% HISTOEY OF SAVINGS BANKS. n A HISTOEY OF BANKS FOE SAVINGS i« |fn 6reat ^U-'itaiii unb Jlrelanb, INCLUDING A FULL ACCOUNT OF THE ORIGIN AND PROGRESS OF j\IR. GLADSTONE'S FINANCIAL MEASURES FOR POST OFFICE BANKS, GOVERNMENT ANNUITIES, AND GOVERNMENT LIFE INSURANCE. BY WILLIAM LEWINS, AUTIIOK OF "HEll MAJESTY's MAILS." r^ Of THl ^ XJNIVEKSITl LONDON: SAMPSOIN^' LOW, SOX, AND MAR8T0N, MILTON HOUSE, LUDGATE HILL, E.G. I- ..^ \^AU Rights rescrred.l Si / Lf } LONDON : PRINTED BY R. CLAY, SON, AND TAYLOK, BREAD STREET HILL. TO THE EIGHT HONOURABLE WILLIAM EWART GLADSTONE, M.R CHANCELLOR OF THE EXCHEQUER, dc. tic. d-c. HE GREATEST LIVING AUTHORITY ON ALL MATTERS OF FINANCE, AVHOSE NAME IS NOW INTIMATELY AND DESERVEDLY CONNECTED AVITH ALL THAT RELATES TO THE SUBJECT OP THESE PAGES, Cljis Morh IS BY PERMISSION MOST RESPECTFULLY DEDICATED. PREFACE. The present volume is ofFered as a contril3iition to the history of a number of provident schemes, which, though quietly working in the country for many years, and affecting to no small extent the social con- dition of great masses of the people, can scarcely be said to have found an annalist. I think I may foii^ly consider that the ground covered by this work has not previously been occupied. In sapng so much, I do not forget the only l)ook which has hitherto emanated from the British press on Savings Banks, Mr. Scratchley's Practical Treatise on Savings Banks deals, however, with the question technically, and is meant avowedly as a text-book for actuaries and those employed about Savings Banks. The present volume, on the contrary, while it may be supposed to possess some interest even for this limited circle, is not meant to take the place of the above, but seeks its public amongst general readers, and amongst those who, either from in- clination in that direction, or through connexion with them as employers, take an interest in the progress of the industrial classes of our country. vili PREFACE. Treating as this volume does of useful practical schemes and matter-of-fact topics, I have sought to avoid all matters of speculation, to speak in very- plain terms and without waste of words, and, whilst noticing in their proper order all the different pro- posals having to do with the subject, to refrain from venturing upon any myself. My aim has been to give a full and accurate account of the early history of Savings Banks ; and as subsequently to their origin the discussions in Parliament with regard to them and kindred subjects were no incorrect reflex of the feeling in the country at different periods,. I have also dealt fully with the parliamentary history of these institutions. In this way Savings Bank reformers, both in and out of Parliament, and their measures of reform — many of them ending in the establishment of different kinds of supplementary banks — are made to pass under review ; and the names of those who framed the original schemes, as well as of those who tried to improve upon them, are rescued, for a brief space at any rate, from a state of obscurity, if not of oblivion. With respect to the latest modification of the Savings Bank principle, as exhibited in the measures brought about within the past few years by Mr. Gladstone, great efforts have been made — as great efforts have been needed — to treat all the questions involved fully and impartially, and to accord these important and far-reaching measures their due place PREFACE. IX amoiigst the other wouderful provident schemes of the present century. Great pains have also been taken to ensure perfect accuracy, both as to facts and figures, and my acknowledgments are due to many gentlemen who are acquainted with the subject in all its bearings, who sent me information, or answered my inquiries, with great readiness and cordiality. It is less neces- sary to mention any of these gentlemen in this place, inasmuch as reference is frequently made to their assistance at the proper place in the body of this work ; but it would be wrong to omit to state that, with reofard to Mr. Gladstone's recent measures, I have had every facility granted me by the Post Office authorities for obtaining the necessary and the most recent information respecting these schemes, and that this assistance has been rendered in a manner which calls for my heartiest thanks, as the only sufficient or fitting acknowledgment. Dealing as I have done with what Mr. Carlyle will allow to be one of the *' side sources " of his- tory, I venture to hope that some of the facts now gathered together may not be without their interest to the student of human progress in some of its highest aspects ; while to all those who are directly concerned in such schemes, and to masters of workmen, to whom the concluding parts especially are more particularly addressed, this volume is offered, mth some confidence that they will find much new and original matter in it, and some old matter put in a new light. niEFACE. An Appendix is added, giving the Acts, or clear abstracts of Acts, at present in force for all the dif- ferent descriptions of Banks for Savings, together with some of the latest statistical information which may be thought of value. W. L. London, May 24, 1866. *^* Two questions connected more or less with my subject have been brought into prominence by the action of Parliament since the present work was completed, and to these questions it may not um^easonably be expected that I should in some way refer. The first, or the Savings Bank qualification in the new Eeform Bill, concerns Savings Banks and Savings Bank de- positors very intimately ; the second question, or the proposal of Mr. Gladstone to employ a portion of the money of Savings Banks in reducing the National Debt, can scarcely be said to have an immediate bearing upon either. With regard to the Savings Bank qualification, I may, perhaps, be permitted to say that, though re- ceived with hostility in some quarters and indifii'erence in others, the balance appears to me to be in favour of the proposal. In most respects, if not in all, the qualification may be defended on the same grounds as the Forty Shilling Freeholds ; the investment is about the same ; the one is open to much the same objections as the other, and there are similar merits in each. Votes may l;>e manufactured under the one PREFACE. XI cc|ually as under the other, and it is not easy to understand why those who support the one "Bye Franchise" shoukl oppose the other. Little trouble will accrue to Savings Banks under the Act ; and the money forming tlie qualification may often- times he allowed to remain in the bank, whereas under other circumstances it might be squandered in unnecessary or unprofitable expenditure. The dis- tinction may be hard on others quite as worthy of the franchise, but who may be in some way unfortunately circumstanced ; and it may seem arbitrary to those wdio have an ecpal amount invested in some other shape : but these are the sort of arguments which may be brought against Fancy Franchises of any kind with quite as much reason as against this par- ticular one. Working men who may claim the Fran- chise on the Savings Bank qualification will not be able to keep the fact secret that they are depositors, and that up to a certain amount ; and they must submit, on misfortune overtaking them, to he deprived of a privilege which they may have learnt to prize : but, notwithstanding all these and some other minor considerations, I cannot help regarding the Clause as, on the whole, a fair and reasonable acknowledg- ment of the merits and claims of many of the best portions of the community, who were not influenced by the consideration of this electoral qualification when they originally commenced the practice of pro- vident habits, and also of the claims of others who may not be unduly influenced l>y the prospect of Xll PREFACE. citizenship which the Clause may henceforth hold out to them. Mr. Gladstone's recent proposal to convert the 24,000,000?. of Consols, invested by the nation in Savings Banks, into Terminable Annuities concerns the Nation itself much more than Savings Banks. So far, indeed, as the matter affects the trustees of Savings Banks, or depositors in them, it was settled some years ago when the money was made a book debt, and the Government became the banker, as it were, for the sum in question. What the Govern- ment now does with the money is no concern of Savings Banks. This is put so plainly by Mr. Glad- stone in his Budget speech, and is at the same time so indubitable, that to quote his words is to say all that can be said on this point. " They (the trustees) have nothing to do with the money ; that is a mere question of investing it with which we are alone concerned. If we lost every farthing of it, we should have to pay it to them ; and if we made a profitable investment of it, it would be entirely our own affair." In one respect only is Mr. Gladstone's proposal specially satisfactory to Savings Bank officials and all who take an interest in Savings Banks. Under the operations described by the Chancellor of the Exchequer in his Financial Statement, and now familiar to every reader, the Balance estimated to be deficient, of over three millions sterling — a deficiency which has long been a Ijugliear in all considerations of the su1)iect — ^^'ill disappear as a separate item in PREFACE. XI 11 the National Aeeouut.s in the process of redemption proposed. The entire scheme shows, especially and prominently, Mr. Gladstone's anxiety to reduce our {^normous hurden of debt He here voluntarily pro- poses to cripple himself in no small degree in the matter of liis resources. Should his proposals become law — and it is sincerely to be hoped they will — the process must go on, even when he or his successors may require to raise money at an obvious disadvan- tage ; but if he be satisfied to throw the burden equally on years of prosperity and adversity, surel}^ this is a matter on which the public generally should feel no fear. CONTENTS. CHAPTER I. PAlJE INTRODUCTORY CHAPTER 1 CHAPTER II. ON THE URIGTN (iF SAVINGS BANKS lt> CHAPTER III. EARLY LEGISLATION ON SAVINGS BANKS — 1817 TO 1844 45 CHAPTER IV. ON THE PROGRESS (JF SAVINGS BANKS VV TO THE YEAR 1844 ... 80 CHAPTER V. LEGISLATION ON SAVINGS BANKS FROM 1844 TO THE PRESENT TIME 122 CHAPTER VI. A CHAPTER ON SAVINGS BANK Fl'.AUDS 183 CHAPTER VII. ON THE DEFICIENCIES OF THE EXLSTING SY'STEM, AND THE ESTABLI.SH- MENT OF SUPPLEMENTARY SAVINGS BANKS 226 CHAPTER VIII. ON PROPOS.ALS FUR GOVERNMENT SAVINGS BANKS 269 XVI CONTENTS. C'HAI'TKU IX. ON THK DF.VKUtrMF.NT OK TIIK I'OHT OFFIfK RAVINOS MASK .hYSTK.M . 311 ( iiArTKi: X. ON IIOVF.HNMKNT INslllAM K AND (JdVKRNMK.M I.IFK AN.NLITIES . . ^ij i'HAPTKK XI. CONri.fDINC. (HAVTF.n 377 ArPF.NI»IX 3^*5 INI>F.X ^•'''7 HISTOEY OF SAVINGS BANKS. ClIAPTEK I. INTRODUCTORY CHAPTER. " Arcliimedes was wont to sa\- tbat lie would remove the world out of its jilace, if he had elsewhere to set his foot, aud truly I believe so far that otherwise he could not do it. I am sure that so much is evident in the architecture of fortuues, in the raising of which the l>est art or endeavour i able to do notliiug, if it have ,iot where to lay the jirst stom." — Sir Hex WoTTOX. The habit of lapng sometliiiig by in a pi-osperous season for the wants of an advei^e one is one of the very oldest customs in the world. All our laws, Divine and human, enjoin the exercise of providence aud frugality as a social, and as a personal duty. These habits wliich are incidcated in Scrip- ture as positive duties, and which lind ample illustrations in many of the arrangements of nature and Providence, have been common in one form or other to all people in every country and in every age. In England, in almost everjiihiug relating to the social advancement of the industrial popula- B 2 SAVINGS BANKS. tion, there has been a great and manifest improvement since the commencement of the present century. In nothing is this more true than in the incentives and appliances provided for the growth of provident habits amongst them. An old stock- ing, a hole in the floor, or a crevice in the wall, was formerly a sufficient bank for such of the poor as cared to save any- thing ; but were that mode of investment unsatisfactory to some few, it was not possible to obtain better. The change which fifty years have wrought in the means for saving and investing small sums of money is remarkable. Not only have these savings assumed in consequence a variety of different forms, but they represent a sum which in the aggregate must be well calculated to astonish anyone who can remember anything of the last century. Before dealing, however, with this as our special subject, a few words may not be spent in vain in endeavouring to trace the gradual advancement made among the poorer classes, the causes that have led to the improvement in their condition, and the means by which the difficulties in their position have been encountered. After this it will not be inappropriate to refer to what still remains to be done. " The nineteenth century," as Mr. Gladstone, in addressing the working men of Glasgow, has just said, " whatever else it is, is undoubtedly in a new and peculiar sense the century of the working man." " It is the century which has seen his position raised, his circumstances improved, new means organised for his benefit, new prospects opened for the future, and he has before him — I mean not the individual but the class — a prospect which, I trust, nothing can mar — of increased weight, increased consideration, increased useful- ness, increased happiness in the generations to come." The jjVTRODUCTOKY. 3 Chancellor of the Exchequer might with justice have said that the second quarter of the present century has seen this great improvement inaugurated and carried on. Beginning with 1830, and letting the period of the removal of political and fiscal burdens mark the commencement of the better order of things, the progress of political economy, of social knowledge, and the favouring circumstances of the times achieved the rest. In the first quarter of the century the working population, left pretty much to themselves, or given over to the tender mercies of political demagogues, were either stolidly indifferent to any improvement, or were kept in a constant turmoil of excitement and confusion. Tlie Eeform Bill bringing political power to the better class of artizans, gave a decided stimulus to the intelligence of the people, and an impidse to the then existing means of educa- tion. This political power brought its responsibilities, and it may be fairly assumed that increased political knowledge was the result. Wliether so much will be granted or no, it is certain that schools and educational establishments now began to multiply in a manner unknown to any previous decade. It was now that there came demands for knowledge, and that the demand brought forth supplies of the most prac- tical kind. The story of the popular literary ventures of 1832 — the very first of their kind — need not be repeated here, though a volume might well be written on the subject, and showing the influence which they, and other ventures to which they gave rise, have had on the intellectual progress of the people. On the demand for knowledge there followed in quick succession the removal of many barriers that stood in the way ; and more important still, the remissions of, to the poor man, enormous fiscal burdens which pressed with B 2 4 SAVINGS BANKS. great weight upon his energies.* It would scarcely be too much to say that every year for the last thirty years the working man has found himself better able to cope with the disadvantages of his position, and, if he should so choose, to place himself to a very great extent beyond the reach of absolute want. "We have alluded to the necessity which began to be felt for the mental improvement of the adult population ; still more important were the steps taken from time to time to educate the children who are the old people and the adults of the present day. The present century, among many wonderful changes which it has witnessed, has seen a complete revolu- tion in the means of education for the masses. Many genera- tions since, Milton, with that clear mental vision which was in him like a kind of second sight, foretold that a time would come when the bulk of the people would get a better educa- tion " in extent and comprehension far more large, and yet * The following table taken from the Statistical Returns, presented hy the Board of Trade, shows in a clear light how much the position of the working classes must have been improved by the removal of fiscal burdens. Almost all the impositions of taxation between 1850 and 1864 have fallen upon the wealthier classes : — Customs Excise Property and Income Tax . . . Other taxes Stamps (including succession duty) Total Repealed or Reduced. £ 12,208,604 5,607,000 16,265,000 2,608,800 1,428,000 £38,117,404 Imposed. 3,291,820 6,380,000 14,764,000 600,000 2,411,200 Diminution or Addition. D. 8,916,784 A. 773,000 D. 1,501,000 D. 2,008,800 A. 983,000 27,447,020 D.10,670,384 IXTRODUCTOEY. 5 of time far shorter, and of attainment far more certain, than hath yet been in practice ;" and although we may not have exactly reached the point prefigured by the poet-seer, some marvellous strides have been taken during the present cen- tury, A dramatist of Milton's own period makes a man of substance reply, in answer to the query, "Can you read and write then ?" " As most of you gentlemen do, my bond has been taken with my mark at it."* At tlie beginning of the present century little had been done for the education of the masses. Grammar schools for the children of the middle classes, and Free schools, as they were called, for an infinitesimal fraction of the poor of our towns had been long establislied, and, so far as they went, with certain enough results ; but, if we except the establishment of Sunday schools by Mr. Eaikes of Gloucester in 1783, nothing had been done for the educational wants of the general poor. Malthus in his "Essay on Population," published twenty years after this date, says, " It is surely a great national dis- grace that the education of the lower classes should be left merely to a few Sunday schools supported by subscriptions from individuals," adding at the same time, that the country "lavished immense sums on the poor which we have every reason to think have constantly tended to aggravate their miseiy." "In their education," he goes on to say, "and in the circulation of those iinportant jjolitical truths that most riearly concern them, wliich are perhaps the only means in our * In 1846, according to the Report of the Registrar General for that year, out of the persons married in that year, one man out of three, and one woman in two, signed the register witli marks. Wliat was being done for the children of that year may be gathered from the return for 1864, where it is shown that only eighteen in 100 of those marrying in that year were unable to write their names. b SAVINGS BANKS, pow^er of really raising their condition, and of making them happier men and more peaceable subjects, we have been miserably deficient." What the state neglected, private enterprise took up ; earnest men like Eaikes and Pounds, the working shoemaker, not only set an admirable example in their own spheres of labour, but roused to action other men who applied to the work greater powers of mind and the benefits of greater system. Dr. Bell and Mr. Lancaster were two of these, who nearly at the same time expounded their views of a general scheme for educating the people ; and who were strengthened in their opinion, as one of them tells us, of its necessity, by the clamom' of many who held that the stability of our institutions was only sure so long as the people were kept in ignorance. Mr. Whitbread, a statesman whose name was very prominent about this time for efforts to promote the interests of the bulk of the people, tried to induce Parliament at this stage to take the subject into its consideration, by proposing a plan for the establishment of parochial schools " for the exaltation of the character of the labourer," and it would have been well if he had met with more success. As it was, the sage legislators of the day, led on by Mr, Windham, considered that such a plan would be very liable to give an education to these classes much above their condition, and Mr. Whitbread's scheme, like many other of his wise proposals to which we shall have subsequently to allude, was set aside. The work, however, had begun and could not be stopped by the attitude of the government. Dr. Bell commenced his system by the establishment of National schools ; Mr. Lancaster, supported by Nonconformists principally, set up Lancasterian schools. Although there was for some time much hostility displayed INTKODUCTORY, 7 between the rival factions, both organizations struck deep into the dense masses of ignorance in our towns and villages. Then came Government assistance, and gradually that system of Government education and supervision which, in spite of many objections to it, has been an untold blessing to the land. Within the last thirty years the wise legislation of the Government has had a direct influence on the progress of the people in education, and in their social well-being. No more powerful aid, for example, was given towards the triumph of enlightenment than the passing, in 1839, of the penny postage measure, when thousands of the poorer classes became emulous of each other in learning the rudiments of education, so as to be enabled to possess themselves of the untold advantages of this wonderfully successful scheme. Mr. Laing, the celebrated traveller, after visiting the Conti- nent, declared that the system of penny postage was far more likely to cause the spread of education among the masses than the Prussian system of education, if it came to be adopted in this country. Only second to the repeal of the taxes on correspondence was that of the reduction of the newspaper stamp duty, and, still more recently, the abolition of the paper duty. The relinquishment of these taxes redounds to the honour of those who took part in the agitation for their abolition, and who held that no artificial impediment, such as a paltry consideration of revenue, ought to stand between the people and the free circulation of thought. Lord Brougham said on one occasion that, " if newspapers, instead of being sold for sixpence, could be sold for a penny, there would immediately follow the greatest possible improvement in the tone and temper of the political 8 SAVINGS BANKS. information of the people." Lord Campbell once expressed a hope that newspapers would be sold for a halfpenny. Much of this has been realized, and the result has been powerful for good. On this point no one can speak with anything like the authority of Mr. Gladstone. Speaking of the repeal of the paper duty, this eloquent statesman has said within the present year, " I did to the best of my ability fight a hard battle for its repeal. And I find now that not only in its repeal was there involved the liberation of a great branch of trade, but there was involved a seed of social and moral good that has sprung up with rapidity, producing a harvest such as, I confess, I had hardly been sanguine enough to anticipate." * Tlie cheap press now finds its way into tlie homes of the poorest, keeps them informed of the current public events, and makes them interested and anxious in all that concerns their country and its institutions ; and, inasmuch as the press of the present day is, under proper conduct, well qualified to enlarge the minds of those whom it must in- struct, it is a " seed of social and moral good " from which a constantly-increasing harvest of good fruit may be obtained. In view of such facts it cannot be said that, during the last quarter of a century, the industrial classes have been entirely thrown on their own resources for the means of their enjoy- ment and improvement. Over and above the tendency of the legislation of the past thirty years, the upper classes have felt it their duty, as it is unquestionably their interest, to attend to the wants and requirements of those at the bottom of the social scale. They are the safest when the vast mass of our working population are the happiest. Dr. Chalmers must have felt this when he wrote, " I would * Speech at Newton-le-willows, July 22, 1865. INTRODUCTOIIY. 9 like to see a king upon the throne, not like an unsupported may-pole among a level population, but a king surrounded by a noble aristocracy and gradations below them, shelving downwards to the lowest basis of the people." Society has been very often and very truly likened to a pyramid, at the apex of which is the throne ; gradually descending, we have substantial strata of the ruling, the upper, and the middle classes, the rough and strong material at the base not unappropriately said to represent the unpolished millions of our industrial population. How far it may be considered true that the foundations of English society are laid in this great class, and how much of the social superstructure they bear on their broad shoulders, we will not attempt to decide. We will content ourselves with saying that the well or ill- being of every man forming this great social pyramid must have a direct or reflex influence on every other man. Homo sum, humani nihil a me alicMum. Of the hundreds of charitable and benevolent agencies set on foot to improve the condition of the English artisan we can only speak in the aggregate. We have the clearest evidence of our senses, that many of them have not been established in vain. Some of them, indeed, have been born and carried on under serious misapprehensions, fatal to their existence, and so have perished without doing half the good which the expenditure of money and time would have warranted. But this is the exception and not the rule. Under the influence of properly organised and properly conducted societies of this nature, which have been quietly working for years, there is a sensible improvement in public morals among the masses of the people. Within the memory of the present generation lewdness, profanity, and vulgarity 10 SAVINGS BANKS. polluted the atmosphere of most large workshops, and the effect of all this on the minds of the younger portions of the workers must have been utterly demoralizing. Then their hours of idleness were hours of mischief ; in them the old proverb of "an idle brain" being "the devil's workshop" was fully exemplified ; bull-baiting, cock-fighting, low drink- ing, and gambling were their amusements ; Sunday nor weekday did their children frequent any school, nor they themselves any place of worship ; they made no provision for want, sickness, or death, and in times of enforced idle- ness they were a terror and reproach to the country, only kept in order by the strong arm of the law. To say that all this is changed would be idle, but that much of it is changed is beyond doubt. Even humble society now quickly lays its ban upon those who would think "to rule the roast" by proficiency in vulgarity and profanity ; in our large work- shops we are assured that acquirements of this nature get less and less appreciation, nor do their exhibition often escape rebuke. Under better and happier influences, many of the rules and social regulations among large congregations of workmen, such as fines and footings, which have always offered great encouragement to idleness and intemperance, have either been done away with or altered for good ; * * By way of giving an example of our meaning, we would adduce the case of the workmen employed in the large brass works of Messrs. Guest and Chrimes, Kotherham. Wlien one of their number, for instance, gets married, instead of the accustomed hard-drinking, the men and their wives drink tea together, and a piece of furnitm'e of substantial value is presented to the newly-married pair, jiaid for out of the subscriptions by the men. On one of these occasions it is related, that the head of the fii'iu was asked to present articles which had been bought for two newly-married couples, and Mr. Guest complied and introduced the business as follows : " The custom you have adopted deserves the warmest commendation and support, and is well worthy of superseding those footings, fines, treats, &c., which, until recently, INTRODUCTORY. 11 masters not only see it to be their interest to encourage their men where they can in habits of sobriety and prudence, but they are now often enabled to enforce regulations tending to this end which before they were almost powerless to effect* The good results of such habits to the industrial classes themselves and to all portion s of society are neither few nor doubtful. The pursuit of economy and thrift will beget, as a matter of course, self-dependence ; and as soon as men become socially independent they also become self-relying and self-supplying. " Few men come to the parish who have ever saved money," said one large employer of labour before a Committee of the House of Commons on l*oor Laws. Another never knew a man who had saved a pound out of his earnings who had in the end become a pauper." But the had become a source of the most cruel, heartless, and unjust robbery to which workmen could possibly be exposed by each other. Thank God that wicked system is fast passing away." * In 1851-2 a large and well-known engineering firm in Leeds had a serious struggle with their workmen on account of the masters having determined to pay the men according to their merit and the character of the work turned out. A determined strike was the residt, which, though the original difference was only with eiglit men, threw eventually more than 600 out of employment. Fresh hands were obtained with the usual difficulty, and these were subjected to great annoyance and even danger ; in eighteen months, however, the works were again all going and were efficiently manned. The masters henceforth made it a condition of employment under them that no member of a trades' union should be engaged, and the se(|uel was a better behaved and superior class of men. Not only so, but the masters are now enabled to make their own regulations for the benefit of those employed under them, which before, owing to the interference of the trades society, they could not make. They have instituted a sick and funeral fund to which the men contribute by work- ing te7i minutes additional time when necessary, an arrangement which we recommend to other large employers of labom- and large bodies of workmen. That the masters should be acquitted of any selfish motive, they allow the funds to be managed and aj)plied by a committee of workmen appointed by themselves from their own number. 12 ' SAVINGS BANKS. good work does not stop here. " In proportion as our men save money," said another large employer, " their morals are improved ; then they come to see that they have a stake in the country, and behave better." Or, as Vegetius, describing the Eoman soldier, puts it, " knowing that his property is deposited with the standards in the public chest, he never thinks of desertion, becomes attached to his standards, and in battle fights more bravely for them ; according to the nature of man, who has always his heart where his treasure is." Arrived at this stage of the upward journey, the pro- vident man feels the need of education, and must have it ; he must also take a part in exerting an influence among his fellows, and even in the government of the country, and if his reading takes a right turn, higher principles of duty are superadded; he will do his work, whatever it is, in eveiy sense better. "I would rather have," said another well- known gentleman, to the Committee just referred to, "a hundred men in my employ who save money than two hundred who spend every shilling they get ; the sober, saving man is always to be depended upon, and the one lot in the long run will almost do as much work as the other." The improvement of which we have been speaking must not blind us, however, to the darker side of the picture. Notwithstanding the improvement which has been made, and the inestimable good which flows from the practice and pursuit of frugality and economy, it is still the exception and not the rule among the bulk of our labouring population. For the hundreds who look to the exigencies of their life, tliere are thousands who are utterly careless of such con- siderations, and who, in the coarse enjoyment of the present, INTRODUCTORY. 13 bury alike all thought of the past aud all expectation of and hope for the future. The stigma of improvidence has long attached, and we fear must yet long attach, itself to the generality of English artisans. But for this stigma there would be no operatives in the world equal to the English operative either in wealth, intelligence, or influence. No one with any experience in the case, and with any care as to accuracy, would venture to say that the English workman, sui generis, is not industrious at liis work,* but too many can say that he is not provident in his homcf The English artisan has been said to be at once the hardest worker and the hardest spender in the world. He w^orks like a horse and spends like an ass. So foolishly, indeed, is much of this hard-earned money spent, or misspent, that it were a charity to withhold it, or if it could be done, to throw it into the * " No labourer," says Mr. Smiles in his WorkmaiV s Earnings, &c., " is better worthy of his hire than the English one. It is not merely that he works harder than the labourer of any other country, but he generally produces a better qxiality of workmanship. He possesses a power of throwing himself bodily into his occupation, wliich has always been a marvel to foreigners ; " and he then recurs to the well-known example of the surprise created among the French peasantry when gangs of English navvies proceeded with the works of the Rouen railway, and worked amidst constant exclamations of " Voila ! voOa ces Anglais ! comme ils travailleut ! " t We put the matter quite mildly here, though it is customarily and very properly spoken of much more severely. For example, Mr. Norris,one of the Government inspectors of schools, in speaking of the well-paid miners and iron workers of Staffordshire — who doubtless are little worse than the same classes throughout the country ^ — says in one of his able reports : " Improvi- dence is too tame a word for it — it is recklessness ; here yoimg and old, married and single, are uniformly and almost avowedly self-indulgent spend- thrifts. One sees this reckless character marring and vitiating the iiobler traits of their nature. Their gallantry in the face of danger is akin to foolhardiness ; their power of intense labour is seldom exerted except to compensate for time lost in idleness and revelry ; their readiness to make "gatherings " for their sick and married comrades seems only to obviate the necessity of previous savings," &c. 14 SAVINGS BANKS. sea. The consequences attending this riot of expenditure is as natural and as inevitable as any of the laws of God's government. As one who know^s them well, and one who has done much for the intellectual culture of the better portion of the artisan class tells us : " In a time of prosperity they feast ; in a time of adversity they clem." Any depres- sion of trade, be it even of the most transient nature, finds them totally unprepared for it ; those who have been accus- tomed to the best wages invariably suffer the most; for, accustomed to the greatest amount of indulgences, they can do worst wdthout it. It is such classes as these that must be reached by some means. In the improvement brought about in the social habits of the people of late years we have a happy augury of the future.* It is time that we brought these introductory remarks to a close. We have to enter upon the consideration of helps and accessories to the spread of prudential habits among the working classes. We have to direct attention to the history and working of some of those schemes which, since the commencement of the present century, have been started to teach men self-reliance and self-dependence, and how they might best help themselves. Anxious not to overestimate the importance of the subject, we still think it not too much * Much of what we have said in the foregoing pages is admirably summed up in a sentence or two in an article on " Savings Banks," which we would not be far wrong in attributing to Dr. Wynter, and which we had not seen before these pages were written : " Contemporaneously with the growth of savings banks, we have seen a growth of civilization among the poorer classes. Thrift has not effected all that amelioration of morals which contrasts so happUy the mid years of the century with its younger ones ; b\it it has been no mean confluent to the tide of progress, the softening of manners, the spread of education, tlie humanising of popular sports and pastimes, the wakening up of the natural dignity and self-reliance of the people, — the broad and indispensable basis of every other virtue." — London Rcvieic. INTEODUCTOEV. 15 to say that on our industrial classes depends very much the continued and onward progress of the world. Let them but be thoughtful and sober, and these classes, which are the direct agents in our wondrous and manifold British industry, will, not only under circumstances of huge toil and no incon- siderable danger, continue to provide all classes with the necessaries or comforts of life, but they will yet strike out new paths ; they will become, in the future, as they have been in the past, the skilful inventors of new instruments and new modes. No fact is more capable of proof than that almost all the successful inventions that have been given to the world to economize the strength of the human hand have been either the productions of thoughtful and industrious workmen, or of those who have risen from that class. "Deduct all," says Mr. Helps, "that men of the humbler classes have done for England in the way of in- ventions only, and see where she would have been but for them." Nor is this all. The list would be a long one of those who have risen by their own industry and perseverance from the lowest ranks to fill the highest positions in every department of life. " It is notorious," says Mr. Smiles, " that many of our most successful employers, and gome of our largest capitalists, have sprung directly from the working classes, and to use the ordinary phrase, have been ' the archi- tects of their own fortunes ; ' whilst many more have risen from a rank scarcely a degree above them. It was the prudent thrift and careful accumulations of working-men that laid the foundations of the vast capital of the middle class ; and it is this capital, combined with the skilled and energetic industry of all ranks, which renders England, in the quantity and quality of her work, superior to any other IG SAVINGS BANK'S. nation in the world." * And what the humbler classes have done for England in past times they may do, and indeed must do in the future, if we would keep our country in the proud position she now occupies in the world. It requires no prophetic vision to foresee that labour must yet undergo many transformations ; and it is of paramount importance that the labourers themselves be not only intelligent but sober and frugal, in order that they may always compete on at least equal terms with the skilled workmen of any other nation. It is far more difficult to point out what course of action will tend most successfully to secure the fair results of sobriety and frugality than it is to show how necessary it is that these virtues should be cultivated. "The difficulty of doing good," as one writer expresses it, " is at least equal to its luxury." The task we have undertaken is far from easy, and beset with perils, but we will endeavour to avoid all occasion of dispute. The pointing out of safe and pro- htable investments fot the hard-earned savings of the frugal and industrious need not and should not be regarded as an invidious task. It seems to us that, as Savings Banks have to do primarily with the foundation of the habit of saving money, and indeed scarcely ever can be considered as com- peting with any of the numerous schemes for the investing of money, the subject should never be regarded with any jealous feeling. The principle upon which these institutions are founded " interferes," to use the words of one who has written most ably on such subjects, " \yith no individual action, saps no individual self-reliance." " It prolongs child- hood by no proffered leading-string ; it valitudinarises energy * Quarterly Review, 1859. 'introduction. 17 by no hedges or walls of defence, no fetters of well-meant paternal restriction. It encourages virtue and forethought by- no artificial excitements, but simply by providing that they shall not be debarred from full fructification, nor defi'auded of their natural reward. It does not attempt to foster the infant habit of saving by the unnatural addition of a penny to every penny laid by ; it contents itself with endeavouriug to secure to the poor and inexperienced that safe investment and that reasonable return for their small economies which is their just and scanty due." * Strengthened by such testi- mony, we will proceed at once to sketch the history, and, as far as we are able, to show the benefits to be derived from the various kinds of banks for savings established from time to time amongst ns. * Mr. "\V. R. Greg in the Edinburgh Review, 1853, p. 406, ^yUNIVEESITY 18 SAVINGS BANKS. CHAPTER II. ON THE ORIGIN OF SAVINGS BANKS. " It would be difficult, we fear, to couvince either tlie people or their rulers that the spread of Savings Banks is of far more importance, and far more likely to increase the happiness and even the greatness of the nation, than the most brilliant success of its arms, or the most stupendous improvements of its trade or its agriculture. And yet we are .persuaded that it is so/'—Miii- burgh Review, 1818. Great Britain can witli justice, we think, lay claim to the original establishment of the system of Savings Banks. One Avell-known writer* on this and cognate subjects has traced them to Switzerland, if not to Hamburg, at a time prior to any experiments with them in this country ; but from the best investigation we have been able to make, the institutions in question were something very different from Savings Banks as English people understand them, dealing, as they did, in business more like the sale of deferred annuities. The insti- tution at Hamburg, which is said to have been founded in the year 1778, — and which is interesting to readers of history as being one of those whose coffers the First Napoleon swept of their funds, thus giving it its death blow,— simply took the spare cash of domestic servants and handicraftsmen, and granted annuities on the members arriving at a certain age. * Mr. Scratchley's Practical Treatise on Savings Banks, 1st edit. p. 36. MRS. PKJSCILLA WAKEFIELD. 19 No withdrawal of money was allowed. In tins country the first proposals for a bank for savings were made in 1798 or 1799, according to the judgment of the reader as to which of the two original schemes best deserves the name of Savings Bank, or whether either of them is entitled to the honour. The two persons whose names it is customary to speak of in connexion with the earliest people's banks are those of the well-known Priscilla Wakefield, and the Eev. Joseph Smith of Weudover. In the mind of each of these estimable persons we think the question of becoming the bankers for the poor around them was at first only a subordinate measure, and quite auxiliary to other matters deemed of greater import- ance. Mrs. Wakefield's scheme arose out of a well-meant anxiety to better the condition of the weaker and more defenceless portions of the community, an object to which she devoted much of her literary ability, and was first started in ] 799, for the benefit of women and children in her own village of Tottenham, and under her immediate superintend- ence. Members paying according to their age certain sums per month became entitled to a pension after sixty years of age ; in case of sickness, four shillings a week ; in case of extraordinary misfortune a certain amount could be with- drawn ; in case of death a sum of money was allowed for the funeral. Honorary members paid subscriptions, which went to meet deficiencies and current expenses. In 1801 there was added, first, a fund from which loans were made to those who had been members for six months ; and second, a regular bank for savings. The interest given in the latter case was the same as that charged in the former, or five per cent. The clauses relating to children were such as almost to entitle the founders to the honour of being the originators c 2 20 SAVINGS BANKS. of Penny Banks, if nothing else ; juveniles were encouraged to deposit their penny per month, which was kept for them, along with interest, until such a time as the accumulation was needed for apprentice fee, clothes, or such like object. The management of this Parent Institution, as it may well be called, was equitably divided amongst the honorary and the "benefited" members. In 1804 the Tottenham Bank was more regularly organized, and Mr. Eardley Wilmot, M.P. and My. Spurling, were appointed Trustees.* The Wendover institution, which was really started a year before that at Tottenham, partook at first so largely of the nature of a charity as to make it almost of the character of a private u.ndertaking between a rich and benevolent rector and his poor parishioners. Still, there M^as here the germ of that of which we are in search. J\lr. Smith, and two of his richer parishioners, who joined him in the work, circulated proposals in the summer of 1798 to receive any surplus money which any of the working population round them felt they could spare — provided it were not less in amount than twopence ; to keep a strict account of every deposit made in this way ; and then to repay the money during the winter season, or generally about Christmas, with the addition of one third of the whole, which would be allowed as interest on their deposits — or to speak, perhaps, more correctly, as a bounty for their economy. Any depositor might receive his money before Christmas on demand ; and it was further stipulated that, in case of sickness or loss of employment, these fruits of his savings should not preclude him from * See tlie Reports of the Society for Bettering the Condition and Increasing the Comforts of the Poor, vol. iii, wliich contains a full account of this earliest 3ft^inor9 Bank. ME. SMITH OF WENDOVER. 