colonne zur eventuellen Benützung der Conto-Inhaber._

                                             D. S. Nr. 4 b (21.) ex 96.

       *       *       *       *       *

[1] Number of the cheque book.

[2] Post Office Savings Bank.

[3] Extract of current account.

[4] N^o 151 of the 13th September 1896.

[5] Number of the acknowledgements of payments or cheques.

[6] Receiving Office (pay office).

[7] Name of payer or of receiver of money.

[8] Deposits and entries to the credit of current account.

[9] Repayments.

[10] Debit entries in the clearing service.

[11] Balance in hand.

[12] Page.

[13] Date.

[14] Brought over from 12. 9. 96.

[15] To be carried over.]

[Illustration: FIGURE VI.

                          [1]Tagesrechnung der Einlagen im Checkverkehr.

                                 [2](Einlagen auf Empfangscheine.)
                              +------------------------------------+
                              | [3]Raum zum Aufkleben der Vignette.|
                              +------------------------------------+

  +------------+---------+-----------+---------------+---------------+
  |  [4]1 Von  |    2    |[6]3 Betrag|     [7]4      |       5       |
  | Seiten der |[5]Nummer|der Einlage|    Nr. des    |  [8]Name des  |
  |Sammelstelle|   des   +-----+-----+Empfangscheines|  Einzahlers   |
  |  leer zu   |  Contos | fl. | kr. |               |   [aus dem    |
  |   lassen   |         |     |     |               | Erlagscheine] |
  +------------+---------+-----+-----+---------------+---------------+
  |            |         |     |     |               |               |
  +------------+---------+-----+-----+---------------+---------------+
  |            |         |     |     |               |               |
  +------------+---------+-----+-----+---------------+---------------+
  |            |         |     |     |               |               |
  +------------+---------+-----+-----+---------------+--+------------+
  |            |[9]      |     |     |    Anzahl     |  |    [11]    |
  |            |Gesammt- |     |     |      der      |  |Unterschrift|
  |            |betrag   |     |     | Einlagen[10]  |  |    des     |
  |            |der      |     |     |               |  |Postbeamten:|
  |            |Einlagen |     |     |               |  |            |
  +            +---------+-----+-----+---------------+--+------------+
  |                                         D. S. Nr. 2 n (9.) ex 96.|
  +------------+---------+-----+-----+---------------+--+------------+

[1] Daily account of deposits in the cheque service.

[2] Payments upon acknowledgement of receipt.

[3] Space for affixing the vignette.

[4] To be left blank by the receiving office.

[5] Number of current account.

[6] Amount of the payment.

[7] Number of the acknowledgement of receipt.

[8] Name of the payer according to the acknowledgement of deposit.

[9] Total sum of the payments.

[10] Number of the payments.

[11] Signature of the post office official.]

[Illustration: Tagesrechnung der Rückzahlungen im Checkverkehr[1]

       *       *       *       *       *

Belehrung für den Postbeamten.[2]

    1. Alle Einlagen auf Empfangscheine sind in diese Tagesrechnung
      einzutragen, ebenso alle Rückzahlungen, welche ohne Vorweisung
      eines Einlagebüchels auf Grund der vereinigten Drucksorte Nr.
      6-8 zu leisten sind.

    2. Die Eintragung hat genau dem Vordrucke entsprechend zu
      geschehen.

    3. Anzahl und Gesammtbetrag der Einlagen und Rückzahlungen sind
      nach Abschluss der Tagesrechnung in die correspondirenden
      Rubriken des Tagessummariums zu übertragen. Die Anzahl
      der zu dieser Tagesrechnung gehörigen Erlagscheine und
      Zahlungsanweisungen ist am Schlusse der Rechnung auszusetzen
      und in der Beilagenliste anzumerken.

    4. Die Tagesrechnung wird nur dann an das k. k.
      Postsparcassen-Amt eingesendet, wenn eine Einlage oder
      Rückzahlung in derselben zu verzeichnen ist. =Nur am letzten
      eines jeden Monates ist stets eine Tagesrechnung einzusenden,
      ohne Rücksicht, ob eine Eintragung stattgefunden hat oder
      nicht.=

       *       *       *       *       *

  +-------------+------------+-----------------+----------------------+
  |      1      |      2     |        3[5]     |          4           |
  |Nummer des[3]| Betrag[4]  | Ausstellungstag |[6]Name des Adressaten|
  |  Contos     |-------+----|       der       |der Zahlungsanweisung |
  |             | fl.   | kr.|Zahlungsanweisung|                      |
  +-------------+-------+----+-----------------+----------------------+
  |             |       |    |                 |                      |
  +-------------+-------+----+-----------------+----------------------+
  |             |       |    |                 |                      |
  +-------------+-------+----+-----------------+----------------------+
  |             |       |    |                 |                      |
  +-------------+-------+----+-----------------+----------------------+
  |     [7]     |       |    |    [8]Anzahl    |        |             |
  |Gesammtbetrag|       |    |       der       |        |             |
  |     der     |       |    |  Rückzahlungen  |        |             |
  |Rückzahlungen|       |    |                 |        |             |
  +-------------+-------+----+-----------------+----------------------+

[1] Daily account of repayments in the cheque service.

[2] Instruction for the post office official: 1. In this daily account
must be entered all the deposits made upon acknowledgement of receipt
as well as all the repayments made without presentation of deposit-book
on the ground of the united document N^o 6-8; 2. The entry must be
absolutely conformable to the printed text; 3. The number and the
total sum of the deposits and the repayments are to be entered after
the closing of the daily account in the corresponding columns of the
summary of the day. The number of the pay-cheques and the orders for
repayment which belong to this daily account is to be set forth at the
end of the account and to be noted on the supplementary list; 4. The
daily account is only to be sent to the Post Office Savings Bank when
there is a deposit or a repayment to be entered. _Only at the end of
each month this daily account must be sent whether there be an entry or
not._

[3] Number of the current account.

[4] Amount.

[5] Date of issue of the order for repayment.

[6] Name of the person to whom the order for repayment is to be sent.

[7] Total sum of the repayments.

[8] Number of the repayments.]

This list is the expression as it were, of a conscious agreement of
wills on a more and more extended scale in a common work of reciprocity.

The all round figure which sums up for the service during 1895, the
total amount of operations relating to the credit and debit of holders
of accounts in the Postal Savings Bank of Vienna is 2,970,170,049
florins. It will be interesting to learn what have been the expenses
which have arisen from such a vast amount of business.

The account of the financial administration of the service of cheques
and _clearing_ makes the administrative expenses 899,356 florins, that
is three-hundredths of a florin, for every 100 florins of business[M].
The average business done for each possessor of a cheque book is
100,000 florins, and the average charges of the service per person have
been about 30 florins.

Going back ten years it is seen that when in 1886 the amount reached
944,997,612 florins, the total expense was 620,247 florins, or
six-hundredths of a florin for every 100 florins of business done. The
operations averaged about 90,000 florins to each holder of a cheque
book and the charges 44 florins each person. The law, in accordance
with which the general expenses are relatively reduced by the increase
in the figure of business done, receives here a fresh verification.

Such is the summary explanation of the organisation and working of the
cheque and clearing system instituted thirteen years ago at the Postal
Savings Bank of Vienna.

It is based on the centralisation at Vienna of the accounts of
depositors holding cheque books and on the almost absolute perfectness
of the regularity and precision with which all those interested are
every time fully informed of their position of the Central Bank, and,
in consequence, of the extent of the credit they have at their command.
This institution implies the free adhesion under conditions fixed by
law of all the depositors at the Savings Bank and the right of each
to withdraw as he thinks proper. The institution therefore works on
the ground of stipulated contract, but its elasticity is seen in the
perpetually widening extension of its operations and its making way in
every class of society and in every one of the professions.

Its realization under the international form, for we give this
character to an agreement between the Savings Banks of Austria and
Hungary, is only a question of time, and the new experiment will
prepare the way for a new enlargement of the system.

The basis of the institution is monetary, it differs in this respect
in no way from all the other modern institutions of credit and of
balancing one account against the other; but the saving of money is
ever on the increase. Within the monetary circulation is developed
a circulation which if it remains still subordinate to the monetary
circulation is not inevitably enchained to it. Our collective effort
tends to break for ever this bond of subordination. The papers which
will follow will be a contribution to that work.

FOOTNOTES:

[H] The account-books of _Empfang erlagscheine_ are used as instruments
in this first class of operations.

[I] Rückzahlungen auf grund von checks, zahlbar an den überbringer bei
des Cassa des Postsparcassen Amtes.

