1Nowadays, 60% of French people own the place in which they live. [1] In 1954, this percentage was only 35% and, as far as we know from existing data, it was even lower at the beginning of the twentieth century. [2] In 1908, in the old Seine department, only 5% of residents owned a property. [3] A century later, 32.6% of Parisians and 44.1% of households in the departments closest to the city owned their home. [4]

2Historiography has cleared up some aspects of this evolution; it is not at all natural, and it occurred in the context of a double movement. First of all, in the last third of the nineteenth century, properties were transformed into “goods” as the real-estate market emerged with its own economic logic and specific actors. [5] Along with financial assets (shares, bonds, and so on), real estate gained increasing importance for affluent French people, to the detriment of land ownership (especially farmlands). [6] The second peak (from the 1960s) coincided with a new cohort having widespread access to the market, thanks to the mortgages granted by banks. This enabled new households to access property ownership, [7] where until then had been mostly excluded from it. In 1967, 11.7% of households were repaying a property loan. In 1973, this figure had risen to 17.5%, and today a mortgage is the main gateway to ownership. [8]

3The first stage (mostly unknown) of loans proliferation occurred in the first half of the twentieth century. In 1894, the state created home loans specifically designed for the working class. This article focuses on their history. It is based on the archives of the Société Centrale de Crédit Immobilier (SCCI): this building society is one of the main entities in charge of implementing the law. This article follows on from a previous study conducted by Alain Faure on the 380 loans granted by the organization between 1912 and 1914, which examined the characteristics of the beneficiaries of this scheme. [9] The period examined in this paper (1924–1927) analyzes the scheme at a crucial time: after its first years and the post-World War I reconstruction, but before the implementation of the Loucheur program (1928–1933), which marked a turning point in French public-housing policies. The present exploratory study (which will be pursued on a larger scale) is limited to seventy-three loan applications signed between 1924 and 1927. It proposes to follow in detail the implementation of the scheme based on these applications. They are qualitatively rich, including an assessment of the borrower’s circumstances at the time the loan was signed (family composition, statement of physical and financial assets, profession, age, number of children, and so forth), repayment status, setbacks (if any) up to the loan’s extinction, as well as several details on the location and architecture of the properties acquired (or more often built) through the loan. [10] As the history of home loans during the twentieth century is currently the subject of a renewed interest, the study of these applications highlights an unknown aspect: credit considered as a way to protect low-income families. [11]

The Beginnings of the SCCI: Protecting Low-Income Households through Wealth

4Home loans specifically aimed at low-income households started to emerge in the nineteenth century. Laborers–whose number grew exponentially with the industrial revolution–were in a situation of high vulnerability, at the mercy of changing economic conditions or individual variables. The resulting political and social disturbances were a contemporary concern, and the nineteenth century was the quintessential time for reflections on this “social issue.” Most of the schemes adopted at the end of the century were informed by these reflections, especially by the reformist circle’s proposals. This circle managed to impose its views thanks to its search for technical responses and its participation in decision making. To protect workers’ families, reformers tried to encourage strategies based on the accumulation of wealth for individuals or families, as ownership was considered the best defense against poverty. [12] This led to a strong urge to budget, or the art of “anticipating what is coming and taking sensible steps;” in particular saving up for times of need. [13] This has been evidenced in Europe since the eighteenth century (nineteenth century in France) by the diffusion of savings and loans associations for small, regular deposits. [14] The support for the building of properties intended to be owned by their occupants was informed by this view: the goal was to help workers own their home, which would be both a salubrious shelter and an asset. [15]

5Some attempts were made in this direction. [16] They mostly occurred at management level, which was where pioneering change occurred in this domain. They usually took the form of rent-to-buy schemes: laborers paid a sum (regularly deducted from their salary) to their employer and became owners, usually after ten or twenty years. The case of the Schneider housing estate in Le Creusot, where “workers are immediately considered as the final owners of the house,” seems to be an exception. [17] But these strategies based on individual savings turned out to be difficult to implement: the low and irregular laborer wages were a major obstacle to their development. The working classes used savings and loans associations on a practical level, to set aside “a short-term contingency reserve for immediate needs” (rather than accumulate wealth); employers’ property purchases often failed because of the instability of jobs, and especially the inequitable conditions of the rent-to-buy schemes. The slightest delay in payment–in some cases even a simple failure to comply with moral standards–was often punished by suspending the scheme and discontinuing the process. [18]