21 parish relief, if otherwise he could oLtaiii it. A Christmas dinner was the comfortable addition to the good round sum which, generally, was garnered at this time, the dinner, too, being provided by the three directors. It is rather curious that the time chosen to receive deposits was limited to Sunday evenings ; but we suppose this would be justified by the scriptural text, not generally applied in this fashion, which they chose for their motto, " Upon the first day of the week, let every one of you lay by him in store, as God hath prospered him." For several years these benevolent gentlemen carried on their operations, and had generally about sixty subscribers, who deposited from five to ten pounds every season. In February, 1807, Mr. Whitbread introduced his Poor Laws Amendment Bill into the House of Commons, and went over the whole ground of the condition and the wants and requirements of the working population, in an eloquent manner. That speech — which must have been of several hours' duration — dealt with the past legislation on the subject, and commented on the various steps which ought to be taken, over and above the mere collection of poor-rates, to alleviate the condition of the poor. After dwelling on the subject of national education, and hinting at a mode such as was eventually brought into operation many years afterwards, Mr. Whitbread went on to describe the want felt by the poor of some safe and profitable investment for their earnings ; " that so few are found to make any saving may in a great degree be accounted for by the dif&culty of putting out the little they can raise at a time." He described the action of Friendly Societies, and showed that at that early period they were open to the same objections that are now being con- 22 SAVINGS BANKS, tiniially raised against tliem. "Mr. Maltlius,"* said Mr. Wbitbread, " had just proposed the establishment of county banks, but he would go farther than Mr. Malthus, and extend his principle." It seemed to him that there would be less trouble in his proposals than in the less extensive proposals of Mr. Malthus.] Mr. Whitbread then went into the matter of his proposals under this head, and we give his own words :t "I beg gentlemen not to start at what I am about to suggest, which to many who hear me may be quite new, but to afford it their cool and deliberate consideration. I would propose the establishment of one great national institution, in the nature of a bank, for the use and advantage of the labouring classes alone ; that it should be placed in the metropolis, and be under the control and management of proper persons ; that every man who shall be certified by one Justice of the Peace to subsist on the wages of his own labour shall be at liberty to remit to the Accountant of the Poor's Fund (as I would designate it) any sinn from 20s. upwards, but not exceeding 201. in any one year, and not more than 200^. in the whole." He then proceeded to show how the money might be invested in Government Stock, in the name of commissioners to be appointed, and by this means interest would be allowed to depositors at the highest rate possible. * " To facilitate the saving of small sums of money and to encourage yomig labourers to economise their earnings with a view to a provision for niamage, it would be extremely useful to have county banks, where the smallest sums might be received, and a fair interest granted for them. At present, the few labourers who have a little money are often greatly at a loss to know what to do with it ; and under such circumstances we cannot be surprised that it should sometimes be ill-employed and last but for a short time." — Malthus. Essay on Population, 1803. + Hansard, vol. viii. p. 887. MR. whitehead's PROPOSALS. 23 " The plan," added Mr. Whitbread, " will be more amply detailed in the Bill itself, and such regulations are provided as will, icith the, iiitervention of tJic Post-office, give ample facilities to its execution. Gentlemen need not to be told that the perfection attained in the management of that great machine is such as to give the most easy and rapid means of communication with the metropolis, much greater, indeed, than usually subsists between the remote parts of any county and its capital town." Mr. Whitbread then went on to say, that in addition to this form of investment, the same machinery might be employed to give those who might wish it an opportunity of purchasing annuities by the payment of stated regular sums up to a certain age ; and even to insure their lives. So strong, indeed, was this feeling, that he eventually proposed, as an addition to his bill, that under the same management there should be an Insurance-office for the poor, with properly-calculated tables and modes of payment. We need not here dwell upon the miscellaneous items which he fully went into in his admirable speech. He finally begged the patient attention of the House and the country to the consideration of the general outline of the plan which he had proposed, in order to encourage the labourers to acquire property, and to secure to them the certain and profitable possession of it when acquired. He had the greatest hope of a happy effect from its being put in practice. " If the poor," said he, " should be found to avail themselves of it to any extent, the advantage to them and the country would be incalculable, and the expense attending it would speedily be covered." This Bill went through several necessary stages ; there was little objection mani- fested to Mr. Whitbread's plans for securing the savings of 24 SAVINGS BANKS. the poor, but there was also little anxiety to forward the measure. Mr. Whitbread in this, as in many others of his wise proposals, was far ahead of his time, and he suffered the matter to drop towards the end of the session.* One at least of the important organs of public ojDinion frowned upon Mr. Whitbread, and laughed at his scheme ; an organ whose frown and whose laugh was no joke at that date. It has not unfrequently been a subject of remark how per- sistently the Quarterly Review stood in the way of progress, clogging the wheels of all kinds of reform. In matters of this kind, however, it generally showed a most enlightened policy, and was not unfrequently in the van of improvement instead of obstruction. It was not so always with its more powerful rival, the Edinhurgh Review. It commented upon Mr. ' AVhitbread's "strange project" of uniting the savings banks throughout the kingdom in one national establishment, and his minor proposals under that head, and very warmly ridiculed all. " Neither from theory nor from experience," it concludes an article, " are we able to discover any kind or degree of good as likely to result from so vast a project ; though it is easy to see that it might be productive of infinite confusion, trouble, and expense. In fact, every savings bank is perfectly competent in itself to transact the whole of its affairs, and can have no great difficulty to provide the re- quisite facilities or securities without either disturbing its neighbours, or withdrawing the attention of Government or the Legislature from their proper concerns" * The most important clauses of this Bill we have given in the Appendix (A). Besides its intrinsic importance, it is very interesting, as viewed in the light of subsequent measures. The similarity of Mr. Whitbread's proposals to the measures which nearly half a ceuturj' afterwards have been carried out, cannot fail to strike the reader. THE BATH PROVIDENT INSTITUTION. 25 Before we come to the plans and exertions of Mr., after- wards Dr. Henry Duncan, of Eutliwell, we ought to speak of the original foundation of the savings bank at Bath. The idea of establishing a bank for taking the wages of in- dustrious domestic servants only, and granting them interest for their money, originated with Lady Isabella Douglas in 1808. The managers consisted of four ladies and four gentlemen. No servant could deposit more than 50/., and the entire amovmt of the funds in the bank could never exceed 2,000/. A servant might deposit up to 50/., withdraw the money and place it in safety, and deposit again in the servants' bank. Interest was allowed at four per cent., and the money could be withdrawn at will. This scheme, so far as it proceeded, was very successful ; so much so, that an endeavour was made in 1813 to convert it into a general savings bank, which should know no limit, either in the amount of the deposits or in the class of people from whom the deposits could be taken. For this purpose a committee, " highly respectable for their rank, ability, and benevolence," met frequently at Bath ; but only to find, " after much deliberation," that these conditions " were utterly imprac- ticable."* In 1815, the Provident Institution of Bath was projected, on very different conditions ; and this time, through the exertions of Dr. Haygarth and the Marquis of Lansdowne, who was president, the bank was successfully floated. This bank was essentially the first of its kind in this country, and upon its basis have been formed almost all subsequent banks of any note. The sums deposited were invested in the An Explanation of the Principlrs and Proceedings of the Provident Insti- tution at Bath. By John Haygarth, M.D., F.R.S., one of the Managers. London, 1816. 26 SAVINGS BANKS. public Funds, and each man's interest at this early period varied according to the price of the Funds on the day when the investment was made for him. In November, 1815, the Provident Institution of South- ampton was established, principally through the exertions of the Eight Hon. George Eose, who was appointed president, and who soon afterwards wrote an account of the under- taking.* The exertions of Mr. Eose on behalf of savings banks will frequently require to be spoken of in subsequent pages. The Southampton Bank w^as an improvement on the Bath institution, having copied several of the details of the bank at Edinburgh. The average rate of interest given was four per cent. Notice had to be given for withdrawing de- posits. One regulation, new at that period, which was a suggestion of Mr. Eose, empowered the othciatiug clergyman or other responsible person, in adjacent parishes, to receive sums " on account of the institution," and remit them to the treasurer at Southampton. It was stipulated, however — and this had an ill effect upon the public, though the proviso was by no means unreasonable in itself — that the institution should not be answ^erable for the money until it absolutely reached the office. We will here refer to two other original English savings banks, quite equal in importance to those of Bath or Southampton. The Exeter Savings Bank, since better known as the Exeter and Devon Bank, was established in 1816, principally through the exertions of Sir John Acland, one of the county members. The rules of this bank limited the amount which could be deposited to 50/. in the tirst and second years, and 2ol. in any succeeding year. The dis- * Observations on Banks for Sav>n>fs By the Ripiht Hon. George Ruse. London, ]816. THE HERTFOKD SAVINGS BANK. 27 tinguishing feature about the Exeter bank was the applica- tion, attended with much greater success, of the Southampton plan of rural or branch banks. In 1817, there were sixty of these branch banks, all contributing sums to the parent bank through village clergymen, who acted as the agents. The plan only entailed a trifling expense for printing, postage, &c., and even these expenses were paid out 'of a' fund_ raised by voluntary contributions. At the date of the first enactment relating to savings banks, this bank had 946 depositors, who had paid in 14,525/. in 1,380 deposits. The interest given was at the rate of four per cent. Within the two years of which we have spoken, only 984/., or about a fifteenth-part of the deposits, were paid as withdrawals. The original Hertford Savings Bank w^as a charitable concern, after the fashion of Mr. Smith's at AYendover. " The Sunday Bank," as it was called, was established about the year 1808, by the vicar of the place, the Eev. Thomas Lloyd. Sums of from sixpence to tw^o shillings were re- ceived by the benevolent pastor from his poorer parishioners after morning service on Sundays, and in this way about 300/. a year was invested between 1808 and 1816. The money did not accumulate from year to year, but was repaid on New Year's day, with the addition of ten per cent, in- terest, wdiich the vicar was able to give by the help of some charitable funds at his disposal. We must now, without referring to other early banks, such as the important institution in St. Martin's Place, London, and other societies, turn to Dr. Duncan, whose exertions on behalf of savings banks were much greater than those of any other person, and which exertions, more than any original suggestions which he may have made with regard 28 SAVINGS BANKS. to them, entitle him to the foremost place in any history of savings banks. Dr. Duncan's claim to be considered the founder of savings banks rests on the ground of his having originated and organized the first self-sustaining bank, and in having succeeded in so arranging his scheme as to make it applicable not to one locality only, but to the country generally.* It remains to be seen whether the bank esta- blished by Dr. Duncan in his own village answers the de- scription here given of the distinctive character attaching to the banks of his proposing. It is very true that all the banks established up to 1810 partook very much of the character of eleemosynary institutions, supported in great part by the benevolence of the rich, and therefore very un- suitable to some localities, where the benevolent rich did not preponderate. Dr. Duncan's great merit — merit for which he has received neither enough credit nor praise, but which should entitle him to a high place in the ranks of those who have sought to do their fellow-men good service — seems to us to lie in having deeply studied the nature and wants of the industrial classes ; in having modified existing pro- posals in order to make them suitable to the general require- ments ; and, finally, in having laboured with unremitting energy to make his plans known around him, and to secure their general adoption. A writer in the Quarterly Review of Octo- ber, 1816, incidentally referring to Dr. Duncan and his pro- posals for parish banks, says, " It is our belief, founded on no slight investigation, that but for this Scotch clergyman, there would at this time have been found only a few insulated establishments for the savings of industry, of which the in- * Memoir of Dr Duncan. By bis Son, the Eev. G. J. C. Duncan. Edin- burgh, 1848. DK. HENRY DUNCAN. 29 telligeut and wealthy would have had little knowledge, and from which the lower classes in general would have derived no advantage." Henry Duncan, who w^as the son of a Dumfriesshire clergy- man, was born at Lochrutton manse, in that county, in the year 1774. At the age of twenty-five he too was ordained a clergyman, and appointed to the charge of the parish of Euthw^ell, a remote locality in the same county. When very young, it is said, he showed remarkable powers of mind ; and it appears he early exercised them in writing for the young, with whom he was an especial favourite. Before he was thirty he had made great progress in geology, and a book he published on the subject when he was about that age gained him the friendship of Dr. Buckland and Mr. Sedgwick. Perhaps, however, he showed most zeal during all the periods of his life in the prosecution of schemes for the benefit of the poor and distressed around him ; and his manse in this way, lonely as it was, and far from the busy haunts of men, soon became a place of resort to much of the young and remarkable talent to be found in that part of Scotland. David Brewster, and James Grahame, the Sabbath bard, Dr. Chalmers, and Dr. Andrew Johnson, were frequent visitors beneath his roof ; Robert Owen, then an amiable enthusiast in the walks of philanthropy ; Thomas Carlyle, a young man who had not then emerged to fame ; Robert McCheyne, and many others who subsequently rose to eminence, were friends of the village pastor, and frequently met to talk over with him different schemes of practical benevolence. " Few, indeed," says his biographer, " whose lot has been cast in a retired spot like that of Ruthwell, have been more fortunate in attaching the affection and good-will of so many of the best 30 SAVINGS BANKS. class of their fellow men," and the boast is neither an idle nor a vain one.- Mr. Duncan mnst have been no ordinary man to have brought round him such a circle of friends. His literary abilities were of no mean order, but gave a charm to all he wrote. Delighting in humble usefulness, he edited, in 1809 and 1810, a number of Tracts for the instruction and moral improvement of " the lower orders," to use the vulgar term then in constant use. The greater part of the work seems to have been the production of his own pen. One series of these Tracts, called " The Cottage Fireside ; or. The Parish School- master," was afterwards published separately with Duncan's name attached, and had a very large sale at the time. " In point of genuine humour and pathos," says a lugli authority of that period,* "we are inclined to think it fairly merits a place by the side of ' The Cottagers of Glenburnie ; ' while the knowledge it displays of Scottish manners and character is more correct and more profound." Whether the plans which he laid for the benefit of the poor, and which occupied so much of his after life, came up at any of the reunions at his house, we have no means of knowing. However it was, we have Mr. Duncan's own statements to show that they were originated in his mind by the frequent discussion at that time of the question of poor-rates, and the endeavours on the part of many of his friends to jDrevent their introduc- tion into Scotland. It is also clear, that though JNIr. AVliit- bread's name is never mentioned, the parish minister had heard of his scheme, and had been much struck with it. The result of Mr. Duncan's reflections on the subject were given in the Dumfries Courier, with which paper he seems to have had some literary connexion. A discussion ensued in * Quarterly Review. October, 1816. DR. HENIiY DUNCAN. 31 tlie columns of this paper, in the course of which some books and pamphlets on cognate subjects were forwarded to ISIr. Duncan by Mr. Erskine, afterwards Earl of Mar. Among the pamphlets he found a very curious and ingenious paper by John Bone, the originator of a charitable institution in London, the plan of which was there sketched. The Society was called by the whimsical title of " Tranquillity, or an institution for encouraging and enabling industrious and prudent individuals to provide for themselves, and thus effect- ing the gradual abolition of the Poor's Eate." This pamphlet, which we have carefully examined, contains, among much matter of a visionary and impractical kind, many proposals for the safe keeping of the savings of the poor similar to those acted upon in the case of the charitable bank at Tottenham. These subordinate provisions attracted the notice of Mr. Duncan, as he himself admits, and he thought that if he could in any way reduce them to a regular scheme, the result would be beneficial to the workin" classes, wherever they might be adopted. He resolved to form some such scheme and give it a fair trial in his own parish, when, if successful, he would endeavour to get it introduced elsewhere. With this object he published a paper, as a sequel to the discussion he had commenced in its j)ages, in the Dumfries Courier, in which paper he directly proposed to the gentle- men of the county the establishment of a Bank for Savings in all the different parishes of the district. " The only way," said ]\Ir. Duncan in making these proposals, " it appears to me, by which the higher ranks can give aid to the lower in their temporal concerns, without running the risk of aiding them to their ruin, is by affording every possible encourage- ment to industry and virtue ; by inducing them to provide 32 SAVINGS BANKS. for their oion support and comfort ; by cherishing in them that spirit of independence which is the parent of so many- virtues ; and by judiciously rewarding extraordinary efforts of economy, and extraordinary instances of good conduct. Friendly Societies, excellent as they are in their way, do not in every respect appear to be calculated for this intended effect ; advantages are held out which cannot always be realized, but in simple Parish Banks there can be no ob- jection of this sort." Mr. Duncan met with little response to his appeals from the gentlemen of the neighbourhood, but he resolved to make the attempt single-handed. The fact that an institl^tion of the kind contemplated could possibly be carried out by a single individual, however benevolently disposed, is evidence enough of that person's sagacity and perseverance ; but the ordinary difficulties were greatly increased by the circumstances in which this particular parish where Mr. Duncan was located was placed. Few parishes, we are told, presented so many and such unusual obstacles to the pro- gress of a scheme of this kind. Almost every adult member of the parish belonged to some Friendly society, and many of these found it extremely difficult to fulfil their engage- ments to the established societies. Again, there were few, if any, resident heritors or proprietors of the land to whom Mr. Duncan could look in any difficulty that might arise, or to whom he could look for any assistance of a pecuniary kind. Nevertheless, he resolved to commence. He had arrived at that experience of human kind which made him understand that, in even the poorest family, "there are odds and ends of income which are only too likely to get frittered away in thoughtless extravagance." Could he but induce the mass of the people to comprehend the value of th(3 savings which THE T^UTHWELL BANK. 33 might by a reasonable economy be gathered from this source alone, and could he succeed in supplying the means of invest- ing these savings securely, affording them at the same time the prospect of a fair rate of interest, not from charity, but rom the resources of trade, he was confident the hopes he cherished would be realized.* The scheme was started in May, 1810, and savings to the amount of 151^. were deposited under the stipulated conditions during the first year. In the two succeeding years they rose to 176/. 241/. and in 1814 to 922/. Mr. Duncan's work was far from completed when even his most sanguine expectations were realized in the progTcss of the Euthwell Bank. His advice and assistance was now continually sought in aid of the formation of similar institu- tions, both in Scotland and England. In 1813, "the Edin- burgh Society for the Suppression of Beggars " conceived the idea of adding to their already extensive operations a Savings Bank on some similar principle to his. A neighbour of Mr. Duncan's, who was also a member of the Edinburgh society, communicated a full account of the Euthwell Bank, and all the accounts of it which had up to that time been published. The opening of the Edinburgh Bank, of which we shall presently speak more at length, took place in 181-4. In 1814, Mr. Duncan paid a long promised visit to Kelso, in order to forward the proposals for a Savings Bank at that place. Mr. Duncan relates t that during his journey to Kelso lie passed through the town of Hawick, and w^as much gratified to find that his scheme was freely talked of there. In the shop of one of the booksellers of the town he found a large number of copies of an account of the Euthwell Bank wet * Memoir, page 98. f Ibid, page 105, D 34 SAVINGS BANKS. from the press, wliicli had been taken from the pages of the Dumfries Courier and supplied by himself. These handbills, which likewise gave a copy of the Pailes of the Parish Bank, had been printed by order of the magistrates of the county at their ordinary meeting. Finding that his scheme had many favourers in Hawick, he promised to call on his journey home and assist them in the formation of a bank. On liis arrival at Kelso an im^portant meeting was held, with the Duke of Eoxburgh in the chair, when Mr. Duncan addressed the meeting ; the Kelso Savings Bank, one of the most important of the Scotch institutions, being the direct result. The number of letters which Mr. Duncan received and wrote per day is described as something enormous ; they arrived by every post, not only from his own and the sister country, but even from Ireland. Not only did these letters contain requests for information and advice ; but they fre- quently were of a controversial nature, and generally from such people, ardent fi lends of the poor, as required considera- tion and some reply. That Duncan was an agreeable and clever correspondent is evident from his published letters ; that this correspondence was voluminous we can well believe. With a view of lessening the amount of his labours in this respect, he was induced to publish a full account of his scheme, together with all the rules and regulations for its working ; and this pamphlet, which came out in 1814, went through three editions very rapidly. Even at this date Duncan's "Essay on the Nature and Advantages of Parish Banks" will w^ell repay perusal, and besides, its intrinsic worth as a literary production is interesting as the first published pamphlet on a subject which will always possess attractions to the philanthropist, if to none else. We have { DR. HENKY DUNCAN. 35 the clearest evidence that Mr. Duncan laboured with un- common zeal to spread a knowledge of the plans he proposed, and to help to their general introduction ; and it is a matter of wonder to us, that, whilst many names are familiar to the world who did not do a tithe of the real hard work he did to l)enefit the poor around him, Duncan's name should be for all essential purposes really unknown, and that but for the filial regard of his son, scarcely an account of his existence should have survived him.* Speaking during his life time, the Quarterly Review warmly noticed his labours of love : " Justice leads us to say that we have seldom heard of a private individual in a retired sphere, with numerous avocations and a narrow income, who lias sacrificed so much ease, expense, and time, for an object purely disinterested, as Mr. Duncan has done." Some years before his death, in 1846, Mr. Duncan attained to the honorary degree of Doctor of Divinity, and he was for one year chosen Moderator of the Assembly of the church to which he belonged. The Duncan Institution at Dumfries, one of the few mementos of the man who did so much for Sa\'ings Banks, serves the purposes of a Savings Bank in the principal town of his native county, a statue of Dr. Duncan being very appropriately placed in front of it. Not long after the establishment of the Edinburgh Savings Bank, there was great contention as to whether that bank or Dr. Duncan's at Euthwell had the priority of merit on the score of general advantage. Pamphlets were written on the subject, not always without bitterness, and * Strange to say, Dr. Duncan's name does not find a place even in Mr. Robert Chambers's elaborate Dictionary of celebrated Scotchmen, an oversight much to be regretted. D 2 36 SAVINGS BANKS. even the great Reviews interfered. The dispute was scarcely called for at that early period, seeing that posterity is hest able to judge of such matters, and there was nothing dependent upon an earlier settlement. The Edinburgh bank followed the village bank by three and a half years, so it was not a claim for priority of establishment. The question as to which of the two possessed the materials best fitting it to be a model for all subsequent banks would not be so easily settled ; and, in fact, this was the point in dispute. Seeing the question was one of considerable importance for many years, and is so still in an archaic point of view, we cannot do better than attempt to give some idea of the difference between them, as gathered from the two accoimts now before us.* Unquestionably the arrangements of Mr. Duncan suffer considerably by a comparison of points, and though we admire the character and arduous labours of the man, there is not the slightest need that we should abstain from hostile criticism of his measures. For example, INIr. Duncan laid great stress on the fact of his bank being the first self- sustaining bank, and the first not partaking to any extent of the nature of a charity. It will be seen how far this was absolutely true. The Euthwell institution consisted of ordi- nary, extraordinary, and honorary members. The ordinary menibers were the poor who deposited their savings ; the extraordinary, those who paid to an auxiliary fund an * ,(1) An Essay on the Nature and Advantages of Parish Banks, together with a corrected Copy of the Rules and Regulations of the Parent Institution at Rutlncell ; and Directions for conducting the details of business ; Forms showing the methods of keeping the Accounts, dr. By the Kev. Heury Duncan, Minister of EuLhwell. Edinburgh. 1815. (2) A short Accomit of the Edinburgh Savings Bank, containing Directions for establishing similar Banks, of his having, towards the close of the last century, carried 4 MR. liOSE ON SAYINGS BANKS. 47 tbrougli rarliameiit a bill legalizing Friendly Societies, was generally looked upon as an authority on such subjects. The first speech of the lion, gentleman on Savings Banks was remarkably al)le : he referred to the immense good which such banks as those of Edinburgh and Bath had done, and were capable of doing. The instances which had come be- fore him of persons who before the establishment of Savings Banks had never saved a penny, but who then had made ample provision for a rainy day, were cheering in the extreme. He proceeded to give particulars of several instances of the kind, mentioning them, as he put it, " to induce hon. gentle- men to exert themselves, and that they might not sit with their hands before them, believing that nothing could be done." The moral good to be expected from these banks was great and obvious. He hoped and expected that they would gradually tend to revive in the lower classes that decent spirit of independence, now almost extinct, wliich shrinks from accepting parochial relief; the poor man would learn to regard his own industry and labour as the source whence he was to derive temporary aid in the hour of sick- ness, or permanent support when the approaches of age should unfit him for active exertions. Not that this matter was applicable oidy to the poor ; a consideration of the sub- ject in all its bearings might well be given to it by the rich on their own account ; he thoroughly believed that the poor- rates of the country would diminish in proportion to the spread of Savings Banks among the masses. 3Ir. Thompson, a Yorkshire member, expressed his warmest approbation of the proposed bill. In Yorkshire, he knew there was a great desire to establish Savings Banks of tliis sort, but the better classes were afraid of doing so, on account of their apparent 48 SAVINGS BANKS. complexity, and because they had not received up to this time the saiiction or countenance of the Legislature, He hoped the provisions of the proposed bill would be as simple as possible, and afterwards that the bill and its clauses would be made as public as possible. Hundreds of working men, to his knowledge, might easily save ten shillings a week, whereas they did not then save a penny ; nor oould they be blamed to any great extent so long as they were without the requisite machinery for acting differently. Establish these banks, and place their working under proper Acts of Parlia- ment, and he should then say that many who were accus- tomed in times of scarcity to solicit parochial relief would have no excuse for their conduct ; if they did not avail them- selves of the opportunity of becoming independent he would rather punish than assist them. Thus early were our legisla- tors alive to the maxim that " the only true secret of assisting the poor is to make them agents in bettering their own condition." The Chancellor of tlw Exchequer (Mr. Vansittart) believed that nothing tended more to the independence of the poor than their learning to support themselves by their own exertions. He thought the object of the proposed bill would be congenial to the feelings of the whole House. On the part of the Government, he was ready to offer his best assistance on behalf of an institution such as the Savings Bank, where rich and poor might meet together and mutually combine in promoting, under Divine protection, their natural rights. " Tliere, forgetful of those petty distinctions which tem- porary circumstances had created, they met as brethren, each to do his duty to his neighbour." After an Irish member had expressed his wish that the same Itill might be extended to Ireland, where, he truly said, such habits as these banks THE FIRST SAVINGS BANK BILL. 49 inculcated were most urgently needed, even more so than in England, this one-sided debate was closed.* Tlie bill was read a first time on the 15th of May, 1816. It provided, that any number of individuals might enrol themselves as Trustees of a Provident Institution or Savings Bank at the Quarter Sessions. It was not meant by this to give any power to Justices of the Peace, but simply that the act of enrolment might thus be made in as public a manner as possible. It was further arranged, that the Pailes proposed for the manage- ment of the new Savings Banks should in like manner be left with the Clerk of the Peace for the respective counties. The bill authorised the Trustees or Managers to appoint such officers as were likely to be needed, and required that in all cases where the persons were to be entrusted with money, they should give reasonable security. It was only further provided, that depositors should not be prevented from ap- plying for parish relief, but that, if any dispute arose on this point, the decision in the matter should be left with the magistrates in Quarter Sessions. The session being near its close, and several members having expressed their sense of the importance of the subject and the necessity of producing a well-considered bill to regulate these banks, the bill was withdrawn till the next session. On the 15th of February, 1817, Mr. Eose again returned to the subject, and got leave to re-introduce his bill. He did not on this occasion enter minutely into the consideration of Savings Banks, further than to express a conviction he had, " which daily became stronger," that these institutions, if properly directed, would have a very direct influence on the vexed question of Poor * From a bare record of the debate in question to be found in Hansard. Third Series. 1816. E 50 SAVINGS BANKS. Law relief. He contended, that, if they became generally introduced through the length and breadth of the country, they would gTadually mitigate, and then do away with, the evils attending the system of the English Poor Law ; and he very reasonably urged that any measure which would tend, even remotely, to such a desirable object, was deserving of, and ought to have, the hearty support and countenance of the Legislature. Mr. Cunven, an authority on this phase of the subject, held that there could be only one opinion as to the utility of the banks, but he was satis- fied " it was an error to imagine they would essentially con- tribute to the alleviation of the present distressing situation of affairs." Nothing short of a measure wliich in its nature might have a compulsory influence over the minds of the people, to teach the poor and the peasantry that the means of relief, of content and happiness, were within the reach of their own exertions and industrious application, would be effectual. After a little further opposition, during which an- other member said that the bill would do more harm than good — that Savings Banks were going on extremely well without any Act of Parliament, Mr. Wilberforcc, ready at all times to forward any measure which .seemed likely to benefit the poorer and more defenceless portions of society, congratulated his friend on his proposals, and said that the system of Savings Banks pleased him most because it was so eminently adapted to teach the poor how much they might do for themselves by their own self-denying exertions. This was one of the class of things for which he, the House, and the country ought to be extremely indebted to all who had been instrumental in origuiating it and bringing it to greater perfection. " Wliatever difference of opinion," continued Mr. MR. WILBERFORCE ON SAVINGS BANKS 51 Wilberforce, " there might exist as to the Poor Laws, it was of all things desirable to countenance and foster so sanative a principle as that on which Savings Banks were founded." The second and principal reading of the bill took place on the 15th of May, 1817; on which night many petitions were presented in its favour, and only three — viz., from Norwich, Hertford, and St. Paul's, Covent Garden — against it. All opposition, however, to the bill resolved itself into simply contesting one or two of its clauses. An attempt was made to throw out the clause which obliged the Trustees of Savings Banks to vest all moneys received by them in the Public Funds, several members contending that at any rate some of the money might be much better employed on mortgage, to the relief of many different interests in the immediate neigh- bourhood, and to the greater productiveness of the money so lent. The arguments used on this occasion were very similar to those occasionally used now in relation to the same subject, and they were then as unavailing as they have been subsequently : the preponderating opinion was that the safety of the investments was, and ought to be, the first and greatest consideration. The clause, however, which pro- posed the giving of premiums out of the parish funds to those contributors who had done best in the way of saving money, fared worse, being rejected in committee almost unanimously. The growth of such principles could not be forced, and, if they grew at all, they would do better without the crutches of eleemosynary aid. At the third reading, a spirited contest arose about the proviso that depositors in Savings Banks should not be disqualified from receiving parochial relief. Mr. Rose contended that anything, whicli would have a tendency to make the poor think that the E 2 52 SAVINGS BANKS, richer classes were legislating with ulterior objects in view, such as to get rid of poor-rates, would throw obstacles in the way of Savings Banks. There would be no need to think of such considerations in a few years, when Savings Banks were more firmly fixed amongst the institutions of the country ; it was highly expedient, however, that they should now be allowed to have their weight. In a few years, argued he, the poor will have formed habits of saving, and so they will have become independent, and be above throwing themselves on the parish, at any rate with impunity. Mr. Wilberforce held and expressed the same view, which Lord Milton and others opposed ; the clause was retained, not- withstanding, by a majority of thirty-three in a House of eighty-seven members. With this discussion the bill passed, and became law in August, 1817. As this bill* is the be- ginnmg of legislation on the subject of Savings Banks, we would here state in outline the principal objects with which it dealt. A sort of Supplementary Act, cap. 105, was passed to apply more particularly to Ireland, to suit the Irish members, who, when the matter was under discussion, argued that the same Act would not deal so well with Ireland, and who, therefore, wished the two countries treated separately.^ Both the acts required that the Eules of the proposed Bank for Savings should be deposited with the Clerk of the Peace of the county in which the bank should be situated, though no discretionary power was left with the magistrates in the matter. The Trustees and Managers were prohibited from receiving any profit from any transactions in these banks, and were empowered to pay over the moneys they received into the Bank of England, or Ireland (as the case might be), to * Act 57 George III. c. 130. PROVISIONS OF THE BILL. 53 the account of the Commissioners for the Eeduction of the National Debt, the latter being instructed and empowered to invest them in Three per Cent. Bank Annuities. Interest on money thus deposited in the hands of Government was guaranteed to the Trustees of Savings Banks at the rate of Sd. per cent, per day, or 4/. lis. od. per annum. The Act restricted the amount which any one depositor could place in a Savings Bank in England to 100/. in the first year, and 50Z. in any subsequent year. In Ireland the limitation was 50/. in any year, though why this distinction was agreed upon does not appear. It was not long before it was seen that the Act just described was defective in many particulars, and further legislation rendered necessary. During the year which elapsed after the passing of the Savings Bank Act, the progress of these institutions, in so far as the number and amount of their deposits were concerned, was great beyond all expectation. In nine months from the date of the bill of 1817, the large sum of 657,000/. had been deposited. The largest amount received at the National Debt Office during that period from any one bank was 82,000/., remitted from the flourisliing Exeter bank ; the smallest was received from a new bank just then opened at St. John's, Wappiug, for the benefit of sailors living in that locality. By the middle of the year 1818, or less than twelve months after the passing of the first bill, there were no fewer than 227 banks established in England and Wales, and about an equal number in Ireland and Scotland. That the encouragement which the bill had given was real is evident from the fact that more than half the entire number of English banks were first opened in 1817-18, So rapid indeed had been the development of the measure. 54 SAVINGS BANKS. that it was soon apparent that the increase of deposits was in a ratio far beyond any possible increase in the amoimt of wages or profit from which small savings could have been made. No doubt that now, for the first time, many hoarded savings saw the light, and began to bring in to their owners a return ; but even this does not account for such an in- crease of business. Towards the close of 1817, 20,000^. was deposited in one day, in a town in the North of England where a bank had just been opened, and it was known that very little of this money belonged to the industrial classes. The interest given for the investment made, it appeared, was attracting a much higher class of depositors than it was ever sought to encourage, or than the Act was intended to benefit. The interest guaranteed by Government has already been stated. In amount, it was at least lis, Sd. more than the interest yielded by any other Government security, while Consols did not bring in more than SI. 5s. per cent. Many, we believe, in the first instance j)ut their money into the Savings Banks to afford encouragement to their poorer neigh- bours or dependents, and in order to inspire them with confidence : and it will be well understood how necessary this was at the outset, seeing that at that time there were few / means of inculcating sound political knowledge, or, indeed, information of any sort, among the great mass of the j)eople, who too often were swayed hither and thither at the mere whim of some noisy and ignorant demagogue. Wliether or not this sufficiently accounts for the fact of the better classes contributing to the early Savings Banks, it is clear that all classes soon found out that it was not possible to do better with their money, and hence allowed it to remain where it was. Several banks were very careful to exclude by THE KICK INVADE SAVINGS BANKS. 55 their rules all but mechanics, servants, and persons in similar ranks of life, but the rest either had no such rules, or were very careless about enforcing them. One gentleman, possessed of 40,000/. was known to have deposited large sums of money in one Savings Bank in the names of his six children. On the 17th of March, 1818, the Chancellor of the Exchequer, influenced by such abuses as these, asked leave to bring in a bill to amend the Act passed last year. No trace of the proceedings of Parliament with regard to this little bill re- mains, but it seems only to have been meant as a temporary measure of relief till the whole subject could be more effectually grappled with. It simply provided for some altera- tions in the forms of debenture, gave power to Justices of the Peace to reject, for a sufficient reason, any Eules deposited with their clerks, and prohibited the arrangement by which a person might invest in a fSavings Bank by means of a ticket or number, and without disclosing his or her name. Shortly after this period, in the year 1819, a question was put to the Chancellor of the Exchequer in the House, which seems to have raised some merriment among the members. Eidiculous as it might seem, it only reflected the spirit in which many people s^ioke of the measures which had recently been passed with regard to the compidsory investments with Government of the money placed in the banks. In Lan- cashire, aided and stimulated by Mr. Cobbett, who all along sneered at the "bubble" of Savings Banks, the people got up an absurd cry, and long kept it up. Mr. Wilhraham, a Lancashire member, asked Mr, Vansittart if there was " any tittle of truth " in the reports that were so prevalent " that Government was about to seize the funds of the Friendly Societies and Savings Banks, and apply them to the payment 56 SAVINGS BANKS. of the National Debt. This report," said the hon. member, " had been caught up by persons little conversant in political matters, and had actually caused the breakiug up of Friendly Societies, to the great loss of those who had claims upon them." He had no doubt the course of legislation had led to this report being circulated by designing persons, and though quite aware that it was impossible for the Govern- ment to touch any of these funds, he would like to hear a declaration on the subject from the authority which in that House was alone competent to give it. Tluc Chancellor of the Exchequer said, that even after much experience of the extent to which malignity and absurdity could go in the propagation of reports injurious to the Ministry, he had not been prepared for such a rumour as this. " It was utterly groundless; there was not the smallest foundation for it, either in fact or possibility. Under the authority of Parlia- ment, the money belonging to the institutions in question was kept entirely apart from the public money, and even if the Treasury were base enough, they had not the power to misappropriate these funds." * Mr. Brougham observed that this was not the first time that such reports had been cir- culated, and such absurd cries raised. When the Education Committee was sitting, it was asserted that its intention was to seize all charitable funds, and to turn the two Universities into charity schools. In such cases as these facts or reason on such reports were very ineffectual, but he hoped that in this particular instance they would be of some avail. Before we notice the further progress of legislation in re- spect to Savings Banks, it would be well to refer to their pro- gress and operation in Scotland. None of the Acts passed up * Hansard's Dtbales, vol. xli. page ] 392. SCOTCH BANKS NOT INCLUDED IN THE ACTS. 57 to this time in any way related to the Scotch banks. When Mr. Eose's bill was before Parliament, its application to Scotland was successfully opposed ; a separate bill was intro- duced by Mr. Douglas, the member for the Dumfries burghs, in 1818, but this did not pass. The failure to obtain this act was said to be owing exclusively to the necessity for legislative interference not being felt in Scotland ; it seems now much more likely that the failure was owing to the want of unanimity among the Scotch promoters of Savings Banks, Mr. Duncan taking a decided stand with the member whom he had influenced so far as to get him to bring in a bill, and the promoters of the Edinburgh bank, on the other hand, who kept up in this way the long-standing dispute which they had always had with " the Father of Savings Banks." * There was certainly some reason why the same legislation was unnecessary for the two countries. There were many circumstances which rendered interference on the part of the Legislature necessary, or at least expedient, in the case of the English banks, and these circumstances scarcely in any way applied to Scotland. The chief of these were the Poor Laws, and the want of secure places of deposit for small sums to bear interest, and be payable on demand ; the English bankers did not usually allow interest on money lodged with them, whereas in Scotland they gave a liberal return for it. The general dispute was at its height in 1819, when the Edinburgh Society published a report against any State interference, and when Mr. Duncan, who, as we have already said, was a strong advocate for parliamentary en- couragement and protection, replied in a lengthy and able * This coguomeu was giveu to Mr. Duneau more than oiice in the House nf f'ni-.