[J] Rückzahlungen an dritte personen durch zahlungsanweisungen des
Postsparcassen Amtes.

[K] Auszahlung von beträgen an dritte personen nittelst postanweisungen.

[L] To accomplish operations in the remotest part of Dalmatia, five or
six days is the maximum required.

[M] A kreutzer is charged for posting a sum to the credit of an
adherent, but no charge is made on the debit side.



APPENDIX


I

Law of the 28^{th} of May 1882

    _with reference to the introduction of Postal Savings Banks in
      the kingdoms and lands represented in the Imperial Council. (R.
      G. Bl.[N] N^o 56.) with the alterations made by the law of the
      19^{th} of November 1897. (R. G. Bl. N^o 133.)_

With the consent of the two Houses of the Imperial Council I will to
order as follow:


ARTICLE 1.

Under State administration and guarantee there will be founded at
Vienna a State Savings Bank, under the control of the Minister
of Commerce and belonging to the jurisdiction of the Postal
Administration, with the title «Post Office Savings Bank».

The sphere of activity, the organisation and the civil service of the
Post Office Savings Bank will be fixed by means of ordinances.

Post Offices in the kingdom and lands represented in the Imperial
Council will be appointed by the Minister of Commerce to serve as
receiving offices of the Post Office Savings Bank.

To the Post Office Savings Bank will belong the management and
execution of the business assigned to it by this law; in which business
it will represent before the public the administration of the State.

To give advice as well as to make proposals in the business relating to
the Postal Savings Banks, a special Council will be constituted.

Regulations as to the composition of this special Council as well as
the determination of its special sphere of action will follow by way of
ordinance.


ARTICLE 2.

The Post Office Savings Bank will receive savings deposits paid into
the Post Offices, and by the agency of the Post Offices will pay back
the deposits when reclaimed.


ARTICLE 3.

All deposits in excess of the current needs of the Post Office Savings
Bank are to be profitably invested.

Such profitable investments of the savings-deposits will be made by the
purchase of the Austrian Consolidated Bonds bearing interest.


ARTICLE 4.

From the profit of the invested deposits is to be defrayed
the interests on the deposits, as well as the whole expenses,
administrative or otherwise.

As long as the profit of the funded capital of the deposits is not
sufficient to pay the interest of the savings-deposits and to cover the
expenses of the administration, the deficit as well as the costs of the
establishment of the institution will be advanced by the State as a
charge on the Postal Budget.

These advances are to be restored without interest, to the Postal
Budget, out of the surplus appearing at the close of the administrative
year.

The surplus remaining over after the entire liquidation of the above
named advances is to be employed in the formation of a reserve fund.


ARTICLE 5[O].

The receiving office (Post Office) in which a first deposit is made,
gives to the party who makes the deposit, a deposit book, in which
each amount paid in, each amount paid back and the interest added to
the capital is to be entered. Each subsequent payment can be made in
any receiving office (Post Office), the amount being entered in the
deposit book.

That person is to be considered the depositor on whose behalf the
deposit is made.

The deposit-book is to be delivered gratuitously and is stamp free.

The Post Office Savings Bank will open an account for each depositor.


ARTICLE 6[P].

The deposit-book is issued in the name of the depositor and is to
contain the notes necessary in forming a judgement of his identity, as
well as the signature of the party who makes the first deposit.

A depositor who cannot write will have to bring with him a trustworthy
man, who will have to attest the identity of the depositor and to sign
the deposit-book in his stead.

An assignment of a deposit-book to another person, is only to be
accepted by the Post Office Savings Bank when the act of assignment has
taken place at a Post Office entrusted with Post Office Savings Bank
business.

This being done, the assignee is to be regarded as the proprietor of
the deposit-book. (Art. 21, § 3.)

Minors are entitled to pay in sums as savings and to receive repayments
back provided their legal representatives have entered no written
objection at the Post Office Savings Bank.

In case of the loss of the deposit-book, a duplicate is, after carrying
out the proceedings prescribed by article 14, to be issued.

Whoever causes two or more deposit-books to be issued loses the
interests on the capital entered in the second and in any subsequent
books.

If the whole amount of the deposits in the two or more deposit-books,
that a depositor has caused to be issued, is over the sum of a 1,000
florins, the depositor loses that part of the capital which exceeds
1,000 florins.

The Minister of Commerce is empowered on well considered reasons to be
indulgent with reference to the loss of capital, which, in conformity
with the regulations occurs to surplus deposits.

Post Office servants are forbidden, except to their superiors, to give
any information whatever to anyone, as to the names of depositors, or
the amount of their deposits.


ARTICLE 7[Q].

Each single payment must amount to at least 50 kreutzers or a multiple
of 50 kreutzers.

The balance in favour of a depositor can at no time amount to more than
1,000 florins including deposits paid in and interest added to the
capital.

Deposits of 50 kreutzers can be made in postage stamps, or in special
postal savings stamps as soon as such stamps are issued by the Minister
of Commerce. These stamps are to be fastened on forms supplied
gratuitously.


ARTICLE 8[R].

The rate of interest for savings deposits, which is never to exceed 3
per cent per annum, after having been placed before the special Council
(art. 1) will be fixed by the Minister of Commerce in concert with
the Ministers of the Interior and of Finances, by way of ordinances,
and every alteration is to be published in the Imperial Law Pamphlets
(_Reichs-Gesetz-Blatte_) in the official part of the «Vienna Gazette»
(_Wiener Zeitung_) and in the various official gazettes.

The new rate of interest will begin to come into operation on the
1^{st} and 16^{th} of the month which follows its publication and will
also apply to deposits made previously.


ARTICLE 9.

Savings deposits bear interest commencing from the 1^{st} or the
16^{th} day of the month following the date of their payment, and the
interest ends on the 15^{th} or last day of the month preceding the
arrival of the notice of the expiration of the agreement with the Post
Office Savings Bank at Vienna.

Sums under a florin are not to bear interest.

The 31^{st} of December, each year, the interests accruing are to be
added to the capital and from that time forward they also bear interest.

In the calculation of interest each month is to be regarded as 30 days.

The officially prepared table of interest is to be publicly posted up
in the receiving offices (post offices).


ARTICLE 10.

Any amount exceeding 1,000 florins to the credit of a savings deposit
is not to bear interest.


ARTICLE 11.

The Post Office Savings Bank is obliged as soon as the deposits and
capitalized interest of a depositor surpasses the figure of 1,000
florins, by a registered letter, to require the depositor to lessen his
capital.

If during the month following the depositor has not lessened the
balance to his credit, then at the expiration of the period, bonds of
the state debt bearing interest in notes will in the course of the day
be officially bought to the nominal amount of 200 florins, and the
depositor is to be informed of the fact.

From the time of the sending out of the notice until the reduction is
effected in the balance to the credit of a depositor no interest will
accrue.

In case the depositor on whose account the bonds were bought, does not
withdraw the documents, the Post Office Savings Bank will receive the
interest falling in on the bonds under its care and will enter these
interests in the books of the institutions as a new deposit in favour
of the depositor.

For the State funds belonging to a depositor lying at the Post Office
Savings Bank a book is to be issued.


ARTICLE 12.

At the request of a depositor and that the balance in his favour is
sufficient, it can be employed in the purchase of Austrian State Funds.


ARTICLE 13[S].

The payment back of the balance in favour of a depositor or any part
of it to him or to his legal heir or authorised agent, will take
place upon a notice which can be made by the party giving it, at the
receiving office (Post Office) which he names in the notice.

The payment back is to made through the receiving office (Post Office)
named in the notice, on production of the deposit-book, on the basis
of an assignment by the Post Office Savings Bank, except the payment
is according to Article 14 barred by legal proceedings having been
instituted, or according to Articles 6 and 17, by a protest having been
made.

When such notice has been given with reference to sums up to 10
florins, the assignment will be sent by the Post Office Savings Bank
by return of post and the payment back will be made by the receiving
office (Post Office) immediately after its arrival.

The repayment of sums between 10 and 100 florins will be made in a
fortnight at the latest, that of sums between 100 and 500 florins in
a month at the latest, that of sums above 500 florins, at the latest
within two months after the arrival of the notice.

The Administration is however authorised, with power of countermand and
under necessary precautions to permit sums up to 20 florins of which
notice has been given to be immediately paid at one of the authorised
receiving offices without waiting for the arrival of the foregoing
assignment from the Post Office Savings Bank.


ARTICLE 14.