6Around 1900, interest in property ownership was renewed, as initiatives aimed at protecting laborers multiplied (the workplace safety laws in 1898, the creation of the Ministry of Labor and Social Security Provisions in 1906, the law on laborers and farmers’ pensions in 1910, and so on). In these initiatives the keyword was social security; that is, the state supporting people’s individual attempts to save money. [19] In this context, laborers’ property had a crucial role, as it constituted a “significant manifestation” of this security. [20]

7The interest in housing increased as the Parisian banlieue began to develop, often in deplorable hygienic conditions. The working classes, who had struggled to find places to live in Paris since the 1880s, increasingly started to leave the city center. Some moved to new buildings in nearby towns; others settled in areas that often had very little infrastructure and bought land cheaply, in cash or through loans. [21] In time, these areas became a destination for irregular, more permanent settlements; there, families would build dwellings themselves, cheaply, with the materials they could find. More permanent constructions with basic comforts (toilet, running water, and so on) would have been too costly. [22] This led to the proliferation of “shanties,” usually unsanitary, which concerned policymakers. Effectively encouraging laborers to become owners seemed to be a strategy to protect them and, at the same time, enable them to access decent living conditions. However, instead of rent-to-buy schemes like those in the nineteenth century—an ineffective solution, as one became the owner of a property only at the end of the process—laborers were lent the sum needed to purchase or rent their property. The gateway to ownership would be money lending.

8Offering home loans to the working classes was a novel idea, though certainly the concept of borrowing was not new to them. It was a common practice in situations where earnings were irregular: whether under the guise of a debt with family or neighbors, credit with shopkeepers, or the use of pawnbrokers and pawnshops, loans made it possible for people to deal with daily expenses and even to access new forms of consumption (sewing machines, furniture, and so on) through sales on credit. [23] But these were relatively modest purchases, and the small, short-term loans involved were far below the amount needed to buy or build a house. At the beginning of the twentieth century, home and real estate loans were still reserved for the wealthy citizens. Outside the cities, they were in the hands of notary offices, which specialized in connecting those seeking (and able to repay) a loan with those wanting to invest their assets. [24] However, the required collateral (usually a material asset, often real estate) and the repayment method (most often, at the end of a term) meant loans were not very well suited to the needs of low-income households. [25] In the city, where notarized loans had been slowly replaced by property developments backed by structures with a strong financial foundation (building companies, banks, insurance companies, and so on), only the wealthiest people could borrow. [26] The establishment of the Crédit Foncier de France (“Mortgage Bank of France”) in 1852 offered some opportunities to those with limited means; in particular, it allowed the loan to be guaranteed by a mortgage on the asset to be purchased, rather than by a preexisting property or real-estate asset, and to be paid off by regular installments rather than by a single payment at the end of the loan term. [27] However, this option remained inaccessible to the working classes (even when the bank broadened its customer base at the beginning of the twentieth century): the Crédit Foncier never loaned more than half the value of the asset. Taking into account that assets were systematically undervalued, this corresponded to just a third of its real value, which forced the borrower to supplement it by other means. In addition, the pressure on the debtors was further compounded by the tendency to shorten the average loan terms (sixty years in 1913, six in 1932).

Loans Supported by the State

9A scheme that “[made] loans available to impoverished people, enabling them to achieve their ultimate goal: a home for their family” was an innovation. [28] A bold innovation: while social welfare was still in its infancy, it set out to grant loans to low-income and precarious workers (that is, people that could potentially be insolvent). The scheme could only be implemented if the state acted as a guarantor. In 1894, The Société Française des Habitations à Bon Marché (“French Society for Budget Homes”) obtained the support of laws encouraging the construction of homes to be rented or sold to low-income families and in particular “[to] laborers or workers who live mainly off their work or their salary.” [29] The society had been created four years earlier on the initiative, among others, of Jules Siegfried, an industrialist and expert on housing problems. The law facilitated access to ownership, which remained the state’s intervention of choice during the entire period between the two world wars. [30] The scheme was based on private initiative: lawmakers encouraged the constitution of construction companies and of building societies, whose objective was not to build but to facilitate the construction or purchase of budget homes. [31] These private-law building societies were supported by various tax concessions and borrowing facilities. [32]