-.Ti-,r,ns al^out this period. 58 SAVINGS BANKS. letter * in which he clearly showed that difficulties and dis- couragements would surely be felt in the progress of Savings Banks, if they were not arranged according to law. The radical difference observable in the two classes of banks — and there were at this time 182 Savings Banks in Scotland with 7,000 depositors, and deposits to the amount of 30,000^. — was the difference between the Parish Bank at Euthwell, and the Savings Bank at Edinburgh, for on one or other of these models all the Scotch banks were with very few variations formed. Mr. Duncan placed, or intended to do so, the management of his bank in the hands of the whole body of depositors ; the Edinburgh bank excluded all popular inter- ference in its management, and left every one to deal with it or not, at their pleasure. The Euthwell bank confessedly, and as we have seen, partook of the nature of a Friendly Society; the Edinburgh bank as nearly as possible approached to the character of a commercial undertaking. The founder of the former was thus an advocate for minute regulations, while the patrons of the latter wished to be left at liberty to manage their affairs in their own way, and only to call in the help of the Legislature when real grievances needed redressing. With the exception of a short Act-f* passed in 1820, by which it was provided that charitable institutions might de- posit a whole or a portion of their funds with the Commis- sioners, no further legislation on Savings Banks was attempted till 1824. In tliis year the Chancellor of the Exchequer * A Letter to W. i?. K. Dour/las, Esq. M.P. on the Expediency of the Bill brought by him into Parliament, occasioned by a Report of the Edin- burgh Society for the Suppression of Beggars. By the Rev. Henry Duncan, of Rutliwell. 1819. + 1 George IV. c. ?«. I THE ACT OF 1824. 59 (Mr. Eobinson) took up the matter where Mr. Vansittart had left it, and carried a Bill through Parliament still further to amend the law.* With a view to remedy still more com- pletely the evil of classes, other than the industrious ones, investing their money in Savings Banks, this Act provided that the sum which could be deposited during the first year should be limited to 50^. and should stand at 30^. for any succeeding year. To provide against anything like evasion of these regulations, a form of declaration was introduced, — which we scarcely need say has existed up to the present time, — stating that the subscriber to it had not contributed to any other bank than the one at which he made the declaration. The Chancellor of the Exchequer endeavoured to carry a clause which required that this declaration should be subscribed by the proposed depositor in his own name, " and own handwriting," in place of a mark or initials, but this was wisely discarded. .This absurd proviso would have put an educational test in the way of those very classes whom, to the exclusion of all others, it was desirable to attract to Savings Banks. Another important clause suc- ceeded better, and was plainly proper to the object meant to be served by it. No depositor could by this further clause invest more than 200/. excluding interest, in any Savings Bank, The case of the funds of Friendly Societies was the subject of another clause. It was only four years since these societies, as we have seen, were allowed to deposit their funds through the medium of Savings Banks ; but the Act of 1820 had given rise to so much abuse, or to so much that seemed like abuse, that some alteration was necessary. The high rate of interest which had been guaranteed by law to * 5 George IV. c. 62. 60 SAVINGS BANKS. these banks induced, not only individuals of rank and pro- perty, but large charities to place their funds in them : the result was a great burthen to the public, inasmuch as the excess over the ordinary rate of interest for public securities was thrown in by the Legislature with the object of in- creasing the provident disposition of the poor. As it was seen that, if this state of things continued, the original object of State assistance and countenance to Savings Banks would be defeated and the public in some degree prejudiced, it was proposed that no friendly society or charitable institution of any kind should deposit their funds in any bank. If the alterations now proposed did not suffice to preserve Savings Banks from the inroads of the ricli, the Chancellor of the Exchequer saw no other means of meeting the evil than by reducing the interest given. He "should feel most re- luctant to weaken the confidence which the public reposed in these banks, and which rendered them one of the greatest blessings ever conferred upon the country ;" but the evil must be met in one way or the other, or with the loss of their normal character they would lose their efficiency. The Act of Amendment then went on to deal with the responsibility of Trustees, the giant difficulty of Savings Banks from that time imtil now. The same arguments were used at this early period as at different times subse- quently. Those who placed money in Savings Banks ought to have some security that that money was not made away with by some one through whose hands it would pass ; and the Trustees, who had the sole control over the affairs of the banks, and appointed all the subordinate officers, were the persons who ought to give some security. On the other hand, enforce to the full the liability of Trustees, and the LIABTIJTY OF TRUSTEES. 61 most able persons would be deterred from accepting so much responsibility, and would give np the connexion which they had already voluntarily assumed. It was now therefore settled that the Trustees should deposit all the money they received with the National Debt Commissioners, and that they should be held liable in case of default only to a certain amount. A legally and efficiently constituted bank should consist of twelve Trustees, each liable for 50/., or 600Z. in the acToreoate. This Act, it was also decided, should refer to Ireland equally as to England, Early in February, 1828, Mr. Joseph Hume — who had not then been many years in Parliament, but who had already commenced that course of conduct in connexion with the public expenditure which, at first, gained him little but ridi- cule and derision, and subsequently the respect of friend and foe and the confidence of the entire nation — took up the Q^uestion of Savings Banks, or more especially that part of it which related to the question of expense to the Government. Mr. Hume had already asked for returns of the progress of Savings Banks ; but on the 6th of this month he required the production of an account, showing the amount of interest that had been allowed to them since they had become connected with the State in 1817. He tried to disabuse the mind of the members of the House as to his having any prejudice against Savings Banks. He told how he had been one of the earliest friends of these institu- tions and heartily wished well to them. When he found, however, that they had already cost the country half a million sterling, and were likely to cost still more as their numbers and efficiency increased, he thought it was high time to ha""'e the matter inquired into, and this expenditure 62 SAVINGS BANKS. stopped. Mr. Hume said that his original notion about Savings Banks, — which was likewise that of all he knew who had endeavoured to establish them, — was that each bank might, and therefore ought to maintain itself, and, whilst it enabled the poor to invest safely their 101. or 20/. as cheaply and as profitably as the rich could their larger amounts, it should neither be a burthen on the charity of the benevolent nor an incubus on the State. Mr. Hume stated that he believed it would be found that up to January, 1827, the amount paid to Trustees, over and above what the money remitted to the National Debt Commissioners had produced, was 452,000^ By the arrangement of the Act of 1817, which ordered that a separate account should be kept of the moneys deposited with Government on behalf of Savings Banks, he was enabled to tell exactly how affairs stood. He found that Government had obtained interest on the Savings Bank Fund to the extent, in round numbers, of 2,250,000?. and had paid to depositors for the same 2,703,000/. Hence the loss* above given, which he had no doubt by the time the accounts were finally made up for the financial year ending in March would be half a million sterling. Mr. Hume went on to state that, if honourable members thought it proper after an inquiry to pay 40,O00Z. or 50,000/. a year, as a means of encouraging these banks, let them do so ; perhaps he would not make any more appeals about it ; at any rate, however, in this case, and if this state of things continued, he thought it would be only fair that Government, and not separate directors, should have the management and control of these banks. There was no possible uniformity among them ; some paid one rate of in- * AVe shall see subsequently that this loss was more than made up in other ways. MR. HUME ON SAVINGS BANKS. 63 terest, and some another ; some charged much higher for paid assistance than others, and yet, with unvarying uni- formity, he might have said, the executive granted the same high rate of interest to all, irrespective of how they disposed of it. The Eeturns were ordered Qiem. co7i. The Statement which Mr. Hume more particularly referred to is in its proper place among the " Accounts and Papers " for that year, and is as follows : — Years. Dividends on Stock Received by Commis- sioners. Interest Paid Trus- tees. Difference. £ S. d. £ s. d. £ s. d. 1817-18 32,071 1 5 44,909 5 1 12,838 3 8 1819 92,865 13 7 106,963 4 9 14,097 11 2 1820 124,278 8 2 141,488 1 3 17,209 13 1 1821 163,631 1 1 182,649 13 3 19,018 12 2 1822 225,252 6 1 253,629 4 11 28,376 18 10 1823 298,270 10 1 340,757 2 42,486 10 1 1824 379,411 6 7 468,261 12 1 88,850 5 6 1825 450,027 13 562,759 4 112,731 13 4 1826 478,286 5 3 592,390 18 11 114,104 13 8 1827 480,851 13 615,516 1 7 134,664 8 7 1828 515,569 9 4 675,753 16 7 160,184 7 3 A month afterwards, the Eeturns having heen furnished, Mr. Hume returned to the charge. The accounts had more than borne him out in all particulars. He now again asked if the daily loss ought to be suffered in the financial state the country was in. The Act regulating Savings Banks ought to be repealed, and another passed in its place. His opinion G4 SAVINCS BANKS. was, (lecide;lly, that Government should just give the interest which it realized by the Savings Bank money, and not add a farthing to it. " At a change in the price of Stock," added the reformer, " Government might very possibly lose three or four millions, and yet the depositors would not suffer the loss of a penny." Much as he wished for the progress and advancement of the poorer classes — and few, we think, worked harder to obtain it for them, — he contended that these classes ought to be placed precisely in the same situa- tion as other people who had capital to invest. Another point which Mr. Hume dwelt upon was the surplus money which managers of Savings Banks had in their possession un- touched, after paying their depositors all the interest that was allowed them. At that time Mr. Hume stated that the surplus in the Newcastle Savings Bank, after paying the expenses of management, amounted to 4,810/. and in the Exeter and Devon Bank to a still larger sum ; and this money which had been paid by Government and saved after the Trustees had given a liberal interest to depositors, was now turned into an invincible argument for some change in the law. Mr. Hume concluded with expressing a hope that Government would bring in a bill to amend the law relating to Savings Banks, or at any rate not throw any obstacles in the way of some private member doing it. The Secretary of the Treasury said, in reply, that Mr. Hume had stated the case fairly and correctly ; and that the Chancellor of the Exchequer fully intended during the present session to bring in a bill with which he hoped to satisfy all classes* The vicissitudes of party prevented this high Government func- tionary from carrying out his laudable, but very impossible -' Times, March 1.3, 1828. THE SAVINGS BANK BILL OP 1828. 65 design. In a few weeks the Chancellor is on the other side of the House, and another occupies his place. A bill, how- ever, was introduced on the 5th of June, 1828, by Mr. Pallnier, which, supported by the new Administration, was passed through Parliament, and became law in the same year.* In introducing this biU, Mr. Pallmer said it was quite obvious that the laws which affected Savings Banks ought to be as clear and as distinct as possible. Savings Banks were- now very important institutions, and the welfare of thousands was connected with them. At that time there were no less than five Acts of Parliament regulatinGf Savings Banks, and these Acts, which contained 150 clauses, involved an enormous amount of confusion and perplexity. He would in the place of these five Acts, propose an Act, simple and consolidated, of thirty or forty clauses. He would en- deavour to deal with all the questions of interest allowed, surplus money, responsibility of trustees, and to make the necessary restrictions towards carrying on the banks safely. And leave was quickly given to proceed with the bill. No- thing transpired in the passage of the bill through Parlia- ment of much moment : so little hold were questions of this nature supposed to have on the public mind, that it is barely alluded to in the pages of Hansard. It seems never to have occurred to the reporters of tlie day, that posterity might wish for a detailed account of the steps by which institutions, such as these we are considering, arrived at some important position, and so important indeed as to make every step of that progress interesting after the lapse of years. Two or three little incidents have survived this neglect. Mr. Leivis, for example, during the second reading of the biU, proposed * 9 George IV. c. 92. F 66 SAVINGS BANKS. a clause for preventing the National Debt Commissioners from taking more than 20,000,000/. from the Savings Bank Trustees, and ordering that, when that amount had been invested, the funds should be declared full. The answer which Mr. Goulburn, the new Chancellor of the Exchequer, gave to the hon. member was, that he "would take a day or two for consideration, after which he should be able to say better whether such a clause ought, or ought not, to be agreed to." Two or three days before there had appeared in the Times newspaper a well- written lampoon on the new Ministry, over which, it will be remembered the Duke of AVellington presided as Premier, and one verse ran — " To rest from toil our Great Untaught, And soothe the pangs his warlike brain Must suffer when, imused to thought. It trie? to think, and — tries in vain. " Sio^ Joseph YorJce embraced the opportunity to compliment the Chancellor, amidst great laughter, on being such a " valuable auxiliary of the ' Great Untaught.' The right hon. gentleman evidently was not one who spoke on the strength of two bottles of wine : his eloquence was cer- tainly not of a fiery description;" and more banter of the like description. Mr. Lewis, however, withdrew his amendment, as did also Mr. Hume, who, when the amount of interest which should be given was discussed, had proposed that, in place of a reduction from Sd. to 2^d. per diem, the interest on deposits should only be at the rate of 2d. per diem. The bill was only further opposed in some trifling particulars and, when finally carried, was ordered to come into operation in the November of the same year. The statute was en- titled, " An Act to consolidate and amend the Laws relating MR. JOHN TIDD PKATT. 67 to Savings Banks," and repealed all other Acts previously in force. From tMs circumstance, the clauses of the bill of 1828 are generally known as the "Governing Statutes' relating to Savings Banks. As the great majority of these clauses are still in force, it will suffice, when we come to give the present Act, to simply mark those which were originally passed in 1828, and so distinguish them from the clauses passed in 1863. We will here give the principal items and arrangements of the new bill. The Act provided that the rules of eveiy Savings Bank should be entered in a book, which book should be deposited with the Clerk of the Peace : the Clerk of the Peace was directed to submit this book to a barrister, who, under the terms of the Act, woidd be appointed by the National Debt Commissioners.* The duty of the barrister would be to certify that the Evdes of the proposed bank were strictly according to law, and this certifi- cation, after it had been made, was to be laid before the Justices of the Peace in Quarter Sessions, who were em- powered under certain circumstances to reject the same, or any part thereof If admitted, as they most commonly * The barrister appointed, under clause 92, was Mr. John Tidd Pratt, who still holds the office after a lapse of thirty-six years. Under a subsequent clause of the same Act there was power'given to the Commissioners to appoint an umpire in cases of dispute, and Mr. Pratt was likewise appointed to decide in these cases on behalf of the Government. Mr. Pratt's name is now properly and deservedly connected with all questions relating to Savings Banks. From time to time this gentleman's intimate acquaiutance with the legal history and working of these and kindred societies has gained him other appointments in connexion with them. By the Act of 7 & 8 Victoria, c. 83, he had additional powers conferred upon him, this Act setting forth that all cases of dispute should be referred to him in the first instance, with- out the necessity of each party appointing an arbitrator. In 1846, under the 9 & 10 Vict., he obtained the appointment of Eegistrar of Friendly Societies, an office which he still holds; and in 1861, on the establishment of Postal Banks, he was appointed Consulting Barrister. Mr. Pratt was born in 1798, and called in 1824 to the bar at the Inner Temple. F 2 68 SAVINGS BANKS. would be, after certification, the Pailes became binding on depositors and officers. The interest to be given to de- positors, as we have already stated, was reduced by this Act from 41. lis. od. per cent, per annum, to 3/. 16s. O^d. per annum. It was provided that savings of Minors might be invested, and that deposits might be made by married Women. Charitable Societies were again authorized to invest sums not exceeding 100/. per year, or 300/. in the whole. Friendly Societies were also authorized to subscribe any portion of their funds into Savings Banks, but a Friendly Society enrolled after the date of the bill coidd not invest more than 300/. principal and interest included. Trustees were not to receive from any one depositor more than 30/. in any one year, nor more than 150/. in the whole and, when the deposit and interest amounted to 200/. interest was to cease. Depositors might withdraw their money and again subscribe, providing they did not do it to a greater extent than 30/. in any one year. Deposits might be mthdrawn from one Savings Bank and placed in another. Should a depositor die leaving any sum exceeding 50/. the same was not to be paid without probate or letters of ad- ministration. Administration bonds for effects under 50/. were exempt from stamp duty. Section nine exacted that no Trustee or Manager should be responsible except for his own wilful neglect or default ; and finally, and a matter of con- siderable importance, the bill provided that once in each year the Trustees of every Savings Bank should make a Eeturn to the National Debt Office, in which a full Financial Statement should be made of the condition of the bank ; and a minor clause enacted that depositors should be entitled, on payment of one penny, to a printed copy of this Annual Statement. GOVEllNMENT ANNUITIES. 69 For several years after the thorough change which we have just described, the institution of Savings Banks increased and prospered wonderfully ; up to the year 1833, we find that no steps were taken, nor agitation of any sort got up, to alter the law with regard to them. In this year, some further changes took place ; but if w^e except a slight modification which was made in the arrangements under which depositors could withdraw their money, — a longer notice being thought necessary, — nothing was done which did not place additional powers in the hands of Trustees. In April, 1833, Lord Althorp, Chancellor of the Exchequer in the Government of Earl Grey, influenced, by a suggestion of Mr. Woodrow, introduced a bill to grant immediate and de- ferred annuities through the medium of Savings Banks, and to grant them on so small a scale as to place them witliin reach of the humblest classes. Something of this sort was undoubtedly required, and the necessity became more and more felt on account of the action of Friendly Societies. The poorer classes, it would seem, had scarcely any means of investing in pensions for their old age : although nearly 5,000 Friendly Societies had up to this time proposed to make some provision of the kind, all but thirty-nine had in 1833 entirely relinquished this class of business. It may be said that Friendly Societies gave up this business because so few availed themselves of the provision that was made. From the very constitution of these societies, however, the poor had little confidence that any one of them would last so long as to give them those benefits in their old age for which they would have to subscribe for a long term of years. Benefit Societies might be broken up at any time by two-thirds of their number ; this sort of thing was constantly occurring, generally leaving the 70 SAVINGS ba:nks. oldest members in the lurch. An attempt, to which we have not yet alluded, was made even before Savings Banks were established, to give the industrial classes a chance of pro- viding for their old age, and preventing them from being left destitute of other support than parish pay, or a home in the workhouse. Baron Mazeres, so early as 1773, who published a work on Annuities, succeeded in getting a bill introduced and passed through the House of Commons — though unfor- tunately it was lost in the House of Lords — which would have made the legislation of 1833 less necessary. Lord AWwrp now stated that the object he had in view was simply and solely to benefit the working classes. The lowest sum which could be granted as a Government Annuity was 30?. a-year. He would propose to make the sum 20Z. The annuity should not be assignable, or transferable, except in cases of bankruptcy or insolvency ; and in the case of the purchaser, either through necessity or choice making default in the annual payments, or dying before the annuity com- menced, the whole of tlie money subscribed shoidd be paid to him or his executors. The tables would be calculated at the rate of 3/. 155. per cent, and this rate being less than the ordinary Savings Bank rate, would enable the Government to introduce the clause for returning deposits. To no class, it was thought, would these proposals be of more service than to members of Benefit Societies, who would thus be enabled to secure superannuation on Government security, and confine the objects of the society in which they might be members to relief in cases of sickness or death. Lord Althorp calcu- lated that a person at the age of twenty-five, paying six shillings a month as a deposit into the Savings Bank, would be entitled at the age of sixty to an annuity of 20/. a-year. MR. ATTWOOD ON SAVINGS BANKS. 71 He contended, that, from the calculations which had been made, Government could not lose by these arrangements, and he thought the principal feature of deferred annuities for a small amount, with money returnable in the cases above stated, might be made, — if the working classes would only avail themselves of the measure, — to tend greatly to their worldly comfort and advantage. Mr. Thomas Attwood, the member for Birmingham, who made some remarkable speeches in the House on matters of finance, but especially with regard to Savings Banks, objected not only to this proposal, but to legislation of any sort with regard to them. The money deposited in Savings Banks might as well be put into the country banks, for the average amount of each deposit, he was sure, was over lOZ., and 10^. was the minimum sum which country banks would take. He " did not believe in paying so much to keep up such establishments, especially when they were not wanted." To such lengths will intelligent men go, and to such an extent will they shut their eyes ! Mr. Attwood put his views before the House quite mildly in this instance, as compared with subsequent speeches. Mr. Brotlurton, a member greatly respected in the House, who had once belonged to the ranks of the people, and who might therefore be supposed better to understand their requirements, felt sure that Savings Banks had been productive of great national good, and could not be too numerous. Mr. Pease, the Quaker member for South Durham, hoped that nothing would be done to induce the working classes to try country banks in preference to Savings Banks. In his own county 700,000^. or 800,000/. had been lost in country banks, and therefore it would be highly dangerous to advise the poor to lodge their money there. Mr. Pease's position, as a large employer of 72 ' SAVINGS BANKS. labour, gave his remarks weight, when he trusted that the clause in the bill of 1828, which provided that Accounts of Savings Banks sliould annually be laid before the Govern- ment, would be carried out in its entirety ; " there was little hope of Savings Banks turning out uniformly profitable to the industrious classes, except Government maintained a strict superintending control over them." The Chancellor of the Exchequer said this was done, and in two or three instances since he took office, wliere the Trustees had neglected to fur- nish proper returns, the Commissioners had exercised the power which the law gave them, and had closed the hanks till the Accounts were sent up.* In May the bill was carried through Parliament unaltered, but, as usual, opposed by two or three fractious members. Mr. Thomas Attwood again expressed his disapprobation of Savings Banks ; and we allude to his speech with a view solely of enlivening our pages, which may over this ground of legislative enactments be dull to some readers. This gentleman stated his belief on the third reading of the Savings Bank Annuities Bill, that Savings Banks " were instituted by the late Lord Liverpool and his Government, not for the good of the people, but for three different purposes." The first was to draw capital to London, in order to bolster up the Funds ; the second was to give the Government the power of putting their hands into the pockets of the people ; and the third, to enable them to scourge the people.f On the House showing manifest signs of disapprobation, Mr. Attwood said, "Hon. members might express disapprobation as much as they pleased, and the noble lord (Althorp) might laugh, but he firmly believed that * Times, April 17, 1833. t Hansard, vol. XVII. Third Series. 1833. LORD ALTHORP REPLIES TO MR. ATTWOOD, 73 Lord Liverpool's great object in getting up these banks was to get his claw in the people." Lord Althorp replied with the straightforward understanding, and quiet, manly good sense which always characterized this eminent statesman. He wondered that Mr. Attwood had not imputed to Govern- ment another motive, that being, to realize profit by Savings Banks, which he need not say they had scarcely yet ^done. He might have smiled, but it was entirely on account of the originality of the hon. member's ideas on the subject : seriously, it was astonishing that such arguments should be used by reasoning men. "So far from being an injury to the people, he believed these banks conferred on them the greatest advantages ; and so far from affording the Govern- ment the means of trampling upon them, they would have an exactly contrary effect." And there can be no question that Lord Althorp was right. The evident effect of Savings Banks, from their commencement, had been to make people independent ; and surely persons of this description would be the very last that any Government would attempt to ill-use. Another member spoke a word for Mr. Attwood : he believed him to have the kindest intentions towards the poor ; only, he must add, that he took the strangest way of showing these good intentions, when he strove to prejudice the poor against institutions which were capable of rendering them indepen- dent and comfortable sooner than any other organization whatever. Mr. Slaney thought the people showed 'great good sense in preferring Government security to the allurements of country bankers. As for the member for Birmingham, he ought to be reminded of Franklin's story about the two sacks, where the empty sack fell to the ground, whilst the full sack stood bolt upright. The fuller the sacks, the more 74 SAVINGS BANKS. likely were the people to be independent, and the less likely were they to be trampled upon. Mr. Slaney was glad to find, that though the crisis of last session had had a bad effect on the deposits of Savings Banks, they were now daily increasing. With this discussion, so far as any record is left, the bill became law. An act passed in 1835 * extended the bill for consolidating and amendmg the law with respect to Savings Banks to Scotland, and of course the bill of 1833, which we have just described, became at the same time applicable to Scotland. Nothing further was done in the way of legislation for Savings Banks till 184-i, so we wiU close this chapter by referring to another attempt made by Mr. Hume, in 1838, to reduce the interest given to Savings Banks, and to introduce other changes into their organization. And here we cannot forbear to state our belief, that, though many thought very differently at that time. Savings Banks, the working classes, and the country generally, had not a better friend than Mr. Joseph Hume. He saw a lavish expenditure going on in connexion with Savings Banks, and he endeavoured to stop it ; with what success remains to be seen. He saw that in consequence of this expenditure, or the inducements which it gave, legislative enactments were openly set at defiance by well-to-do people, who, besides their own deposits, made fraudulent investments in the names of the various members of their families, or their friends; and that the action of the Legislature was in this way an attempt to cultivate good habits amongst one portion of the community, at the expense of promoting bad habits amongst another. Mr. Hume on this occasion reminded the House that he was one of the * 5 & 6 William IV. cap. 57. 'et, though the 90 SAVINGS BANKS. average amount of money deposited in Savings Banks in one year before this time had only been about 1,100,000/., no less a sum than 859,734/. was deposited in 1827, and not half of that sum was withdrawn. These facts show the great hold which Savings Banks had already taken upon the country. Of what service they were during such times as those witnessed in 1826 we shall have to speak. We are far from anxious to trouble the reader with any statistical information which might easily be withheld, but the progress of which we are now speaking can be best traced by presenting first, a tabular view, which gives that progress from year to year, and which will likewise furnish material for remark.* Remembering that this table does not give the actual business done by Savings Banks within this period, — which, indeed, from the absence of proper returns in the earlier years of those Banks it would be difficult to present, — many instructive lessons may be gathered from it as to their value and utility. In fact, however, and for all practical purposes, the amounts remitted by the Trustees to the National Debt Office very fully represents the progress of Savings Banks, for they may be considered as representing so much surplus every year, after all the claims on the banks had been met. The variations observable in the returns are accounted for quite easily by the state of the country at the time. When the amount falls, it may be taken for granted that the country is passing through a period of exceptional suffering and trial, and that the .funds which have been patiently accumulated for times of need are thus made available when the necessity arises for it. The country was unusually prosperous, for example, in 1823-4, and an * See next page. tall:: oy -. ..vings bank business. 91 enormous surplus wus r turned. In 1825, as if to mark the coming storm, there is a heavy fall in deposits. In 1826, TABLE I. Showing the Amounts invested by Savings Banks with the National Debt Commissioners from 1817 to 1811, witli the Total Capital of all the Banks at the end of each year : — • Year euding 20th Nov. Total amount credited to Trus- tees, including Interest. Total Capital at the close of each year. £ £■ 1817 231,028 231,028 1818 1,533,812 1,697,853 1819 1,233,684 2,813,023 1820 807,825 3,469,910 1821 1,312,800 4,7.40,188 1822 1,849,264 6,546,690 1823 2,205,272 8,684,662 1824 3,149,151 11,720,629 1826 1,769,988 13,257,708 1826 1,131,659 13,135,218 1827 1,475,250 14,188,708 1828 1,734,374 15,358,504 1829 960,142 14,791,495 1830 1,056,584 14,860,] 88 1831 1,037,629 14,698,635 1832 1,099,368 14,416,885 1833 1,448,751 15,324,794 1831 1,575,016 16,386,035 1835 1,654,896 17,469,617 1836 2,006,588 18,934,591 1837 1,649,691 19,711,797 1838 2,200,663 21,446,341 1839 2,137,502 22,486,553 1840 1,949,126 23,549,716 1841 1,950,751 24,536,971 the tables were turned, not only in a figurative, but, so far 92 SAVINGS BANKS. as we are concerned, in a literal sense. The circumstance can be only too well explained. The Quarterly Revievj of that time gives a glowing account of the increased wealth of all classes, especially those of the trading community.* " The increased wealth of the middle classes is so obvious, that we can neither walk the fields, visit the shops, nor examine the workshops and storehouses, without being deeply impressed with the changes which a few years have produced. In the agricultural districts we do not, indeed, see such great strides, but we see universal advancement." Then we have the familiar record of the exportation of gold ; of the Bank of England and provincial banks deluging the country with notes.t Money became so abundant that a terrible rage for speculation set in ; joint-stock companies with unlimited liability were projected for every imaginable object. On the reorganization of the South American re- publics, which had just then been effected, all sorts of pro- posals for mines were started ; the El Dorado had to be found now, if ever.j In the session of 1825, 438 petitions * Quarterly Review, vol. xxxii. p. 189. + "Many a man in tliat year," (1825), saj-s Miss Martiueau, "set up for a banker who would, at another time, have as soon thought of setting up for a kiug." — History of the Thirty Years' Peace. Lord Liverpool complained afterwards of the system "which allowed any petty tradesman, any cobbler or cheesemonger, to usurji the royal prerogative, and issue money without check or control." + One prospectus of this date sets forth that, in the district proposed for a mine there was ' ' a vein of tin ore at its bottom, as pure and as solid as a tin flagon." Another, "Where lumps of pure gold, weighing from ten to fifty pounds, were lying totally neglected," the quantity of gold in the mine "being considerably more than was necessary for the suppl}' of the whole Avorld. " Mr. Canning, in reference to the companies projected, said soon afterwards, " They fixed the public gaze, and excited the public avidity so as to cover us, in the eyes of foreign nations, if not with disgrace, at least with ridicule. They sprang up after the dawn of the morning, and had passed THE FINANCIAL CKISIS OF 1826. 93 for private bills were presented, and 286 private acts were passed. The King, even, was so deceived by the general appearance of things, or was so purposely blind to their real state, as to congratulate the country, in July, 1825, on " the prosperity everywhere pervading the country." The time arrives when anxious speculators begin to look out for some return for their money ; they are told that their capital cannot possibly realize so soon ; then the bankers are besieged, but, tempted by the abundance of money, they had discounted bills at long dates to an enormous extent, and lent money upon securities which were presently seen to be almost worth- less. Then came the panic, — and then the crash. Commercial houses first failed, big, substantial firms, which were sup- posed to have the wealth of Crcesus at their back, came down thunderingly. " JVIany a firm of unimpeachable honour and unquestionable solvency was compelled to bend before the storm." Then came the turn of the great banks : they had advanced their money to tlie merchants, and now that the security had failed, they also must bend before the blast. On the 5th of December, the news spread with the wings of the wind, that the banking house of Sir Peter Cole and Co. had failed ; next day, Williams and Co. stopped payment ; and from that time, without intermission, seventy country banks went down within six weeks.* How things were restored to their original condition, and how promptly the Govern- ment acted during the terrible panic, we need not stay to tell. Savings Bank deposits fell from about three millions in 1825, away before the dews of the evening descended. They came over the land like a cloud ; they rose like bubbles of vapour towards the heavens, and destroyed by the puncture of a pin, they sank to the earth and were seen nore." Annual He/jister, 1826. 94 SAVINGS BANKS. to less than half that sum in 1826. More money was with- drawn in the year of the panic than had been withdrawn altogether since the year 1820. It is not a little curious, as showing that depositors in Savings Banks are less inclined to speculation than other classes, to point out, that during the panic a sum equal to at least fourteen millions sterling must have been safely lodged in the different provident banks of the country ; and that little money was hazarded in the speculations of the time is evident from the fact that only one-tenth part of the whole amount of deposits was with- drawn to supply emergencies. In this way were those people rewarded who preferred a safe deposit with a reasonable in- terest to " cent, per cent." and unlimited risk. Nor can we stop to describe the result of the panic on the industrial classes. The picture of that terrible time has often been drawn, when thousands of hungry, infuriated men, roused by the sorest distresses, went about robbing shops, breaking machinery, rick-burning, chased by the constabulary, and fired upon by the soldiery. The time was a most disastrous one, but it was full of lessons for all classes. Many of the provident poor suffered little, and never liad anything to fear, on account of having prepared themselves for such calamities. Those of the poor who acted less wisely, and ventured their little surplus in some speculation or other, met with few con- dolences. When a portion of them petitioned the House of Commons for relief, they were rather roughly told that they ought to have deposited their earnings in Savings Banks. It was on tliis occasion that Sir Kobert Peel replied to this taunting, and recognised the imperfections of the existing machinery, by asking, indignantly, how the House could expect this to be done in cases where " the Savings EESULT OF REDUCTION OF THE INTEREST. 95 Bank was perhaps twenty miJes from the working man's home." To return again to the table. In 1827 and 1828 the accounts show a much more healthy state of things, and it is clear that the deposits are steadily gaining their natural ascendancy over the withdrawals, when there is another re- hound, of a greater magnitude than ever; the withdrawals not only exceeded the deposits of 1829, but the deposits of 1830 added thereto. There can be no question that, primarily, the Savings Bank Act of 1828, which came into operation on the November of that year, and under which the amount of in- terest allowed on deposits was reduced by 14s. per cent, was the cause of this exceptional and most important change. Like all misfortunes of this nature, it had its bright side, and was far from being an unmixed evil. As we have already endeavoured to show, a large number of depositors up to this period belonged to classes much above the artizan class ; and as the former looked more to the interest given, wliile the industrious classes thought most of the security offered, it is no wonder and no calamity that the coimexion which the higher classes had formed with Savings Banks was now dis- solved. Henceforth, the returns may be looked upon as more than ever the result of habits of economy and thrift, and as representing the surplus money of the artizan and the lower portions of the middle classes. The year 1830 shows that confidence was slowly returning, when again there is a period of great depression. Two millions of capital is withdrawn in 1831-2, over and above the deposits of those years, to meet demands on the banks. The political agitation of those years sufficiently accounts for this state of things. It will require little to be said in order 9G RAVINGS BANKS;. to sliow that a time like that was likely to tell largely against such institutions as those under consideration. Tlie time was one of great anxiety among all classes, and amidst the uncertainties and anticipations which followed in rapid suc- cession, it would be only bold people, and those of more than average intelligence and power of mind, that could confide, without the smallest degree of wavering, in the stability of the country. We had a turbulent population at home, and amidst much agitation for their undoubted political rights, there were many clamouring for bread, many clamouring for work, and thousands for they knew not what : and France offered an illustration of what might possibly happen. With such manifest agitation everywhere, with funds falling, and the entire political sky lowering, there cannot be much wonder that many waited patiently for some issue before they trusted to resources other than their own. Not only were actual hardships endured during this great crisis in our his- tory, but the working classes brought hardships upon them- selves. Led by intemperate and impracticable men, many thousands of the more ignorant beguiled themselves into believing that the Eeform Bill would do everything for them, and they would need to do nothing ; that every man would be forced into independence and competence whether he would or no ; that taxes would be repealed ; and that in this new state of society there would no longer be any need of that spirit of striving which is at the bottom of all true schemes of social progress and advancement. This period over, many illusions were dispelled, many useful lessons learnt. Under somewhat fairer and happier auspices, society settled down into its old ruts again, only too thankful in many cases that the old ways were still open. After the year 1832, the INCKEASE OF BUSINESS BETWEEN 1825 AND 1840. '.I? progress of Savings Banks continued to be eminently satis- factory. There was a transitory cloud in 1837, and another in 1839, caused by excei^tionally hard times, such as a bad harvest and scarcity of food, and distress in the manufac- turing districts caused by unusual reverses in trade, when again the funds laid by came opportunely in aid ; but, with these exceptions, the Eeturns furnish no further grounds for remark. We will therefore proceed to give a small table, which, without giving the details of each year, shows in a clear light the progress made by the banks at the expiration of three quinquennial periods. TABLE 2. From 1825 to 1840. Year ended. Number of Depositors. Total Amount of Deposits from 1S17. I lucrease. Depositors. Deposits. 20 Nov. 1825 20 Nov. 1830 20 Nov. 1835 20 Nov. 1840 358,160 430,166 587,488 824,162 £ 13,769,988 15,739,907 17,705,228 22,915,940 72,096 157,322 236,674 ' 1,969,919 1,965,321 5,200,712 Taking the year 1841, on account of the facilities for cal- culation afforded by the census of that year, we find that up to the 20th of November, 184:1, the total number of Savings Banks in the United Kingdom was 55.3, of which 428 were in England, 23 in Wales, 76 in Ireland, and 28 in Scotland. The smallness of the number of Scotch banks is accounted for by the popular character of the private banks, and tlie fact that until within six years of the period we liave reached, or 98 SAVINGS BANKS. 1835, none of tlie acts relating to Savings Banks had any reference to Scotland. The average amount of each deposit in 1841 was — in England about 30^. ; in Ireland 29/.; and in Scotland 121. The total number of depositors in England as compared with the population of 1841, was one to every 22 inhabitants, in Wales 1 in 58, in Scotland 1 in 52, and in Ireland 1 in lU?). One of the most positive proofs of the increase in the provident habits of the people between 1828 and 1844 is to be found in the increase of the number of small depositors. In 1828 the number of depositors in Savings Banks who had not subscribed more than 20/. was 203,604. In 1844 they had increased to 564,642, or nearly three times the number.* The amount of the deposits in the first instance was 1,473,389/. ; in 1844 it reached 3,654,799/. One writer, overlooking the fact that the increase here spoken of was a gradual one year by year, has endeavoured to trace the effect of the decrease in the amount of large deposits and the increase of the number of small ones to the operations of the Act for the Amendment of the Poor Law in 1834. There can be no question that this act supplied motives for economy, and operated in increasing the number of provident people ; but in view of the fact that the increase in the number of depositors between 1833 and 1834 was exactly in proportion to the increase between 1834 and 1835 or 1835 and 1836, it is quite as proper, and we submit more so, to speak of Savings Banks operating beneficially upon the Poor Law, r.s that the Poor Law Amendment Act increased in this way the efficiency of Savings Banks .f * Progress of Savings Banls. A series of tabular views, 1829 to 1841, by Mr. J. Tidcl Pratt. Loiidou. 1845. t Companion to the Almanac, 1839, p. 131. INCREASE OF PROVIDENT HABITS. 