If a deposit-book proves to be lost the following proceedings occur:

The owner has, in order to obtain a duplicate to give immediate notice
of the loss, either directly to the Post Office Savings Bank, or to
the nearest receiving office (Post Office) with as exact an account as
possible of its characteristic marks.

The Post Office Savings Bank immediately orders a note of the
characteristic marks to be entered in its books with the result that
meanwhile no payment is made to anyone on the lost deposit-book.

At the same time the Post Office Savings Bank causes a public placard
to be put up at the Post Office where the lost book was issued, and
also in that to which perhaps it might be forwarded, by which all
persons are informed that at the expiration of a month from the date of
its publication, if no claim to the lost book is made in the interval,
it will be cancelled and declared null and void, and a new one issued.

If within the month no claim is made, the Post Office Savings Bank
will on payment of a fee of 10 kreutzers Austrian currency, issue a
duplicate and declare the deposit-book proved lost, to be null and
void.

If a claim is made during the course of a month, the Post Office
Savings Bank must refer the parties to the ordinary tribunals, and no
duplicate is to be issued nor any proceedings permitted with reference
to the lost book until the validity of the outstanding claim has been
decided by a legal judgement.


ARTICLE 15.

The statement of paragraph 1480 of the General Civil Code, by which
claims to arrears of interests are lost after three years, has no
application to interests of depositors in the Post Office Savings Bank.

In relation to the lapse of Post Office Savings Bank deposits the
ordinary legal decisions will be relied upon. Lapsed deposits fall
into the postal treasury. Such a lapsing of deposits will be stopped
by every new payment, every notice for payment back, every entry of
interest in the deposit book.


ARTICLE 16.

State bonds bought officially, or at the request of depositors, and
kept at the Post Office Savings Bank fall into the postal treasury, if,
during a lapse of 40 years, no one has laid claim either to the deposit
or to the interest, and the depositor has not forwarded to the Post
Office Savings Bank any order whatever with reference to them.


ARTICLE 17.

Neither savings deposited at the Post Office Savings Bank, nor the
Post Office Savings Bank deposit-books can be sequestered, and in like
manner they cannot be used as security. Nor can a deposit-book be
seized or taken in distraint.

These restrictions have no application to the books mentioned in
Articles 11 and 12, as issued for the state bonds bought for a
depositor.

If a depositor declares himself insolvent, the Official Receiver is
empowered to give notice to the Post Office Savings Bank to pay him the
balance in favour of the depositor, and thereon to give a receipt.

A protest against the payment back of a savings deposit can only be
considered in case a lawsuit has been entered into with reference to
the right of property in a deposit-book, or on the hypothesis which
Article 6 meets.


ARTICLE 18.

The reserve fund which is primarily intended to cover every possible
loss which may occur to the Post Office Savings Bank is to be formed
by the laying aside of the surpluses which remain at the close of the
administrative years from the produce of the savings-money deposited,
after deduction for interest paid, administrative and other expenses,
and after restitution of the advances made from the postal budget.

The reserve fund is to be gradually stored up until it reaches 5 per
cent of the total amount of the deposits, but it must never go beyond
the point of two million Austrian florins.


ARTICLE 19.

The reserve fund capital is to be placed at interest and whatever it
brings in is to be added to the reserve fund so long as this last has
not reached the maximum fixed.

When the reserve fund has reached the above mentioned point, all the
business profits will be entered to the credit of the Postal Revenue.


ARTICLE 20.

The Post Office Savings Bank is to render a formal account of the
administration of the savings-money paid in at the receiving offices
(Post offices), and the duty of the control lies with the supreme
audit-office.

At the end of each solar year the Minister of Commerce will communicate
to both Houses of the Imperial Council, a detailed business statement
with reference to the administration, working and position of the Post
Office Savings Bank and will publish the same in the official part of
the «Vienna Gazette».

The Post Office Savings Bank will periodically make known the actual
position of the institution in the «Vienna Gazette».


ARTICLE 21.

The correspondence of the Post Office Savings Bank and its organs with
the depositors is post free.

The revenue of the Post Office Savings Bank is exempt from duty.

In the business of the Post Office Savings Bank all legal documents
passing between the Bank, the authorities or the organs of the Bank and
the depositors, their legal heirs or authorised agents, are free from
stamp duty and taxes. In like manner the interest of savings-deposits
is exempt from the Income-tax and from any tax which may replace it in
time to come.


ARTICLE 22.

The exact time when the Post Office Savings Bank in Vienna, as well as
the receiving offices will commence their work will be fixed by the
Minister of Commerce.


ARTICLE 23.

The carrying out of this law is entrusted to the Minister of Commerce.


II

Law of November 19^{th} 1897

    _containing alterations in the Law of May 28^{th} 1882 (R. G. Bl.
      N^o 56) and decisions with regard to the Orders' (Cheque and
      Clearing) Service of the Post Office Savings Bank (R. G. Bl.
      N^o 133)._

With the consent of the two Houses of the Imperial Council I ordain as
follows:


§ 1.

The arrangements of the Law of May 28^{th} 1882, contained in the
Articles 5, 6, 7, 8 and 13 (_R. G. Bl._ N^o 56) will no longer be in
force.

In their stead will come the following arrangements, indicated in the
articles bearing the same numbers.

(_The articles altered: 5, 6, 7, 8 and 13, are with their new text
given in Appendix I, containing the Law of May 28^{th} 1882._)


§ 2.

To the existing Orders' (Cheque and Clearing) Service of the Post
Office Savings Bank the modifications in the Law of May 28^{th} 1882
(_R. G. Bl._ N^o 56) as well as the alterations refered to in § 1 of
the present Law, have no application.

An exception, however, occurs with reference to articles 1, 20 and 21
of the above mentioned Law which are to be applied to the aforesaid
service conformably to their sense.

In addition to which the Government is authorized to regulate this
service by way of ordinances.

Apart from such regulations the service is to proceed according to the
following determinations.


§ 3.

The administration and keeping of the accounts of the Orders' (Cheque
and Clearing) Service at the Post Office Savings Bank are to be carried
on separately from those of the Savings' service.

Participation in the Cheque service with or without inclusion in the
Clearing service is to be granted by the Post Office Savings Bank on
paying in a guarantee deposit.

The Post Office Savings Bank will open an account for each participant.


§ 4.

The guarantee deposit remains in the Post Office Savings Bank as long
as the holder of the account continues a participant in the Cheque
service and contingently also in the Clearing service.

In case a holder of an account on the one side, or the Post Office
Savings Bank on the other, wishes to give notice to withdraw, which
either can do at any time, the guarantee-deposit will, within a
fortnight at latest after receiving the notice, be repaid.

To the Post Office Savings belongs also the right by giving notice
of the repayment of the guarantee-deposit to cause the immediate
withdrawal of a participant and it has also the right to decline,
without giving any reason a request to participate in the Cheque and
Clearing service.


§ 5.

The amount of the guarantee-deposit, which is on every occasion to be
paid in specie, will be always fixed by way of ordinance.

This fixing can be arranged in such a way, that in the event of the
whole transactions exceeding an agreed maximum sum the guarantee
deposit is to be increased.


§ 6.

The rate of interest for deposits in the Orders' (Cheque and Clearing)
service cannot rise higher than two per cent per annum.

The Government is empowered within this maximum point to fix the rate
of interest for deposits.

The Government can also ordain that the abovementioned deposits,
especially the guarantee deposits shall either bear no interest at all
or only partially do so.


§ 7.

Of the money paid into the Orders' (Cheque and Clearing) Service of the
Post Office Savings Bank there will always be kept in hand a portion in
specie adequate to meet probable needs.

The surplus remaining is to be placed out at interest in such a way as
always to assure the complete fulfilment of the engagements entered
into.

The placing out can be made:

1. By acquiring partially mortgaged bills of exchange (salt mine,
treasury bonds).

2. By opening at a banking establishment a running account at short
dates of payment (a deposit running account).

3. By advances on security of bonds of the United National Debt and of
the National Debt of the kingdoms and lands represented in the Imperial
Council, also those Austrian bills upon which loans are permitted by
the statutes of the Austro-Hungarian Bank, finally upon stock and other
securities in the Austro-Hungarian Bank. (Advances with the exception
of accounts booked.)

4. By discounting coupons of the funds pointed out in N^o 3, also
in prize-tickets in the Austrian State Lottery, also of other funds
indicated in N^o 3, repayable by draft, last on discharge certificates
of Customs duties.

5. By discounting Bills of Exchange to be cashed at a Bank, a Savings
Bank, or else at a Deposit or Credit Company, registered according to
the Law of April 9^{th} 1873 (Z. 70 R. G. Bl.).