10At first glance, the results of the law are deceiving. Building societies were slow to take off, even after the new terms of the law (adopted on April 14, 1906) authorized councils and departments to participate in their financial support. On April 10, 1908, a new law “concerning small properties and budget housing” was adopted. The state could now grant loans at 2% to building societies, undertaking part of the cost of the loan. From 1926, the state would be financed by the Caisse Nationale des Retraites et de la Vieillesse [“National Old-Age and Pension Insurance Fund”] and then the Caisse des Dépôts et Consignations [“Deposits and Consignments Fund”]. [33] These advantageous conditions enabled building societies to offer loans at 3.5% to aspiring homeowners. Further rate reductions would apply to families with more than three children (1912) and disabled veterans (1918). [34] The difference between the rates at which these companies lent to the state and the rates at which they lent to their clients allowed them to cover their operating and management costs. These measures would allow the effective launch of the process. The change in the rates in the 1920s did not affect the overall scheme: the state shouldered almost half of the cost of the loans. These were seen as “mutual insurance” mechanisms in which the individual effort was supported by the collective effort. [35]

11The options offered by building societies were appealing to many households struggling to find a place to live after the war. The housing crisis worsened after 1918, as the rental laws adopted during the conflict and extended to the interwar period had permanently frozen the real-estate market. Because they were enjoying fixed rent, renters were opposed to leaving their homes, even when they were no longer suitable for their needs. Similarly, the postwar increase in production costs in the construction sector slowed down new constructions, and redirected investments mainly to the high-end property market. [36] Thus, many families were unable to find accommodation, unless they crammed into narrow, often unsanitary dwellings, for rent amounts that were usually deemed too high. The possibility offered by building societies to build or purchase a property, taking advantage of the reduced-rate loans proposed by the state, was for them one of the rare alternatives to poor housing. [37]

12Because public authorities considered access to ownership to be essential to the evolving workers’ protection, they oversaw its implementation closely. In fact, the borrower was considered as being in a structurally unfair relationship with market professionals; this relationship was more similar to that of a customer, and contrary to the practices of access to ownership attempted in the nineteenth century. [38] It was necessary to protect “a man who asks society for a way to create a household and be free and independent” through a strict regulation of credit institutions, which should be “about altruism, not speculation.” [39] From 1906 onwards, building societies authorized by law (like budget-housing construction companies) had to have their statutes approved by the Ministry of Labor. [40] Starting in 1925, companies that had not been approved were forbidden from describing themselves as “building societies” and from using “all designation[s] likely to create confusion with the aforementioned societies and offices in their contracts, brochures, posters and any other documents. [41] The concern for protecting borrowers affected also the purchase of lands. [42] In 1913 a law was introduced that ruled the operation of the booming savings and building societies, often allocating development plots under dubious conditions. Minimal technical conditions were also imposed to developers, “whose operations [had to] be strictly overseen by administration, not only in the interest of the public but also of those who had acquired the plots,” which were considered (to use the words of a contemporary) “minor.” [43]

13Among the societies registered in the Île-de-France was the Société Centrale de Crédit Immobilier (SCCI), a private-law society established in 1911, and a unique institution among the three hundred building societies in existence during the interwar period. [44] Jules Siegfried and Alexandre Ribot were part of its management board (the latter would also become its honorary president). Jules Siegfried also took part in the establishment of the Société Française des Habitations à Bon Marché (“French Society for Budget Homes”) and supported the vote on the first housing law in 1894. He died in 1922, and in 1926 his son Jules took his place on the management board of SCCI. [45] Alexandre Ribot (1889–1940), secretary, lower-house member, then senator, was the proponent of the law on building societies in 1908. During the first years of the SCCI, the two men were part of the committee that allocated the state’s advances: [46] this certainly contributed to making the SCCI’s work easier, assisting more than ten thousand households in the interwar period to become owners (8% of the loans granted before 1939). [47] The management board also included André Join-Lambert, lower-house member from 1919 to 1936 and staunch supporter of social policies, in particular laws on working-class housing; he was also vice-president of the Board of Directors of the Caisse d’Épargne et de Prévoyance [“Savings and Pension Fund”] in Paris, [48] which included also Georges Risler, member of the Conseil Supérieur des Habitations à Bon Marché [“High Council for Budget Homes”]. [49] Considering that the SCCI’s premises were for a long time supplied by the Bank of France, it is clear that this organization enjoyed the active support of several figures in the budget-housing campaign, for whom it represented great exposure. Hence the interest in studying more closely the way the SCCI implemented the scheme, despite gaps in the archival records (we no longer have the minutes of the society’s management board nor the loan applications that the society rejected). However, the very detailed loan applications stored at the regional archives in Paris at least allow an observation of the scheme in practice. The following study is based on the analysis of seventy-three loan applications signed in 1924 (twenty-six), 1925 (twenty-five), and 1927 (twenty-two), which allowed the construction or purchase of individual homes in the Seine and Seine-et-Oise departments. [50]

Loans to Insolvents?