99 What assistance these Savings Banks must have rendered during the crises through which the people passed between 1S17 and 1841 may be judged by the use made of them. But we think we see more in Savings Banks than that they enabled many in times of hardship by a wise foresight to escape much that others suffered. We see in the progress of these banks un- doubted evidence of the increasing prosperity of the country, in relation at any rate to the poorer classes ; and they were among the direct agents in creating that prosperity. Savings Banks created and then fostered habits of economy and frugality, and every man won over to the pursuit and practice of these habits increased the sum of the prosperity manifest during the period we are considering. Perhaps we can make the position we here take up more clear from the following table,* carefully compiled from the best sources of informa- tion on such subjects, and which we think is calculated to show the good influence of Savings Banks in a somewhat new and strikincr Ho-ht. In every county, as may be seen from this table, there is a decided increase in the number and amount of Savings Banks deposits between the two periods ; and in every instance, except two, there is a decided decrease in the amount spent on the relief of the poor. Not only so, but taking the two exceptional cases, we find that in the one case, a small county, there had not up to this time been any Savings Bank established ; and in the other instance, that of the large and populous county of Lancaster, — which shows an increase instead of a diminution on the two years in the amount of poor relief, — it is not less curious that its industrial population have never patronised the Savings Banks to the same extent, in proportion to tlieir * See next page. 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'i; a rii <-> >, I-H C3 CI CJ bU ^ a rn w OJ n d) <-.> fcO 3 •rH 4J a !-> I-H ri2 CO 0) +J ;=3 03 O) r/1 CO ii t> hn rrt +2 h-J > ^ O) 01 O t> r/^ O bC ^I-H PL, , CLi l» 102 SAVINGS BANKS. number and earnings, as the same classes have done in the country generally. Further, the three counties of Kent, Middlesex, and Norfolk, which in 1841 had the greatest number of depositors in Savings Banks in proportion to their population, also exhibit the pleasing fact of the greatest dimi- nution in the amount spent in the relief of the poor. It may be said that many considerations ought to enter into such cal- culations as those we are making, and that at best such statistics only prove that the same causes, such as abimdance of work, good harvests, &c., will contribute to the increase of surplus funds, and the decrease in measures of relief. But it must be borne in mind that prosperous trade does not neces- sarily produce frugal people and provident habits, though it often enough leads to unnecessary and A'icious expenditure. By far the greater part of the decrease in the sums given for relief is unquestionably owing to the operations of the Poor Law Amendment Bill already referred to, which Lord Althorp carried through Parliament. Truly stigmatized before his time as " the great political gangrene of England," the old Poor Laws of tliis country first made paupers, and then promptly maintained them. It i^;, however, the relative proportion in which the increase of Savings Bank deposits stood to the decrease of the sums for relief that we wish here to impress upon the reader, lea^dng him to form his own conclusions. And witli all respect to those who framed the measure of 1834, which was very beneficial to tlie country and only just to the independent poor, we think the results have been rather too much magnified. From the year 1820 we can plainly trace a manifest improvement in the condition of the poor, and we have not scrupled to ask for a place for the Saving Bank system among those important agencies which GENERAL PROGRESS OF THE COUNTRY. 103 have led to this improvement. Still, taking tlie measures of Poor Law relief as a good criterion of their condition, we find that the sum total paid for the ten years between 1811 and 1821 was 68,000,000/., giving a yearly average of 6,800,000/. In the ten years ending 1832, the amount of poor rates was 62,900,000/., or a yearly average of about 6,200,000/. Thus we have, in spite of what was considered the iniquitous system of relief, and in spite of an increase of population amounting to 16 per cent., a clear reduction of 5,000,000/. within ten years. The advancement is still more clear, if we take the case of the large centres of popvilation, but this is perhaps, un- necessary. The Eeturns, however, of the Eegistrar General may be supplemented by Eevenue Eeturns for the same period, from which the improvement in the condition of the industrial classes may be made still more palpable. In 1814 the con- sumption of tobacco was 15,000,000 lbs. ; in 1832 it had in- creased to 20,000,000 lbs., an augmentation of 31 per cent., while the population only showed an increase of 24 per cent, during the same interval. The amount expended upon articles which, like tobacco and intoxicating drinks, are not, to say the least, of the first necessity, forms no incorrect measure of the progress of the nation, and of the ability of the people to bear the national burdens which must be imposed. In 1814 the consumx^tion of sugar was 1,997,000 lbs ; in 1832 it amounted to 3,655,000 lbs., an increase of 83 per cent, to be set against the above rate of increase in the population. The tea consumed in 1814 was 19,224,000 lbs. ; in 1832 it had increased to 31,568,000 lbs., or an increase of 65 per cent. ; and coffee increased from 6,324,000 in 1814 to 22,952,000 lbs. or an increase of 183 per cent., in 1832. The increased con- 104 SAVINGS BANKS. sumption of such articles, (not forgetting reductions in price,) was an evidence of nothing, if not of the growing prosperity of the people. Such items show that the people, as a mass, enjoyed a greater command over the comforts of life than formerly. The rich man, of course, added little or nothing to his ordinary consumption of the articles that were necessary to his comfort or convenience, hut with the poor it was very different. Por example, the amount of silk imported during the period of which we have spoken varied hut little, while the imports on the article of cotton wool, the staple fihre of the masses, increased from 152,000,000 Ihs. in 1820 to 259,000,000 lbs. in 1832, or an increase of 70 per cent.* Enough has been said, we hope, to show the gradual pro- gress made in these years in all that relates to the social advancement and well-being of the people, and to what extent Savings Banks played a part on that advancement. Because these institutions have been proved to create frugal habits — in much the same way that the sujjply of intoxicating drinks creates in many cases a demand for them — as well as to give them direction and encouragement, we have endeavoured to ];>rove tlieir right to a foremost place among the many other mighty engines of civilization which have made Great Britain what it is. And now we must conclude this chapter with a less pleasant task, and refer briefly, at present, to two foes to Savings Banks, one without and one within, both of which had a very powerful effect as hindrances on the progress of these useful institutions. We refer to the doubts which began ■" Tliu mortality at the eomiueiiccment of the present century was 1 iu 4i' ; ill 1S31 it was 1 in 58 ; and in 1841, 1 in 62 ; showing conclusively that the masses oi' tlic ]icr)))](' wrvc licttcr liouseil, hettcr clad, and, licst of all, hctter ted. HINDRANCES TO THE TROGRESS OF SAVINGS BANKS. 105 to be cast on the utility of Savings Banks by portions of the public press, and the serious frauds which now for the first time began to engage public attention. In 1844, when ]Mr. Goulburn's bill was under discussion and subsequently to that, several newspapers began to dispute that Savings Banks were either so useful or so wise as had been generally thought up to that period. The Times newspaper, with an hostility which Dr. Chalmers characterized as " most glaring " and " likely to mislead every artizan from the path of his ti'ue interests," laughed at and ridiculed the system long after it had proved its usefulness in numerous ways. That paper, which opposed the new Poor Law of 1834 with great bitter- ness, and had treated with manifest injustice other schemes for the social amelioration of the poor, devoted several editorial articles in 1844 to throw discredit on the institution of Savings Banks. The articles in c^uestion were calculated to work a nnschievous practical influence on many readers, especially on those who gave little attention to the subject of political economy ; they were meant to create a spirit of opposition to Savings Banks, but in many cases they must have had the opposite effect and failed to convince all who were not equally perverse. To show the kind of argument indulged in by the leading journal at a time when it was equally as now the greatest newspaper poA^'er in the land, when its rebuke or praise had a weighty effect on any important measure, and when Cabinet Councils debated whether it should be propi- tiated or defied,* we need only give the following extracts : — " A labourer sixty years of age has, by hook or crook, saved 500?. "We know such a case. The 500?. is the plague of his life. It would be a mercy to swindle hiui out of it, except that he would probably feel a good deal at the ' Miss Martineau's History nf the Thirty Years' Peace, vol. ii. p. 88. 106 SAVINGS BANKS. loss. Could lie forget il, he would be both a happier and better man. To begin ^dth, it is a guilty possession. His father is maintained by a distant Union ; his sons and daughters are all but forbidden his cottage. He invests it in secret. . . . "When he dies his children will sfj^uander it, not in dis- sipation, but in the mere feebleness and incontinence of ingrained poverty. " Another extract striking at the root of all habits of jDrovidence and thrift : — *' WTien a labourer has saved 50^. or 100?. then the greatest difficulty comes : what is he to do with his monej' ? He has caught a tartar. His usual course is a very natural one, because it is the first course that offers — to open a public house. He does so, and 'generally and happily loses his money. A labourer with 200?. in his pocket has a very fair prospect of the union workhouse before hini. He is not commercial enough to open a shop, and small fanns are obsolete. He may, to be sure, shut his doors against all his kith and kin, and buy a selfish annuity v-ith the sum, which will just keep him while he rots and dies. But will he, and who is to advise him to do so ? " Granted that things are very different now to what they were when these remarks were penned, and that investments of any sort may now he made with comparative ease, it seems to us that the argument of the Times was based throughout on false assumptions ; that it is a mistake to suppose that the primary or sole object of Savings Banks was to build up capitals for investiture in business or trade, and not for ex- penditure on the necessaries or comforts of life ; nor to make every labourer a capitalist, in the usual acceptation of that term, but to enable him to end his days in some sort of inde- pendence, and in some degree of peace and comfort. Savings Banks at their establishment were, always have been, and still are, meant for accumulations, not to be traded with, — though, of course, there is no prohibition, — but always have had and still have a homelier aim. They are meant to in- culcate the habit of laying by for an evil day, for old age, the winter of life, or as Dr. Chalmers, we believe, strikingly puts it, " for tliose mishaps and sicknesses which might be termed THE ''times" on savings BANKS. 107 its days of foul weather." In such case the money Avill not be traded with, but in right season spent. The answers to some of the arguments of the Times are indeed so obvious that it seems superfluous even to state them. Money in hand is all the world over better than beggary. That the inculca- tion of such a principle will tend to fill our towns with paupers is monstrous absurdity. The object and design of Savings Banks are, of course, primarily, to seek to get hold of the surplusage of money in the hands of the poorer classes, to rescue it from A^icious or unnecessary expenditure at the best seasons, in order to its forming a reserve for needful sub- sistence or additional comfort at another period. " A domestic servant," says another article of the Times*' "at the age of fifty-five or sixty, finds she is incapable of further employment. She has saved 80/. Very creditable to her, of course, and very stingy she must have been to her nephews and nieces to have done so much. But what is she to do with her 80/.? . . . Across the Channel such a sum would be a mine of agricultural wealth. On this side the CLannel it would be a snowball in the sun." This is, by the way, an extreme and unfortunate case, and one we would hope not often, in all the particulars, occurring. But were it frequent, surely 80/. in hand is better than nothing and an immediate resort to the parish. To say that the 80/. would always remain 80/. and would not melt away like snow before the sun, ^^'ould be ridiculous ; but if there be any virtue in self-reliance, and in self-dependence, it surely would not be ridiculous to say that that which enabled a woman to minister to her own wants in a greater or less de- gree, and in the same degree to rescue herself from becoming a burden upon other people, was, so far as it went, a solace Tillies, Sc|itr'ii|]ipr, 1^44. "^•^ 108 . SAVINGS BANKS. and a blessing to her. Once, and only once more, the Times declared that " investing money in Sa\dngs Banks was mere hoarding," nothing more than the creating of misers. " It is most melauclioly to notice the few helps and encouragements to thrift and husbandly which cm- ju'esent condition allows the labourer. We tell him to save. We put it as the most indispensable moral duty ; the great commandment of our law. We build prisons (sic) for those whom age or calamity have proved transgressors against it ; yet, having laid tliis heavy burden upon the" labourer, where is the 'little finger' of help contributed by society. AVe refer him to the Savings Banks and to Friendly Societies, i. e. we tell him to hoard his money, or to secure an annuity, on the chance of old age. There caunot be two modes of investment less interesting, less social, less suited to the condition of the mind of a labourer. Where it is practised, we can only say that it is an act of faith and prudence so diy, so pure, so transcendental, as to be above humanity, especially that very form of humanity found in the English agiicultiu-al laboiu'er. " '&'^ Here we think both arguments and facts are at fault. There can be no question that at this time there were many almost insuperable obstacles to the profitable investment of *0 small sums. These obstacles, caused by the state of society and the tendency of legislation, especially on the distribution of land, have since been removed, and no longer influence the case. Why, however, the best should not be made of existing means is at least a fair question ? People must save money — hoard it, if the term be liked better — before it can be used. It may be uninteresting and unsocial to save money instead of spending it, but people must do either the one thing or the other ; and if they do the former, they at least know the value of a secure place of deposit where their money shall lie in safe and remunerative custody till it be needed. Then as to the facts. " The acts of faith and prudence," " so dry, so transcendental, &c.," were at that time, as at present, more frequent where the agricultural labourer is in strongest force than in almost any other part of the kingdom. In Dorset- SAVINGS BANKS IN RURAL DISTRICTS. 109 shire — " poverty-stricken Dorsetshire," as it is called by the Times itself— the Savings Banks return for 1843 averaged more than 21. a-head for the entire population, while in Lan- cashire, with its highly-paid manufacturing population, it only averaged 1/. Nor is this a solitary instance. The rural population throughout the country are by no means the least frequent visitors to Savings Banks.* Far more important, however, in their disastrous results than those attacks from without, were the blows levelled at * To make tliis statement more clear, we append a later Return, wMcli, on other gi-ounds, is interesting, as shomug wliicli classes of the community resort most frequently to Savings Banks. It sjieaks volumes as to the culpability of the higher paid English operative, that the agricultural labourer, with ten or twelve shillings a week, contrives to save more, relatively, than he does. Counties. Number of Accounts open in 1858. No. of De- positore to every 100 of Population. Average De- posits per liead of Popu- lation, 1858. AgEI CULTURAL : — Berkshire Devonshu'e Dorsetshire Yorkshire, East Riding . Manufacturing :— Lancashire Yorkshire, West Riding . 16,393 61,558 14,134 25,091 117,927 63,334 9-64 10-33 7-67 11-35 5-80 4-77 £ s. d. 2 12 7 2 18 11 2 12 2 3 6 1 1 12 4 1 5 6 Something of this result can of course be traced to the varying facilities, such as the number of banks, which were not always established in the most populous localities. no SAVINGS BANKS. Savings Banks from within. There were now developed inside these institutions seeds of much mischief, which materially retarded the growth of Savings Banks in subsequent years, if not of the habits which the promoters of Savings Banks sought to engender and foster. The subject of Savings Bank frauds will belong to a subsequent chapter ; but as one or two cases occurred during the time treated of here, and had their influence on subsequent legislation, we have considered it advisable to dispose of them before proceeding to describe the legislation of the last twenty years. It was seen from the commencement of Savings Bank operations that the first and most imperative element should be complete and unquestionable security. When Government undertook to legislate for Savings Banks it did so with a view to their protection from those frauds which must necessarily overtake some of a great number of semi-private under- takings. In 1817 the Banks were rapidly increasing in number and importance, and it was only natural to suppose and assume that abuses would creep into the management. To meet the probabihty of a misapplication of the funds, Govern- ment agreed to take all the money deposited with the trustees of Savings Banks, and to guarantee a certain fixed rate of interest for it, even above that which the fund directly ob- tained for itself This was at once an encouragement to the frugal and a perfect security for such sums as were paid to the National Debt Commissioners. In the interval, however, between the payment of the sums by the depositors and the second payment by the trustees, no safeguard was provided beyond the vigilance of the same voluntary and unpaid trustees. Those trustees were completely irresponsible after the year 1828. Before that time we can only assume their LIABILITY OF TRUSTEES. Ill responsibility, not from the ordinary reading of the enactment, but from a decision which was given in a court of law. That decision was to the effect " that deposits are made by persons, not on the faith of the person acting as cashier or actuary, but upon the faith of the gentlemen who act as trustees . . . If, therefore, the clerk or other person employed by them (the trustees) is guilty of peculation, they are themselves liable for any defalcation which may ensue." Whether this decision was right in law or not matters little now, inasmuch as the Act of 1828 released the trustees from any such obligation entirely, declaring as it did that " no trustee or manager should be personally liable, except for his own acts or deeds, or for anything done by him ; " and even this was again limited " to cases where he should be guilty of wilful neglect or default." The valueless character of the safeguards granted to those who of all classes most needed ample security for that for which they had pinched and economized soon began to be seen. Having limited the period of our survey in this chapter to the year 1844, we cannot here introduce the case of the great frauds in Savings Banks which created such painful sensations all over the country as one by one the most monstrous iniqui- ties practised on the most deserving of the poor came to light. Our only reference here will therefore be to one such case in Ireland, and the first instance of the land in England. The case of the Cuffe Street Bank in Dublin, which, so far as we can find, was the first serious defalcation committed on Savings Banks made public, was also one of the most inge- nious instances of an accumulation of frauds on record. The other case occurred in connexion with the Hertford Savings Bank in 1835. The Dublin fraud brouoht to lidit earlier O O than this date deserves the first place, not only on this ground, 112 SAVINGS BANKS. but because it was greater in extent and deeper in villany. No one can read of the numerous cases of fraud which liave occurred at different times in connexion with the Irish Savings Banks without feelings of deep indignation. Tlie influence, it is quite clear, is felt in Ireland to this day. The Irish people are quite an exceptional people, with whom fore- thought and self-control are not indigenous. One of the most important organs of public opinion in Ireland, in alluding to such topics, has said that " nothing can be expected from the Irish peasant until he learns to restrain his irregular im- pulses — impulses often generous, but too often impetuous and ill-directed — until he learns to make the gratifications of the present yield to considerations for the future." For many years the Irish poor were left to themselves, and the result was shown in their reckless and determined improvidence. The institution of Savings Banks is described as having come to the Irish industrial population like a ray of hope. Great improvement took place. The Irish labourer has never been worth so much as the English one, — the wages of many at the period of which we are speaking being generally sixpence, and scarcely ever more than a shilling a day, — and yet it can be proved that this very class had managed to contribute to the Savings Banks in Ireland, up to the year 1841, no less a sum than 2,000,000^. out of the total of 2,800,000^. then remaining in Irish Banks. It is impossible for pen to describe the result of a bank failure, occasioned by the worst possible circumstances of fraud, upon such classes as these. The actual failures spread dismay over the entire country. The loss they sustained was their ruin ; for, so wronged, scores of them were thrown back despairing on their former reckless- ness, and referred to their treatment as full excuse for any THE CUFFE STREET SAVINGS BANK. 113 amount of subsequent improvidence. And men will hesitate before they blame them. The Cuffe Street Savings Bank at DubKn was originally established in 1818 as the St. Peter's Parish Savings Bank. It was started by several of the most influential gentlemen in Dublin, who formed themselves into trustees and managers. The then Archbishop of Dublin, Archdeacon Torrens, Judge Johnson, and Serjeant (afterwards Lord Chief Justice) Lefroy being among the most prominent. On the strength of the \vell-known character and wealth of the trustees, this bank from its commencement did a very large business ; so much so, that it was calculated to have received in deposits in one year (1831, when the bank was at its best,) no less than 100,0007. The bank began on an unpretending scale enough, to judge by the appointment and pay of its only salaried official.* This person was a Mr. Dimn, who combined in 1818 the functions of sexton to the parish with wdiich the bank was immediately associated, with that of actuary of the bank, at a salary of five pounds a-year. The rector of the parish was security for Dunn ; but all such considerations troubled the trustees but little. On the strength of this person's religious character, for " he was a very correct man,'' t be soon became factotum. Almost from the first a boy of the name of Ballance, whom Dunn had taken from a charity school, was his book-keeper. This lad was also a kind of general servant of Dunn's, living with him in his house, and soon became his * Vide Report of the Select Committee appointed to Inquire info and Report ttpon the circumstances connected with the failure of the Cuffe Street Savings Bank, 1849, from which our account is derived. + "I am certain," said a reverend witness, "that he was a very correct man until the temptation of such an enormous quantity and overflow o money got into his hands." — Report (36). I 114 SAVINGS BANKS. perfect tool. Witlioiit making him his confidant — for the actuary was too cunning, as it seems, for tliat — he used him exactly as if he had been one. For eight years Dunn managed solely the affairs of the bank, giving the most perfect satis- faction to every one, depositors as well as trustees. In 1826, however, a Mr. Lannigan, a barrister, comes prominently upon the scene. This gentleman was a trustee, and seems to have been dissatisfied with being one merely in name. Mr. Lan- nigan began, therefore, a little " meddling," and from the way his interference was received, this trustee, shrewder than the rest, began to suspect something not quite right. He then looked narrowly into the system of keeping accounts, and was not long in finding sufficient to awaken the strongest sus- picions of Dunn's malpractices. Dunn, however, had not been asleep all this time. He not only with great ingenuity kept his accounts as square as possible, but operated upon the credulity of the other working trustees, and succeeded in getting a party among the number to form a wall round him. On Mr. Lannigan mentioning his suspicions to his brother trustees, Dunn's machinations stood him in good stead: they would not hear anything to the prejudice of this " very correct man." Mr. Lannigan repeated his attempts with the same effect ; was considered a suspicious and troublesome fellow, and got no little abuse for his pains.* For five years it is said this unseemly contest went on, and although this * One of the questions asked, by the Chairman of the Committee just quoted from, of Mr. Fox, curate of St. Peter's, Dublin, was (32) : " Do I understand you to say, that Mr. Lannigan communicated his suspicions regarding Mr. Dunn to the Board of Trustees?" "Yes," answered the reverend gentleman, " and we used to have extrerncly u-arm contests there on that account, because he was not a man very capable of explaining his meaning." DISCOVERY OF THE FRAUDS. 115 trustee succeeded so far as to get more than one sub-com- mittee appointed, nothing came of it : the committee were too prejudiced in favour of their servant to go the right way to work in investigatmg the matter, or they were too easily blindfolded by him to find anything out. Mr. Launigan, however, persevered in his opposition, and was rewarded by Dunn's retiring, amidst the condolences of the whole parish, which evidently thought him a very ill-used man. Soon the tables turned ; and grief of this cheap sort gave place to bitter indignation. Immediately after the man had resigned a depositor applied for some money, when, on comparing his pass-book with the ledger, the account was found to be open in the former and closed in the latter. Hereupon the ci-devant parish sexton absconded. With eyes at length wide open, the trustees called for the books of other depositors, and without as yet making any noise, soon found that Dunn had appro- priated 6,000/. to his own use. The trustees then communi- cated with the National Debt Commissioners, and asked their advice in the emergency, suggesting that some one should be sent over to inquire into the circumstances of the bank, and to close it, if it were found necessary to do so. Mr. Foot, one of the trustees, a Director of the Bank of Ireland, who had been one of Dunn's strongest friends, and who was now one of the most anxious that the position of the bank should be retrieved, took the communication to London, and succeeded in securing the services of ]\Ir. Tidd Pratt. That gentleman W'Cnt to Dublin, however, not to investigate the case, but simply to make awards, stating how far and in what cases the trustees were liable to pay the depositors. He adj\ulged in 208 cases, and to the amount of 11,864/. Of this sum 7,500/. were to be paid by the trustees out of the funds remaining in 1 2 116 SAVINGS BANKS. the bank, while the rest claimed up to that time did uot con- sist of legal claims, as the money had been paid to Dunn out of office hours, at his private residence, and even in the street. Mr. Pratt found out in making his awards that almost every legislative enactment relating to Savings Banks had here been systematically violated ; that the bank itself had rules founded upon the Act, but that they had all been evaded. Depositors had placed as much as 200/. in the bank in one year, and had received interest upon all they had deposited ; the same individuals were also found to have had two different accounts in the bank. In all cases of this kind where a deficiency existed Mr. Pratt ruled that the depositors could not legally recover, but he recommended in his private capacity, that if the bank were carried on, such sums might be paid out of the accruing yearly profits. Mr. Pratt is said to liave recommended in the same way that the bank might go on under a fresh management, and seems to have appointed another set of trustees for the purpose ; at the same time informing them that the National Debt Commissioners would receive untlwut remark the yearly statements as usual, thougli those statements must of necessity for some time to come exhibit an increase of liabilities over assets. The bank was carried on, and against Mr. Pratt's advice the whole of the claims were at once met, "with a view," as the trustees said, "to induce a more perfect confidence." In 1845, the Govern- ment observing that year by year the bank was getting into a worse financial position,* made an attempt to close it ; but on the case being submitted to the Attorney and Solicitor General, they found they could not do so unless the Annual * The whole of Dunn's defalcations, -vvliich were found ultimately to amount to about 40.0002. were not found out till this year. CLOSING OF THE CUFFE STREET BANK. 117 Eeturns were not sent. Tlie Eeturns, wortliless as they were, had been regularly sent, niid thus the Executive was power- less. After another crisis at this period, the bank finally went down in 1848, the liabilities amounting to the sum of 56,000^. and about 90/. to meet it. The numlier of depositors who had accounts with the bank at the time was 1,900, nine- tenths of whom were poor people. In a debate which oc- curred in the House of Commons immediately after this failure, Mr. Reynolds, the member for Dublin, commented in strong terms on the conduct of the National Debt Com- missioners, who had known the state the bank was in for fifteen years, and had never zealously interfered* This member also stated his intention to move for a Select Com- mittee to investigate the whole question. -The Chancellor of the Exchequer said he saw no objection to such a committee, and it was subsequently appointed. The proceedings of that committee, and the assistance which was given to the defrauded depositors after much deliate, will be referred to in their proper place in the next chapter. The results of this fraud in Dublin and the neighbour- hood was most disastrous ; not only so, but years after- wards, in remote parts of England as well as Ireland, this case of fraud was referred to with considerable bitterness, and urged as an excuse for prodigality and recklessness. There was at the time a still more important Savings Bank, * Great attempts were made to show, at this time, that the Government had grievously neglected its duties, and that the Arbitrator had exceeded his. From the anomalous and unsatisfactoiy state of the law, which occasionally placed the Commissioners and the Certifying Banister in embarrassing positions, a colour was often lent to these allegations. It is very clear that flagrant mistakes were palmed upon the National Debt Office, and never found out, and not less certain that, at this early period, Mr. Pratt was often hampered by uncertain and incomplete powers. 118 SAVINGS BANKS. with several branches, in Dublin ; and so great was the effect of the fraud, that nearly all the money deposited in this bank was withdrawn within four weeks, and it was a considerable period before it recovered its position. The depositors in the Cuffe Street bank were of the poorest classes, and the effect upon them when they found they had been robbed of all they had is described as painful in the extreme. " Dealing with the case, and the details of it," said one influential gentleman, " I have never seen anything more calculated to excite painful feelings than this was ; some of the depositors were on the very verge of wretchedness and destitution, without a shilling to support them." According to another excellent authority * some died of want and distress, and many of them had to seek the shelter of the workhouse. Before the case came on for discussion in Parliament, several petitions were presented to the House of Commons, praying for help, and setting the pitiable situation in which the frauds had placed many of the depositors before the public ; and one, signed by 5,076 citizens of Dublin, with the Protestant and Catholic Archbishops of Dublin heading the names, bore out in full the facts to which we have just alluded. ijl The fraud in connexion with the Hertford Savings Bank was one of the earliest cases that occurred in England, the particulars of which have been made known. This bank, as will be remembered, was one of the first formed in this country. Like many more of the original banks, this one was conducted on the principle of making it a Head office for the surrounding district, with branch banks radiating from it as from a centre. Clergymen, as has already been stated, * Dr. Haiicorlc, in a pamphlet entitled, Duties of the Puhlic loith respect to Charitable Savru'js Bccnks. Dublin, 1856. THE HEETFOED BANK FEAUD. 119 almost exclusively acted as the Agents for these branch banks. The Rev. Mr. Small, a clergyman at St. Albans, acted in this capacity in that town, and in the course of a connexion with this bank, extending over a period of several years, contrived to embezzle the money entrusted to him to the extent of 24,000/. This he did in two different ways. In the one case, he received deposits and did not remit them ; and in the other, acting with due clerical discretion, he applied to the Head bank for sums in the names of depositors for which he had not received their warrants. The systematic frauds of this reverend gentleman were found out when the St. Albans Bank was detached from the parent stock under the erroneous impression that it was strong enough to com- mence business on its own account. It appears that in this way the trustees of the principal bank were only liable for half the amount of the defalcations ; but it ought to be placed on honourable record, that eventually, through the liberality of the trustees, who, fortunately, were principally rich noble- men, the poor depositors were reimbursed of their losses in full. We have gathered the above facts from statements made in the House of Lords in 1835, and as the question of the liability of trustees and the security of deposits was then largely introduced, it may be interesting to follow up the story with a few remarks to which the case gave rise. The Marquis of Salisbury, one of the trustees, asked the premier, Lord Melbourne, if the law, as it then stood, could not be altered. The liability of trustees, inculpating, as it might, innocent men, rendered many gentlemen most anxious to withdraw their names from such offices. This was one horn of the dilemma. The other was, how de- positors could be made to feel secure. " It was no trifling 120 SAVINGS BANKS. matter. When Savings Banks were first formed, but few individuals could ever have expected tliat the sums sub- scribed would amount to what they now were."* It was high time that the security of these savings, and as to who was liable for them, should be once for all distinctly settled. Lord Salisbury was sure no one would like to remain a trustee without knowing the amount of his liability. He then appealed to Viscount Melbourne — who with himself was a trustee of the Hertfordshire Bank, and would have to pay a share of the loss — whether he would not have a bill brought in to remedy the grievance. Lord Melbourne thought it was not necessary. Much as he lamented, for his own sake and that of the country, what had occurred down in Hertfordshire, he did not think that in consequence of this one misfortune they should interfere with the general business of the Savings Banks in the country. Let them look sharper after the management, and then such things would not occur. Lord Brougham believed there had been great carelessness in the case of this particular bank, "but was happy to find that the trustees were such undoubtedly solvent men." Lord Salisbury and the Duke of Eichmond were certain, if nothing had to be done, that many trustees would at once withdraw their names, " and then," said the latter, " the body of depositors would withdraw their money." Lord Denman reminded his noble friends that, if the trustees acted so, their responsibility would, in all probability, follow them into their retirement, — " he was by no means sure that their withdrawal would put an end to their responsibility." The Earl of Wicklow hoped that nothing would be said or done which would destroy the confidence of the public in About sixteen millions steiling. BEFOKE THE HOUSE OF LOEDS. 121 Savings Banks. He trusted that, in this instance, " the trustees would be found lialjle for the whole of the de- ficiency." Lord Salisbury thanked the noble Earl for his kind wish, but explained how it was not possible that this could occur. An alteration in the law was eventually made, but ihe consideration of this change we leave till the next chapter. 122 SAVINGS BANKS. CHAPTER V. LEGISLATION ON SAVINGS BANKS FEOM 1844 TO THE PKESENT TIRIE. "If there is any question why such importance should be ascribed to measures of a purely economic character, the reply is, that these minor matters insensibly build up the character of the nation ; insignificant, it may be in themselves, they mark, in the aggregate, the well-being or the suffering of the British people." — British Quarterly Revieiv. It will be remembered that in the third chapter we de- scribed the course of Parliamentary action with regard to Savings Banks down to the year 1844, and in that chapter left Mr. Hume, after an unsuccessful attempt to reduce still further the rate of interest to be given to depositors. The year 1844 is remarkable in the annals of Savings Banks for the carrying of a measure known as Mr. Goulburn's Act. The bill which was introduced by that gentleman, who was Chancellor of the Exchequer in Sir Eobert Peel's adminis- tration, was meant in great part to provide against the con- stantly recurring frauds in Savings Banks, and still more especially to allay the consternation among trustees of safe banks, who now loudly complained of the state of the law with respect to their liability. The discussion in the House of Lords to which we alluded at the close of the last chapter may be taken as showing that Savings Bank trustees were by no means satisfied, several years before this, with the un- certain state of the law. The great fraud on the Dublin ME. goulbukn's act OF 1844. 123 Bank is described as having come upon many trustees like a tkuuderbolt, and, aware that they were not spared by the judicial bench* in cases of the kind, they now threatened open rebellion. j\Ir. Goulburn received, as he stated sub- sequently before a Committee of the House of Commons, a large number of notices from such officers that, if tlie law were not modified, they would resign their trusts. Moved by such considerations as these, which the Government seem to have felt they could only disregard at the imminent risk of shaking the credit of the entire Savings Bank system, Mr. Goulburn introduced his Itill (7 & 8 Victoria, chap. 83,) on the 2d of May, 1844, to amend the laws relating to Savings Banks. t Tlie principal matter with which the bill dealt M'as the liability of trustees, but this was by no means the only one. Second only in importance was the proposal to again re- duce the rate of interest. Tlie remarks -vdth M'liich he in- * In a case that arose out of the Carnarvon Bank fraud of 1824, in the Court of Bankruptcy, both the Commissioners, Sir John Cross and Sir George Rose, expressed very strong opinions on the point as against trustees. The fonner judge, after giving a decision against the trustees in the case, said, "The case coidd not be made too public," and he " ti'usted that it would operate as a warning to the trustees of Savings Banks generally." Sir George Kose "fully conciUTed" in the observations of his colleague. He thought " it should be borne in mind that deposits were made by parties, not on the faith of the persons acting as actuary or cashier, but upon the faith of the gentlemen who acted as trustees ; where such persons neglected the duties which Avere incumbent upon them, then- conduct was deeply deserving of censure. If, therefore, the clerk, or other person employed by them, were guilty of peculation, they were themselves liable for any defalcation tha might ensue." t Speaking of Mr. Goulbui-n, when he first took office, a contemporary said, " He possesses that degree of talent which renders him highly respect- able without exciting any invidious feeling. He is content to be useful with- out aspiring to the reputation of an innovator ; and, if he shall introduce nothing new, he will at least abstain from anything that is dangerous." Mr. Goulburu's legislation for Savings Banks scarcely bears out this estimate. 124 SAVINGS BANKS. troduced his proposal to reduce the interest rate are curious, to say the least, when viewed in tlie light of the sjDeech to which we have previously referred. He felt confident, he said, that the country had no right to pay upon these in- vestments a higher rate of interest than could be obtained from an investment in other securities. The Savings Banks rate was considerably higher than any other investment of money. Although the Act of 1828 had tended to reduce materially the number of depositors of the better classes, and had increased — as we have shown in the last chapter, we think quite con- clusively, so far as figures can show it — in a still greater proportion the number of those who had deposited only small amounts, there were still many who were attracted to Savings Banks on account of the interest given being higher than that obtained from the Funds. Mr. Goulburn now proposed that the bill should contain a clause reducinc; the rate from 2^d. per cent, per day, to 2d. With the same object in view, namely, to restrict the operations of Savings Banks to the class of provident poor, the Chancellor proposed to reduce the amount which any one could put by in one year from 30/. to 20/. and to make the total amount which could be deposited in any Savings Bank, 120/. instead of 150/.* A further proposition, which provided for another wide- spread evil in the same direction, was one requiring that no * This arrangement, which was quietly dropped before the bill became law, owing to the pressure which managers of Savings Banks brought to bear upon the House, was strongly urged by Mr. Tidd Pratt. That gentleman and Mr. Higham, Comptroller of the National Debt Office, prepared this bill. In the Committee of 1848, Mr. Pratt gave it as his opinion (140), that no depositor should be allowed to put in more than 101. in one year, instead of 30?., or it might go to 15?. ; "but I am quite sure that this latter sum is as much as the small savings of the industrious classes can amount to. " He also proposed to limit the total amount to 100?. LEGISLATION ON TRUST ACCOUNTS. 125 persons should be permitted to make deposits as trustees without stating the names of the persons for whom they were acting, and that no payments should be made in such cases except under a receipt signed by all the parties interested in the funds deposited. By means of the clauses in previous acts relating to trust accounts, the law was regularly evaded, and many persons had considerable sums of their own in Savings Banks, which they represented as being held in trust for other people, whose names even they were required not to divulge* This clause w^as carried w^ithout any trouble, as it met such a palpable evil ; provision was made, how- ever, that the law should not be applicable to trust accounts opened before the passing of the act. Had it not been for such an exception, those who had recourse to the stratagem of feigning the character of a trustee might have lost much of their money, on account of the difficulty or impossibility of obtaining within the time the signature of the party apparently interested. Though the clause was not made retrospective, as some urged it should be, as a punishment to those who had deceived the manao'ers of Savings Banks, it was clearly the best thing that could be done to put an end to the practice, which entirely depended on the powers of the so-called trustees to draw out the money alone. Mr. Goulburn spoke next on the question of liability of trustees. Though the topic was engaging great attention out of doors, little was said upon the point on this occasion : the section of the act thus passed so quietly, was, however, pregnant * In this same Committee, Mr. Pratt stated that in the course of his in- vestigations in Ireland he had found one man who had had seventeen books out of one Savings Bank, and money to the extent of 520?. lodged there, altogether his own property, but which he represented himself as holding in trust. 126 SAVINGS BANKS. with' meaning, and, as it turned out, pregnant with results. The clause provided that no trustee or manager of any Savings Bank shall be liable to make good any deficiency which may hereafter arise in the funds of any of these institutions, unless these officers shall have respectively declared, by writing under their hands, that they are loillinrf to he so answerable ; and not only so, " but it shall be lawful for each of such persons, or for such persons collectively, to limit his or their responsibility to such sums as shall be specified in any such instrument." This declaration was, of course, to be lodged with the National Debt Commissioners. On a trustee or manager making it, he became liable to make good every deficiency that might arise in the bank with which he was connected, whether through his own carelessness, or the cupidity of those under him ; if a decla- ration of this sort were not made, he was liable for nothing.