SAVINGS BANKS. In any consideration of the dimensions of savings bank deposits, it is impossible to divorce the problem from the effects of the World-War and the post-war period. The general table given below takes this all-important point into account, for it is designed to include 1913, the year immediately preceding the war; 1920, the first year for which comparable fig ures were available after the war; and 1925, the latest year for which general information was at the time of writing available.
As shown in the articles MONEY and CURRENCY, the general effect of the war and its results was to cause widespread currency depreciation. This had several, and to some extent contradictory, results in the field of savings. To mention the first, which is partly of a theoretical character, if a uniform depreciation of the currency occurs, so that all prices, salaries and wages are doubled, each individual's margin of savings should equally be doubled. Thus if, before the war, a man earned £300 a year, spent £250 a year, and saved £50 a year, after the war, when prices were double, he should, in theory, have earned i600 a year, spent £5oo a year and saved iioo a year. Hence it would be natural to find a post-war increase in the total volume of savings, and this, to some extent, the table shows. At the same time, post-war sav ings are in depreciated money, for even gold has lost one-third of its pre-war purchasing power. To crystallise this argument, the increases in post-war over pre-war savings, as shown by savings bank deposits, do not necessarily prove that the peoples of the world are saving a larger proportion of their income, or that the cult of thrift is increasing. They rather suggest that, as money is worth less to-day than before the war, people have to save more units of money to-day to equal in purchasing power their savings of before the war.
The next general point is the check imposed on savings by a currency in the act of depreciation. This is of a twofold character. Currency depreciation is expressed in rising prices and wages, but every wage-earner and housewife knows that prices rise first, and wages only a considerable time afterwards ; so much so that, as a rule, wages never overtake prices. So long as they lag behind, any margin in the household budget available for savings in evitably disappears, and in many cases past savings have to be drawn upon. This is the check in its first manifestation. The
second is that when a currency is depreciating rapidly, saving becomes the act of a fool. What is the use of saving io,000 marks in a year, only to find, at the end of it, that it takes a million marks to buy a dollar's worth of goods? There is the classic story from Germany of the wastrel who spent his in heritance upon champagne, and then sold the empty bottles for more marks than the champagne had originally cost him, and whether or not this is true, it is obvious that currency depreciation is a serious enemy of thrift. So long as a currency is falling in value, the exercise of thrift is not only an impossibility, but also an act of folly. Hence, while, in such countries, savings bank deposits, measured in worthless paper currency, may apparently be growing, so soon as they are reduced to gold values, they shrink to nothing. As shown later, German deposits in savings banks at the end of 1923 were, measured in paper currency, oo,000,000,000,000,000,000 marks. Reduced to gold marks, they were only i oo millions as against 19,700 millions before the war.
Only when the collapse ends in the stabilisation and revaluation of the currency, is it possible to obtain a true picture, and wherever the collapse has been a severe one, some shrinkage in the nation's savings from pre-war figures is inevitable. Thus, for all practicable purposes, the French franc had been stabilised by the end of 1926. At that date, the total volume of savings was Frs. 15,969,000,000, as against Frs. 5,829,000,00o in 1913. Super ficially that suggests a great increase in the traditional thrift of the French nation, but during the intervening period, the franc had fallen to a fifth of its original gold value. To allow for this, the 1926 figure should be divided by five, reducing it to Frs. 3,194,000,000. Finally, gold itself had lost one-third of its pre war purchasing power, so that even this last figure should be re duced by one-third to Frs. 2,129,000,00o. A comparison of this last figure of two milliards with the 1913 figure of nearly six milliards shows the real inroad on French savings bank deposits made by the war and the post-war inflation.