14In the absence of information on the rejected applications, it is difficult to profile loan applicants. However, we have a detailed knowledge of those approved by the SCCI. This enables us to assess the discrepancy between the social objective of the law (“to establish small building loans for those who cannot apply to Rue des Capucines” [i.e. the Crédit Foncier]) and its implementation by the SCCI. [51]

15The audience targeted by housing policy was not clearly defined. Although it is not possible to profile it exactly, lawmakers had sidestepped this difficulty by setting a maximum value for budget housing; in their opinion, this would limit the number of people choosing to live there. [52] The law simply specified that it was aimed at the less fortunate “who lived mainly off their salary,” although they still had to have some preliminary savings (a fifth of the loan amount). [53] In fact, the sixty-three SCCI borrowers were laborers, with the exception of a war widow and a self-employed cobbler. [54] The legal scheme also favored large families by granting them reductions on the interest rate. [55] From this point of view—and although one of SCCI’s directors was a devoted natalist—the objectives set out were not reached. As dictated by the law, which demanded that single people be excluded from the scheme, all applicants (except a widow) were married couples. Yet, of the seventy-three borrowing families only seven are classified as large in the legal sense (more than three children): the strong natalism of housing policies was often more of an aspiration than reality. [56] Finally, it was not possible to determine the number of disabled veterans among the borrowers, although in theory they had privileged access to home loans. [57]

16These seventy-three borrowers were low-income families. The average salary of the head of the household (seventy-two men and a war widow) was equal to twice the salary of an average laborer—1.3 times more than the salary of a junior mailman in Paris, but less than the maximum salary of a primary school teacher. [58] In 1924, for example, borrowers’ salaries were between seven thousand and fourteen thousand francs, while the average salary of a laborer in France was 5430 francs and a college professor’s was 29,600 francs. Their wives, when they worked, were employed in the cardboard sector, or they were tailors, laundry workers, or cleaners. [59] In more than half of the cases, the assets of these families (whether in cash, savings accounts, or shares, and excluding the land to be built on) were less than six months of accumulated earnings (forty applications out of seventy-three). In more than 90% of the cases, they were less than the equivalent of a year’s salary (sixty-six cases out of seventy-three), although on average the loans equated to more than two years’ earnings. [60] In other words, these families borrowed from SCCI more than what their assets allowed them to commit to. In this regard, the SCCI met the goals of the law: to grant loans to “laborers living mainly off their salary” who were ineligible for home loans. The amounts borrowed from the SCCI were however significantly lower than those granted by the Crédit Foncier. [61]

17Even including the value of the land, 71% of these households owned less than half of the debt they were going to contract. Borrowers had limited means and were vulnerable: households that could not guarantee their loan with their own assets were in a fragile situation. Since there was no notice of dismissal or social welfare in case of unemployment, only twenty had a protected status: fourteen worked on the railways, four in administration, one in the army, and the last one, the war widow, received her husband’s pension. A further difficulty is that the income of these borrowers was often irregular. While for nine of the seventy-three heads of the household the salary was calculated on an annual basis—for example, the state-railways employee was on an annual salary of 5150 francs—more often the salary was calculated on a monthly (thirteen cases) or daily, even hourly basis (twenty-two cases); for example, the cabinetmaker, whose bimonthly paycheck detailed the number of hours worked. [62] The longer the loan term, the higher the risk. Perhaps in order to reduce the portion of income allocated to the repayments (on average 14%), and since the borrowing rates were low (2.25 to 4%), borrowers spread their repayments out as much as the law allowed them to do: thus, two-thirds of them contracted a twenty-five-year loan (the average term being slightly longer than twenty-three years). [63]

18As noted by a commentator, this resulted in “80%—plus insurance and fees, and thus sometimes 90% or 100%—of the asset value being loaned to. .. insolvents” or at least to weak borrowers. [64] The success of the scheme was crucial for the SCCI as well as for the stakeholders supporting the legal measures. It proved that it was possible to grant loans to an audience that until then had been excluded from the mortgage circuit, but it also reassured public opinion about the use of public monies, as the state supported part of the amount of these loans. [65] The organization focused on the success of the scheme to limit the risk of outstanding debts.