6. By purchase of bonds of the National Debt, deeds of mortgage
or bonds having priority rights, in so far as such stocks are, in
conformity with N^o 3, capable of being taken in deposit.

The duration of the loans described in N^o 3, as well as the paper to
be discounted, described in N^o 4, and the bills of Exchange within the
kingdoms and lands represented in the Imperial Council as described in
N^o 5, is limited to three months.

In selecting what to take in deposit, or what to buy, in fixing
the extent of the sum to be lent out, as well as the choice of the
institutions with which it is to enter into business relations, the
Post Office Savings Bank is to seek direction from the Ministry of
Finance.


§ 8.

The Orders (Cheques) issued in the Orders' (Cheque and Clearing)
Service are subject to no other tax than that fixed by the Law of
February 29^{th} 1864, § 7 (R. G. Bl. N^o 20) of 2 kreutzers a piece.

The declarations which, in conformity with the regulations of the
Orders Service are added to the order (cheque) by the Drawer,
especially such as the declaration by which a third person is
designated as Receiver of the sums assigned, or by which commissions
are given for the issuing of post-office orders or the retiring of
bills, etc.; also the authorisations for the Post Office Savings Bank
and the receipt-vouchers, reciprocally given by the Post Office Savings
Bank Office and participants, are free from stamp duty and taxation.

In like manner the extracts forwarded to parties from their accounts
are free from stamp duty and taxation.

In respect of sums received in current account by the Post Office
Savings Bank, the payment of the percentage tax fixed by the Law of
February 29^{th} 1864, § 7, paragraph 2 (R. G. Bl. N^o 20) does not
operate.


§ 9.

For the use of the Orders' (Cheque and Clearing) Service the Post
Office is to impose special fees.

In addition to the already existing fees and repayment of the cost
price of printed matter supplied to parties interested, the Government
is empowered to impose to the amount stated below the following fees:

1. A record-fee of 2 kreutzers for each official act with reference to
the account (Deposit, Assignment, Entry to credit or debit).

2. A commission up to the maximum of 1/4 the thousand on the paying out
side of the account (Entering to the debit). These fees are to be taken
by the Post Office Savings Bank deducting them from the account.


§ 10.

For the Orders' (Cheque and Clearing) Service, a special Reserve fund
is to be formed, which is primarily intended to cover possible losses
which may result from the service.

This Reserve fund is to be formed from what remains of the surpluses
at the close of the administrative year after deduction resulting from
the possible deficit in the Savings Service.

This allotment of the surpluses is to continue as long as the Reserve
fund designated has not reached the point of 5 per cent of what remains
of the deposit capital in the Orders' (Cheque and Clearing) Service, at
the close of the year, after deduction of the payments back.

The money of the Reserve fund formed for the Orders' (Cheque
and Clearing) Service is to be placed out at interest under the
restrictions of § 7 as to the nature of such arrangements, and the
produce accruing from time to time, is to be added to the Reserve until
it has reached the abovementioned point.

The Reserve fund having reached this point, the whole of the profits
on the business done in the Orders' (Cheque and Clearing) Service will
accrue as receipts to the Postal Revenue.

To what remains the determinations of Article 4 of the Law of May
28^{th} 1882 (R. G. Bl. N^o 56) understood in conformity with their
sense will apply.


§ 11.

The determinations of §§ 2 to 10 of the present Law apply from the time
it comes into operation, also to deposits paid in before that time to
the Orders' (Cheque and Clearing) Service of the Post Office Savings
Bank.


§ 12.

With the execution of this Law which comes into operation from the date
of its publication, together with the partially altered Law of May
28^{th} 1882 (R. G. Bl. N^o 56) My Minister of Commerce and My Minister
of Finance are charged.


III

Ordinance of the Ministry of Commerce

    _in agreement with the Ministry of the Interior and with the
      Finance Ministry, November 22^{nd} 1887, by which on the
      basis of the Law of November 19^{th} 1887 (R. G. Bl. N^o 133)
      Regulations with reference to the Orders' (Cheque and Clearing)
      Service in the Post Office Savings Bank are issued._

In carrying out the Law of November 19^{th} 1887 (R. G. Bl. N^o 133)
by which alterations were made in the Law of May 28^{th} 1882 (R. G.
Bl. N^o 56), and determinations with regard to the Orders' (Cheque and
Clearing) Service in the Post Office Savings Bank, the Ministry of
Commerce in agreement with the Ministry of the Interior and the Finance
Ministry ordains as follows:


A.--_Savings Service._


§ 1.

The highest point of the rate of interest, according to the
determination of the Special Council of the Post Office Savings Bank,
is to be fixed at _three_ per cent per annum.


§ 2.

Whoever pays the first deposit in favour of another--of the Depositor
and signs the deposit-book in this name, is to be called the Payer.

The Depositor is at any time entitled without the intervention of the
Payer to appear at a Receiving Office and to have his own signature
accepted.

As long as the Depositor has not exercised this right, the Post Office
Savings Bank will consider the Payer as authorised in the name of
the Depositor to dispose of the balance in his favour, unless the
Post Office Savings Bank has been made aware that it is against the
depositor's will.


§ 3.

Until further notice Repayments may be made of sums up to 20 florins,
immediately upon notice of recall, by duly authorised Receiving
Offices, without previous assignment from the Post Office Savings Bank.


§ 4.

Business regulations which have been made by the Post Office Savings
Bank not in present agreement with the arrangements of articles 5, 6,
7, 8 and 13 of the Law of November 19^{th} 1887 (R. G. Bl. N^o 133) in
relation with §§ 2 and 3 of the present Ordinance are out of force.


B.--_Orders' (Cheque and Clearing) Service._


§ 5.

In carrying out § 2 of the Law of November 19^{th} 1887 (R. G. Bl. N^o
133), the Orders' (Cheque and Clearing) Service of the Post Office
Savings Bank is to be regulated by the rules existing with reference
to them in the Post Office Savings Bank applied in such a manner
as the alterations of the aforesaid Law as well as the following
determinations render necessary.


§ 6.

The Post Office Savings Bank will keep separate the accounts and
administration of the Orders' (Cheque and Clearing) Service from those
of the Savings Service.

Participation in the Orders' (Cheque and Clearing) Service is also to
be allowed to persons who are not depositors in the Savings Service.
It will be granted on payment of a Guarantee-deposit, and of course if
the participant wishes he can enter the Clearing as well as the Cheque
Service.

In order to obtain permission to be a participant in the Orders'
Service the person wishing to enter has to ask for an account to be
opened and to pay in the Guarantee-deposit.

This request is to be made on one of the forms issued by the Post
Office Savings Bank, which are to be delivered gratuitously at all
post-offices and to be forwarded to Vienna post paid under an enclosure
containing the sum for the desired Cheque and Receipt books.

To the Post Office Savings Bank belongs the right to refuse a request
for admission as participant in the Orders' (Cheque and Clearing)
Service without giving reasons (§ 4 of the Law).

The Guarantee-deposit is to be paid within a month at any Receiving
Office after the grant of the said request by using a Receipt (Pay)
certificate.

The Post Office Savings Bank opens an account for each participant.
Deposit-books are no longer to be used in the Orders' (Cheque and
Clearing) Service.


§ 7.

The amount of the Guarantee-deposit will until further notice be fixed
at 100 florins.

The Guarantee-deposit will remain at the Post Office Savings Bank as
long as the holder of an account continues a participant in the Orders'
(Cheque and Clearing) Service. During participation in the Orders'
(Cheque and Clearing) Service, the Guarantee-deposit cannot be disposed
of and in case the participant should withdraw from the Service it can
only be paid back upon 15 days notice (§ 4 of the Law).


§ 8.

The deposits in the Orders' (Cheque and Clearing) Service, including
the Guarantee-deposit, will until further notice bear interest at 2 per
cent per annum. The interest begins from the 1^{st} or from the 16^{th}
of the month following the booking of the deposit, and terminates at
the expiration of the 15^{th} or from the last day of the month which
precedes the writing off from the account of the sum assigned for
payment.

Sums under one florin will not bear interest.

On the 31^{st} of December in every year the interest accruing will be
added to the capital and will in like manner bear interest.

In reckoning the interest every month will be regarded as thirty days.


§ 9.

The Post Office Savings Bank has always the right to give notice to a
participant to withdraw his Guarantee-deposit, with the result that
from the day the participant receives the notice he can no longer
dispose of the balance to his credit by way of cheques (§ 4 of the Law).