* The above were the three most important changes made in the law of Savings Banks under Mr. Goulburn's Act, but there were several minor clauses introduced into the bill which deserve mention, and which were, there can be no doubt, equally with the more important sections, the direct results of the systematic frauds already described. With his eye direct on the Cuffe Street actuary, concerning whom the Government knew more than was generally known in 1844, the Chancellor, whilst studiously avoiding all mention of the Dublin case, spoke of those who, ignorant of business, took their money to improper places, and made deposits out of office hours. The fourth section of the Act was, therefore, designed to meet such cases, by declaring any actuary or * Only four sets of directors of banks, and these banks of very insignifi- cant size, made a declaration of the kind in question between 1844 and 1848. I PROVISIONS OF MR. GOULBURN'S ACT. 127 cashier who sliould so take money out of course, and not account for it at the very first meeting, to be guilty of a mis- demeanour, and liable to be punished for fraud. Section 5 required that deposit-books should be produced at the bank at least once every year for purposes of examination and check. Section 17 provided that bonds of sufficient security shall be given by every officer of a Savings Bank trusted with the receipt and custody of money, and that these bonds shall be placed (not with the Clerk of the Peace as before tliis Act), but under the charge of the National Debt Commissioners. The old arrangement likewise for depositing the Piules of the bank with the Clerk of the Peace was repealed by section 18, and in its place the next section enacted, that when a new bank was proposed, two written or printed copies of the Pules of such bank should be transmitted to the Barrister for his certificate, who, on approval, was to send one copy back to the Bank authorities, and the other forward to the National Debt Office. It was the 7 and 8 Vict, which, in addition, conferred extended powers on the certif}dng barrister, by appointing him final Arbitrator in any disputed case. The bill, after having been modified in one or two respects, and contested on several points,* received the Eoyal * It was during the passage of this bill that the managers and trustees of the different Savings Banks in the country first combined to influence the action of the Legislature. On this occasion it can be shown that they made their influence felt, and provoked several divisions in both Houses. "With the House of Lords they were most successful, owing, no doubt, to the great number of peers who were honorary oiRcers of Savings Banks. For example, in the House of Commons they succeeded in dividing the House twice on the question of the rate of interest. They wished no reduction to be made in that rate ; but, when it was decided that the rate should be reduced, amendments making it 3^. 6s. 8d. to trustees and 3Z. Os. Qd. to depositors, and 3^. 5s. Qd. and 21. 18s. id. were proposed against the Government plan, eventually car- ried, of U. 5s. Qd. and 3/. Os. \0d. respectively. It was declared that the 128 SAVINGS BANKS. Assent in August, 1844, and was ordered to take effect on the 20th of November following. It will not be supposed that the bill, of which the above is an outline, was passed through its different stages without a word from Mr. Hume. That member may well be forgiven difference of 4s. 2d. only would not defray the cost of management. It was objected also, and not without reason, that the Government erred in not naming the exact sum, instead of not more than 3Z. Os. lOrf. per cent, which should be given to depositors ; that this was a matter which ought not to have been left in any sense to the trustees. Much unpleasantness might have been saved if the sum had been definitely stated, and instead of twenty or thirty different rates of interest, all had been paid alike, and there had not been left any doubt as to what depositors should consider their right in the matter. Out of dooi;s there was a regular combination ; deputations waited upon the Chancelloi- of the Exchequer, and gentlemen from all the leading Savings Banks in England, Scotland, and Ireland, met in London to concert those schemes of defence to which we have just alluded. A meeting was held, at the important institution in St. IMartin's place, with Sir Henry Willoughby as Chairman, when the following resolutions, among many others, were agreed to by the deputies from banks representing 5,000,000/. of deposits. Nothing could of course better show how the action of the Legislature was regarded by the managers of the institutions in question : — 1. "That the proposed reductions in the amoiint of deposits from 30/. to 20/. in each year, and the total amount of deposits from 150/. to 120/. will be highly injurious to the interests of the depositors." ^ 2d. "That the reduction in the rate of interest from 2\d. per cent, per day to 2f/. is far too great, out of proportion to the reduction of the interest in the Funds, and would be extremely prejudicial to the depositors in all Savings Banks, but more especially to those in the smaller banks, throughout the kingdom." 3d. "That clause 7, re(piiring the production of the books of every depositor once a year, will cause annoyance to depositors, is not capable of being enforced, and is no efficient security." 4tli. " That the proposed alteration respecting the liability of trustees and managers of Sa^dngs Banks seems highly objectionable. The present provision, of no trustee responsible except for his wilful default or neglect, is well understood as applicable to all cases of voluntary trusts, and should undergo no alteration." 5th. ' ' That it is not expedient that trust accounts be altogether abolished, but that provision should be introduced to meet the case of fictitious deposits and the abuse of trusts." And so on throughout almost all the clauses. xviR. HUME'S "IMPUDENCE." 129 for alluding on one of these occasion^ to the past, and stating, how, so far as the rate of interest was concerned, he had been fighting for the very thing which was hkely to be brought about. This was clearly a case of patience and obstinacv rewarded.* The bill, however, Mr. Hume stated, scarcely Avent far enough for hini, though it was in the right direction. He still held the opinion that persons holding Government security should be placed on the same footing, and thp.t those who had 20/. in the Funds should be dealt with in exactly the same manner as those who had 1,000/. In this, however, we cannot help thinking Mr. Hume w^ent rather too far, and argued on the assumption that there was no difference between the shilling of the rich and the shilling of the poor man. Mr. Goulburn in replying to Mr. Hume said, he knew this was a favourite point %\'ith the member for INIontrose ; but he could not concede it : a poor man with 20/. in the Funds could not and never would be able to bear a fall in the Funds so well as the large stockholder. Early in 1848 a Committee of the House of Commons, con- sisting of the Chancellor of the Exchequer, Mr. Goulburn, Mr. J. A. Smith, Sir J. Y. Bullar, Mr. Shafto Adair, Mr. Bramston, Mr. Gibson Craig, Mr. Fagan, ]\Ir. H. Herbert, Mr. Herries, Mr. Hume, Mr. Eejmolds, Mr. Poulett Scrope, and • On one occasion, about this time, Mr. Hume had complained of the "impudent conduct" of .some Government official, to which Sir Robert Peel, as Premier, replied. Sir Robert said, he "would not quarrel with the hon. gentleman," (an experiment he had often tried without much success,) "con- sidering him a good judge as to how far impudence might be carried with im- punity." Mr. Hume at once owned the soft impeachment. "If I had not had the impudence of the devil," said he, " I should never have done any good in this House." The Times, the next day, gave it to Mr. Hume smartly, as was its wont, and congratulated him "on his generou-s though rather .startling, acknowledgment of tlio .source of all his strengtii." K 130 SAVINGS BANKS. Mr. Ker Seymour, was appointed to inquire into the state of the Irish banks. As ah-eady related in the last chapter, the Cuffe Street bank soon broke up after the trustees were enabled to take refuge under the Act of 1844. Into this inquiry, which we have before referred to, it is unnecessary to enter much further ; it presents little else than information relating to the flagrant breaches of faith of officers to whom were entrusted the hard earnings of hundreds of the poorest people living around them. The scope of the inquiry was limited to Ireland. It seems to have been purposely intended that a full investigation into the general Savings Bank question should not now be made. The inquiry was not extended in any sense to the English banks, though some of the most prominent English managers offered to give evidence. Doubtless the Government feared that a full exposure of the frauds in Savings Banks, an inquiry into several matters connected with the disposal of Savings Bank money already beginning to be mooted, might have the effect of shaking the confidence of the people. People were openly saying that Government had not done its best to make the Savings Bank a secure repository for the people ; yet, rather than raise this issue before a Committee of the House, it submitted to have the investigation that was made designated " a perfect star-chamber business," and the members of Government themselves subjected to great ridicule. The Committee sat only nine days, and made a report to the House, which Lord George Bentinck characterized as "the most extra- ordinary one that ever was presented to Parliament." " It is as remarkable for its brevity as for its vacuity — as brief as it is worthless." The report is certainly brief, and may here be given without curtailment : "Your Committee," it commences. FINDING UF THE COMMITTEE. 13i " has jjroceeded with the inquiry entrusted to them by the House, but owing to the late period of the session they have found themselves unable to bring it to a satisfactory con- clusion. They are of opinion that it is advisable that a further inquiry should take place, either during the recess or in the next session of Parliament, regulating the liability of trustees, and providing for the appointment of auditors to Savings Banks." The Government immediately set to work to introduce a bill. They saw that a great mistake had been made four years before, in settling the question of the liability of trustees in the way it was done, and now the endeavour must be, if possible, quietly to re-enact the old law in this particular, making trustees liable in the way they were before 1844. The great mistake in this instance, and that which proved fatal to the attempt, was in legislating for English as well as Irish banks, when the inquiry upon which the bill was taken to be founded had been limited to Ireland, and was not allowed under any circumstances to extend to England. The debates to which the measure of 1848 gave rise are certainly the most animated that ever took place in the House on this subject, and it will be interesting, as in different ways indicating the feeling of the country, to notice the expressions of opinion which the discussion elicited. The Cliancellor of the Exchequer, Sir Charles Wood, in moving the Bill to amend the Law of 1844, appears* to have urged that the clause re- quiring the trustees to voluntarily assume responsibility had completely failed ; that few trustees woidd take the respon- sibility upon them, and that, consequently, depositors were * His speech on the occasion doas not seem to have been fully reported. K 2 132 SAVINGS BANKS. losing faith in tlie banks ;* irregularities were increasing ; and the trustees had not even the pretence of a sufficient inducement to make them attend to their self-imposed duties. In place of no responsibility at all, he proposed that each trustee should be responsible for a certain sum, which would be large enough to ensure a reasonable amount of attention, and so small as not to frighten them into resigning their office altogether. This sum it was proposed to fix at a hundred pounds. Clauses in the bill also provided for tlie appoint- ment of auditors, as suggested by the Committee of Inquiry, and for the examination of depositors' books, "that once in each year the books of every depositor shall be produced at the office of each Savings Bank, for the purpose of being in- spected, examined, and verified with the books of the institu- tion by the auditor." More from the way in which this bill was introduced and the circumstances attending the Committee of Inquiry, than from any decided opposition to the Government pro- posals, much agitation prevailed among Savings Bank officials, which was ultimately made to extend to depositors.! The latter were led to believe that the proposed legislation would in some way be inimical to their interests, and petitions were got up, praying that no further Acts should be passed until a full inquiry was made into every part of • The tnistees of four small banks made the declaration : those of Ton bridge, Ashby-de la-Zonch, Fareham, and Carshalton in Surrey. + At a meeting of the managers of the principal Savings Banks held on the 29th of August, 1849, it was resolved : "That this meeting has read with mingled feelings of pain and alarm the clause in the proposed bill virtually requiring tiustees and managers of Savings Banks to give security or 1001. each, and making such trustees and managers responsible to an indefinite extent if they should neglect to limit their responsibility to that sum, as pointed out in the Act." OPPOSITION TO FUKTHER LEGISLATION. 133 the Savings Bank system. Sir Henry Willoughhy, who for some years before this time, and till his death, took mucii interest in this and cognate qnestions, again presided at a meeting of Savings Bank managers in London about this time, and helped them to concert measures of opposition Before speaking in Parliament on the introduction of the bill under consideration, he presented two large petitions, signed by 79,000 depositors in Savings Banks, praying that Government would cease their interference with these in- stitutions. This gentleman then referred to the quietness with M'hich Government had introduced such an important bill, " not having given such a notice as was invarial)ly given even with respect to the commonest turnpike road." And the quietness was a mistake of no ordinary moment. Had the details of the bill now introduced been understood l)y the country, there might have been opposition from managers ot Savings Banks, but there could not well ha^e been so much dissatisfaction expressed by the Press, or by the body of de ■ positors, whose interest every clause of the bill was meant to conserve. Sir Henry Willoughhy also on this occasion gave utterance to the feeling which Mas in many other minds, and M'hich had led to the opposition then manifested, by alluding to "the impression which had got abroad and which he believed was perfectly true, that the money of depositors was used for other purposes l)y the Government than those that related to the Savings P>anks." Whether the money was used advantageously or not he would not say, for that was not the question. Colonel Thompson spoke strongly of the erroneous impression that everybody had been in about the Savings Banks having full Government security for their money ; so strongly, indeed, that in another place 134 SAVINGS BANKS. we shall make further allusion to him. The bitterest opponent, however, which the Chancellor met with on this occasion was the leader of the Opposition in the House. Lord George Bentinck felt sure that the bill was one which its mover (Sir Charles Wood) did not understand. After going into the details of the measure, and endeavouring to prove that the examination of depositors' books could not be accomplished in the larger banks every year,* and that the smaller concerns could not afford to pay for auditors out of the small surplus of interest which went to pay ex- penses, Lord George added, "Surely a Government which had proposed so much and done so little, can refrain from doing harm, since they cannot do good ; and will not press this most discreditable bill through the House at the end of August without necessity for it, and against the opinions of those best calculated to form a judgment." Irish members, seeing the turn the discussion was taking, urged that, at any rate, the bill might apply to Ireland. It was patent to everybody that the poor depositors in Ireland needed every protection, how- ever secure the same classes might feel in England. In Ireland such a bill was really required, and was necessary, to restore confidence in Savings Banks ; f why not make * Mr. Brotlierton, the member for Salford, soon after stated that the managers of the Manchester Savings Bank, with 20,000 depositors, insisted upon every person bringing his book to the office annually, as a precaution against fraud. + The Committee of 1848 went very fully into the changes "which were needed in Ireland, and many witnesses were asked what they would propose. For example (1579), Mr. "W". Keating Clay was asked: "Do you believe, in consequence of the Cuffe Street bank, the deposits will decrease in Dublin and neighbourhood if the law is not amended ?" and replied, "I should say they will be altogether withdrawn. I don't think the other Savings Banks in Dublin, which have conducted their business faultlessly all through, can exist another year under the present law." Another witnesss, in answer to a THE ACT APPLIED TO IRELAND ONLY. 135 it apply to Ireland only ? After an unsuccessful attempt on the part of Lord George Bentinck to throw out the bill altogether, it was decided, on the motion of Mr. Wodehouse, and by a vote of thirty to eleven, that the words " Great Britain" should be struck out of the motion, and that the Act should simply apply to Irish Savings Banks. That the bill now passed was a beneficial change in the law, and a considerable step in the right dii'ection, no one now doubts ; had not the perverseness of Savings Bank of&cials prevented the Government from making its provi- sions apply to England, much subsequent suffering and grievous loss would have been saved to many of the best classes of our industrial population. It was a safeguard such as was wanted in Ireland, and it answered admirably. The bill having been made law, and new depositors secured to a considerable extent from robbery and exaction, the attention of the Legislature was called to those who had lost their all by past frauds ; and the records of Parliament show that one member after another reverted to such topics until redress was obtained. On the 29th of IMarch, 18-49, Mr. Reynolds, the member for Dublin, moved for the ap- pointment of a Committee to investigate into the case of the Cufte Street bank in Dublin, and to ascertain who were liable for the extensive frauds in that bank. He alluded to the unsatisfactory result of the previous inquiry, which was, indeed, not meant to be final. In making his motion, Mr. Keynolds, who had access, of course, to the best sources similar question, said (1205) : " I am quite satisfied that the Savings Bank system in Ireland will crumble to dust unless there is legislation." A third witness said, nothing would do but trustees fully liable, and a system of Government inspection and regular audit of the accounts. 136 SAVINGS BANKS. of information, entered into a full account of this bank, stating, indeed, many of the facts which we have already given. He complained most bitterly of the Government, who had accepted the advice of a " flippant barrister," as Mr. Pratt was designated, and who had suffered the bank to go on when it was known to be in a state of hopeless in- solvency. He described the heartrending scenes which he had witnessed in Dublin, owing to the failure of the bank, and during the last eighteen months, and related some of the cases to the House, where they had ended in insanity, death, or suicide. That the depositors were mostly poor persons he proved, by stating the average amount due to each of the 1,664 persons who were creditors of the bank to be but 27/. Mr. Reynolds added, that he had no hesita- tion in saying, under the peculiar circumstances of the case, that the Government ought to make good the loss.* If he had not proved that point, he left it to a Committee of Inquiry to take up. "In the name not only of justice, but of mercy and compassion," he besought the House " to agree to his motion, and to save many poor persons from utter and total ruin." The member for Dublin University (Mr. Napier) seconded the motion for inquiry, and discussed many of the details of the failure from a legal point of view. In one remark, he gave expression to a very general feeling : the course of legislation on Savings Banks had plainly been to reduce, for strong reasons doubtless, the respon- sibility of trustees ; in proportion, however, as that responsi- bility was reduced, so he, Mr, Xapier, thought the moral responsibility of the commissioners increased. " Precisely in the same degree as the trustees were relieved, should the * The Times and Morning Chronicle strongly advocated the same view. niorosALS for ax investigation. 137 vigilance of the other body have been awakened." Nor was it less unfortunate — though this is a matter which was not alluded to — 'that at a time when it was thought most fitting that the interest on deposits should be reduced, steps should also be taken to make them less secure as well as less remunerative. Mr. H. A. Herhert, the member for Kerry, proposed an amendment, extending the inquiry to the Tralee and Kil- larney banks, and also to the single case of failure in Scot- land, at Auchterarder. Mr. Herbert dwelt upon the case of these frauds in an able manner, but we reserve the consi- deration of them to the next chapter. The reference to the Scotch case doubtless called up Mr. Cowen, the member for Edinburgh, who was sorry to hear of the necessity for any such inquiry in Scotland; he "had been accustomed to think that they were above suspicion in Scotland with reference to their banking matters." Mr. Cowen said that he regarded all discussions on Savings Banks as most mo- mentous, and as involving the consideration of the most important national questions. " It was of the greatest im- portance that Savings Banks should be placed on a solid foundation, and cleared of all those injurious anomalies which now attached to them," for he " believed that they might be made the means of aiding in a great measure to stem that flood of pauperism w^hich was now overflowing the land." Much warm discussion followed. The Chancellor of the Exchequer alleged that the proposed inquiry would be both a useless and an expensive one ; and Mr. Goulburn, the ex-Chancellor, who was equally committed to the same course of legislation and the difficulties which that legisla- lation had brongh.t upon the Government, rendered pro in p"^ 138 SAVINGS BANKS. assistance by saying exactly tlie same thing. On a division, it was carried by a majority of three in a House of 100 members, that a Committee should be appointed ; and by a majority of eight, that the inquiry should extend to the three Irish and the Scotch defaulting bank.* It was one thing, however, to carry a Committee of Inquiry in the face of both the great parties of the House, and another to nominate the members who should compose it ; and this Mr. Eeynolds subsequently found out to his evident chagrin and disappointment. The Government had clearly not been sufficiently on the alert, and hence they had Ijeen beaten in the first particular ; they secured themselves however against any further defeat. In the following April, INIr. Eeynolds proceeded according to usage to nominate his Committee, which he wished should consist of eight English and seven Irish members. The Chancellor of the Exche- quer objected, and wished for the reappointment of the Com- mittee of the preceding session. Mr. Goulburn promptly assisted by saying, that it would be a reflection on the Com- mittee of last year if it was not so reappointed. In that Committee there were only three Irish members, though the subject then, as now, had exclusive reference to Ireland. Mr. Eeynolds, Mr. Herbert, Sir Henry Willoughby, stoutly contested the point, which ended in the names of two addi- tional Irish members being proposed. The Government saw the importance of the question, and that the inquiry would be made in this way to turn upon the administration of Savings Banks generally, and the responsibility of Govern- ment in regard to them, and succeeded in resisting any change by an adverse majority of 111 to 74. The whole • Hansard, vol. civ. pp. 22 — .^4. I A COMMITTEE APPOINTED. 139 of the names not having been gone through on this occasion, the Irish members returned to the subject again a few days subsequently. " In the names of tlie poor who had been rendered paupers by laws badly administered," one member asked, " for an impartial jury." Some of the daily papers had declared that the Government meant to pack the Com- mittee and so get a favourable decision, and this encouraged the independent members to persevere. Mr, Herbert said, '' the Government all along most consistently attempted to quash inquiiy." He condemned in strong terms, and under the apparent approbation of the House, the conduct of Mr. Pratt in relation to the Irish banks. Mr. Eeynolds declared he would divide the House upon all the remaining names offered by Sir Charles Wood. After two divisions, however, when he was left in a minority of 42, and 59, in a House of 202 members, he desisted from carrying out his threat ; though he had a close phalanx of followers, he saw he had no chance against the combined hosts which the leaders of the two principal parties in the House had brought to bear. The members ultimately appointed were the Chancellor of the Exchequer,' the ex-Chancellor, Mr. Herries, Sir George Clerk, Mr. P. Scrope, Sir G. Y. BuUar, Mr. Ker Seymour, Marquis of Kildare, Mr. Adair, ]\Ir. G. Craig, Mr. W. Pagan, Mr. Bramston, Mr. J. A. Smith, Mr. H. Herbert, Mr. Eeynolds. This Committee sat thirteen days, and examined nine witnesses, including several officials connected with the Cuffe Street bank, ]\Ir. Tidd Pratt, Mr. Higham of the National Debt Office, and Mr. Boodle of the St. Martin's Place Savings Bank, but came to no conclusion, and re- commended nothing to the House. On the 13th of May, 1850, the same gentlemen were 140 SAVINGS BANKS. reappointed under the self-same conditions as in the pre- vious year : they sat eleven days, and examined some of the same and other witnesses, and on this occasion made a long and exhaustive report to the House* This report, for which all the members except Mr. Eeynolds and Mr. Herbert voted (each of these gentlemen having produced a report of his own which the Committee would not accept), went over the case of the defaulting Savings Bank in Dublin very succinctly ; exonerated the National Debt Commissioners and their officers from blame ; stated that they found the commissioners did not exercise all the powers they possessed, but this arose "partly from a misgiving as to the effect of an exercise of their authority, and partly from an unwill- ingness to run the risk of creating a discredit of these in- stitutions ; " and that if the trustees had taken the advice of the commissioners, when in 1845 they advised them to close the bank, the loss to the depositors would not have exceeded five shillings in the pound. For these and similar reasons the Committee came to the weighty conclusion, relative to this particular case of fraud, that " while they cannot admit the existence of any legal liability on the part of Her Ma- jesty's Government, they recommend the case of the depositors in the Cuffe Street bank to the favourable . con- sideration of the Government, with a view to the adoption of some measure which shall at least mitigate the extent of their loss." With regard to the other frauds into which they were instructed to inquire, they reported that there were " no peculiar features connected with them differing from * During the interTal, Mr. Reynolds, member for Dublin, who had obtained the Committee originally, became Lord Mayor of Dublin, and Mr. Gibsor Craig became Sir W. Gibson Craig. Mr. J. A. Smith was appointed chair man on each occasion. FlNDKsG OF THE COMMITTEE OF 1850. 141 those of other banks which have suffered from the dishonesty of their actuaries." They concluded by expressing their conviction of the unsatisfactory state and working of the existing law ; proper power did not reside with any authority " to check abuses, however indisputable ; " by expressing their opinion that the provisions of the law of 1844 had worked in a manner obviously at variance with the inten- tions of Parliament, and wound up by the following im- portant paragraph : — " Your Committee have oticrved with much satisfaction that the Chancellor of the Exchequer has introduced a Savings Banks bill, which is calculated to remedy several important defects in the existing law, and extends the respon- sibility of Her Majesty's Government to the depositors ; and they therefore abstain from all observations on this part of the subject, further than to state the con^action, which this inquiry has forced upon them, of the urgent neces- sity for further legislation, if these institutions, which have of late years acquired an extent and importance so little anticipated by the original founders of Savings Banks, are to preserve their hold on the confidence of the countiy, or produce the beneficial results expected from them in encouraging and rewarding the industry and self-denial of the working classes." This report was presented to the House on the 1st of August, and at once referred to a Committee of the whole House. Next day, the Chancellor of the Exchequer pro- posed that a grant of 30,000/. should be made to the defrauded depositors in the Cuffe Street bank, out of the Consolidated Fund. Sir James Graham opposed the grant. If this money was a matter of charity, he argued, they were opening the door to a dangerous principle ; if of justice or equity, the claim ought to be paid in full. It was unworthy of the British public to compromise for ten shillings in the pound. Other members asserted that if Cuffe Street de- positors were paid, the poor creditors of other insolvent banks would likewise have to l)e paid. Generally, however, the TTouse felt with the Coiinnitteo ; it was altogether an I'i2 SAVINGS BANKS. exceptional case, the claims of the formerbeiiig, as Sir Charles Wood expressed it, "something between equity, sympathy, and charity." 3Ir. Bright, a resident of Eochdale, and Mr. Sharman Crawford, the member for that borough, whose ears had lately rung with the tales of heartless deception practised there, were both for paying these depositors in full ; " there might be no legal claim, but there were the claims of equity and morality." Mr. Bright, indeed, went so far as to say, that if Government would bring in a bill to secure other banks in future from these dreadful calamities, he would mllingly vote that all claims from Savings Bank failures should at once be met by the State. The House divided on Sir Charles Wood's motion, when ]18 members voted for it, and 39 against it. We may as well say here that several attempts were subsequently made to get the remaining 30,000Z. from Government, but witliout avail.* It will not be difficult for the reader to understand the position of affairs up to 1850. The law was clearly unsatis- factory ; it had been pronounced so by Committees which, though composed of nearly the same members, had sat in three successive years, and patiently examined into tlie question in its every detail. The only difference of oi^inion indeed in the Committees was, as to the persons who were liable, and to what extent, for the defective state of the law, and the results to which it had led. ISTor is it at all * For example, iu August, 1852, Mr. Reynolds again brouglit the subject before the House liy proj^osing that the remaiuiug money due to depositors should be paid by the State. On this occasion he told how he had had the honour, in 1849, of placing Her Majesty's Government twice in the same night in a minority on this subject ; but, unlike other members who had done the same thing, he had not received Her Majesty's commands to form a new ministry. This style of banter was scarcely suited to his subject, but more f rious appeals were er^ually unavailing. PAID AND UNPAID OFFICIALS. 143 wonderful that legislation should have been needed. Savings Banks, as it was often pointed out about the time, had increased enormously within a short period, and beyond all proportion to the expectations which were originally formed with regard to them. When they were first started, many benevolent individuals entered heartily into the work of managing tliem, and asked for no return, except the sense that they had assisted in a humane and praiseworthy object, for the labour they underwent. Putting two con- siderations together — the great increase of business, and the no less certain decrease in the first ardour attending sucli enterprises — the increase of paid officials became absolutely necessary, and in. almost a corresponding ratio did the unpaid machinery decline. Slowly but surely the management of Savings Banks went out of the hands of an unpaid into those of a paid staff of officials, and every year the system of check became more nominal than real.* It was apparent, not less from the proceedings of solvent Savings Banks than from the exposures made in the case of unsound ones, that those who had originally taken part in the establishment of these institutions slowly became honorary in place of active members of the board ; and of those who still continued to take a share in the work, many had got into the habit of leaving their duties to subordinates, in some cases signing blank forms, and even cheques, to be filled up by the acting- manager at his discretion. "O^ * The following remark had already been made from the judicial bench : " I find that country gentlemen, &c. were willing to lend their names as trustees, in the establishment of banks for the deposits of the sa^-ings of the poor, but were negligent, in too many instances, in giving their personal services, whereby the business fell almost entirely under the exclusive manage- ment of the person appointed as actuary." — Sir John Cross. 1-4-i SAVINGS BANKS. At tins stage in the history of Savings Banks, the Chan- cellor of the Exchequer came forward, — as the reader has already learnt from the Pteport of the Committee of 1850, — • with a Lill to amend the law. This bill he introduced to the House of Commons on the 29th of April, 1850, and it forms part of our object to explain in detail the plan now proposed, inasmuch as for many subsequent years the same measure, with only trifling modifications, was offered over and over again to the consideration of the House, and as often declined, through the overpowering influence of the Savings Bank interest in the country. On bringing forward his bill, the Chancellor said he wished to avoid allYeference to the past, except in as far as the experience of the past was a guide to future legislation. He very briefly traced the history and progress of Savings Banks, remarking at the time that, if he were not to do so, few could be aware of their real nature, and how they had grown to their present dimensions. We need not follow Sir Charles "Wood through this account, nor even repeat the reasons which actuated the Legislature in making changes in the law from time to time up to the year 1844. Eeferring to the Act of that session, he described it as " most defective," and the bill he wished to introduce would amend it. Speaking of the responsibility as to loss in Savings Banks, which many persons thought should rest with the Government, he repudiated the notion, unless Government was allowed to have some control over the persons who might occasion the loss. On the other hand, he did not wish to do away with "the most invaluable feature in Savings Banks — the local management." He thought, however, that Government might take a medium course, and I'aiily meet the case by making such arrangements as "would A PROPOSAL FOR TREASURER. 145 md in the State bearing nearly tlie whole responsibility as •egarded the receipt and payment of money." What he pro- )osed was to alter the enactment that the treasurers of 5avings Banks should receive no emolument, and to vest he appoint meiit of Treasurer in the hands of the Goimnissionej^s "or the Reduction of the National Debt. The existing trea- urers might in most cases be continued, and if they wished work for nothing, they might still have the option ; but le insisted on the Government reappointing such officers, ,nd upon having a control over them. To this officer, or some lue acting for him, all payments should be made over — the eceipt and payment of money by any other person to be leclared illegal.* He considered that this arrangement rould guard against the possibility of fraud. The treasurer nd secretary, acting for different interests, as it were, could carcely be guilty of collusion, and the one would in all cases ct as a check upon the other. If this plan were agreed to, he Government would of course be resx^onsible for every arthing paid to the treasurer. This was the great and distinguishing feature of the aeasure which the Government was disposed to adopt ; ut there were other features in the bill of considerable uportance, which ought not to go unmentioned. Thus, ; proposed that the Act of 1844 should be repealed, and hat trustees should be responsible for their wilful neglect r default, as in the Act of 1828. It was clear, however, tiat under the appointment of treasurers the responsibility * "IN'early all the frauds, and all the loss which had occuiTed in Savings anks, " said the Chancellor, "were owing to the actuary or secretar}^ receiv- ig mone}' irregularly, sometimes at his own house, and very often out of Bee hours." 146 SAVINGS BANKS. would be little more than nominal. Another point ■which the bill provided for was an efficient audit of the accounts, the trustees of each bank to appoint an auditor, and the pass-book of each depositor to be annually exa- mined, the auditor in each case comparing the book with the ledger of the office.* The bill proceeded, further, to give power to the National Debt Commissioners to send down to any Savings Bank, should they see occasion for it, an Inspector, to test the accuracy of the accounts of that bank : with the other provisos already mentioned, depositors would thus be absolutely safe. The next clause provided against any further loss to Government. The Chancellor in intro- ducing this subject spoke of the different rates of interest which had been given to Savings Banks, and said all of them were higher than could be given without loss. But this was not all. The loss sustained in having to pay out a large sum of money whenever called for, no matter how low the Funds were at the time, was equal almost to the former. After explaining the case, and giving examples of its working, he added that Government thus suffered a loss on capital and a loss on interest. "It had been proposed that - Government should merely act as a broker, making depositors subject to all the fluctuations of the Funds ; but," said the honourable gentleman, "from the numerous com- munications I have received from all parts of the country, * Even in seaport towns this inspection of pass-books might be accom- plished without much trouble ; if there was any difficulty in getting in the books, such an inspection might be made as would be sufficient to test the general accuracy of the accounts. Thus at Cork, the year before (1849), 6,623 pass-books had been sent in for examination, and only 1,164 did not come in. The accuracy of the larger number was ample test of the accuracy <>( all. SIR CHAELES WOOD's PROPOSALS. 147 depositors think much of tlieir getting their money back as they put it in, and looked to the amount of interest as a secondary consideration." He then gave a. variety of statistics, and proposed that the limit to the amount of deposits should be fixed at 100?. and that the rate of interest should be reduced from 3/. os. to 3/. for trustees, and 21. 15s. instead of 3/. Qs. IM. to depositors.* The Chancellor of the Ex- chequer concluded by expressing the wish that the bill of which he had given the principal clauses, should ' be dis- cussed fully and temperately : it involved no party feeling, but it involved many things intimately connected with the welfare of the classes for which Savings Banks were esta- blished r he said he had done his best to meet the difficulties of the case, but difficult as it was to do, the matter ought at once to be settled, and to be settled once for all.f It, however, was not to be settled so soon. Before we refer to any further expression of opinion on the subject in Parlia- ment and the ultimate decision in the case, it is only right that we should present the other — the Savings Bank — view of the n J after, as uttered by the powerful, we had almost said corporate, body at St. Martin's Place. The Committee of Managers of this important London institution met, as their custom was, to pass resolutions on any matter affecting Savings Banks. A petition to Parliament was framed on the resolutions come to in this as in other instances, and similar petitions were got up and presented to Parliament * The Chancellor here pointed out that the average rate of interest given to depositors at that time (1850) was but -ll. I85. id. and that the reduction would be scarcely felt by any class ; that reduction, however, would not only jirovide against the Government losing any more money, but would meet the expense of the proposed Government treasurers of Savings Banks. t Hansard, vol. ex., third series ; and Times, 1850. L 2 14)8 SAVINGS BANKS. from other Savings Banks, who naturally looked to the St. Martin's Place institution for advice and guidance. At a meet- ing held at this representative bank on the 14th of May, 1850, Lord Walsingham in the chair, the proposals of the Chancellor of the Exchequer were gone through seriatim, and all of them, without exception, disputed and condemned. It came to the conclusion that (1) the proposed introduction into Savings Banks of a Government treasurer, &c., " must lead to great confusion, and eventually to the disruption of these valuable institutions ;" (2) that " the proposed reduction of the existing rates of interest and the limit in the amount of deposits will, besides imposing injurious restrictions on depositors, so diminish the means of defraying the expenses of manage- ment as to render it extremely difficult in some, and impos- sible in other cases," to engage efficient assistance ; (3) that any further reduction of the rate of interest to depositors would only tempt them to withdraw their money from Savings Banks and place it in " more attractive, but frequently hazardous investments;"* (4) that the grand principle on * It must not be assumed that there was no difference of opinion on these points, even among Savings Bank managers. The following letter, read by Sir Charles Wood during his speech in 1850, is conclusive to the contrary. The writer, who was manager of a large provincial Savings Bank, wrote : "I have had occasion to remark that the chief inducement to deposit money by those for whom Savings Banks are intended, consists in having a safe lylace for deposit, and that the amount of interest for the most part is but a secondary consideration ; whereas those persons whose means are greater, and who do not actually require Savings Banks, use them to suit their convenience when the Funds are high, and take out their money from the Savings Banks to invest in the Funds when low, just at that very time when the withdrawal occasions loss to the country." He then expressed an opinion almost identical with one which Mr. Tidd Pratt has often given, that " 20^. would be quite sufficient to alloAv a person to deposit in one year," and that, "when the deposits reach 100/. there is no necessity to allow further deposits to be made." Again, the Rev. W. Rowan, Treasurer of the Tralee Bank, when asked OPPOSITION FROM SAVINGS BANK3. 149 which well-conducted Savings Banks have hitherto been so efficiently managed, viz., " that of having the constant super- intendence of gentlemen unconnected with the receipt or pay- ment of money, will be destroyed if the new bill should be passed into a law." We ought to add that this Committee did not object to the abrogation of the law of 1844, which was passed " contrary to their expressed wishes and recommenda- tions ;" that, although they urged tliat frauds were compara- tively rare, and far less in amount and extent than in public or mercantile establishments, and that for such reason there was no just ground for the introduction of an entirely new system such as was now proposed, they had no objection to a mea- sure adapted still further to promote the solvency and good management of Savings Banks, only they must insist that the necessity for such important changes " should be considered by a Select Committee, and evidence taken from men of long experience in Savings Bank management." The last resolu- tion to which this body came was, " That a petition to the House of Commons, founded upon the foregoing resolutions, be printed and circulated for the information of other Savings Banks." To return to the discussion in the House of Commons on the bill now proposed, Mr. Hume in a temperate speech supported, on the whole, the Chancellor of the Exchequer. He held that Government ought to undertake one of two things — either to leave Savings Banks altogether alone, or else to ensure perfect security to the depositors, which he saw no difficulty in doing. in the Committee of 1849, if he thought changes were necessary in Savings Banks, answered that, "The Sa\dngs Bank system must either become a general failure, and the funds invested in them withdrawn, or you must place it upon an entirely different footing with respect to inspection and working." 150 SAVINGS BANKS. Of course lie agreed with the proposal to reduce the rate of interest and the limit of the total amount of deposits, remark- ing on the latter subject that he had known many cases where Savings Banks had been taken advantage of in a way that, he Avas about to say, was quite unworthy of them ; " but let no man say that anything was unworthy where profit was the object, for he found in all ranks and classes a tendency to avail themselves of the folly of the public." Government, he thought, could not do better than try to encourage among the labouring classes the habit of saving; " for the moment a man had a nest-egg he desired to add to it, and thus were habits of economy and prudence fostered among the mass of the people." >S^2> Henry Willoughhy opposed the bill ; he thought the proposal to reduce the rate of interest would be " an ex- tremely disagreeable measure." He referred, however, on this occasion principally to the management of Savings Bank funds, and expressed his opinion that what was required was that the management of the affairs of Savings Banks should be taken out of the hands of the Commissioners of the National Debt, and a separate commission appointed for the purpose. Few members questioned the wisdom of the proposals at this time, but many expressed themselves dissatisfied that the bill would have no reference to the past, and that the Chan- cellor had not alluded in any way to the depositors who had lost their all by the bank failures and by the action of the bill of 1844. INIr. Crawford spoke of the Eochdale depositors, Mr. Pagan of the Killarney depositors, and Mr. Herbert of the Dublin and Tralee depositors. Mr. Slancy thanked tlfe Chancellor of the Exchequer for the amount of attention which he had bestowed on the bill, which he " deliberately thought would interest more persons than any other measure that would THE BILL IS WITHDRAWN. 