19To best guarantee the repayment of the loans, the SCCI used three tools: a very good knowledge of the borrowers, partly compulsory insurance, and individualized support. First, a preliminary analysis: the files collected show a rigorous assessment of the applications. Several details were collected before granting the loan. Thus, the SCCI knew precisely the composition of the borrowers’ families (children, but also dependent parents), their assets (monies, savings, shares, and value of the land to be built on), the characteristics of the dwelling that they intended to purchase or build (plan, location, public transport) and their ability to repay. This last point was the subject of a detailed assessment: the declaration of revenues, included in each file, was supported by a certificate from employers; in half the cases, upon request, employers supplemented the certificate with praising “morality reports,” confidentially addressed to the SCCI. [66] Starting from 1925, building societies’ staff conducted assessments at the applicants’ residence. As noted by a commentator, “the prime reason for the trust that [the building society] might inspire, the reason that its functioning is shielded from all doubt, is that it is based on relationships between people that know each other.” [67] It is important “for the society to know the applicants before granting the loans” (following a process similar to that of the private credit bureaus that emerged in the United States at the end of the nineteenth century to assess borrower risk, and whose relationships were not based “on financial information but on the personality of the borrower”) [68]: hence the enquiries made by SCCI staff. Its employees, whose recruitment conditions are unfortunately unknown to us, compiled reports on the genuineness and solvency of prospective borrowers, evaluating them on the basis of their day-to-day behavior (regular rent payment, care in the keeping of the house) and moral values (households were judged on whether they were “serious,” “honest,” and “appropriate”). To obtain this information, they had no hesitations in interviewing neighbors, janitors, employers, even the mayor’s office for their opinion on the applicants (“well regarded” families, neighbors offering “positive information”).

20As to the second strategy, the SCCI insured itself against the potential failure of its borrowers. The legal obligation for a deposit of at least a fifth of the value of the property to purchase or build was certainly fulfilled, sometimes even surpassed. Interestingly, however, sometimes the SCCI included the materials already owned by the borrower in this amount, plus working time for those who had elected to build their house themselves (five cases); working time was considered as a “notional” asset. Thus, for a foreman who in 1924 obtained a loan of 25,058 francs, the security was comprised of 2200 francs in “cash, savings, and shares,” 4000 francs in land, and 400 francs in “owner’s labor.” [69] But in all cases these assets were insufficient to guarantee the total loan: although above the compulsory deposit of a fifth of the value of the property to build, they were still far below its total value. Consequently, the property itself was taken as security through to a mortgage. This scheme allowed the borrower to be an owner immediately, while ensuring the building society would be refunded through the sale of the property in case of debtor’s failure to pay. The mortgage was a security imposed by law, like insurance against fire; it was especially safer as the SCCI oversaw closely the quality of the dwellings built or purchased, ensuring thus their market value. [70] On the other hand, borrowers had to be insured in case of death. This type of insurance slowly emerged in the 1860s. It was offered to budget-home buyers without much success in 1894, and had been encouraged by the Caisse des Dépôts et Consignations, which offered a rebate of 0.25% on the interest rate. It became compulsory in 1922. [71] The borrower would take up the single premium contract, subject to a medical exam, at the 1860s. It was offered to budget-home buyers without much success in 1894, and had been encouraged by the Caisse des Dépôts et Consignations,ing on the age of the borrower and the loan term) but it could be counted as part of the loan.

21As a third strategy to guarantee the success of the scheme, the SCCI set up a very advanced pedagogical support scheme. To an extent, it was imposed by the law: approved building societies were required to offer clear and accurate information to their clients. They had to make borrowers aware of the precise terms of their commitment by providing them with educational material. Upon signing the loan, borrowers received “a booklet allowing [them] to check their account with the society by showing, month by month, the reduction in their debt according to the volume of their transfers.” [72] Similarly, they received a copy of their life-insurance policy. This document specified, for each yearly period, “the sum that the Caisse Nationale d’Assurance en Cas de Décès would have to pay in case of death of the insured during this period.” [73] This information was useful to borrowers, as at the beginning of the twentieth century the working classes were not used to long-term institutional loans. [74] Just before World War I, for example, the Caisse des Dépôts et Consignations sent its employees to train small cooperative members who struggled to manage the accounting for their construction company because they lacked the skills. [75] The volume of correspondence exchanged with the SCCI suggests at least a partial knowledge of the schemes in force. Advice, balance of the loan, amount due in case of early termination: several questions calling for all types of clarifications.