§ 10.

For making use of the Orders' (Cheque and Clearing) Service, besides
the fees at present existing--under which are included the fee of 2
kreutzers the cheque, already fixed by § 8 of the Law of November
19^{th} 1887, and according to rule the equivalent of the cost price
of the various printed documents furnished to participants in the
service,--the under mentioned fees will be taken:

1. A record-fee of 2 kreutzers for each official act with reference to
the account (Deposit, Assignment, Entering to Credit or Debit);

2. A commission on each entry to the debit up to the sum of 3,000
florins at the rate of 1/4 the thousand, and 1/8 the thousand for sums
exceeding that amount.

These fees will be taken by writing them off the account.

From the commission, however, are free:

_a_) The Debit Entries in the Clearing Service;

_b_) Sums sent by means of Post Office Orders through the Post Office
Savings Bank;

_c_) Sums written off in the Cheque Service on account of a purchase of
State-bonds made for a participant, finally;

_d_) Every entry of fees, commissions, etc. in favour of the Post
Office Savings Bank.


§ 11.

The Post Office Savings Bank will keep for three years the accounts,
documents and writings in the Orders' (Cheque and Clearing)
Service relating to business concluded; it can only therefore give
consideration to claims with reference to payments in, assignments,
payments back, interest and fees, etc., when they come within this
period.

To claims which refer to a Post Office missive (Paying in Order,
Post Office Order, Registered Letter and the like) the Post Office
regulations as to the time in which such claims can be made will apply.


§ 12.

The foregoing regulations §§ 5 to 11 apply from the time this ordinance
comes into operation, and will also apply from the same time to all
deposits already made in the Orders' (Cheque and Clearing) Service, (§
11 of the Law).


§ 13.

The Officials of the Post Office Savings Bank and of the Receiving
Offices are bound by duty to keep the business and official secrets,
and not to give to any third person, except their superiors, any kind
of information whatever with reference to the name of a depositor, to
the sums paid in or paid back, or to the amount of the balance in hand.


FINAL REGULATIONS


§ 14.

The Receiving Offices of the Post Office Savings Bank will receive at
the End of each calendar year an indemnity for business done in the
Post Office Savings Bank Service.

This indemnity amounts to:

_a_) Two kreutzers at the close of each year for every deposit-book
issued at the Receiving Office in question during the year and then
existing.

_b_) One and a quarter kreutzer for every payment during the year
effected at the Receiving Office in question, into the Savings Service
and into the Orders' (Cheque and Clearing) Service.


§ 15.

This Ordinance will come into force at the same time as the Law of
November 19^{th} 1887 (R. G. Bl. N^o 133).


IV

Instruction concerning the Savings Service of the Post Office Savings
Bank.


1.--_Receiving Offices._

All post offices in the kingdoms and lands represented in the Imperial
Council are appointed to be Receiving Offices of the Post Office
Savings Bank, and have daily during the prescribed hours to carry out
the Post Office Savings Bank Service. They receive deposits, effect
payments back, give information about all branches of the Post Office
Savings Bank Service, and in connection with this Institution, aid the
depositors in every way.


2.--_Depositors and Payers._

Any one can become a Depositor in the Post Office Savings Bank and
obtain a deposit-book, or cause another person to obtain one, upon
making, in conformity with the regulations, a payment at a Receiving
Office, of a given sum within the prescribed limits.

Societies, Unions, Cooperative Associations and persons having a legal
position are competent depositors in the Post Office Savings Bank.

The person in whose name the book has been issued is to be regarded as
the Depositor.

No Depositor is permitted to obtain, or cause to be obtained on his
behalf, more than one deposit-book issued in his name; on the other
hand every one is free, beyond their own deposit-books, to obtain for
other, wholly distinct persons, deposit-books and to pay in deposits on
their behalf.

Whoever in favour of another,--the depositor,--pays in the first
payment and signs the deposit-book in his name is called the Payer.

Any one can be a Depositor who can read and write. Minors no more than
persons having a legal position are debarred from being depositors.

The Post Office Savings Bank regards the Payer as empowered in the name
of the Depositor to dispose of the balance to his credit as long as the
latter has not informed the Post Office Savings Bank that it is against
his will.

This can be done by the Depositor signing his own name in the
deposit-book at a post office.

The admission of the signature can take place:

_a_) In the presence of and with the consent of the Payer;

_b_) Without the intervention of the Payer.

In the first case the Payer confirms the authenticity of the signature,
in the second case the Depositor has to establish his own personal
identity.


3.--_The Deposits._

The smallest deposit is 50 kreutzers, larger deposits must be a
multiple of that sum.

In order to render possible the saving of smaller sums than 50
kreutzers, Post Office Savings Cards have been issued.

Post Office Savings Cards are cards imprinted with a postage stamp
of 5 kreutzers, and having the necessary room to fasten on further
stamps; these cards are sold at all Post Offices, and by all postage
stamp vendors on payment of the value of the imprinted stamp. Such a
Post Office Savings Card with stamps fastened on to the value of 50
kreutzers will be accepted at the Receiving Offices of the Post Office
Savings Bank as a deposit.

One and the same depositor can only be permitted to bring for deposit
three Post Office Savings Cards during one week, either singly or at
the same time.

The balance of a depositor in paid up deposits and capitalised
interests is not permitted to amount at any time to more than 1,000
florins.

The Depositor must with the first deposit inscribe his signature in the
place appointed on the third page of the deposit-book and must further
give an account of his calling or occupation, the place, day, month,
year of his birth, as well as the place where he lives and his address.
He must moreover sign with his own hand the so-called «_Gegenschein_»
(Counter-certificate) to be found in the deposit book. And he himself
choose a given private «Watchword» (_Losungswort_) and inscribe it in
the appointed place in the counter-certificate.

The result of this will be that payments back in the customary way can
only follow on giving this watchword.

A person who cannot write is obliged to bring with him a witness who
authenticates the depositors mark by his own signature. To those known
personally to the Post Office official, or, who identify themselves by
means of a certificate of domicile, a passport or a work-or service
book, the Post Office official can himself become the witness.

In the case of Societies, Unions, Cooperative Associations and persons
having a legal position either the bringer of the first deposit can
give his signature and be then regarded as the Payer, or no signature
will be received. In the latter case nothing can be done with reference
to the deposits until the Payer by means of an official document, N^o
14, signifies to the Post Office Savings Bank who will be authorised to
give notices of withdrawals and to collect payments.

Subsequent payments can be effected on each book at any office without
further notice and without its being necessary for the person to come
personally.

Every deposit must be at once entered in the deposit-book by the Post
Office official and this entry is to be certified by the imprint of the
Receiving Offices stamp of the day and the signature of the Post Office
official. The Depositor (Payer) is bound before leaving the office to
examine the entries sufficiently so as to see that they are correct.

Deposits are also received from Rural Agents to the limit of 300
florins for each deposit-book and for each commission bought. Deposits
up to 5 florins pay no fee. For deposits of more than 5 florins a
receiving-fee of 5 kreutzers is charged.

The Post Office Savings Bank receives from Depositors, Coupons of
Austrian Bond falling due and enters the proceeds in the deposit-book
and to the depositors account.

To this end the coupons together with the deposit-book are either to be
given in at the Bank of the Office, or forwarded post-paid to the Post
Office Savings Bank at Vienna.

Each single coupon given in or forwarded must have legibly written on
the back, the number of the deposit-book and the depositor's name, if
not, a list of the sorts and numbers of the coupons as well as the
number of the deposit-book will have to be given.

For receiving the coupons the Post Office Savings Bank charges a
commission of 1 kreutzer the coupon, which will be deducted from what
it produces.

The sending-back of the deposit-book will be post free.

It is moreover allowable when a depositor has to receive at a post
office not dependent on the Treasury a sum by order,--whether it be an
ordinary post office order, or a repayment--or transfer post-office
order, or finally by a pay-order in the cheque service of the Post
Office Savings Bank, not to pay the same in cash, but have it
immediately entered in the deposit-book.


4.--_Acknowledgments of Receipts._

Beyond the entry which the Post Office Service makes in the
deposit-book, the depositors receive, and so, relatively, payers,
upon each deposit an acknowledgment of receipt from the Post Office
Savings Bank at Vienna, forwarded every time to their address or to
_poste restante_ as they desire. Should this acknowledgment of receipt
not have reached a depositor within 14 days, or should it contain
some errors with reference to the sum or name or in some other way be
erroneous, the depositor has to find in his deposit-book, «Complaint»,
and to separate the paper, fill it in conformity with the case, and to
forward it in an envelope, N^o 42^o, which he will receive gratis at
any post office.