151 be introduced this session." He thought the security now promised would be real, though he was sorry the Chancellor meant to make the people pay for it. His opinion (and he had considered the subject of industrial investments very largely) was that neither the amount of, nor the interest on, deposits should be reduced ; he would " be most willing to pay a small bonus to tempt the savings of these poor people." We are glad, however, to say that this view of the case did not meet with much approval. After several more appeals from such members as Mr. Bankes and Colonel Thompson, that Govern- ment would come to the rescue of the defrauded depositors who had, in their ignorance it might be, looked to the country for security, the bill was ordered to be brought in by the Chancellor and Mr. Attorney-General. On the motion made to read the bill a second time on the 8th of August, 1850, ]Mr. Hume and Sir Henry Willoughby importuned the Chancellor of the Exchequer to defer the consideration of the bill to the next session ; the former urging that honourable members might study the reports of the Committees of 1849-50, during the interim, and the latter that time might be given " to allow of a consolidation of all the statutes relating to Savings Banks, and an inquiry into the whole subject." The Chancellor replied, that after the agitation which had been got up among tlie managers of Savings Banks, and the considerable mis- understanding which prevailed relative to the provisions of the bill, he reluctantly consented to withdraw it.* Several members took the opportunity to urge that the Chancellor should bring the matter forward the first tiling in next session ; but the Savings Bank interest proved still stronger » A bill to continue the Act of IS-IS, "for Amending the Laws relating to Savings Banks in Ireland," was carried through Patliament in this session. 152 SAVINGS BANKS. in 1851, and again Sir Charles Wood got nothing done, and never heartily took np the question again. In 1853 an Act was passed to "Amend and Consolidate the Law relating to the Purchase of Government Annuities." The bill was introduced and carried through by the Chancellor of the Exchequer. This Act continued the same powers to the Commissioners as were given in 1833, and the clauses relat- ing to the purchase of annuities, deferred and immediate, were continued. It further empowered them, however, to grant deferred annuities for a sum to be paid down at once, and not returnable, and also to grant annuities otherwise than through Savings Banks. It was said that the reason why the Act of 1833 had been practically inoperative was the want of such a clause: that the fact of only being able to buy a deferred annuity on the condition of money being returnable, not only caused many lapses, but made the tables heavier than they ought to be. Under the fresh clause better things were augured ; any one purchasing such an annuity, it was argued, takes the chance of his not living to receive it, just as the member of a benefit society takes his chance of never being ill, and therefore never needing what he pays to secure if his health should fail. The benefit in return for this risk is, however, proportionally increased, inasmuch as the contri- butions of those who do not live to the term when the annuities commence, go to swell the contributions of those who may, — the purchase-money, in the case of money being returnable, being of course much larger than in the other, where more risk is run. We give the argument for what it is worth ; but it is certainly curious that at a more recent date, when again the law regulating the purchase of annuities under- went alteration and amendment, a great outcry was raised, ANNUITIES AND INSURANCES. 153 because the tables of rates, " with money returnable," were temporarily kept back; one respectable organ of public opinion going so far as to say that the changes would be inoperative till these tables were produced. An opposition was got up during the progress of the measure in Parliament, owing to the clause empowering the Government to grant life assur- ance policies to those who should likewise buy annuities. It was said now, just as it was urged, though much more strongly, subsequently, that there were great objections to the Govern- ment becoming a trading community, or doing anything which could be carried out by a private company. " The system of life assurance," said a well-known Scotch member, " was at present carried on so successfully and so judiciously by the ordinary life assurance societies, that it would be most unwise to interfere with them." Another member argued that the annuities scheme had so lacked success that no amount of tinkering would make it applicable to the country. The Secretary of the Treasury explained that Government were not anxious about doing the business of insurance offices, but only desired to give facilities, which the law did not then allow, for the conversion of Savings Bank deposits into a satisfactory provision for want or old age. The bill was read a third time, with a majority of 28 in a House of 56 members, and soon afterwards passed without any further difficulty, and received the Eoyal Assent. Such a measure, whatever the poorer classes might think of it, was well cal- culated to spread the spirit of independence amongst them. The State did Vv^ell to offer the opportunity of increased facilities ; and if those for whose benefit such schemes were intended did not avail themselves of them to secure, by a very small amount of temporary sacrifice in seasons of health and 15-i SAVINGS BANKS. prosperity, a provision against those risks to which all the poorer classes are liable, of falling through unexpected con- tingencies into poverty and pauperism, the blame would rest elsewhere than with the State. As we have already said, the session of 1851 passed without any attempt at legislation, and in the beginning of 1852, there being still no sign of action on the part of the Executive, the late Mr. Hcrhert, so well known in connexion with the Irish banks, proposed a resolution to the effect — " That this House has observed with regret the continued neglect of Her Majesty's Government to fulfil their promise of introducing a bill for the regulation of Savings Banks, by which those important institutions may be enabled to preserve their hold on the confidence of the country, and a due encouragement be thus given to the industry and providence of the working classes." There was every reason to believe that this resolution would have passed, until the Chancellor of the Exchequer rose. Sir Charles Wood admitted that the bill had been far too Ions: delayed ; but this was no fault of his. It was thrown out in 1850 ; he could not get it introduced in 1851 : it was ready, however, and it should be brought forward this session. He had not given notice of it, because he had been engaged in consultation with several members in so preparing the measure as to ensure its passage through the House. His firm conviction was, that the delay in the present instance had tended not only to improve the bill, but to diminish the chances of opposition to it when introduced. During the last four years the greatest pains had been taken to frame such a measure as should effectually remove the evils that had been complained of ; and within the past few months they had had the assistance of a new Comptroller of the National Debt Office, who had " devoted himself with great diligence to tlie THE NATIONAL DEBT OFFICE. 155 subject."* He submitted, in conclusion, that he was not deserving of the censure of the House, especially as it had been settled to try the measure again during the present session. Mr. Disraeli agreed with Sir Charles "Wood. " thouCTh the resolution before the House was apparently justified by the circumstances, it would not Ije becoming in them to divide the House after what had been promised. The question was surrounded with difficulties, hut notwithstanding these diffi- culties it was the paramount duty of the Legislature to grapple Avith it ; and an opportunity would be soon afforded. Mr. Disraeli at this time did not know how soon he was to be in a position to grapple with the subject himself. Sir Charles Wood's pledge was not kept. All such measures as those we * The gentleman to whom reference was here made is the present Comp- troller-General, tlie veteran pnblic servant Sir Alexander Young Spearman. This gentleman, of whom all parties speak as a man of irreproachable character and eminent abilities, has now (1866) been fifty-eight years in the public service. To him is no little owing the efficiency with which his depart- ment is now managed, and the increased facilities which have been given to the public in all things connected with the provident habits of the people. It may not be out of place here to state, with reference to the office held by this gentleman, that it was formed about the commencement of the present centur3\ whereas the Commissioners date from the creation of the Sinking Fund in 1786. Sir Alexander Spearman succeeded Mr. Higham in the position. As more than one of the witnesses at the Committee of 1858 did not know who formed the Board of Commissioners, of whom they were con- stantly speaking, and another did not know whether the Board ever met, it may be new to some readers, if we say that the Commissioners for the Reduction of the National Debt consist of the Speaker of the House of Com- mons, the Master of the KoUs, the Chief Baron of the Exchequer, the Chancellor of the Exchequer, the Accountant-General of the Court of Chancery, and the Governor and Deputy-Governor of the Bank of England. The Board hold a meeting once in each quarter. Three Commissioners form a quorum, and tlieir powers are defined by Act of Parliament. The Comp- troller-General acts in the capacity of Secretary to the Board, and is entrusted with the carrying out of its orders. The expenditure of the National Debt Office amounted, in 1856, to about 14,000^. ; but must have increased con- sideralily since that ilate. 156 SAVINGS BANKS. are considering have suffered greatly from the vicissitudes of administrations, and it was so in this instance. Towards the end of 1852 Mr. Disraeli succeeded Sir Charles Wood as Chan- cellor of the Exchequer in Lord Derby's first Ministry ; but he had scarcely time, supposing him to have had the disposi- tion, to take up the matter where it had been left. When the Derby Administration gave place to the coalition Ministry of Lord Aberdeen, and Mr. Gladstone took the place of chief financial minister, there was soon a better prospect of some settlement. Even under his auspices, however, matters at first went on very slowly ; so multiform were the questions and interests involved, that even Mr. Gladstone's powers were severely tried to clear the ground of the incumbrances which time and prejudice had reared. When Mr. Gladstone left office and was succeeded by Sir George Lewis much had been done ; the necessary preliminary measure of a full investi- gation into the Savings Bank question by a Committee of the House of Commons had been decided ; the real nature of the connexion existing between the Government and the Savings Banks was better understood : and when after a lapse of two or three years he returned to his old position, he took the matter up where it had been left, and carried the subject, by his unapproachable eloquence and energy to an easy and final solution. Mr. Gladstone's name will go down to posterity covered with honourable trophies of his great powers ; but we question whether among the great schemes he has carried any will be remembered longer than those meant to increase among the lower classes the habits of prudence and frugality. Early in 1853, and when he had but just succeeded to the office of Chancellor of the Exchequer, Mr. Glad- stone gave notice that the subject must be taken up, and MK. GLADSTONE AND SAVINGS BANKS. 157 if possible settled. A bill* was allowed to pass the second reading without discussion ; but when the subject came up before Committee in July of that year, Mr. Gladstone, com- pelled to succumb to the wish that Parliament should be pro- rogued, asked that this and other bills might be deferred till the next meeting of Parliament. He said he had made great progress with the bill since it was first introduced ; he had sought to get the opinion of the different Savings Bank managers upon it, and he believed he had acquired a pretty accurate knowledge of the state of feeling in the country on the subject. t All this was favourable to the prospects of the bill ; but now, as the House had lasted since November 1852, he feared that if it was pushed forward it might fail to pass. He should have liked to have got the question settled, but he now thought his object would be more speedily obtained by the delay proposed. Here the sagacious Minister was mistaken ; the old adage of no time being better than the * "To anieucl tlie Laws relating to Savings Banks, and, in certain cases, to give the guarantee of Government to the depositors for the repayment of the sums legally deposited in such Savings Banks." + In a long petition to the House of Commons from the Trustees and Managers of the St. Martin's Place Sa\-ings Bank, this hill is strongly opposed, thus showing that Mr. Gladstone had not succeeded with the managers of that in- stitution. Speaking of the direct Government guarantee proposed to be given, the managers say that they "find the proposed change fettered Avith such a variety of intricate and cumbersome official regulations, as cannot fail in practice to prove greatly annoying and vexatious to depositors, and perplexing to the managers of the banks and their officers, upon whom will still devolve duties and responsibihties ill- defined under the provisions of this bill, and not capable of being sufficiently understood or exjilaiued ; subversive, as the pro- posed change will also prove, in this and nianj' other well-regulated Savings Banks, of those systems of entrj-and cheek under which their present accuracy of accounts is so admmably and inclisputablj' maintained." They objected to the reduction in the rate of interest, treated of several other minor matters, and again prayed that a full inquiry should be made by a committee before any bill was passed. 158 SAVINC4S BANKS* time present could often be well applied to proposals to defer desirable matters of legislation to a future session. No men- tion was made of the subject for nearly eighteen months ; the country had more pressing, and, for the time, much more serious matters to consider, which it will be quite unnecessary to particularize. On the 20th of December, 1854, Mr. Gladstone moved for and obtained leave to bring in two bills during the session of 1855: the one "to create a charge on the Consolidated Fund" of the money due on behalf of the depositors in Savings Banks, and the other, the bill for the management of Savings Banks which was withdrawn in 1853. In the former important pro- posal the Chancellor of the Exchequer desired to make the law more perfect as to the relation between the depositor and the State, by giving the latter a better title to the money invested with the State. He wished, in his own language, " to reduce the obligation and the contract of the State with the depositor to tliat simple form which is adopted by every banker." He would propose, "as respects the bulk of the funds received from Savings Bank depositors, that they should be held in this country as they are held in other countries," and not in the complicated form of Stock and other public securities. Mr. Gladstone's view, more than once expressed in strong terms, with respect to the State using the money belonging to Savings Banks, was that it was no matter to anybody what was done with the money,* providing it were * " YoTi take the money of these depositors, and you give them the entire security of the State for their money. They cannot have a hetter security ; and if you give them that, they have no interest in the employment of the money: it does not signify to them if you fling it to the bottom of the sea. So long as the Treasury of the country is sound, it does not matter one rush what the ''hanccllor of the Exchequer do(« with the money. If he invests it THE DISPOSAL OF SAVINGS BANK MONEY. 159 ready at call and the stipulated interest were given, — the stability of the countiy being surely a* sufficient guarantee for its safety. Savings Bank authorities, on the other hand, dis* puted the right of the Chancellor to use the money ; would prefer to use it themselves in other investments, if the funds were applied otherwise than under statute in the purchase of Bank Annuities ; and referred to the uncertain title in law which depositors had for the money according to the govern- ing statute. Mr. Gladstone's bill proposed to give this title to every penny so deposited with the State, by throwing the burden of any deficiency arising on the Consolidated Fund, and so silence at any rate the last objection.* Early in the session of 1857 the then Chancellor of the Exchequer (the late Sir George Lewis) was several times asked if the subject of Savings Banks had not to be brought forward and concluded. These questions led to his promising to bring in the Government measure which, often brought forward and as often witlidra^\ai, was still waiting for a tide of popular favour to carry it into law. On the 27th of February in this year he gave notice of this intention, and earnestly trusted that the House would allow it to pass. In a short speech, the points of which we need not recapitulate — for it dealt with the same facts and came to the same conclusion as well, tliej^ are no richer ; and if he plays all the tricks of the monntebank, or disposes of it with the artifice of the swindler, they are none the poorer. " The depositors in Savings Banks have nothing to do with the question, and it is only weakening and impaii'ing their position to make them depend upon the prudence of the minister, instead of upon the credit of the British public." Savings Bank managers held a strong opinion against what they called jobbing with their funds. They said Mr. Goulburn had promised that the practice should be stopped ; and it was, in 1844 ; but that Mr. Gladstone had revived the practice illegally in 1853. These bills were not introduced in 1855. * Hnnsnrrl^ vol. ^.\xx^^. 1854. 160 SAVINGS BANKS. those speeches of previous Chancellors already described,— he proposed the first reading. Then came the dissolution of Parlia- ment, and its forcible postponement for one more session.* In a fortnight from the meeting of the new Parliament Sir G. Lewis, true to his promise, moved that the House go into Committee on the Savings Bank Bill, which had even then reached that stage. His motion was, "That it is ex- pedient to amend the laws relating to Savings Banks, and to provide for the establishment of Savings Banks with the secu.rity of the Government." The Chancellor said that almost everybody was agreed as to the principles of the bill, though it was true that the managers of many Savings Banks con- tested some of the details. The greatest objection to the bill when last introduced being the provision to limit the total amount of deposits to lOOZ., he would now propose, as it did not affect the bill at all materially, to drop that clause ; the law to remain .as it then stood. This was the only material difference; there were minor points, but they were not worth pointing out. He then went over the changes which the bill proposed to make in the law ; the ample security he A\'islied to give to all who deposited money in Savings Banks, at the same time taking no superfluous securities and imposing no unnecessary restrictions in order to guard the interest of the public. Should the local authorities of Savings Banks still be found unwilling to part with their own control, or admit any interference on the part of the Government, there was only one course left to him — namely, "to abandon the bill," to leave things in their present position, and continue a system by which the depositors are left entirely to the security of the local officers ; while at the same time Government is left Hansard, vol. cxliv. p. 1292. OPPOSITION TO SIR O. LEWIS'S BILL. 161 wholly irresponsible, except for the amounts actually lodged in its hands. " I trust, however, that the plan will be considered a reasonable plan," said the Chancellor, in conclusion, " that it will be found not to impose upon the local authorities any shacldes of which they can reasonably complain, and that no securities are denianded on behalf of the public beyond what are absolutely necessary."* Sir Henry Willouglibij held that the law needed consolidating before any new Act was passed. It was not long since 200 petitions were presented to the House for a consolidation of existing statutes, and an inquiry into the entire system. Let the House take this step first. After speaking warmly on the subject of the disposal of Savings Bank money, he appealed to the Chancellor to refer the whole subject to a Select Committee, who should recommend a clear and well-defined legislative enactment. Mr. Sotheron Estcourt and Viscount Godericli took the same view ; the former gentleman, however, warmly approved of the Government bill, which had "happily been re-introduced," and thought that "most of the alterations made were improvements." As a trustee of a Savings Bank he would consider his position infinitely im- proved by the bill. If, however, the feeling of the House was for a committee, this course could not prejudice the bill, though it would delay it. Mr. Thomas Baring thought the matter should go before a Select Committee ; so did Mr. Henley. The Irish members, Mr. Slaney and others, were for passing the bill, and not deferring legislation any longer on any pretence. The Chancellor of the Exchequer opposed any further delay ; the adoption of any other resolution would simply tend to shelve the bill for another session. If honour- * A clause was added to the bill now introduced to prohibit the assumption of the title of "Savings Banks," by institutions not established under th^ Savings Bank Acts. M 162 SAVINGS BANKS. able gentlemen really wished to reject the bill, let them resort to the direct and fair course of doing so. He also was for consolidating the laws relating to Savings Banks ; but till that could be done he thought it by far the best plan to introduce a few more clauses into the law to remedy griev- ances which could not wait to be redressed. The motion was then agreed to. The second reading came off on the 8th of June. Mr. Ayrton, in along and animated speech, during which he said that the greater number of Savings Banks were now most efficiently managed on a principle which was most con- ducive in binding the humbler to the more influential classes, and that he could conceive nothing more calculated to destroy that sympathy than the present proposals — " felt inclined to move that the bill be read a second time that day six months." The result of the proposals would be a step in the direction of the system which obtained on the Continent, where every function of the community was usurped '•' by what was called the civil service of the country." Amidst cries of " Divide," Mr. Ayrton said he was strenuously opposed to any such system. Mr. McCann said the whole body of the people were unanimous in applauding the measure of the Chancellor of the Exchequer. Sir Harry Verney approved of the principle of the bill, but said he would like to see the subject referred to a Select Committee. Mr. Barrow opposed the bill and the Select Committee also. Mr. Estcourt again, in an admirable and temperate speech, during which he showed an excellent knowledge of the subject in all its bearings, assisted the Government in their proposals. To give the reader a proper idea of the ground taken by Mr. Estcourt, who, when the com- mittee was eventually appointed, was made chairman of it, we need only give the concluding part of his speech on this occasion : — ■ MK. SUTIIERON E8TC0UKT. 163 " He earnestly wished that this session wouhl not pass without a Govern- meut Sa\'ing3 Bank bill becoming law, and he hoped the honourable gentle- man would persevere with this bill ; but even should the bill jiass, he joined his voice with that of others in entreating the Government, after giving the poor man the guarantee which he did not now possess, to give to the public generally more accurate information on the whole subject, a clearer account of how the money was applied, and how the deficit spoken of had arisen. That information ought to be given, if only for the purpose of showing the groundlessness of the suspicious observations made against this bill ; and therefore, though he heartily concuiTed in giving his voice for the second reading, he joined with other gentlemen in entreating the Government to give them a Select Committee, not in order to shelve the bill for the session, but, next year, for the purpose of assisting the Government, and giving the puldic that information which they ought to have." Mr. Glyn and Mr. Marjuirc approved tlie bill without reference to a Committee, one of these gentlemen submitting that the Committee could sit on the general subject after the bill had passed into law. In reply, Sir George Lewis took the latter view, and said he would be glad to give every facility to the Committee in that case.* After demolishing the man of straw Avhich Mr. Ayrton had set up, the bill M'as carried without a division. So far things went on prosper- ously, but the opposition gathered in strength ; Savings Bank managers again took the matter up, and urged, by petition and otherwise, that nothing should be done till a Committee inquired into the matter, and a bill be founded on the result of their investigation. The Chancellor of the Exchequer appointed several nights on which to proceed witli the bill, but each night there were so many notices given of motions with regard to the subject — generally twenty or thirty — that the Government were compelled by the pressure of other business again and again to defer the consideration of it, and ultimately * A few days after this. Sir George Lewis gave a pledge to Viscount Godericli that, if the bill passed, the Committee should be appointed to consider every question that Sir H. W^illoughby had raised. U 2 • llU- SAVINGS BANKS. to withdraw it. In reply to Mr. G. A. Hamilton, the Chancellor said, on the 21st of August, 1857, that he had come to this latter conclusion mainly from the considerable misunder- standing existing among the local administrators of Savings Banks. He thought his proposals had not received the appro- bation which he conceived their merits justified.* He would offer no pledge for the future, however, further than this, that if the House next session appeared to wish for a Select Committee, he would agree to the appointment of one. The House of Commons met in the November of the same year, when the question being again raised. Sir George Lewis gave notice that immediately after the holidays, he would propose a Committee of Inquiry, who should be instructed to go into the entire subject. The Committee which was appointed on the 9th of February, 1858, "to inquire into the Acts relating to Savings Banks and the operation thereof," consisted of the following members : — Mr. Sotheron Estcourt (Chairman), Mr. Bouverie, Mr. Ayrton, Viscount Goderich, Sir Henry Willoughby, Mr. Bonham Carter, Mr. E. Egerton, Mr. Pagan, Mr. Cowan, Mr. Grogan, Mr. J. A. Turner, Mr. Henley, Mr. Whitbread, Mr. Bramstone, Mr. Adderley, ]\Ir. Gregson, and Mr. Thomas Baring. They sat twenty-one days, and examined Sir Alexander Spearman, Mr. Tidd Pratt, Lord Monteagle, Mr. C. W. Sikes, Mr. John Craig ; and the * The trustees of the principal Savings Banks again petitioned against the bill. The petition from the St. Martin's Place institution prayed " your honourable House to pause ere you pass such an Act as would assuredly compel your petitioners, and, in their view, all parties similarly situated, to resign the charge which they have hitherto had so much pleasure in fulfilling, and, as they may venture to assert, with entire satisfaction to the parties pecuniarily iiterested." In their opinion " considerably more importance has been at- tached to the terms ' Government security, ' and ' Government guarantee, ' than the facts of the case would require." A COMMITTEE IS APPOINTED. 165 following eminent actuaries or other officials of the principal Savings Banks in the kingdom : — ]\Ir. Edward Boodle, of the St. Martin's Place bank ; ]\Ir. Shopland, Exeter ; Mr. Wortley, Fiushury bank ; Mr. Saintsbury, jMoorfields bank ; Mr. J. Hope Nield, Manchester ; J\Ir, Maitland, Edinburgh ; JMr. Meikle, Glasgow ; Mr. Sturrock, jun,, Dundee ; Mr. Jameson, Perth; ]\[r. D. Finney, Marylebone bank; jSIr. Hatton, Brighton ; ]\Ir. Deaker, Dublin. IMr. W. H. Grey, a Govern- ment actuary, and ]\Ir. Edward Taylor, of Eochdale, attended to give evidence on the sul)ject of Savings Bank frauds. The Committee, as might be expected, from this imposing array of names, collected a most interesting and important body of evidence, and presented, pretty unanimously, an extremely exhaustive and important report to the House. Upon the report of this Committee we shall have to draw pretty largely in more than one succeeding chapter, and will therefore content ourselves with describing briefly the general nature of the evidence, and with giving a sum- mary of the Eeport presented with that evidence to the House. Further on in the present chapter we propose to attempt some account of the arguments used in the Committee with regard to the investment of Savings Bank money, when, two years later, a bill founded on the recommendation of the Com- mittee was brought before the House of Commons, where the subject was warmly discussed. In this way, all the im- portant conclusions come to by the Savings Bank Committee will at one time or another be fairly noticed. The evidence itself may be classified as follows. Mr. Tidd Pratt came on first, and gave information of the course of legislation on the subject, and in other ways the results of his long expe- rience in such matters. Sir A. Spearman gave a full account. 166 SAVINGS BANKS. in an examination lasting over four days, of tlie mode in ■\vliicli investments were made at his office, and of the principal financial operations connected with these invest- ments. Lord Monteagle, by permission of the House of Lords, attended and gave the Committee the benefit of his long and intimate acquaintance with such financial subjects. Mr. Boodle, who took the lead of the actuaries, and who, while falling into several inaccuracies, showed perhaps the greatest practical acquaintance with the subject in all its different bearings, described not only the manner of conducting the St. Martin's Place bank, but conveyed to the Committee the prevailing impressions of Savings Bank officials on the sub- ject of the investment of their capital. Mr. Craig, of the Bank of Ireland, explained at length his system of book- keeping, and humorously described its introduction into the Cork Savings Bank. The other actuaries described the peculiarities of the different banks they represented ; described frauds, and spoke of checks which had been devised for preventing their recurrence ; and gave theu- opinion, which will be seen subsequently to have been anything but unanimous, on such disputed points as the limits of deposits, the rate of interest, making the audit, and regulating the expenditure. Few of tlie witnesses left the box without offering some practical suggestion, or recom- mending something of value. All the gentlemen agreed as to the necessity of doing something. Most of them thought an independent Commission should be appointed to manage the affairs of Savings Banks. Every witness expressed his opinion that the one thing needfid M^as a Government guarantee for the absolute safety of all deposits ; and al- thouuh ^Ir. Ciaiu' and otliers thout-ht that this should be THE QUESTION OF GOVERNMENT GUARANTEE. 167 supplemented by a staff of Government inspectors, regarded the change as imperatively required* It is impossible, how- * Mr. Sikes said (2,628), "I believe that one great essential for the future progress and prosperity of Savings Banks would be the guarantee of the Government for every deposit duly made in the hours of business " Mr. Wortley said (1,570) that he thought it a desirable thing, and also Govern- ment auditors or inspectors. Mr. Hope Nield (1,937) thought it "desirable decidedly, if it can be obtained without trammelling or destroying the opera- tions of the banks." Mr. Maitland " had no doubt whatever about it being a desirable thing, if it can be safely given " (2,153). Sir Alexander Spearman gave his opinion at greater length (4,368). "There will be no satisfactory amendment of the law unless the security of Government is given to depositors. I think it is impossible that the present state of tilings should he. allowed to continue. The question has often been discussed, and depositors in many cases have believed that they had the security of Government, and found to their cost that they had not ; complaints are constantly arising ; ajjplications are constantly made to know whether they have the security of Government or not. I think myself that dejiositors are entitled to have the real protection of a Government security, but I think also that it will lie quite impossible to give this security without at the same time giving to the officers of Government a very different power of dealing with the management of Savings Banks. It would be idle to talk of the one without the other." So weighty are the con- clusions to which the Committee of Inquiry came on the subject of this guarantee that we present them here in cxtcnso. "A very general impression prevails throughout the country that the Government is bound to make good a deficiency whenever a deficiency occurs ; a claim accordingly has been made, in several instances, on Parliament to replace the money of depositors in cases of defalcation. This impression is not warranted by the laws which regulate Savings Banks. It is difficult, however, to maintain that Parliament, having released local trustees fi'om their liability, should not be bound to provide some other guarantee for the money of depositors, who have no share them- selves in the management of their bank. It appears to your Committee that an alternative ought to be given, and freely off"ered to the choice of trustees, either to secure the guarantee of Parliament upon such conditions as the com- mission shall prescribe, or themselves to undergo the same liability in regard to Savings Banks as was enacted by 9 Geo. IV. c. 92, s. 9. The able actuaries connected with various large banks, who have attended your Committee, have detailed vai'ious methods by which imposition and error may be rendered almost impossible in large establishments ; but in the case of the smaller- banks, where the funds are not adequate to pi'ovide a staff of paid officers, it will be for the Commission to see what arrangements they can make to check misconduct, and to afford to depositors, at least once a year, a certainty that their money has been duly lodged with the Government, for which purpose some valuable suggestions were made by several of the witnesses experienced 108 SAVINGS BANKS. ever, that we can at any greater length give the recom- mendations which were made on this and other important matters of which the witnesses spoke. Nor indeed can we do more than condense into the fewest possible words the full and voluminous Eeport which the Committee made on the occasion. Seeing that the demand for this Committee was so great, that so much pains were taken to arrive at a just conclusion, and that the Report itself was not without its effect on the institution of Savings Banks, we doubt not that we shall be readily excused for giving prominence to it, and for presenting the resolutions in which the principal points of recommendation are embodied * 1. Tliat tlie laws relating to Savings Banks in the United Kingdom require to be amended, and to be consolidated in one Act. 2. That it is expedient to place the superintendence and management of the general funds of the Savings Banks in a Commission consisting of five members. 3. That it is desirable that this Commission be constituted of the Chancellor of the Exchequer, the Governor of the Bank of England, and three other persons appointed by the Crown, all of whom shall be paid. 4. That all expenses of the Commission be paid out of the moneys of Savings Banks ; that the surplus fund shall be invested in public securities, and the interest cariied to the account of the surplus fund, out of which such expenses shall be defrayed. 5. That the powers and duties of the Commission shall be defined by Act of Parliament ; that provision be made for the summoning and holding, at stated intei-vals, the meetings of the Commission ; that three shall be a quorum ; and the minutes of each meeting duly recorded and signed by tlie Chairman. in the practical management of banks. In one point all the witnesses con- cur ; and yoiu' Committee must record tlieir own opinion to the same eflect, that the most effectual restraint upon malversation is to be found in the pre- sence of a second party in every transaction where money is paid or received ; and that a rule to this eflect ought to be imjierative in all banks, under a penalty on its infringement." * The Committee sat six days deliberating on their Report after all the witnesses had been examined. Draft reports were proposed by jMr. Ayrton, Sir Henry Willoughby, and the Chairman, the report ultimately carried, after a few emendations, being that by Mr. Estcourt. RESOLUTIONS OF THE COMMITTEE. 161) 6. That tlie Eules and Regulations relating to the receipt and payment of all nione3's, and to the purchases and sales of stocks and all securities, be passed at meetings of the Commission specially convened for that purpose, and shall be subject to the approval of the Lords Commissioners of Her Majesty's Treasury. 7. That the annual accounts of the C^ommission, containing the receipts and payments of all moneys, and every detail as to the sales and purchases of stocks and other securities belonging to the Savings Banks, wathin the year ending on November 20, in each year, be audited by the Commissioners of Her Majesty's Audit. 8. That monthlj" accounts of the receipts and payments of all moneys, and of sales and purchases of stocks and other securities, be prepared by the Com- missioners, and copies of the monthly accounts shall be forwarded to the Lords Commissioners of Her Majesty's Treasury, and to the Governor of the Bank of England, witliin one week of the following month. 9. That the annual accounts, containing the receipts and pajTuents of all moneys, and every detail as to the sales and purchases of stock, and of other securities of the Savings Banks, be laid before both Houses of Parliament in the first week of February, if Parliament is sitting ; and, if Parliament is not sitting, then within ten days next after the first sitting of Parliament. 10. That no sales, purchases, or exchanges of stocks or securities held by the Commission shall be" made, except as required for the purposes of the Savings Banks, and that no funding of Exchequer bills held by the Com- mission shall in future be made without the special authority of an Act of Parliament. 11. That the Commission should be empowered by Parliament to invest a portion of such funds, not exceeding one-thu"d of the whole, in other securities than those now authorized to be purchased with those funds ; these securities being such as are created or guaranteed under an Act of Parliament. 12. That it is inexpedient that any existing deficiency of the funds should be made the gi'ouud of reducing the present rate of interest allowed to the banks, but the whole subject of the estimated deficiency be referred to the con- sideration of Parliament. 13. That any future surplus income of the Board shall be carried to the credit of a guarantee fund, to meet any casual charges, losses, or deficiency of income ; but if there shall be no surplus to meet such deficiency of income, the rate of interest allowed to Savings Banks shall be proportionately diminished. 14. That the Commission shall have power to frame regulations respecting the accounts to be kept, and the audit thereof, and respecting the receipt and payment of deposits, on the adoption whereof by any Savings Bank such bank shall acciuire security for the deposits therein guaranteed by Parliament, and that such Savings Bank shall have a special title. 15. That the Commis.sion may appoint such u. 674). THE TEALEE BANK FRAUD. 189 The other modes of enriching himself to which we have not yet referred may be given in Lynch's own words. Soon after his apprehension he made a confession of his mal- practices, in order to exonerate a clerk of the hank who had heen arrested at the same time, and who was at first thought to l)e an accomplice, and we take the man's own account of his ingenious trafficking in forged pass-books as the most lucid one that could possibly be given. "A depositor lodged money with me," said the actuary ; " I entered it in the pass-book, but not in the receipt-book. He subsequently lodged more, say with Mr. Fitzgerald, and it was duly entered iu the pass-book and the receipt-book. For these depositors there necessarily was no account to be found in the bank books, and the party paying him upon notice given would thus be presumptively implicated," He proceeded to give another instance of his artifice : " I frequently took an old pass-book and tore out the bo7id fide deposit leaf ; I made an entry therein in a fictitious name, and a quasi deposit, as if it were some years antecedent. During bank hours I used to hand in those books to whoever might be in the bank, directing notice to be given for the amount, as though the depositor had left it with me for that purpose, as it were, some days antecedently. The manager entering such notice was thus presumptively implicated ; and as the course of the bank uufortimately was to 'keep' and not relodge sums 'noticed for,' the manager of the day marked it as ' kept,' which meant, given to me to give to the quasi depositor." " Kept !" What a fund of irony there is in that one word so applied ! In one or other of the modes described, this actuary, "respected by all who knew him," contrived to " keep," and, what is worse, to spend, 36,00U/. of the hard-earned savings of the poorest classes around him. His 190 SAVINGS BANKS. estate at the time of his apprehension was worth something like 3,000/. ; this property Lynch offered to give up in full, "leaving not even a bed for his daughter ;" but on Mv. Pratt's being applied to for advice^ that gentleman recommended the treasurer not to fall in with the offer, inasmuch as it would be "a compounding of the felony." (825.)* Mr. Pratt had arrived by this time at Tralee, and was engaged in the investi- gation of the affairs of the bank, and in making Jiis awards in the case. That investigation showed the most culpable neglect on the part of the managers and trustees : Lynch had been engaged in his nefarious practices for fifteen years, and yet till the day he made his confession a breath of suspicion never reached one of them. The confidence of the trustees in the man was so unbounded, that one trustee would sign anything he wished ; and the other, who generally acted, signed because he saw the name of his fellow-trustee. Mr. Pratt ascertained that here, as at Cuffe Street, the law had been systematically violated ; depositors had put in money to any extent ; they had deposited their money at all times, and under all kinds of circumstances ; charitable institutions deposited their funds without any limitation, one fund having at one time had as much as 5,000/. in the bank. Mr. Pratt, in making his awards, had to take all these facts into consideration, giving satisfaction so far as it was in his power to those who had made their de- posits legally, and refusing it in all other cases. In this way he made awards on the trustees of the bank to the sum of over 10,000/. The trustees disputed their liability on the strength ,* Mr. Pratt's idea was to make tlio trustees liable in a great measure for the deficiency, as guilty of wilful neglect or default. The advice given as to Lynch's property was of very questioualde projiriety, and very question- able, as it afterwards appeared, in law. The money, however, was lost to the depositors completely, and went to Lyucli's relations. THE KILLARNEY BANK FRAUD. 