22The SCCI went further, as the society’s services supported borrowers from day to day. They defended their interests by checking the construction works for defects or delays on the site, by managing renters once a rental was authorized—for example, in case of a withdrawal for professional reasons—and, more generally, by responding to the several requests they received, even if they went beyond the scope of the loan. Some borrowers, in fact, also had to familiarize themselves with their status as urban owners: of the seventy-three applications studied, sixty-three families were previously renters and another three lived in porter’s quarters. [76] This led to various issues, for example concerning the new plans for the road, about which one of the property buyers should have been consulted. The SCCI services responded that “not knowing what the exact plan is for the city of Montreuil,” he should “complain with the council offices and reserve all [his] rights.” [77] Similarly, they informed a borrower whose wife had died (leaving two daughters born from a previous marriage) that he was not obliged to sell in order to settle the succession; the property could remain undivided, which he was allowed to do under the budget-home laws by way of derogation to the Civil Code. [78]

A Qualitative Success

23The SCCI put itself at the service of borrowers. To what end? Home loans offered by the SCCI within the scope of the law facilitated working classes’ lasting access to a sanitary home, while allowing them to accumulate some savings. The success of the scheme should be measured against these two criteria, but in practice it is difficult to evaluate. The buildings were of good quality and respected the health rules imposed on budget homes. However, it is more difficult to draw conclusions in regard to people’s ability to accumulate wealth. For example, how should an early repayment be interpreted? It could have been due to an increase in the borrower’s earnings or rather to difficulties to be settled by the selling of the asset. Of the sixty-seven cases for which we know the final outcome of the loan, several indices suggest the positive outcome of the scheme. In total, forty-three borrowers repaid their loan at the end of the established term; nine of them even did so slightly in advance, probably helped by the strong inflation at the time (the price index doubled between 1924 and 1940). [79] In twelve other cases, the head of the family died prematurely, but the house went to the heirs thanks to life insurance. In total, in 80% of the loans whose outcome is known, the borrower (or his family) became owner of the property it had committed to. Another element of the relative success of the scheme is evidenced by the fact that five of seven households that had short-term payment difficulties ended up settling their situation: rather than selling the property, as it was authorized to do by law, the SCCI granted them an extension. In January 1934 (during the economic crisis) a household started to decrease its monthly payments. The society became concerned about it in April. The borrower went to the headquarters to explain that he had been unemployed for two years. In May, having found another job, he started making higher monthly payments to cover for his delay, and managed to repay the total loan in 1951, after the twenty-five years of annual installments initially scheduled. [80] In the 1940s, the same tolerance was shown to a family that was deeply shaken by the death of their mother. After having been in a common-law marriage with a new partner, who ultimately ran away with part of the assets, the father went to hospital in 1943 and lost his job. His seven children nearly ceased any relationship with him. Once abandoned, the house deteriorated; the garden became deserted, the loan stopped being repaid, and the fire-insurance premiums were no longer paid. After making enquiries on site, the SCCI located one of the children, who, on the society’s advice, rented the house out. The family finally purchased it in 1952. [81] Only in two cases were the difficulties followed by a sale—although it is unclear whether this resulted in a loss or a gain for the borrower, as there are no indications about the sale price of the property. One case was an unemployed person struggling to make his monthly payments: he ended up reselling his house the following year, after finding a job outside the city (he might have sold it to get rid of a weighty financial commitment). The other case was a widow who was no longer able to settle the debt after her husband’s death: while the insurance covered the monthly payments following his death, a former period of illness had caused arrears to accumulate.

24However, in general, thanks to the laws and to the efforts of the SCCI administrators who followed each case closely, most of these low-income families managed to become owners and improve their living conditions: one of the families, with seven children, left a one-bedroom rental for a more sanitary home with four bedrooms, a dining room, a kitchen, and an inside toilet; another transformed a former wooden shack of twenty square meters with no facilities into a brick house with inside toilet.