Other blank forms of complaint are gratuitously supplied at every
post-office.

For entries of interest and coupon the Post Office Savings Bank does
not give receipts.


5.--_Replacement of Lost, Spoiled or Filled in Deposit-books._

Should a deposit-book be lost, the loser must notify the fact to
the Post Office Savings Bank at Vienna, on a printed form, supplied
gratuitously at every Receiving Office, stating the peculiar marks of
the lost book as exactly as he can possibly remember them, also the
particular circumstances under which the loss took place, as well as
his full address, enclosing at the same time 10 kreutzers in postage
stamps and the notice of withdrawal book, requesting that a duplicate
of the deposit-book lost may be given him. Should the notice-book be
also mislaid, this is to be notified on the printed form and the sum of
five kreutzers added for a new notice-book.

The Post Office Savings Bank notes down the loss and until further
notice makes no payment on the lost deposit-book.

Meanwhile arrangements will be made for its annulment and if during the
space of a month no claim is raised, a duplicate book will be issued
and forwarded.

If no room can be found in a deposit-book for further entries, or it
has become torn or so dirty as to become useless, the depositor has
to send it with the printed form, N^o 11, properly filled up to Post
Office Savings Bank at Vienna for exchange. Books filled up will be
exchanged gratuitously, for a spoilt book, however, the sum of 10
kreutzers is to be added to the request. In case the notice book is
also spoilt, the sum of 5 kreutzers is to be added for issuing a new
one.


6.--_Interest._

Deposits begin to yield interest at three per cent per annum from one
florin upwards.

Interest begins from the 1^{st} or from the 16^{th} day of the month
which follows on the deposit and ends with the 15^{th} or with the last
day of the month which precedes the arrival of the notice of withdrawal
from the Post Office Savings Bank.

On December 31^{st} of each year the interest accruing will be added to
the capital and from that time it will, in like manner bear interest.

To each depositor, the Post Office Savings Bank sends at the close of
the year an interest-order, valid for two months with an announcement
of the amount of interest which has accrued to him for the year ending
December 31^{st}. The depositor must cause the amount of this interest
to be entered in his deposit-book within the prescribed two months, on
presentation of the interest order at some Receiving Office.

If a depositor has not within the time allowed caused the entry of the
capitalised interest to be effected as per order received, he does not
lose the interest, only he has to forward his book to the Post Office
Savings Bank for the purpose of having it entered there.

The determination of § 1480 of the general Civil Code according to
which claims on arrears of interest lapse after three years, do not
apply to the interest on deposits in the Post Office Savings Bank.

With reference to the lapsing of Post Office Savings Bank deposits the
general legal decisions are valid.

This lapsing will be arrested by any fresh deposit, by any fresh notice
or by any fresh entry of interest in the deposit-book.


7.--_Notice of Withdrawal._

A depositor or the legal successors or authorised agents of a depositor
are entitled at any time to require through the prescribed notice the
payment back of any part of the deposit or the whole deposit. Sums less
than a florin can, however, only be recalled if the deposit-book proves
that the total amount deposited does not exceed the amount recalled.
Notice of withdrawal is given on a special document, that is on a
leaf out of the notice-book which the depositor receives gratuitously
at the same time as the deposit-book. These leaves are to be detached
according to the order determined by the numbers printed on them, to be
duly filled up and forwarded undercover (document N^o 42^b) to the Post
Office Savings Bank.

For the Notice of Withdrawal the following rules are to regarded:

1. The Notices must always bear the signature which according to
instructions was received in the deposit-book, or communicated to the
Post Office Savings Bank on document N^o 14.

2. The address to which the order should be sent must, where _poste
restante_ is stated, in every case give the receiver's full name.
Addresses in figures cannot be used, because they are not allowed on
registered letters, and the orders for payment are always sent for the
greater security of the depositor by registered letter.

3. The watchword chosen by the depositor must be added to the Notice.

If the Depositor has forgotten his watchword he can at any Receiving
Office desire the issuing of a request to make it known to him anew. To
obtain this favour he must present his deposit-book to the Post Office
officials and prove himself the Depositor (Payer). In case he is not
personally known to the officials, he must bring some witness who is
known to them, or a document capable of giving this proof (passport,
certificate of being naturalised, Work-or Service-book).

4. If the Depositor cannot write he must add his mark to the
notice-form and this mark must be attested by a witness.

Should the witness be the same one who attested the Depositor's
signature on the Counter-cheque and in the Deposit-book, the Notice
with the mark of the Depositor and the signature of such a witness can
be sent without further delay to the Post Office Savings Bank.

But should the signature of this person be no longer adducible, the
Depositor has himself to go to a Receiving Office and establish his own
identity.

In the case of depositors who cannot write but have a watchword, its
declaration and the attestation of the mark by any witness is enough.

The right is reserved to give Notice to withdraw the balance to the
Depositor's credit and to give a receipt for the same to the Official
Assignee, should the depositor fail,--to the Guardian appointed by the
authorities, should the depositor become incapable of managing his
affairs,--to the executor of the estate with relation to the person to
whom the right of inheritance to the deposit-book belongs should the
depositor die. The persons designated, are required to address their
memorials direct to the Post Office Savings Bank, sustained by the
documents necessary to form a judgement of the case together with the
deposit-and notice-books. The deposits of a deceased Depositor are to
be withdrawn in full by notice from the person who has the right of
inheritance.

If a Notice-book has been used up, or in any way has become useless, or
a depositor has lost his notice-book, he can on form N^o 5^d which will
be supplied at all post offices gratuitously, request the Post Office
Savings Bank to forward him a new Notice-book.

In the case of Notice-book lost or spoilt the sum of five kreutzers
must be added in postage-stamps; in that of an ordinary used up
Notice-book, a new one will be substituted gratuitously.


8.--_Repayment._

Consequent on the Notice of withdrawal the Post Office Savings Bank
sends to the Depositor, to the address he has named Payment-order valid
for two months.

The order is sent as a rule by return of post, but in any case soon
enough for the repayment to take place within the limit named by the
Law of May 22^{nd} 1882:--upon notice of sums between 10 and 100
florins within 15 days, upon notice of sums between 100 and 500 florins
at the latest within a month, and finally, upon notice of sums over 500
florins, at the latest within two months of the arrival of the notice
at the Post Office Savings Bank.

On delivery of this order, _the Depositor, in the presence of the
Post Office Official, putting his signature in receipt to the Payment
Order_, and on producing the deposit-book, in which the sum paid back
will be entered by the Post Office official and deducted from the sum
total of the balance, the repayment to the depositor will follow at the
pay-counter.

The Depositor can authorise any person he pleases to receive payment
of a sum thus withdrawn by notice. If he possesses a watchword he
needs only to duly fill in the form, N^o 15 (authorisation) and to
give or send it by the person authorised with the deposit-book and the
payment-order. On this person presenting the authorisation and signing
the payment-order, and at the same time presenting the deposit book,
the sum will be paid.

But the Depositor can in like manner also request in the Notice that
the payment-order be sent to the person he has authorised to receive
it and whose address he has given. Then the Depositor sends the
deposit-book together with the authorisation to the person he thus
authorises to receive the payment. But for payment of the sum the
person thus authorised must, if not personally known to the post office
officials, produce a document for his identification or establish his
identity by bringing with him a witness.

For authorisation without the watchword, the legalisation of the
signature of the withdrawer, either in a law court or by a notary is
requisite.


9.--_Repayments without delay._

But also without having to send a previous notice to the Post Office
Savings Bank, a Depositor (Payer) can at once at any post office obtain
repayments of sums from 1 to 20 florins.

Repayments can be made without delay on producing the notice drawn out
according to the regulations together with the last acknowledgment of
receipt or abstract of the credit account with at the same time an
entry of the sum in the deposit-book.

Repayments made without delay are not allowed on authorisations, also
the whole balance of the depositor's account cannot thus be withdrawn,
but a sum of at least 50 kreutzers must remain in the book. This sum as
well as the interest can then in the usual way be withdrawn by notice.

After each repayment made without delay, the depositor receives a
statement from the Post Office Savings Bank with reference to his
remaining balance (Statement of Credit-account), on the ground of which
he can again obtain a repayment without delay.

Repayments without delay cannot be made with reference to annulled
deposit-books, or, with reference to deposit-books concerning which a
protest, recognised by the Post Office Savings Bank has been made.