191 of the Act of 1844, and when the case was brought before the Court of Queen's Bench the decision of the barrister was set aside. To this day, we believe, the unfortunate depositors in the Tralee Bank have in no sense, either by private bene- volence or Government aid, been recompensed for their loss. When the blow first fell with all its crushing weight upon the people, they are described as having borne it "with wonderful patience ;" then this state of things was followed by a period of stolid indifference to all the ordinary maxims of thrift and prudence, as if their treatment had destroyed the growth of provident habits. So much is evident from the statements of a respectable solicitor at Tralee who was examined before the Committee of 1848 : — " Can you state (Mr. Herbert to Mr. Justin Supple, 872), from your own knowledge, wliat class of persons the depositors are, generally speaking? — Generally speaking, they are composed of servants, artisans, mechanics, and small shopkeepers. There are a few of a higher class, but they are very few indeed. I have pass-books with me amounting to about 16,000Z., and I assure the Committee that there is not a case in which I could not point out a more or less considerable degree of hardship." He then stated several cases. (878) " Can you state from the general feeling of the country, what evil consequence will be the result of the failure? — Taking the failure," says the witness, "in connexion with the years of famine, I think the con- sequence will be to drive the classes which have been hitherto industrious and economical in their habits, to vice and wickedness, because the dissipated characters who have saved nothing, or did not take the trouble of saving, now look upon the poor industrious creature who has been clieated, laugh at him, and tell him that they have spent their own money, whUe the industrious man has had somebody else to spend his for him." The agitation was at its height in Tralee when news came that the neighbouring Savings Bank at Killaruey had stopped payment. Mr. Pratt had not even finished his awards in tlie one case before he was required to investigate this fresh iniquity. It would seem that the exposure of the one actuary had led to 192 SAVINGS BANKS. closer investigation on the part of the trustees of the Killarney bank, and the earlier development of the fraudulent proceed- ings of the other official. Here again the frauds were found to be of an ingenious character, and might have been con- tinued over an indefinite period, but that the trustees were compelled by the force of public opinion in the neighbourhood to do the work they had taken upon themselves. As it was, the deficiency was found to amount to 20,000/. : the entire liabilities of the Killarney bank were 36,000/., but the money in hand and the jDroperty of the actuary, who decamped, which was calculated to realize about 5,000/., reduced the loss to the former sum. As the average amount due to each person was 45/. we may well conclude that the majority of the depositors were of the poorer classes. Though the real loss was less than in the case of the Tralee Bank, the bank at Killarney was found to have been managed with greater carelessness ; the trustees and managers professed to make a yearly audit of accounts, but this to all intents and purposes meant nothing more than taking the actuary's word for everything. The details of this fraud have never, so far as we can find, been made the subject of a searching public investigation, so that little more is known than that the frauds in question were of the usual character. Mr. Pratt, in a short report which he presented to the Lords of the Treasury after he had visited the place, said that he found the one case to be very similar to the other (Tralee), both as regards the actuary and the managers. In both cases the accounts of the treasurer were correct, and in both had the trustees grossly neglected their duties. Here again he made awards against the bank to a large amount, and in one respect these awards were much called in question. This public officer received much blame, THE AUCIITEIIAEDER BANK FEAUD. ] 93 both in and ont of Parliament, for the character of his decision, whereas it seems quite evident now that he simply endea- voured to carry out the regulations of a most imperfect law. The law of 1844, there can be no doubt, was unjust in the case of one class of depositors at Killarney. On the clauses of this Act, Mr. Pratt was compelled to award to those depositors who had contributed their money after 1844, only the surplus money which was left after the depositors who had made legal deposits* before 1844 had been paid their claims in full. This decision was, of course, come to on the ground that the trustees had not assumed the responsibility provided by Mr. Goulburn's Act. In this way the depositors before 1844 got 20^. in the pound, whereas those coming after that year only got os. in the pound, and a further small instalment afterwards when the actuary's property was realized. The decision might be right in the eyes of the law, but the law was most unjust that rendered such a decision possible, or proper. The next Savings Bank failure in the order of its occur- rence, which has been made the subject of any investi- gation, was that at Auchterarder, in Scotland, in 1848. The Committee of 1849 were appointed to inquire into the case, as well as the Irish cases already spoken of, but we do not find that any evidence was taken on the failure in question. It seems, however, that the Auchterarder Savings Bank was a branch of the important institution at Perth : notwithstanding this, it was locally managed, the local trustees, furthermore, being held responsible for any irregularity. This small bank * As usual, many persons had been allowed to deposit illegal sums on which they had no claim. One man was shown to have taken out 420^. from the Provincial Bank of Ireland, and to deposit it all in the Killarney bank in one day. O 194 SAVINGS BANKS. was originally established in 1841, the principal landed pro- prietors and ministers of various denominations taking part in its organization. In seven years the number of depositors had reached to 2,000, and as the total amount standing to the credit of each person was less than the average of 10?. they must have consisted of the very poorest part of the population of this rural district. The number of managers amounted in all to forty ; but the ruling power was John Find lay, cashier and parochial schoolmaster, and the sole paid officer of the bank. In December, 1848, a trifling inaccuracy was found out in his accounts, when he lost no time in absconding. It was then seen that he had within seven years appropriated 1,500?. to his own use. The liabilities of the bank were 4,300?., whilst the available assets only realized 2,774?. The dividend, given out of this money, a subscription entered into by the trustees and their friends, and the sale of the defaulting actuary's small estate, ultimately reached to eighteen shillings in the pound. "What benefit it was to the poor people at Auchterarder to be connected, as one of several branches, with the flourishing concern in the neighbouring county town, we are at a loss to understand. This connexion did not pre- serve the accounts from being tampered with; it seems to have aff'orded no check : and when a paltry sum of 150?. was needed to reimburse this deserving population in full, the Perth institution came forward with — nothing better than advice ! * It surely cannot be a matter of surprise that the bank was " never re-opened," and that " no private gentlemen could be found to undertake the trouble or risk for the fitture." * Vide Select Committee on Sainngs Banks, 1858. Evidence of Jlr. Jameson, actuary of the Perth Bank. (Qu. 2,906.) THE KOCIIDALE SAVINGS BANK. 195 We have liitherto been concerned almost entirely with Irish Bank frauds ; henceforth we shall have to deal exclusively with English ones. Not only on account of the date of its occurrence, but from its magnitude and enormity, the fraud on the Eochdale Savings Bank deserves the first place. It is not too much to say that no Savings Bank defalcation equalled this one in the depth of its iniquity and cunning, and in the disastrous effects which followed, affecting as they did the growth of provident habits not merely in that parti- cular locality, but throughout the entire kingdom. The Eochdale Savings Bank was commenced in 1818, or immediately after those institutions were recognised by the State. It seems to have been started in the usual way, and to have progressed with great rapidity, — the community about Eochdale forming a very favourable specimen of the Lanca- shire people. In 1822, George Haworth, a young man of twenty-one, succeeded his father, John Haworth, who had been actuary of the bank since its commencement. As the son remained with the bank almost till its affairs were wound up in 1849, he may be said to have been associated with it through its whole course of thirty years. When very young, this man appears to have shown extraordinary energy and talent for business, and each year he not only added to his engagements, but seemed to accomplish all he undertook with equal readiness. In addition to his duties at the bank, he first took an agency for the sale of wool, then, as now, the staple trade of the town ; then he obtained an agency for the sale of porter, both from a Dublin and a London house. Latterly, however, he had advanced himself to the dignity of cotton spinner, and was occupier of a large factory ; was at the same time a land agent, estate agent for several gentle- o 2 196 SAVINGS BANKS. men who possessed large properties in the neighbourhood, an insurance agent, and valuer and receiver of rents for the Lancashire and Yorkshire Eailway Company. Not less on account of his more private character than from those multi- farious matters with which he was connected, Mr. Haworth was a man of mark in the place. He was a member of the Society of Friends, and this of itself was a password to the trust and confidence of many men.* Whenever anybody wanted a chairman, or sought a little patronage for anything literary, scientific, or charitable, resort was had to " Friend Haworth ;" " he always patronised such things as far as he could;" and who could do more, especially one who was "not himself a particularly talented man V'f " Talented" he might not be in the ordinary acceptation of the term, nor indeed need he have been, to do this much ; but never was there a man more talented in the art of deception. " He deceived everybody by an appearance of wealth." He lived hand- somely, " though scarcely with any particular extravagance ;" he was above mere "gig respectability," and rode in his car- riage. " For the reputation of honesty, probity, and wealth," said Mr. Taylor, " there was no man in Eochdale who stood * An estimable sect of Christians, they are not better known for the zeal with which they contrive to amass and keep in their immediate circle vast stores of wealth, than for the uprightness and conscientiousness they generally display in the conduct of their business. The transactions of Haworth, and another of their black sheep who about the same time committed, or attempted to commit murder, whilst assuming their character, is described to us as having spread consternation and dismay through their ranks. The way in which the Society of Friends has, as a body, taken up the management of Savings Banks is most commendable. t A great part of our information relative to the Rochdale bank fraud is gathered from the evidence of Mr. Edward Taylor, a worthy and intelligent tradesman of Rochdale, who was examined before the Committee of 1858 in reference to the transactions in question ; and no one is better able to speak of them. GEORGE HAWOKTH. 197 higher;" and so far did he disguise his real character, that his most intimate friends were those who were most deceived by him. " He was not only," says a friend of ours, who himself suffered by his frauds, "never suspected of doing wrong, but he was regarded as above suspicion and uncommonly safe." It is true that some persons now and then expressed their surprise that George Haworth should act as actuary to a Savings Bank, and moreover attend so closely to his duties there when his hands were otherwise so fuU ; but Haworth ■deceived even these people by putting his connexion with the bank on the ground of charity, and an anxious desire to pro- mote the happiness of his poor feUow-tradesmen, — for whom indeed he was each day laying up increased stores of untold niiseiy. Clever to the last, but supposed by some — of course wise after the event — to have gradually failed in heart and strength after losing his father-in-law, who it now seems was his confidential assistant and accomplice, he escaped his justly-merited punishment in this world, and by an inscrut- able Providence was allowed to die unmolested on the 19th of November, 1849. Deluded to the last, his fellow-townsmen considered his loss irreparable ; it was a general feeling that this man should have a public funeral, and it was nearly being so concluded when the relatives of the deceased stepped in and wisely put their veto upon it. Strange to say, but only in keeping with the unnatural strangeness of the whole affair, suspicion never entered into the heads of any one, high or low, in connexion with the bank, till this man was far beyond the reach either of earthly anger or law. The trustees and managers were called together after the funeral ; and so igno- rant were they of the real state of the case and the true nature of their late actuary, that they thought they were met simply 198 SAVINGS BANKS. to elect his successor, and were actually prepared with dif- ferent nominations, and not to hear from the dead man's attorney that the "wealthy and respected man" had been for twenty years trading on the falsest of false pretences, and fattening on the hardly-earned scrapings of the poor whom he had so patronized. Haworth's solicitor told the unwelcome story of a deficiency. Enough was said to make the trustees at once decide to call in the depositors' books, and in the course of a few days it was ascertained — though it took a much longer time to credit it — that the liabilities of the bank amounted to 100,403/., that the total assets were calculated to realize 28,686/., and that the deficiency amounted to the enormous sum of 71,715/. In the course of two or three weeks the trustees made the announcement of the defalcations to the public, with what result may be better imagined than described. At first the depositors took the matter veiy calmly — a feeling in which was mingled incredulity ; and a disbelief that they would be allowed to lose so much money got possession of the people's mind. The general opinion was, till undeceived, that the Government would have to stand to the loss.* Of course this made it all the more deplorable when the real facts became known. One of the witnesses who was examined before Mr. Slaney's Committee on the savings of the middle and working classes (1850), gave the following evidence of the feeling in Eochdale at the time : — " I was in Lancashire some time aso, meeting with large bodies of working men at the time of the failure, and I shall not soon forget some remarks that were made about the Government. One man said, 'Dr. McDowall * So prevalent was this impression, that for several weeks 17s. M. in the ponnd was frcelj^ offered for Savings Bank books in Rochdale. THE ROCHDALE BANK FRAUD. 199 came here, and told us that the Government was a set of robbers, and that they did not care about the property of the working men.' He said, ' I did not beKeve Mr. McDowall then ; but when I see there is no security for the savings of the working men in the Savings Bank, and we supposed Government had them under their protection, I believe now that Mr. McDowall was right, and that Government cares nothing about either the poor man or his savings.'" Of course we give this extract simply to show the effects of the fraud on the minds of the poorer classes, for nothing could be more unfair than such conclusions. Soon the depositors came to look the loss fairly in the face ; they elected a committee of their number to act for the rest, and Mr. Taylor, the witness before the Conmiittee of 1858, was appointed chairman; they agreed to avoid litigation if possible, and relied on private benevolence and the possibility of a grant from Government to make up the deficiency. The sum of 17,000/. was readily subscribed among the trustees and tlieir friends ; another sum of 17,000/. was realized out of Haworth's estate, and ultimately the managers were enabled to give a dividend to depositors of 12s. 6d. in the pound. Thanks to Mr. Taylor's intelligent evidence, we have not only gleaned the above particulars, but we are enabled to give some account of the way the Eochdale frauds, which entailed so much misery and so much loss, were accomplished. As the first question likely to arise in the mind of the reader would be, doubtless, to ask where were the trustees, it would be wise to dispose of it first. Haworth " was exceedingly re- spected, and everybody had faith in him," says Mr. Taylor, naively ; " but from what we discovered, he must have been exceedingly designing for many years." In no instance that 200 SAVINGS BANKS. has come within our notice were the trustees, who ought to have been this man's master, so completely his tools. Hawoith was so much the factotum of the bank that he really appointed the trustees ; and so " designing" was he, that when he got some one appointed who was likely to attend to his duties, or be otherwise troublesome, he took care to keep the knowledge of the appointment to himself. Mr. Taylor gave his own case in corroboration. This gentleman iound out afterwards, that he had been appointed a manager in 1838, and never was aware of the interesting fact till the hanJc failed in 1849. "I never was at any meeting ; I never was called upon to attend any meeting; and I can name several others in the same way." Of course Haworth took care to make a show of having trustees. When the same witness was asked (qu. 3,175), if any attended, he said that " one or two attended occasionally ; one very old man indeed, who was Haworth's tailor, really was a trustee, and he attended, I dare say, once or twice a month, and sat in the bank ; but he was a very imbecile old man, and would do whatever George Haworth told him to do." Sometimes Haworth had to manceu\Te a little in order to get his returns signed, and then he would resort to the trustees whom he in a manner kept in stock. A case in point is recorded. A gentleman named Chadwick was pass- ing the bank during one of Haworth's times of need, and the actuary called him in, and asked him to be kind enough to sign a return. Mr. Chadwick naturally hesitated, as having nothing to do with the bank. " But thou art a manager," said Haworth, showing him his name, for the first time, in a printed list ; and Mr. Chadwick, thinking that he had perhaps just received this mark of the actuary's esteem, at once fell in with his request, and signed the return. THE EOCHDALE BANK EKAUD. 201 Haworth knew better than neglect to make out and send the proper " returns ;" the expedients, however, by which he contrived to get them, false and true, signed, were wonderful for their cunning and daring rascality. It is impossible to spare space to describe them in detail. " Is it your belief," said Mr. Sotheron Estcourt to the Eochdale witness, " that the returns were always properly furnished ? " " I should say so," said Mr. Taylor ; " Mr. Haworth was exceedingly exact!" When asked why the managers and trustees did not look at the papers to which they put their names, Mr. Taylor said, in justice to these men, that " George Haworth's power of deception was very great, and they were deceived by him." When it suited him he would deceive a gentleman into taking office, and then constantly deceive him in the execution of the duty allotted to him. He went to one gentleman and asked him to become a trustee ; the person excused himself on account of his business occupations and the risk ; Haworth said that the re- sponsibility was with Government, and showed him a draft bill which had never been passed into law ! Satisfied on this point, the person then inquired as to his duties. The arrant rogue said he wanted his name to act as a check on the managers, and sign orders for money which they had audited ; for "the managers manage the hank." When Haworth had obtained the names of gentlemen to act as trustees, &c., on some false pretence or other, he had the audacity to trade upon their names. If any poor person, on becoming a depositor, began to express any doubt about security, Haworth, "who was much looked up to in the town by the poor," made answer : " Thou seest the names of these gentlemen ; what dost thou think of them ?" Having succeeded so thoroughly 202 SAVINGS BANKS. in beguiling those persons who ought to have acted as a check upon him, all the rest was comparatively easy to a clever and shrewd person like Haworth. His task was far easier, indeed, than that of some of the Irish actuaries ; and once the ascend- ency gained over the trustees, nothing but close attention and a vigilant confidant were required. The first defalcation was traced back to 1837, and consisted of his forging the receipt of different persons whom he represented as having received certain sums of money. The great bulk of the fraudulent transactions was accomplished, however, by the actuary keeping two sets of books, one of which, marked " H," were his private books, and the other the public ones. In his private book were found the accounts of nearly a thousand depositors, who, it seems, had been carefully chosen as having the largest sums in the bank, and who generally were bringing additions to their store, and seldom drawing upon it : these moneys he accounted for, " for he was exceedingly exact," — but only in his private books ; he never entered them in the regular bank books, and they were never acknowledged by any one but him- self. Under any sort of supervision or audit from a disin- terested second party, the discrepancies must have been found out ; the trustees, however, as we have seen, did just as they were ordered, without ever thinking of questioning anything ; and the yearly audit, which this "exact" man insisted upon — he made himself ! " The following is another instance," to quote from a little pamphlet published at the time, " of Haworth's cunning and duplicity: — A friendly society of Ploughboys deposited on a given day 30^., which was properly entered in the book, and laid before the trustees. Shortly afterwards the actuary must have erased the word 'deposited' and substituted ' withdrawn,' at the same time placing the figure 1 before the EFFECTS OF THE ROCHDAXE FKAUDS. 203 30, thus making it appear that the society, instead of de- positing 30^. had withdrawn 1301" With this last instance of his villany in his raid on the Ploughboys' money, we leave George Haworth to the deliberate judgment of posterity, in the hope that this case may always be the blackest page in the catalogue of such crimes. The effect of this fraud, when the depositors found that no help was_coming, was most disastrous ; some of those who had lost considerable sums of money took to hard drinking, de- claring that they would spend their own money themselves : the feeling found expression in such phrases as, " We will spend our money rather than a George Haworth shall have it." If the moral influence associated with such habits as those of economy and forethought were not annihilated, they seemed to be, and the lessons as well as the savings of years lay bu.ried in this bad man's grave. The Eochdale bank was never re-opened ; the bank at Heywood, a small town about four miles distant, was entirely closed by the shock which followed after Haworth's decease ; and in many towns in the North of England, but especially in Lancashire and York- shire, the case exerted an evil influence for many years on the spread of provident habits, and is still bitterly remembered. Among the details of several cases of fraud in Savings Banks that were presented to the Committee of 1848, we find some particulars of the defalcations at Eeading and Brighton, which we mention together, inasmuch as the same actuary related them in brief, and in fact was connected with both investigations to which they led* In 1842 a fraud was dis- covered in the Eeading bank through one of the clerks there Evidence of Mr. Hatton, actuary of the Brighton Savings Bank. 204 SAVINGS BANKS. noticing that a depositor's book did not agree with the ledger account. The books of all the depositors were called in, and great numbers were found not to correspond. Ultimately the frauds were found to have extended over several years, and to amount in all to 3,000^. They were easily traced to the secretary of the bank, who was also the accountant. It seems he took sums of money from depositors, entered them in their books, but not in the ledger of the office ; and hoped by constant attention to the work to be present whenever any of the books that had been tampered with were brought to the office. So culpable in this case did the trustees feel them- selves to be, that the secretary was allowed to refund the money he had taken, so long as his private funds lasted, and was then quietly dismissed. Being before the year 1844, the trustees were liable to the whole extent of the defalcation, and proceeded to pay off all depositors by means of a sub- scription amongst themselves, one of them giving 1,000^. Mr. Hatton, then a clerk in the Heading bank, was employed to investigate the fraud and bring matters to a settlement ; and this he did so ably, that he was appointed actuary. In seven years from this time, Mr. Hatton was engaged upon an equally unfortunate business in connexion with the Savings Bank at Brighton. A deficiency was found out in this bank in 1849, to the extent of nearly 4,000/., and was proved to have arisen from falsifications in the accounts of Mr. BuckoU, who for many years had been actuary of the bank. The first suspicion of anything being wrong was felt by one of the managers, who, somewhat shrewder than the rest, went carefully through the balance-sheet of the year 1848, under the impression that the amount of profits ought THE BRIGHTON BANK FRAUD. 205 to have been larger. He was unable to do more, however, than confide his suspicions to the actuary of the Eeading bank, and to request his opinion. After Mr. Hatton had examined into the amount of business done, and compared the business with the capital and the various items presented to him, he expressed his opinion that the profits on the year should have been at least 100^. more than they appeared to be. Strengthened in his opinion by this advice from an experienced actuary, the manager in question, at the annual meeting held immediately afterwards, got up and said that he did not feel satisfied with the balance-sheet, and moved that the meeting should adjourn for a short time for some investigation to be made. A close examination of the accounts was so little to Mr. Buckoll's mind that he "decamped," leaving a letter for the managers, in which lie stated how unworthy he had been of the position he had filled, having committed frauds on the funds of the bank to a considerable extent. A warrant was immediately issued for his appre- hension, with a view to criminal proceedings, but he got clear away; and up to within a few years ago had never been heard of Mr. Hatton, who succeeded eventually to the situation which Buckoll filled, was called in to pursue the investigation into the case, and it is from his evidence before the Committee, already so often alluded to, that we are enabled to extract some account of the way in which the frauds were accom- plished. The actuary, it seems, made false entries in de- positors' books, false entries in the ledgers, and forged the initials of managers, who were required to certify to each entry in the latter. If he wished to draw 100/. from the funds of the bank, his plan was to get hold of a pass-book, — ■ a new one, if he could not find an old one readily, — forge 206 SAVINGS BANKS. entries in that book as well as corresponding entries in the ledger; this book he would present to the managers in attend- ance^ who readily paid the amount. In some cases the money was left with Buckoll to pay over to the quasi depositor, as was then too much the custom all over the country. Afraid, how- ever, to do too much of this sort of work himself, he arranged in several cases to have the money paid on what is known as a power of attorney, or an order for payment to a second party. Thus he went among his friends, and represented that some poor person or other had applied to him to withdraw a sum of money standing to his credit ; but as he could not act as his agent in the matter, and the party could not himself attend at the bank, would Mr. So-and-so oblige him by simply going and receiving the money ? These persons, who in all cases were proved to have been innocent agents in the trans- action, relied on the character of Buckoll, who of course was highly respected in the town, and would then hand the money over to him according to agreement. Another mode by which, towards the end of his course as actuary, he contrived to appro- priate to his own use several large sums of money, was by taking deposits out of course (as in the case of the Dublin actuary, even in the street), and never in any way accounting for them to the bank. What the trustees were doing during all the years these frauds lasted, how the accounts were made to square, and where the system of check was, does not appear. Mr. Hatton, in justice to the trustees, said they "were as efficient as trustees and managers are found to be ;" but this kind of evidence is simply a reflection on the general body of such officers, and scarcely any exculpation of the individuals in question. The system of check was clearly inefficient. It is pleasing to add, that in this case the depositors li FRAUDS IN THE ISLE OF WIGHT. 207 suffered nothing from the frauds. The bank had money in the " separate surpkis fund" to the extent of 3,000Z., and this, with 600^. which an unfortunate Guarantee Company had to pay for the defaulting actuary, paid nearly all claims. From 1851 to 1861 there were numerous instances of frauds in Savings Banks, all which cases will he found included in a list at the end of this chapter, though not described at any length. It is the less necessary to do so, as nearly all of them are fully described in reports made by Mr. W. H. Grey, a pro- fessional actuary, who had long been experienced in Savings Bank matters, and who had been sent down by the National Debt Commissioners to investigate such cases as they arose. It would appear from his reports that most of them were imitations on a small scale of the gigantic frauds already described in detail The common feature of almost every case was extreme laxity of book-keeping;* nothing like a proper audit ; and signatures given by responsible persons without even a cursory examination. Thus in the Isle of AVight Savings Bank at Newport, ]Mr. Grey's testimony is, that he found that "fictitious documents, purporting to be signed by depositors, giving notice of their intention to withdraw a part or the whole of their deposits, have been produced by the secretary, on the faith of which cheques have been signed by the attending manager without seeing the pass-book, and without ascertaining whether such sums were really standing in the ledger or not. These cheques have been entrusted to * It almost passes the bounds of credibility, and yet it cannot be denied, that in two separate banks, where the accounts were thus overhauled, items of money to a large amount were repeatedly found entered in the books with nothing but a pencil ! 208 SAVINGS BANKS. the secretary for delivery to the depositors at any time they might call for them, instead of insisting on personal attendance during bank hours." The actuary of the Rugby bank com- mitted his frauds in the same way. Again : " In some cases, fictitious accounts had been raised in the ledgers, and closed again immediately the fraudulent repayments had been made ; and in other cases in which the amounts had been previously withdrawn, the dates of the real withdrawals had been altered into those of the fraudulent ones." No comparison, it seems, was ever instituted between the cash-book and the ledger, and the system pursued had practically left the whole control of the receipt and payment of about 30,000^. a-year to one individual. The secretary, indeed, William Wheeler Yelf, " was generally much respected in the island," was distri- butor of stamps, did a large business on week days, and was employed as a Wesleyan preacher on Sundays ; but we have seen how much all this, and more, avails where the man is thrown amongst overwhelming temptations and has no prin- ciples to guide him. We have already spoken of many of the results of the Eochdale fraud ; the case of the Isle of Wight bank shows that that fraud affected other banks. It was suggested after the failure of the Eochdale bank that the trustees of every other institution should at once set about a rigid comparison of the depositors' books with the books of their respective banks. The Newport trustees at once acted upon the suggestion of the National Debt Commissioners. They established tJie practice of having the balance-book con- taining a list of the balances due to depositors always on the table when the bank was open, and of comparing this with the depositors' books brought to the bank. Had not Yelf been a clever swindler, or had the trustees carried the plan to a fair RECENT CASES OF FRAUD. 209 conclusion, he would now have been found out. Mr. Grey- thus explains the new deception adopted to conceal the de- ficiency : " At the annual examination both ledger and balance- book were duly placed in the hands of the managers ; but when they had satisfied themselves that all the balances had been correctly transferred, they shrank from the laborious task of adding together two or three thousand accounts, trusting to the secretary's addition." Tliis labour was just what Yelf wanted. " In point of fact," continues Mr. Grey, " the addi- tion of each page was correct, but the total of each page was brought into a summary page at the end ; and in doing so, 1,000^. was dropped in one place, 1,OOOZ. in another, in the capital column, and 20/. here and 30/. there in the interest column, with some odd money to make up the required de- ficiency." Well might the Government actuary add, " From these practices it will be perceived how imperfect a system has been pursued, and how little it was calculated to prevent or discover fraud !" We come now to a comparatively recent date, and to two frauds in Savings Banks which must be fresh in the memory of every reader. We refer, of course, to the aggravated case at Bilston, and the late case at Canterbury. A witness before the Committee of 1858 expressed his opinion that from that time henceforth the country had done with extensive fraudu- lent proceedings in any large Savings Bank. It unhappily comes, however, within the province of liistory to chronicle one such case occurring so late as 1862, and another the facts of which transpired even after the passing of the Consolida- tion Act of 1863. I The Bilston Savings Bank was estabKshed in 1838. ISTothing unusual marks its eaily history, except the fact that the man TJNIVERSIT1 210 SAVINGS BANKS. who ultimately managed all its affairs and so largely embezzled its funds was prominently active in its establishment, and was one of the original trustees. To show the estimation in which the Eev. Horatio S. Fletcher was held by his fellow townsmen in 1838, we need only state that in that year, being before simply perpetual curate of the parish, he Avas presented by them with the incumbency of St. Leonard's, Bilston, worth 700^. a year. That he should take a large share of honorary employment after this was only what might have been ex- pected. AYhether expected or not, he did undertake many offices. In 1839, Mr. Fletcher, in addition to being a trustee, was made secretary to the Bilston bank. In 1849, he also became treasurer. Not content with this monopoly of offices, he soon afterwards took upon himself — for there is no record of his having been appointed to the office — the work of actuary. The whole of these offices, and the entire system of check which they are properly supposed to give to each other, Mr. Fletcher held till 1861. And why not? The man was universally known for his charity and benevolence : as the principal clergyman of the place, did he not teach mercy and charity; and, as a magistrate, did he not uphold the majesty and dignity of the law ? Since the way in which trust is reposed in individuals can never be fully explained nor made the subject of rigid rule, who could better be relied on than the Eev. H. S. Fletcher, Incumbent of the parish, and Justice of the Peace ? Nothing can be more easy than to say now, that it was consummate folly to allow one man to hold the im-' portant offices he did ; but who would think of saying so much then f Suffice it to say, that this man, like so many more of wrhom we have had to speak, contrived to ingratiate himself into the good will of all around him, and had that I THE BILSTON BANK FRAUD. 211 peculiar kind of cleverness which succeeds in getting his application and zeal laid to the credit of his disinterestedness and his charitable disposition. Since the subsequent facts make it impossible to put a kinder construction upon them, all the rest follows in this case simply as a matter of course. On the 3d of January, 1862, the announcement was made in the Times newspaper that the Bilston bank had come to a sad end, and that defalcations to the amount of 8,840/. had been found out in the accounts of the treasurer of that bank. How these frauds, which extended over several years, were accomplished, and how they were found out, remains to be seen. We will reverse this order, and speak of the exposure first. In the spring of 1861, Mr, Tidd Pratt, the energetic Eegistrar of Friendly Societies — whose name indeed seems almost synonymous with such subjects — ^visited Bilston, and delivered a lecture on " Benefit Societies." In the course of that lecture Mr. Pratt alluded to the cognate topic of Savings Banks, and spoke of the necessity for regular accounts and regular returns in connexion with them. He then took the opportunity to refer to the " very irregular manner " in which the accounts of the bank in their own town were kept, Now, it must not be supposed that Mr. Fletcher had forgotten his returns ; he was far too careful for that ; he knew the penalties attacliing to such neglect. It seems that both weekly and annual returns, although they were habitually and carefully " cooked," were regularly forwarded to the National Debt Office. The " Eeturus " to wliich Mr. Pratt appears to have .pointed, were those called for annually by the House of Commons, with the object of improving the law of Savings Banks ; and these returns, from 1855 to 1861 the factotum of the Bilston bank had constantly neglected to send. Mr. Pratt, in continuation of his statement afterwards, confessed he p 2 212 SAVINGS BANKS. knew notliing of the circumstances of tlie bank, further " than that his suspicions were always aroused in cases where he found any accounts were not properly rendered." There can be no doubt about it, that this reference roused the " reverend defaulter " to a sense of his danger ; for it subsequently transpired that not a penny was abstracted unlawfully from the bank after the week of Mr. Pratt's visit and lecture. Furthermore, not only was the culprit aroused, but the trustees were awakened to some sense of their responsibility, and very soon afterwards there was a movement amongst them for a change in the management and an overhauling of the books of the bank. In a very few weeks after Mr. Pratt's visit a new set of managers and trustees were proposed, and Mr. Fletcher was deputed to see them, and endeavour to get them to act. In July the appointments were legally made, in- cluding that of Mr. Hawkesford to the post of actuary. Then quickly followed the disclosure which indeed, sooner or later, was now inevitable. The new actuary got the books from the parsonage — the bank being held in the school-room of the church — and was not long in finding out some of the dis- crepancies with which they abounded. On first discovering the frauds the actuary spoke to the treasurer, who promised to confer with him about tliem ; on finding out the magnitude of the defalcations, he again mentioned the matter, choosing an extraordinary time, not however without its significance — of a Sunday after the usual service. The clerical delinquent acknowledged his guilt, and said, " He was very sorry, but never intended to defraud the depositors of a shilling." It will be seen, however, that the fraudulent transactions were of such a nature as not to admit of any extenuation, and to render condonation of any sort impossible. Tlie feeling pro- duced by the disclosure was painful in the extreme, and the THE REV. HORATIO S. FLETCHER. 213 country spoke out with vigour on this extraordinary and merciless breach of trust. The local magnates, indeed, and the body of trustees who had allowed these frauds to run on, spoke with bated breath of the " deficiencies " of the Bilston treasurer ; the Times, on the other hand, spoke far more in accordance with the general feeling of the country, when it characterised " this man Fletcher " as " the meanest, tlie most cowardly, and the most cruel of swindlers."* Under his manipulations, the Bilston bank was a Savings Bank in nothing but the name ; there were trustees, but they were tools ; rules, properly certified, but never obeyed ; accounts made out and " cooked," but never checked or audited. The trustees did just what they were bid, and the real operator at the bank did just what he chose. This clergyman and magis- trate was a swindler, his books a heap of lies, his balance- sheets pure fiction. Mr. Pratt w^as sent for to examine into the state of the bank immediately after its condition became known, and it is to the account which he himself subsequently gave to the depositors that we are indebted for most of the particulars which elucidate Mr. Fletcher's mode of operation, when in the thick of his guilt. Mr. Pratt stated, that from 1848 to January, 1861, there did not appear to have been any meeting either of the trustees or managers, for the purpose, according to the rules, of auditing or settling the w^eekly accounts. The Eev. E. J. Heafield, a trustee and manager of the bank, con- fessed at the trial of Mr. Fletcher, at the Staffordshire Lent Assizes, 1862, his own culpable negligence in the following- words : — " The weekly returns signed by me were prepared by Mr. Fletcher. Wlicn I signed them, I never in any loay com- pared them with the looks. They were presented to me either * Tinm, Jamuiry 17, 1862. 214 SAVINGS BANKS. by ]\Ir. or Mrs. Fletcher, and I took no measures to vcrifij their accuracy."* What might not a designing man do with such a tool as this ? Having subdued his trustees in this way, the rest was, as we shall see, quite easy. The books at the bank were, it is only fair to say, kept quite correctly ; so were the depositors' books. According to the evidence of Mr. Pratt : " In the day-book everything was entered with scrupulous correctness ; and 1200 depositors out of 1400 had brought in their books, and he did not believe an error had been dis- covered." Mr. Fletcher chose a somewhat simpler course of action, which we will describe. His duty as actuary of the bank required that he should furnish weekly returns of the transactions to the National Debt Commissioners : the cor- rectness of these returns were to be checked by the treasurer, which office he of course filled himself. All that was necessary to the perpetration of fraud was that this actuary-treasurer should be on easy terms with his conscience, and this imfor- tunately was the sad state of the case. Deceive the Commis- sioners by falsified returns, and any amount of money, under the peculiar arrangements of this bank, might be pocketed without fear. In order to help himself to a full solution of the case, Mr. Pratt brought these returns down from London, and compared them with the bank accounts, with the following result : f — " The whole of the Eeturns he held in his hand were signed by Mr. Fletcher, as actuary and manager. In the statement dated Januar}^ 1, 1859, the amount received w^as returned at 234/. On looking at the books for that day, he found it should have been 334/., therefore 100/. had been abstracted on that day [cries of 'Shame,' and sensation]. V • Midland Corinties Express, Marcli 16, 1862. + Report of the depositors' meetiug, Birmingliam Daily Post, January 16, 1862. THE BILSTON BANK FRAUD. 215 On the 8th of January, he found the payments were set down at 174^., whereas they had only been 74/., thus showing that the treasurer had put another 100/. in his pocket that week. In the return dated January 29, the receipts were set down at 183/., and the payments at 148/., whereas the former ought to have been 283/., and the latter 48/., thus taking to himself 200/. [renewed sensation]." So on through almost all the weekly accounts of three or four years. There seems to have been no other fraudulent transactions than those of this simple but abominable kind; the whole defalcation had taken place in this way, and it was made manifest that no one but the treasurer had participated in it. It is fortunate for the depositors that the frauds were found out when they were ; but for the negligence in sending the required returns ordered by the House they might have been continued for an indefinite period. As it was, the assets of the bank realized in the first instance ten shillings in the pound ; towards the close of 18G2, another dividend of half-a-crown in the pound was paid, and since that time a third small amount has accrued to the depositors, who are never likely to be com- pletely reimbursed of their loss. In 1862, Mr. Fletcher was tried before Baron Channell, and found guilty of " appro- priating money with intent to defraud." His counsel, however, having made an able defence, characterised by the judge as being as subtle as it was ingenious, the point as to whether the prisoner was a " trustee " at the time of appropriating the money — this being one of the facts upon which the indict- ment was based— was reserved, and he was released on heavy bail. Into the further history of this man, the sequestration of his living by the Bishop of Licliheld for the behoof of the depositors, the repeated failures of justice in his case, his eventual imprisonment for two years, it is not befittiug that 216 SAVINGS BANKS. we should enter, these being items of almost current police intelligence. We can only spare a few words to tell how similar re- sults followed in this as in previous frauds. Men declared they would put it out of the power of mortal man to deceive them in this way again. In many cases a degree of reckless- ness was induced in those who had been cruelly wi'onged, which could only have been considered excusable if they had lost their all. It is not at all unnatural, that, from what cannot but be considered a defective education, men should so act, and be so ill prepared and disinclined to look evil consequences fairly in the face : still such facts only prove the truth of what we have before urged, that the extent of money loss, through such dishonest transactions as Savings Bank frauds, is but a trifling part of the aggregate misfortune they entail upon the country. Other depositors, it is but fair to say, acted far more wisely. Induced by the counsel and persuasion of tliose whom they could trust in a time of need, many depositors in other banks withdrew their money, and placed it where alone they could get that security which they so much needed, and several of the Bilston depositors did the same with the sums they obtained. It was represented to them truly, that not only would Government suffer by a run upon the old banks, but, what was of far more importance, they would themselves suffer, and their second period of suffering be worse than their first. iSTothing can be so palpably true as that money, completely withdrawn at such times, is oftener wasted than kept, and frugal habits rewarded after this fashion far oftener discontinued than resumed. And here, it seems to us, — and we mention it, though we are somewhat anticipating the subject — the country is greatly advantaged in having the new system of Savings Banks to RESULTS IN THE BILSTON CASE. 217 point to. What was much wanted in previous cases was some safe place, where tmiid depositors might resort with their savings, and defrauded depositors go with what they had saved from the wreck.