25These loans were thus a modest, but remarkable first stage in the working classes’ access to ownership. But their significance goes beyond this one objective. These loans also contributed in their own way to constructing a society of labor. Firstly, through the adoption of a new notion of time: the implementation of home loans encouraged borrowers to “exchange current assets for future ones” thanks to a regular, long-term commitment supported by the state. [82] Although vulnerable, workers were invited to think in the long term. Only three conditions limited the length of the loans: the beneficiaries had to sign the loan offer before they turned sixty, they had to have completely repaid it by the time they were sixty-five, and the loan term had to be a maximum of twenty-five years. [83] As we have seen, households did not hesitate to take advantage of these opportunities.

26Loans also introduced a new expense frequency. While clerical workers were usually paid monthly, laborers received their pay every week or every fortnight (in 1969, only 10.6% of laborers were paid monthly), which posed several problems regarding expenses with a different frequency. [84] Rent, in particular, could often be due every three months, a stressful deadline for families. Reducing this frequency became one of the key issues for social reformers from the nineteenth century onwards, leading to the establishment of the Caisses de Loyers [“Rent Banks”]; for example, the one created by the Amélioration du Logement Ouvrier [“Association for the improvement of working class housing”] to “facilitate laborers’ budgeting by depositing weekly, to the society’s offices, the necessary amount to the settlement of the term.” [85] The SCCI chose to ask for monthly repayments, although by law it was allowed to demand these amounts to be paid quarterly or annually. [86]

27The regular frequency of these expenses was informed by the new modes of consumption that became popular at the time, such as rent-to-buy schemes. [87] This regularity is represented in this case by the schedule outlining the amounts due month by month until the final repayment of the loan. It is likely to have been associated with other types of periodic consumption: wastewater and water supply services (which budget homes were provided with by law), electricity connection, or weekly public transport passes. [88]

28Finally, these payments required banknotes. While workers usually received their salary in coins and few of them had a bank account—in 1966, only 20% of the families had a checking account, including savings accounts—monthly payments, as far as the records indicate, were settled by money order (ten cases of payment by money order, one by check). [89] This method of payment was very common. [90] It allowed money to circulate from one place to the other securely, and allowed people to settle expenses both remotely and in cash. It would be interesting to know if this type of payment was a novelty for these families, or if they already used it for other types of payments (for example taxes, which had been payable by money order since 1912). More generally, the issue of methods of payment raises questions about the administrative learning curve associated with the loan: having a medical checkup, submitting a copy of one’s marriage certificate, contracting insurance against fire, or asking one’s employer for a salary statement. The development of the administrative culture associated with accessing social security, whose early glimpses can be detected here, is in itself deserving of further analysis.

Credit: A Tool for Social Protection?

29Despite the success of the SCCI’s initiatives, the global impact of the laws supporting access to ownership by credit remained limited. Only 140,000 households took advantage of it between 1908 and 1939. [91] As it hinged mostly on the state’s commitment and on the public budget, the scheme was directly affected by the financial crisis in the 1930s through the increases in interest rates and the temporary suspension of the state’s advances.

30The period nevertheless appears to have been an essential experimentation stage for mortgages. These are strongly distinct from the attempts to access ownership made in the course of the nineteenth century; the goal was no longer to accumulate capital by saving in order to free oneself of the working-class condition, but to anticipate the gains in becoming an owner through a loan. Therefore, access to ownership is not the relic of forms of protection inherited from the nineteenth century, but a new strategy based on the commitment of workers. It was operated with the support of the state, which viewed it as one of the legitimate tools for the protection of low-income families—hence its strict rules.

31Similarly, these credit schemes were means of protection and are therefore different from the mortgage loans implemented in the 1960s. These loans developed very quickly once borrowers became more secure and more solvent, thanks to the safety net provided by social security. This protected them in case of illness, old age, and (from 1958 onwards) unemployment. Workers’ access to the bank-loan market was anticipated by the low-interest loans of the 1930s and extended through the diversification of the banking sector of 1966–1969 (which allowed banks to offer both deposit and loan services). However, this access was also accompanied by an increased vulnerability, as these institutions were more concerned with cost-effectiveness than the philanthropic organizations of the interwar period had been.

32The specificity of home loans in the interwar period gives us the opportunity—and that is perhaps their greatest contribution—to trace a detailed timeline of loan schemes. The study of home loans can be “a gateway to reflections on social exclusion through the exclusion from consumer markets;” but, if only we look toward other periods or other domains of application, it can also inform a reflection on the modes of inclusion and construction of the salaried status. [92]