The Post Office Savings Bank sends out no acknowledgements of receipt
upon entering and carrying to the depositor's credit, interest and
coupons,--the last receipt or statement of balance of account is
therefore valid for a repayment made without delay; but the sum to be
repaid must not include the credited interests or coupons.

After repayments in the usual manner or after such payments as the Post
Office Savings Bank at Vienna itself makes as well as after other debit
entries in the deposit-book, as for example purchases in the stocks,
no statement with reference to the remaining balance is given, the
acknowledgement of the receipt of the last deposit remains therefore in
like manner valid until the next repayment made without delay.

In the same way a statement with reference to the remaining balance
retains its validity without regard to these repayments or debit
entries, until in its place comes another acknowledgment of receipt in
consequence of a new deposit, or a new statement with reference to the
balance of the account in consequence of a new payment made without
delay.

It is evident of itself that a higher sum than the balance remaining
at the depositor's disposal after deduction of the last repayment and
entered in the book cannot at any time be paid.

Should it happen that owing to the Post Office Service the
acknowledgment of the receipt of the last deposit has not come into the
depositor's hands, the previous receipt-acknowledgment, or statement of
balance will be considered valid; the last deposit, not yet confirmed
cannot however be included in the payment requested.

If after a payment made without delay there remains less than 1 fl. 50
kr. to the credit of the depositor, the Post Office Savings Bank will
issue no statement of the balance of the account, since in such a case
there can be no further payment made without delay until there has been
a new deposit paid in followed by an acknowledgment of receipt.

At the bank of the Post Office Savings Bank at Vienna repayments can
be made without delay every day from 8 o'clock in the morning until
6 o'clock in the evening (on Sundays and holidays from 9 until 12 at
noon) without regard to the amount of the sums required.

To this end it is necessary to present at the Cashier's sliding
window the Notice-paper filled in and signed by the person empowered
to do this together with the deposit-book; bringing the last receipt
acknowledgment or statement of balance is not requisite.

For sums above 20 florins, the depositor, in case he has no watchword
must prove his own identity.


10.--_Business in the Public Funds._

When the Savings account of a depositor's exceeds 1,000 florins, the
Post Office Savings Bank is obliged to request the depositor by a
registered letter to lessen the amount of his saved up capital.

If within a month after the request the depositor has not lessened
the amount of his capital, there will at the expiration of the time,
be bought on his account in the course of the day, bonds of the only
stock issued in notes, to the amount of the sum required to reduce the
account to 1,000 florins, in any case for the nominal sum at least of
200 florins.

The price of this purchase will be entered to the debit of the
depositor's account as repayment; the bonds bought will remain under
the care of the Post Office Savings Bank and a Stocks-book will be
forwarded to the depositor.

       *       *       *       *       *

A Depositor (Payer) who has in the Post Office Savings Bank an adequate
sum at his disposal can at any time request the Office to make
purchases for him in the Public Funds.

The request for the purchase is to be drawn up on Form N^o 22, and
must, if the purchased stock is to remain at the Post Office Savings
Bank contain a watchword. If the depositor already has a watchword in
connection with his deposit book that watchword is to be inserted.

If a depositor cannot write he must make his mark and have it attested
by a witness. If this witness is the same person who attested the
depositor's mark on the counter-cheque and in the deposit book, then
the request with the mark of the depositor and the signature of the
witness can be sent without further delay to the Post Office Savings
Bank. But if the signature of this witness cannot any longer be
obtained, the depositor has to go to a Receiving Office and himself
prove his own identity.

For the first purchase together with the request it is simply
necessary to enclose the deposit-book; for each subsequent purchase
the deposit-book and if it relates to deposited bonds the stock
account-book also must be sent.

The purchase is made as far as practicable according to the state of
the market as noted in the official price-list of the Vienna Exchange
on the day in which the request refered to reached the Post Office
Savings Bank, a commission being charged of 2 per thousand, which
however cannot amount to less than 20 kreutzers.

The stock bought will, according to desire of the depositor either be
sent at his own risk and cost to the address he names in his request or
be taken care of without cost by the Office under guarantee for kind
and number of documents, class of coupons and winning numbers in the
lotteries, and the Post Office Savings Bank will prepare and send to
the depositor with reference to them a «stock account-book» (Document
N^o 32).

Stock which the depositor has not bought through the Post Office
Savings Bank can be deposited by means of a stock account-book. The
process is thus: the Post Office Savings Bank buys the stock sent and
enters it to the credit of the sender, upon which the resale to him
is gone through and the stock entered in the usual way in the stocks
account-book.

In such cases the purchase and sale in respect of stock of the same
kind takes place at the same market price, so that there is no loss to
the depositor, merely costing for the purchase on account the fixed
commission of 2 per thousand.

Depositors have, with a view to the taking over of such stock to send
it at their own cost to the Post Office Savings Bank, joining with
it a request in which the stock to be taken over is described, the
deposit-book being sent (either lottery or stock account-book).

       *       *       *       *       *

The Post Office Savings Bank undertakes to present at the Treasury of
the Public Debt, the bonds bought on account of depositors in order
that they may be stamped with the names of the holders.

This can be done at the request of the purchaser immediately after
purchase of the bonds refered to in which case the stamp duty will
be accounted for at the same time as the costs of purchase, or, the
stamping of the bonds can be requested which according to the stock
account-book are already in the Post Office Savings Bank. In the last
case the duty which including the cost of the form used amounts to 40
kreutzers a stamp is to be forwarded in postage stamps enclosed with
form N^o 22.

In every case the request must contain the exact name of the holder
and further information as to where he wishes to take the interest,
otherwise it will be understood that it is to be received at the Public
Debt Treasury.

After the stamping has occurred, which, according to rule must take
place within 3 or 4 weeks, the Post Office Savings Banks forwards the
stamped bonds to the address given before the business was entered on.
If an account of the interest due has to be prepared it is forwarded to
the holder by the Treasury of the Public Debt.

       *       *       *       *       *

The coupons of the Bonds deposited as per stock account-book will,
when they fall due, be detached and cashed, and upon the day of their
falling due entered both in the stock account-books of the holders
without their having in each particular case to give notice. With
reference to these sums coupon-orders will be issued to the depositor
on the ground of which they can receive payment of them at any
Receiving Office, on the amount being entered in their deposit-book
before the expiration of the two months during which the orders are
valid.

After this the entry can only take place by sending the deposit-book to
the Post Office Savings Bank at Vienna.

It remains free to the holder of the stock-account book to cause the
Post Office Savings Bank to forward the coupons in its case, falling
due in their entirety or in part, either _in natura_ or in money to
himself or to a third party. This order should be sent to the Post
Office Savings Bank in sufficient time for it to arrive before the
coupons fall due.

When the coupons are detached and sent _in natura_, no commission is
charged, only the persons to whom they to be addressed must pay the
postage as when coupon interests are forwarded.

For banking coupons or lottery prizes, a commission will be charged as
for stock in case of the Post Office Savings Bank at 1 per thousand,
excepting, however, when the produce of the coupons is itself entered
to the account of the depositor.

       *       *       *       *       *

The owner of a stock-account book can at any time request that his
stock in the public funds be sent to him or that it be sold. The
request is to be duly addressed to the Post Office Savings Bank on
form N^o 22^c in connection with N^o 24. The request forwarded to
the Post Office Savings Bank must contain the watchword and personal
signature of the person making the request and be accompanied by the
stock-account book and also by the deposit-book when it is a question
of entering the money resulting from the sale to the credit of the
depositor's account.

The sale takes place in agreement with the final state of the market
officially noted on the day the request arrived at the Post Office
Savings Bank upon a commission of 2 per 100, at the lowest, 20
kreutzers.

If a stock-account book is lost, the loser is to inform the Post Office
Savings Bank in writing, sending at the same time his watchword, and,
enclosing 20 kreutzers in postage stamps to request a duplicate.

If after eight days subsequent to the notice the stock-account book is
not found the Post Office Savings Bank will issue a duplicate and send
it to the depositor, or if an official act is sought with reference to
the book, the Post Office Savings Bank will enter into communication
with the actual possessor of the book and it will depend upon the
result whether the Post Office Savings Bank can grant the request
of the loser, or whether it decides to relegate the parties to the
magistrate in whose jurisdiction the matter lies.


11.--_Freedom from Cost of Postage and Commissions._

The correspondence of depositors with Post Office Savings Bank as well
as with the Receiving Offices and with the Post Office management is
always post-free, even in the case of a registered letter.

This favour however has no application to the sending of certificates
of stock or with reference to money transactions which result from the
purchase and collection of the interest on the stock, nor does it apply
to notices forwarded of their declared value, with the sole exception
of the deposit-book being sent by letter with the declared value for
the purchase of stock in the funds.

The correspondence of the Post Office Savings Bank and its organs with
the depositors is with reference to orders to addresses designated free
from the tax of 1 kreutzer the letter, a tax appointed with reference
to the post offices not dependent on the Treasury and to rural post
offices, and in connection with the collection of registered letters
also to those dependent on the Treasury.

The memorials addressed to the Post Office Savings Bank, to the
Post Office authorities and their organs by depositors their legal
successors, or authorised representatives, as well as the acts of
conveyance mentioned in article 6 of the law of May 28^{th} 1882 are
stamp and duty free. The interests of the savings deposits are in like
manner exempt from the Income Tax and from any future tax coming in its
place.

The deposit-book as well as the forms necessary in giving instructions
in business transactions with the Post Office Saving Bank will be
supplied to depositors gratuitously.


12.--_Official Secrets._

The officials of the Post Office Savings Bank are bound by duty to keep
the business and official secrets and it is strictly forbidden to them,
beyond their superiors, to impart to any persons whatever, knowledge of
any kind relating either to the names of depositors or the the amount
of the sums deposited or withdrawn, or to the amount of balances. Those
who contravene this rule will undergo disciplinary treatment, and,
according to the circumstances, will be dismissed from the service.

Every depositor may therefore rely on the strictest secrecy with
relation to his business transactions with the Post Office Savings
Bank, not only with reference to the usual Post Office Savings Service,
but also with regard to the business in the Public Funds.

                          POST OFFICE SAVINGS BANK.
                                      _The Director_,
                                    WACEK.

FOOTNOTES:

[N] _Reichs-Gesetz-Blatt._ Collection of the Imperial Laws.

[O] _According to the altered form of the law of November 19^{th} 1887._

The earlier form of Article 5 ran thus:

Each depositor will receive from the receiving office (Post office)
where he pays in his first deposit, a deposit book in which each amount
paid in, each amount paid back, and the interest added to the capital
is to be entered. Each subsequent payment can be made at any receiving
office (Post office), the amount being entered in the deposit book.

That person is to be considered the depositor on whose behalf the
deposit is made.

The deposit book is to be delivered gratuitously and stamp-free.

The Post Office Savings Bank will open an account for each depositor.

[P] _According to the altered form of the law of November 19^{th} 1887._

The earlier form of Article 6 ran thus:

The deposit-book is issued in the name of the person for whom the
savings have been deposited, and is to contain the notes necessary
to the identification of the same, as well as the signature of the
depositor.

A depositor who cannot write will have to bring with him a trustworthy
man who will have to attest the identity of the depositor and to sign
the deposit-book in his stead.

An assignment of a deposit-book to another person is only to be
accepted by the Post Office Savings Bank when the act of assignment has
taken place at a post office entrusted with Post Office Savings Bank
business.

This being done, the assignee is to be regarded as the proprietor of
the deposit-book. (Art. 21, paragraph 3.)

Minors are entitled to pay in sums as savings and to receive repayments
back, provided their legal representative has entered no written
objection at the Post Office Savings Bank.

In the case of the loss of the deposit-book, a duplicate is, after
carrying out the proceedings prescribed by Article 14, to be issued.

For one and the same person, but one Post Office Savings Bank
deposit-book is to be issued.

Whoever causes two or more deposit-books to be issued loses the
interests on the capital entered in the second and in any subsequent
books.

If the whole amount of the deposits in the two or more deposit-books
that a depositor has caused to be issued is over the sum of a 1,000
florins, or if a depositor has deposited in one year more than 300
florins, in the two or more deposit-books issued to him, he will lose
in the first case that part of the capital which exceeds 1,000 florins,
and in the second, that part of the capital which exceeds 300 florins.

The Minister of Commerce is empowered for well considered reasons to be
indulgent with reference to the loss of capital, which, in conformity
with the regulations, would occur to the surplus deposits.

Post Office servants are forbidden, except to their superiors, to give
any information whatever to anyone, as to the names of depositors and
the amounts of their deposits.

[Q] _According to the altered form of the law of November 19^{th} 1887._

The earlier form of Article 7 ran thus:

Each payment must amount to at least 50 kreutzers or a multiple of 50
kreutzers. The sum total of payments in the course of a year cannot
exceed the amount of 300 florins, after deducting the amount resulting
from payments back during that year.

The balance in favour of a depositor including deposits paid in
and interest added to the capital cannot, deducting the amount of
repayments amount to more than 1,000 florins.

Deposits of 50 kreutzers can be made in postage stamps, or in special
postal savings stamps as soon as such stamps are issued by the Minister
of Commerce. These stamps are to be fastened on forms supplied
gratuitously.

[R] _According to the altered form of the law of November 19^{th} 1887._

The earlier form of Article 8 ran thus:

The rate of interest for savings deposits is to be fixed at 3 per cent
per annum.

The rate of interest can only be altered by legislation.

[S] _According to the altered form of the law of November 19^{th} 1887._

The earlier form of Article 13 ran thus:

The repayment of the balance in favour of a depositor, or any part
of it, to him or to his legal heir or authorised agent, will take
place upon a notice which can be made by the party giving it, at the
receiving office (post office) which he names in the notice.

The repayment is to be made through the receiving office (Post Office)
named in the notice on the production of the deposit-book on the
basis of an assignment by the Post Office Savings Bank, except the
payment is, according to Article 14, barred by proceedings having been
instituted, or according to Articles 6 and 17 by a protest having been
made.

When such notice has been received with reference to sums up to 10
florins, the assignment will be sent by return of post by the Post
Office Savings Bank and the payment back will be made by the receiving
office (Post Office) immediately after its arrival.

The repayment of sums between 10 and 100 florins will be made in a
fortnight at the latest, that of sums between 100 and 500 florins in
a month at the latest, that of sums above 500 florins at the latest
within two months after the arrival of the notice.



PROPOSED LAW

DEALING WITH THE ORGANISATION OF A

Service of Cheques and Clearing of Accounts

in the General Savings Bank

laid before the Chamber of Representatives of Belgium at the sitting of
Nov. 20^{th} 1896


EXPLANATIONS[T]

  GENTLEMEN,

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.

FOOTNOTES:

[T] Sitting of December 2^{nd} 1896. Parliamentary Documents N^o 29.



PROPOSED LAW

    _Additions to the laws of March 16^{th} 1865 instituting a
      General, Savings Bank, and of March 30^{th} 1879, codifying the
      postal legislation._


ARTICLE 1.--The Savings Bank is authorised to organise, with the
assistance of the postal administration, a service of cheques and of
clearing in current accounts in the interest of those depositors who
shall satisfy certain conditions in virtue of the present law.

ART. 2.--This service shall have a distinct and separate administration
to that of the Savings Service; the bookkeeping operations to which it
gives rise shall be centralised at the Savings Bank in Brussels.

ART. 3.--All participation in this service by the opening of a current
account shall be voluntary; withdrawal shall always be possible.

ART. 4.--Royal decrees shall determine:

1. The general conditions of admission and particularly the minimum
of deposit which shall be required of every adherent and which shall
remain non-withdrawable so long as his participation in the service
shall continue; the carrying out of his withdrawal;

2. The conditions and the forms under which the Savings Bank shall
receive deposits of third parties and payments on account of adherents,
either directly or by the intermediary of the postal administration;

3. The rules according to which the adherents shall be able to
dispose of the free balance of their account, by means of cheques and
clearings; the conditions and the forms of the cheques given out; the
arrangements made to prevent errors and frauds; the intervention of
the postal administration in the payments or repayments effected on
account of the adherents;

4. The rules which will permit the accounts to be kept from day to day
and to enable the account holders to know the condition of affairs in a
regular manner;

5. The formation of a reserve sufficient to assure the regularity of
the operations;

6. The rate of interest which shall be given to the funds placed in the
cheque and clearing service;

7. The constitution of a reserve destined to cover the eventual losses
of this service;

8. The fees for collection which shall be charged to the adherents.

  H. DENIS.
  E. VANDERVELDE.
  F. FLÉCHET.
  L. BERTRAND.
  T. NIEZETTE.



    Transcriber's Notes:


    Simple spelling, grammar, and typographical errors
    were corrected.

    Punctuation normalized.

    Anachronistic and non-standard spellings retained as printed.

    Italics markup is enclosed in _underscores_.

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    and } as well.

    Added missing "FIGURE V." reference to top of page 57.





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