* In the Bilston case this privilege was largely used. The Post Office Banks broke many a fall, and they set many on their feet again who otherwise would have been hopelessly overcome by the shock. Two years before it would have been sheer mockery to have told depo- sitors, under such circumstances as those to which we are alluding, not to make a run upon Savings Banks ; they had no alternative till, in 1861, that alternative was provided. It would seem, from a memorandum before us, that the authorities of the Postal Banks, without in any way seeking to prejudice the interests of the old banks, did all that was fairly possible towards reducing the disasters which have invariably and inevitably followed previous cases of Savings Bank failures. Tliey instructed their agents, in all cases where, owing to the depredations at Bilston, Savings Bank depositors applied for advice about withdrawing their money, to recommend con- tinued confidence in these institutions; if, however, such depositors were bent upon withdrawing their money, then to advise that it should not be asked for in cash, but by means of a transfer certificate, which would make them depositors under tlie Crown, The strict fairness of these instructions may be judged by the closing injunction: "Although you may fairly inform those depositors who are alarmed at this failure, that the depositors in Post Office Savings Banks have absolute and direct Government security for their money, you * Or, as it was far better illustrated at the time, "It is not enough to bring a man who has been tossed about in an uuseaworthy bark within sight of terra firnm. We must heave him a rope, or, if possible, run out a plank between the quay and his crazy ship's side, on which he may safely walk across." 218 SAVINGS BANKS. must on no account do or say anything to weaken their trust in the old Savings Banks." The last case* in the catalogue of this peculiar description of crimes is that which occurred at Canterbury during the year 1865. This case is indeed so recent that any lengthy description of it would scarcely be tolerated. We may well spare ourselves the trouble, for the Canterbury fraud was little else than a repetition, on a smaller scale, of the one perpetrated at Eochdale, to which we have given so much space. Nor is it a little singular that the actuary in the Eochdale case was in many respects the prototype of the Canterbury actuary : in the estimation in which both were held in their resj)ective spheres, in their character and occupation, there are several points of close resemblance between them. In the Canterbury case we have the old story of misplaced confidence, want of check, and a constant embezzlement of considerable sums of money extending over a long series of years. The actuary and secretary of the Canterbury bank, Mr. Samuel Greaves, was for many years almost tbe sole responsible official ; of course " he bore the highest possible character for probity and honesty " : nor will it surprise any of our readers to be told that it came after- wards to be said of this man, " from his many professions he was thought incapable of such conduct as that which was proved against him." The Canterbury bank was established in 1816. Greaves's connexion with the in- stitution dates from 1830, when he was appointed actuary at a salary of 40Z. per annum. The salary, however, was * No attempt is here made to catalogue and descrihe fraiids not occurring in Sa\'ings Banks proper : a chapter itself might be written on banks for the people established and carried on under a sj'stem of complete deception and villany. Nor have we entered into the case of frauds in Penny Banks, such as the unfortunate case at Birmingham. THE CANTERBUEY BANK FRAUD. 219 increased from year to year, up to the time of the exposure, when it stood at the respectable figure of 200/, Originally a " hoyman," the actuary of course, and necessarily, engaged in other pursuits than those connected with the bank ; and this circumstance, in the same way that it occurred in almost every other fraud of the kind, led to the mal- appropriation of the money of the bank. It was another case of partial service and partial pay, and an almost unlimited command of money, when among many other business engage- ments it was always possible that money might be urgently needed. Like Haworth of Eochdale, Mr. Greaves undertook several agencies, among them those for the sale of coal and porter. In 1840, it seemed, from the statements of his counsel, he began to lose money in his business, and was then, to put it in the mild form chosen at his trial, " induced to abstract some of the funds of the bank to meet his pressing diffi- culties." Once on the downward road, he never turned back ; it was impossible to manage it. It was the old story, told with plainness by his own advocate. He took the money, with the full intention of repaying it on an eariy date ; difficulties gathered fast around him, and still the man went on, foolishly trusting to some turn of fortune's wheel to replace him in his old position. He tried speculation, but he lost still more irretrievably ; his lucky day never arrived : and at length the weight of anxiety under which the man must have laboured for twenty-five years brought him down, and with the lack of his usual vigilance came detection and exposure. This detection was effected by a Mr. Abrams, the clerk of the bank, and it is from his evidence at the trial of his superior officer that we learn the actuary's mode of operation. All the cases of fraud, it seems, were identical in character. 220 SAVINGS BANKS. and were effected by means of claims for withdrawals only. Every deposit reaching the bank was properly received and properly accounted for. Like Haworth at Eochdale, the Canterbury actuary carefully noted those who were generally putting money into the bank, and seldom taking any out. In the case of many of these depositors he had provided him- self with forged pass-books, with the deposit column always correct, but the withdrawal side manipulated according as he himself wanted money. Suppose any of the depositors came to the bank, to deposit or withdraw a sum of money ; they presented themselves to the actuary, who entered in their proper book the proper sum, but immediately substituted a forged pass-book for the purposes of the bank. The ledger clerk received a book from the actuary to copy into the ledger, and in this way the books of the bank came to tally with the forged depositors' books. All that was necessary to carry on the frauds was that the actuary should keep a strict eye on the real pass-books of the deiDOsitors, for the discrepancies would be patent, as it eventually transpired, the moment the true books were seen. Sometimes the money was obtained with less trouble. Greaves would occasionally give himself notice that a depositor wished to withdraw a certain sum of money (and this occurred several times in connexion with a person who had deposited considerably, but never withdrawn any sum), and represented that the money was entrusted to him " to keep." After the quasi notice had been acted upon, he would draw a cheq[ue for the money, and the amount would be entered in a false pass-book and copied into the ledger ; the luckless depositor,- with her book safely by her, being in entire ignorance of the whole transaction. The utter absence of any control on the part of the managers and trustees, as exemplified in such a mode of i)rocedure, especially THE CANTERBUKY BANK FKAUD. 221 cousidermg that it came after the case of Bilston, the agitation of the last few years, and the passing of the Act of 1863, ' reflected the greatest discredit upon the honorary officials of the bank, though their conduct subsequently went far to atone for their past neglect. The case is described as having excited the most painful interest in the city of Canterbury. Tlie actuary, an old man of seventy, was tried at the city quarter sessions in October, I8G0 ; the trustees of the bank prosecuting him on the charge of felony. The transactions were again described, but only in brief, inasmuch as the prisoner pleaded guilty. A strong memorial was presented, signed by many clergymen and tradesmen, which, instead of asking for a mitigation of sentence solely on account of his age and infirmity, put forward the followiug extraordinary motive for interference : " The memorialists wish so far to relieve his character from any undue opprobrium that may attach to it, by declaring that the various business transactions they individually have had with him, have always been conducted in an honourable and satisfactory manner." At any rate, this questionable memorial may at least serve to show the estimation in which he was held by his fellow-townsmen. The prisoner was sentenced to six years' penal servitude, — six years for each of the two indictments ; but, on account of his age, the years to run concurrently together. The entire deficiency, when at length the whole of the accounts of the bank were made up, was found to be 9,300/. Happily the depositors, whom, so far as he knew, the actuary was mercilessly robbing, were ultimately secured against loss. The surplus fund of the bank, amounting to 3,500/., was applied to meet the case ; the actuary gave up property to the value of 1,700/. ; a gentleman who was liis surety for I 222 SAVINGS BANKS. 400/. was called upon to pay that sum, and tlie remainder, about 3,000/., was subscribed by tlie trustees and their friends. The bank was of course stopped on the defalcations coming to light, the books were called in, and the trustees sought the advice of the Government of&cials, as to transferring the business to the Post Office. The stipulation in this case was, we believe, that the trustees should make good the deficiency, and that then the business of the bank, which was a large one, the deposits amounting to 150,000/., should be handed over to the new establishment. Every effort was made by the Post Office, in the way we have shown in the Bilston case, to stem the tide of improvidence which generally sets in at such a time, and in this case with great success. The frauds above described have, of course, formed the principal cases, — cases which from their flagrancy and extent have either been made the subject of parliamentary inves- j tigation, or have so occupied the attention of the press as j to have become grave subjects of public discussion. Besides j those leading cases, there have been, as we have before j hinted, a certain number that have been concealed from the I I public from motives which, though they may have been open to question, we cannot characterise as wholly bad or unwise. From two Eeturns issued at different times on motions made in the House of Commons, we are enabled to compile a com- plete list of those frauds that have been officially reported to the National Debt Office. The first Return embraces the period between 1844 and 1852, and the second, 1852 to 1857. The numerous frauds of which we have already spoken, or to which we have referred, occurring before 1844, and the important ones perpetrated since 1857, are not included in the following list. The gross amount of loss would have been considerably swelled had a perfect list been possible-. EETUKNS OF SAVINGS BANK FRAUDS. 223 As it is, the following table gives the name of the Bank, the amount of the Frand, and the amount of the Loss to depositors, so far as it can be correctly ascertained : — ' Name of Bank. England. Bradford, Wilts . . . Bromley Dunmow Higligate Newport, Isle of Wiglit Leicester Mitcham N'ewto^vll Ougar Poole Eeeth Rochdale Rugby Euucorn St. Heleu's .... Southjiort Spilsliy Upper Albany Street . AVest London Yoxall and Barton . . Scotland. Aucliterarder .... Monfjuliilter .... Ireland. Kilkeel Tralee Killaruey Nenagli Mallow Castle Townsend Total Defaleaticms £ 400 932 16 700 8,156 689 10,000 180 497 6,221 230 71,715 1,438 98 12,932 200 3,213 250 1,106 200 1,400 336 976 36,000 20,370 832 Defaulters. Depositors' Loss. Actuary . . Actuary . Secretary . . Secretarj- . . \ Clerk emploj'ed ( by Secretary. Actuary . . Actuaiy . . Secretary . . Actuary . , Secretary , . Actuary . Secretary . Actuaiy . Actuary . . Actuary . Secretary . Actuary . . Actuary . Actuary . . Actiuiry . No returns. No returns. ,850 180 5,663 147 37,433 6,680 2,436 430 976 36,000 19,105 832 224 . SAVINGS BANKS. The frauds at Hertford, Brighton, Eeading, Cuffe Street, Bilston, and Canterbury, where the amounts of the defal- cations are known, are left out of consideration. Thus the total amount of the frauds enumerated in the Eeturns, ex- tending over tliirteen years, was 179,280/. ; or if we include the Cuffe Street bank fraud, to make up for those Irish banks which sent no returns, and errors of computation, and spread the total over all the thirteen years, the average amoimt of defalcation was at the rate of 17,600/. a year; or, taking the banks mentioned in the Keturns, upwards of 7,900/. for each involved. Doing the same with the total loss to depositors, or 117,732/., we find the average loss for each bank to be nearly 5,000/. The reader who may have followed us through this chapter, and remembers the classes to which the cheated depositors generally belonged,* will have some idea how much pain and suffering the amount of money so treacherously wrested out of their hands really represents. " But the evil," Mr. Gladstone well said several years ago when speaking on this very point, " that is done, is, unfortunately, not to be measured by the actual amount of money loss ; there is an amount of evil such as figures can convey no idea of; and it is impossible that the public confidence in these institutions can be that which it ought to be, while these losses are liable to occur at all." This was a deficiency which Mr. Gladstone sefj- himself to remedy immediately afterwards, and, tliough unable to do so at the time through the opposition of Savings Bank managers, it was not long before another system was * Of the Roclulale depositors, for example, 1,245 were women, 722 im- man-ied factory operatives, 292 married, and 231 young girls ; there were besides, 953 miners, 539 labourers, and 191 members of sick clubs. 'I'lIK lil'.MKDY I« FOrXD. ^ 225 provided wliicli sliiick lor ever iit the; root of tliis grievaneo ; and lor all ])ractical purposes, and so I'ur as it was' now possil)le, re])aired Uk; injury wliieli tlu; industrious class(!S had sullered llirouuli Uic action of defective legislation, and the moral olrc]iendiiiK him, and 1)rinf,'inp; liini hack to tliis country, ami he will shorliy he brought to justice. Q 226 SAVINGS BANKS. CHAPTER YII. ON THE DEFICIENCIES OF THE EXISTING SYSTEM, AND THE ESTABLISHMENT OF SUPPLEMENTAEY SAVINGS BANKS. "Were greater facilities provided for saving, and gi-eater enconragement given by the intelligent classes to the formation of provident habits, we believe the habit of economy would spring up in many quarters where at present it is altogether unknown. The working man, though he may not like to be patronised, likes to be helped ; and those who help to provide him with con- venient places in which to deposit his spare earnings, will not fail to be regarded by him as among his best friends." — Mk. S. Smiles. In the fourth chapter we endeavoured to trace the progress of Savings Banks up to the year 1841, or after they had had a legalized existence of twenty-five years. We there tried to show that, for some years prior to that period, a manifest improvement had set in, and was rapidly proceeding, in all that related to the social condition of those classes for whose benefit such institutions as Savings Banks are mainly in- tended; and we think we succeeded in proving that the progress of these banlvs was commensurate with the gradual national advancement. Except in the years marked by financial or political embarrassment, the number of Savings Banks increased in a fair and regular proportion each year ; and not only so, but the first table we gave (page 91) showed conclusively that the amounts deposited increased in the different years in the same proportion. We would now take SAVINGS BANK STATISTICS. 227 up the statistics where we left them, and present the reader with a continuation of the same, in a slightly different form. TABLE IV.' Showing the amount of Deposits and Withdrawals, and the Capital, of Sa-vdngs Banks, at the end of each year from 1841 to 1861 inchisive. Year ending 20tli Nov. Deposits. Withdrawals. Capital of Savings Banks in tlie United Kingdom. £ £ £ 1841 5,694,908 5,487,723 24,536,971 1842 5,789,203 5,656,160 25,406,642 1843 6,327,125 5,333,015 27,244,266 1844 7,166,465 5,716,275 29,653,180 1845 7,153,176 6,697,042 30,950,983 1846 7,300,367 7,25.5,654 31,851,238 1847 6,649,008 9,060,075 30,236,632 1848 5,862,742 8,6.53,108 28,114,136 1849 6,196,883 6,522,760 28,537,010 1850 6,363,690 6,760,328 28,930,982 1851 6,782,059 6,305,566 30,277,654 1852 7,281,177 6,684,906 31,754,261 1853 7,653,520 7,116,330 33,362,260 1854 7,400,141 7,956,347 33,736,080 1855 7,188,211 7,654,133 34,263,1.35 1856 7,741,453 8,023,583 34,946,012 1857 7,581,415 8,375,095 35,145,567 1858 7,901,925 7,839,903 36,220,362 1859 9,021,907 7,335,349 38,995,876 1860 9,478,585 8,258,421 41,258,368 1861 8,764,870 9,621,539 41,546,475 From the above table, many important facts may be gathered. Speaking of the yearly proceeds, in 1847, * Compiled from Returns presented by the Statistical Department of the Board of Trade. Q 2 228 SAVINGS BANKS. 184-8, 1849, and 1850, the withdraM'als of money exceeded the deposits by amounts respectively of 2,411,067/., 2,790,366/., 325,877/., and 396,638/. This extraordinary state of things is partly accounted for by the panic which set in about this time among Savings Bank depositors, owing to the discovery of numerous frauds, and, as a matter of course, the knowledge of the divided and defective respon- sibility under which the system was worked; but more especially was it owing to the commercial crisis of 1847-8. In the three following years, 1851-2-3, the crisis quite over, and a general examination of Savings Bank accounts tending to reassure tbe public mind, the deposits again gained their natural ascendency, when, in 1854-5-6-7, the excess paid was at least equal to the excess received in the three pre- vious years. There can be little doubt but that this result again was owing in some measure to the Crimean war, and the scarcity of money during the period, but principally to the agitation which generally prevailed among depositors at the constant failures in the Legislature when attempts were made to place Savings Banks on a proper footing; these failures leading to repeated petitions for a Select Committee to go over the whole subject. In 1858 there was a slight improvement; in 1859 a considerable increase in the deposits, clearly the result of the investigations of the Select Com- mittee of the previous year, which Committee, though it had done little towards a final settlement, had certainly dispelled a cloud of misapprehensions that had gathered round the concerns of ^Savings Banks. That improvement continued, though in a less degree, in 1860 ; when the Returns for 1861 show another large decrease of deposits and an increase of withdrawals, which we would not be wrong were we to eatp: of progress shown. 229 attribute to the frequent discussions in Parliament, and in the country, relative to a new system of Government Banks. Having to some extent accounted for the variations observ- able in the above table, let us proceed to compare the progress made during the period of twenty years now under considera- tion with that shown during the previous quarter of a century and described in a previous chapter. Between the years 1825 and 1835 the increase in the aggregate amount of deposits in the Savings Banks of the United Kingdom was at the rate of exactly fifty per cent. Between the years 1835 and 1845, the returns show an increase in deposits in this decennial period of ninety-eight per cent. Comparing the returns for 1845 and 1855, the progress made, if indeed progress is the right word to use here, was at the rate of only five per cent. Were we to take the first five years of this last decennial period, we should find that there had absolutely been a de- crease in the business of Savings Banks to the extent of tiuelve per cent., but this unsatisfactory result admits, as we have just shown, of partial explanation. To continue our survey, however, up to the latest period, viz. including the Eeturns for 1864, we find that the deposits for 1854 amounted to 7,400,141/., and the deposits for 1864 to 8,174,679/, showing an increase during ten of the most prosperous years this country has known since the establishment of Savings Banks at the rate of only about eight per cent. It is almost unnecessary to say that as regards all the material elements of prosperity the progress of the country between 1841 and 1861 was most marked. Taking England and Wales only, we find the amount deposited in Savings Banks in 1841 was 4,440,379/.; in 1861, the amount deposited was 7,188,034/. Now the population of England and Wales 230 SAVINGS BANKS. was in 1841 15,929,000 ; in 1861 it was 20,119,496. The declared value of our exports was in 1841, 51,545,116/. ; in 1861 it had increased to the enormous sum of 125,102,814/., and last year (1865) it stood at over 165 millions sterling. What the increase in the amount paid as ^vagcs was likely to be, we leave our readers to estimate from these sums. In nothing is the national prosperity more manifest than in the relative number of paupers in receipt of relief. Though the population increased during the twenty-two years in question several millions, the total number receiving in and out-door relief, was, in 1849 (this being the first year the return was made) 934,419 ; in 1861, the number was 890,423, or an actual decrease of forty-four thousand persons. Such sta- tistics as the above might be multiplied indefinitely, especially those relating to the wonderful progress of the Money Order Office at the Post- Office, but it may suffice just to make a reference to the increase of wages during the period.* Mr. David Chadwick, an eminent authority in Lancashire, states that between 1840 and 1860 the wages of the operatives em- ployed in the different departments of the cotton trade had increased from 12 to 28 per cent. ; in the silk trade the increase had been 10 per cent. In the building trade the increase throughout the country had averaged from 10 to 30 per cent.; in the iron trade from 8 to 20 per cent. It would scarcely, therefore, be too much to say that within the period, and up to 1861, while the price of most kinds of food had decreased, It is very difRcult to obtain correct and complete statistics on this subject. It is to be regi-etted that a valuable suggestion which Dr. Farr made before the last Census was not acted upon. He recommended that facts connected with the rate of wages should be collected during the Census. Had it been attended to, much might have been stated here \vith precision which will only admit of approximation. THE PROGEESS OF THE COUNTRY. 231 the wage for almost every description of labour had increased in at least an equal proportion. In view of such facts, and before we attempt to describe the different plans which were produced in order to make these useful institutions once more progressive ones, let us try- to ascertain why more of the money thus gained did not reach the Savings Bank. A careful examination of the Eeturns of Savings Banks will show beyond the possibility of doubt that the first and greatest check received by these institutions was when it became apparent that they did not possess within themselves that absolute security which they were thought almost universally to offer. AYe could not well exaggerate the result ; this is the fountain from which all the ills have proceeded. The evil did not confine itself to the banks where the depredations had been carried on ; it was not confined to the banks already established ; but it extended to quarters where before there had been a manifest disposi- tion to increase the facilities and to meet the wants of an advancing population, and this feeling was destroyed. The first effect of the frauds was, of course, to stop the deposit of money ; in a smaller degree and among less educated people they even tended, as we have seen, to destroy the habit of laying by any money at all ; but among all they produced a decided conviction that the financial arrangements of the system, especially with reference to the anomalous connexion between Savings Banks and the Government, were unsound. "We have several times referred to the state of the law as to the exact nature of this connexion, but it is neces- sary to return to it again as entering very largely into the consideration of the slow progress of Savings Banks. There can be no question that the great bulk of the British people, 232 SAVINGS BAKKS. aucl not simply the lower and middle classes, imagined — up at least to the time of the great frauds of 1845-48 — that Government was fully responsible for all the money placed in Savings Banks. In 1851 w^e find Mr, Bright saying in Par- liament : " Nine out of every ten depositors believed that they had the security of Government for whatever money they invested, and that in placing that money in the local Savings Bank they were securing it better than if they lodged it in the hands of the wealthiest private banks in the country." * Mr. Hume said the same on several occasions. Mr. H. A. Herbert, an Irish member, whose name deserves to be asso- ciated very intimately with legislative attempts to x^ut Savings Banks on a proper footing, testified over and over again to this impression being the prevailing and universal belief. General Thompson told the House in 1848 that he " was struck with profound astonishment to learn that Savings Banks were not what in common parlance was called ' as good as the bank.' " He had advised servants on numerous occasions to put their money into such banks in the belief that they had complete Government security for their money. Such expressions of opinion from men who, though they had never penetrated into the mysteries of official life, could scarcely be thought ignorant in financial questions of this kind, show how wide-spread must have been the misappre- hension, and are of themselves almost a sufficient justification of the ignorance of the bulk of the poorer classes. Nor were there wanting excellent and numerous autho- rities who must have contributed to this improper im- * Subsequently Mr. Bright went the length of s;n-ing, that Savings Banks were " nothing less than traps for the people who subscribed to them. There was a universal belief that Goveruraout was responsible. " THE IRRESPONSIBILITY OF GOVERNMENT. 233 pressiou. Mr. Scratcliley, iii his Practical Treatise on Savings Banks, pp. 72-4, has taken great pains* to string together a formidable list of those whom he finds inculcating the same view as that already expressed by prominent members of Parliament during debate. Suffice it to say, that when such books as McCuUoch's Commercial Dictionary/, Porter's Progress of the Nation, The Quarterly Review, Chaniber^s Information for the People, Ghamhers's Magazine, The Penny Magazine, and the Irish school books, laid it down that depositors had perfect security from Government for the money paid into Savings Banks, those of the class which relies to such a great extent on the intelligence of those above them may well be excused for falling into error, and may well be pitied when called upon to bear loss. Government took up the subject of Savings Banks at an early stage in their history, with the object of "protecting" them,t and to that end they made it an imperative duty on the part of the trustees of these banks to deposit their money with the State ; unfortunately, however, no steps were taken to enforce this provision. Here lay the fatal mistake, and the source of all the trouble. " The whole success of Savings Banks," says Mr. McCulloch in his * Since wi'iting the above, it is only fair to say, that we find this writer has taken no pains at all over the matter, but has simply benefited by the industry of auotlier, without in any way acknowledging his obligations. Mr. Edward Taylor of Rochdale, in a pamphlet now before us, published several years before Mr. Scratchley's book, entitled "Savings Bank: ought Government to make good past losses in Savings Banks ? " supplies the whole of the quotations given, and even the setting for them. t The preamble of the fij-st Act (Act 57 George III. c. 130, 1817) runs thus : " "Whereas certain Provident Institutions or Banks for Savings have been established in England, for the safe custody and increase of small savings belonging to the industrious classes ; and it is expedient to give protection to such institutions, and the funds established thereby," &c. &c. The preamble of the Act of 1828 runs exactly to the same effect. 234 SAVINGS BANKS. Statistics of the British Eminre, " depends upon the security the depositors have for their money. No one was accustomed to speak of Savings Banks without commenting on the increase in the stability of the country by giving the poorer classes a direct interest in the preservation of public credit ; but it requires no great amount of penetration to see that so much entirely depends upon the fact that faith is kept with such depositors." To all intents and purposes proper faith was not kept by the banks, and a proper knowledge of the real amount of risk the poor were running was wrongly with- held from them : hence the undoing of a great part of the good work accomplished in the first quarter of the present century by the establishment of Savings Banks; " What was the use," indignantly asked a member of the House of Com- mons of the Government in 1851, "of preaching to the poor tlie duty of being honest, industrious, and self-dependent, if the fruits of their hard earnings were thiis to be swept away?" Ten years afterwards a more powerful voice than ]Mr. Her- bert's asked the same question, and appealed to the country for a reply. " If ever," said the Times newspaper, speaking of Savings Bank money in a leading article, 17th January, 1862, " there was a sacred fund, this is one ; if ever there was a class and a fund which deserved the protection of wise laws and stringent responsibilities, surely this is the class and this the fund." Says an objector : " Irregularities will creep into the management of the best of funds, and frauds are as old as the world." Says the Ti^ncs : " How can people treat such cases as a matter of course ! How can we look on while the poor commit their all to such institutions as these ! It is useless to tell us that nine out of ten, or ninety- nine out of a hundred of these Savings Banks, are conducted with scrupulous THE "times" on savings BANK FRAUDS. 235 care and constant supervision." Eeferring, then, to the recent case at Bilston, it continued, " How can the depositors of a few hoarded shillings know where the Fletchers hold sway, and where the managers do their duty ? The only sound advice to give the working classes under such circumstances is, to have nothing to do with institutions ivliere such tilings can occur." The argument was irrefutable ; nor was the advice given hastily. The Postal Banks had then been intro- duced to the country, and the article thus winds up : " This advice would have been difficult to give some years ago ; it is not so now. The Post Oflfi.ce Savings Banks offer an escape from danger, and at the same time remove the necessity of taxing the time and attention of philanthropic men in offices where negligence may occasion such wide-spread ruin. We confess that, in the face of such occurrences as those of Bilston, we hope the day will speedily arrive when these 531 fallible Savings Banks will all cease to exist." * • * Mucli to the same purpose a well-known writer in the London Review says : "As long as Savings Banks are Sa\-ings Banks, based, on the one hand, on the confidence of the poor, and, on the other, on the benevolence of the local clergy and gentry, acting as trustees and managers without fee and reward, and therefore without such bounden obligations as men can be called to account upon, so long will frauds periodically arise, opening up great gulfs of deficits, strewing thorns upon the pillows of the poor, and driving sharp pangs of despair- into their heaiis. " Dr. Hancock, in one of his admirable pamphlets, alluding to the system of checks relied on by the managers of many banks, says : " It is impossible, in the nature of things, to devise a perfect system of checks. So long as the work has to be done by human agency there must always be some risk. To secure the performance of actions by human agents, three forces commonly operate : 1, A moral sense of duty ; 2, A fear of large pecuniary loss from liability, in case of the non-performance of duty ; and 3, A fear of judicial punishment, if non-performance be made a penal offence. The limit placed on the liability of the managers eflectually took away or reduced to a minimum the fear of loss and of punishment, and the divided responsibility there has always been between Government and the trustees, by weakening the sense of duty, did the rest." 236 SAVINGS BANKS. We liave said that the frauds in some of the Savings Banks led not only to their stoppage, but to the closing of others in the neiohbourhood. Nothing can be clearer on this point than a reference to Ireland. In 1846, there were 74 Savings Banks in Ireland ; in 1851, no fewer than 21 of them had ceased to exist. In 1846 there were eight in county- Down ; in 1851 only two remained. In county Kerr}^ there were almost an equal mmiber ; in 1851 not one remained. Doubtless other causes besides the breaking of faith with the people led to this, partly and indirectly, — such, for example, as the failure of crops, — though still there was the fact, signi- ficant enough, that in the districts least \dsited by famine, and where the people were most industrious and frugal, there had been the greatest diminution of these banks. Bearing in mind such facts, and also that it can be proved that the frauds to which Savings Banks have been so liable have led directly or indirectly to the breaking up of no less than fifty of these institutions in the United Kingdom, let us proceed to some inquiries as to how far the banks, uncertain and insecure as they were in 1861, met the requirements of the country in other respects. Before 1861 there were in the United Kingdom 6.38 Savings Banks ; of which 498 were in England, 33 in Wales, 51 in Scotland, 54 in Ireland, and 2 in the Channel Islands. Com- puting from the census of that year, there was one Savings Bank to eyevy 43,000 inhabitants. In England, though the 498 banks were distributed through every county except one, there were many populous districts and numbers of large towns not supplied with them. Eutlandshire with its 22,983 inhabitants was the exceptional county in England : but in Scotland there were nine, and in Ireland four counties, entirely THIRTEEN COUNTIES WITHOUT SAVINGS BANKS. 237 without Savings Bank accommodation. Tlie following is a list of those thirteen counties : — SCOTLAND, with a population of 189,858 Ayr, Clackmannan ,, Haddington , , Kinross , , LinlithgoAv , , Orkney & Shetland Peebles , , Sutherland „ Wigtown , , 22,951 36,386 8,924 30,135 62,533 10,738 25,793 43,389 IRELAND. Carlow, with a population of 68,078 Kerry „ „ „ 238,254 Leitrim ,, ,, ,, 111,897 Longford ,, ,, ,, 82,348 One of the Channel Islands, Alderney, and the Isle of Man with its three or four market towns, had likewise no Savings Bank. Thus fourteen counties and the above islands, con- taining an aggregate population of at least a million persons, could not count upon a single Savings Bank to assist those of that great number who were inclined to provident habits, or those who might have become so had tliese facilities been within reach. So much for the counties in the length and breadth of which no bank for savings could be found. Applying the same test to towns and villages already applied to counties, we find that of places above the position of hamlets there were, in 1861, no less than 3,500 without banks; and not only so, but 150 of this number were towns of more than 10,000 inhabitants, and 500 of the places which had no Savings Bank accom- modation had each one or more private or joint-stock banks. But we have another consideration to urge here ; and that 238 SAYINGS BANKS. is, the insufficiency in the number of Savings Banks in many counties where their extent and population required them. No one will say that Berkshire, Dorsetshire, and Cheshire required as many banks as did Middlesex, Lancashire, and Yorkshire — the vast centres of population and the busy hives of industry — and yet the facilities of which we are speaking happened to a great extent to be so arranged. In 1861 we find the relative number of the population and the depositors in Savings Banks in our English counties to vary very considerably — a difference ranging from one in eight to one in thirty-six. In the county of Berks, there was one Savings Bank for every 17,000 persons; in Dorset- shire one for 18,500 of the population. On the other hand, to take the rich and thriving county of Lancashire, which had the lowest relative number of banks, we find there was only one to every 68,000 persons, and in the AVest Pdding of Yorkshire only one to every 66,000 persons. From a careful calculation which we have made from these and similar facts, it would appear that of the two and a half millions of persons for whom Savings Banks were specially designed, and who in 1861 were not depositors, at least half of them were the breadth of an English county distant from any place where they could place their money had they been desirous to save it, and the rest were distant from six to twenty miles from any such repository. Nor were those who were much nearer these banks, i. c. the denizens of our large towns, much better circumstanced. Of the existing establishments in 1861 there was a large proportion of them open for so short a time, and at such inconvenient hours, as practically to make them closed banks to our working population. That they did little business is ABSENCE OF REASONABLE FACILITIES. 239 not to be wondered at ; tlioiigh we think our readers must be astonished to know that of the entire number of Savings Banks much more than half of them only received, on the average, a dozen deposits a week ! Astonishing as this is, all wonder may well cease when it is found that of the whole 638 Savings Banks of the United Kingdom only twenty were open daily, while 355 were open once a week, and fifty-four but once a fortnight, and ten but once a month ! Of the re- mainder a considerable number were open two and three times a week, and the rest did business at various periods. Inves- tigating the matter a little more closely still, we find that, in 1861, fifty Savings Banks were open \iVit four hours monthly; 124 were open only o/ic hour cctcli week; and 150 open l)ut two hours "per week. In England the 498 banks were open in the aggregate 1,988 hours a week, giving an average of about four hours per week for each bank, or, if we leave the metro- politan banks out of the consideration, an average of about two hours and a half per week. Turther, taking three English counties, solely chosen on account of their alphabetical order, Bedfordshire, with five Savings Banks, had seventeen and a half hours per week of Saving Bank accommodation ; Berk- shire, with ten hanks, had only twenty-one hours ; and Buck- inghamshire, with six banks, but an aggregate of eight hours each week, during which its population could resort to the banks with their savings. After these facts, let no one wonder that the odd savings of the poor burnt holes in their pockets, and led them to resort to the "house of call" open within a stone's-throw almost at all hours. A statement was made before the Committee of 1858, that twenty-five out of every hundred persons properly designated as of the industrial classes were debarred from saving their 240 SAVINGS BANKS. money, even if inclined to do so, from the want of con- venient places of deposit ; and the reader may, we think, with the help of the above statistics, judge whether that statement was at all an exaggerated one. " Is nothing to be said of the inherent disposition of so many of the poorer classes to spend their money, and the utter repugnance they feel to habits of frugality ? " says a doubting reader. Certainly. But how do the facts bear on this matter ? Let us take the returns of the four different counties already alluded to as containing relatively the largest and the smallest number of Savings Banks. In Berkshire, for every thousand persons an amount equal to 2,479/. was accimiulated in 1856 ; in Dorsetshire the amount was 2,550/. : on the other hand, in Lancashire, which we described as most insufficiently served with banks, the amount per thousand persons was only 1,562/., and in the West Eiding of Yorkshire but 1,266/. But we will take the case of a single bank to show that the want of facilities was a most important element in the want of progress ; and to make the fact still plainer, we will go to Lancashire itself. The Manchester Savings Bank has for long been one of the best managed institutions in the kingdom, whilst elsewhere there had been, as we have seen, the slowest growth, if not complete stagnation in Savings Banks generally. The de- positors in the ]Manchester bank were nearly quadrupled in the twenty years now under consideration, and no better test is required that these depositors were of the right sort than the fact that, in 1860, 200,000/. lodged at Manchester belonged to persons who could not even sign their names.* These * The case of the Edinburgh Savings Bank, another excellently managed institution, is still more to the point, where unusual facilities produced an unusual amount of depositors and deposits. THE MANCHESTER SAVINGS BANK. 241 facts did not fail to strike the members of the Committee of 1858, and Mr. J. Hope Nield, the eminent actuaiy of the Manchester Savings Bank, was asked how he accounted for the fact of this bank advancing so much more rapidly than any other. Mr. Nield succinctly replied, " Only from the constantly increasing facilities which it has been our con- stant endeavour to give." Mr. Nield afterwards explained the facilities to which he referred. In many banks, de- positors had only a very short time for business, and then perhaps they were restricted to one kind of business for one day, another kind of busmess for anotlier day. In the Man- chester bank depositors could go and do any kind of business whenever it was open. There lay the distinction between " free " banks, and what were known as banks on the " re- strictive principle." In a restrictive principle bank, of wliich there were an enormous number, withdrawals were made on one day, deposits on another; new accounts could only be opened on a certain day, additions could only be made to accounts on another certain day. Then there was the notice to be given for withdrawing money. The more " free " the bank, the less notice : generally a week was required ; more often a fortnight was wanted ; in many cases a month's notice had to be given. " Whenever," said Mr. Meld, " a free bank could be pitted against one on the restrictive prin- ciple, the increase in the number of depositors in the former case would be found to be four or five times as much as in the latter." This was shown in a clear light by a striking illustration — also a somewhat amusing one : " Up to 1847," said Mr. Nield, " the late Venerable Archdeacon Brooks, of Liverpool, would insist to the day of his death upon paying everything himself in the Liverpool Savings Bank, and, as a R 24:2 SAVINGS BANKS. consequence, the bank was only open two days a month for the repayment of money. Deposits were completely stationary there for many years, and cases were known where persons went to the Manchester bank to open an account there, and remitted money by post." Whilst speaking of the Committee of 1858, we may here give the opinion on this point of another gentleman, of whose career as an ardent and laborious Savings Bank reformer we shall presently speak. Eeferring to the absence of what he considered reasonable facilities in Savings Banks, ]\Ir. Charles William Sikes, of Huddersfield, expressed his decided con- viction that the present system " was inadequate to meet the wants and wishes of the working classes of this country." When asked (2,715) if he had made any calculation as to the extent to which the savings of the working classes might reasonably be expected to amount if the Savings Banks were thoroughly popvdar with them and were felt to be perfectly safe, Mr. Sikes answered : " I think that if a knowledge of Savings Banks becomes widely diffused (and the process is going on), and if the re-organization of them receives the confidence of the country, the average annual deposit, which now aniount;S to seven millions, is so small a proportion of the aggregate income of the working classes of this country, that instead of being, as it had been, stationary, with scarcely a Jluctuation of two jier cent, for twenty years, there will be a probable increase in the course of three or four years, or perhaps a longer time than that, of two, three, or five millions of money ;— in other words, that the animal de- posit, instead of being seven millions, will get to eight, nine, or eleven millions, in ten years. The income of the working classes is fully 200 millions a year, and, with anything like MILITARY SAVINGS BANKS. 243 provident and sensible habits, thirty millions a year might be deposited in Savings Banks." And now that we have at considerable length described the defects and inequalities of the Savings Bank system, we cannot perhaps do better than offer some accoimt, first, of different banks of a supplemental character which have been started within recent years, and afterwards speak of some of the various proposals made, out of Parliament, to render the general system more efficient. For many years prior to their actual establishment it was felt by those best conversant vith the habits and feelings of our British soldiers, that the Savings Bank institution did not meet their wants and requirements, and that sup- plementary banks were needed. Tliis project was frequently urged,* and in 1842 Lord Hill gave his consent to the plan of Military Savings Banks proposed by Sir James McGregor and approved by Lord Howick, the then Secretary-at-War. * Accordincr to an excellent authority, Mr. Smiles, to whose admirable article in the Quarterly Review (Oct. 1859) we are indebted for some of our particulars of the historj- of this movement, it would appear that the first proposal for Regimental Sa\Tiigs Banks was made in 1816 by Paj-master Fairfowl, but allowed to di'op ; it was taken up again in 1827, when Colonel Oglander, commanding a regiment of Cameronians, brought the project under the notice of the Duke of Wellington. The Duke could not see any benefit to be derived from the proposal, and wrote the following characteristic memorandum upon the papers : " There is nothing that I know of to prevent a soldier, equally with others of his Majesty's subjects, from investing his money in Savings Banks. If there be any impediment, it should be taken away ; but I doubt the expediency of going further." He added something further, however, which, also eminently characteristic, opened up a new feature in the case, and closed the door to such proposals till after the Duke had left the service. "Has a soldier," continued he, "more pay than he requires ? If he has, it should be lowered, not to those now in the service, but to those enlisted hereafter." Colonel Oglander had no idea that the soldier should have less than his ' ' thirteen pence a day, and a penny beef money," and therefore suffered his proposals to be simply negatived. K 2 244 SAVINGS BANKS. An Act of Parliament was obtained (5 and 6 Vict. c. 71), and immediately afterwards the authorities at the different bar- racks commenced operations, under regulations made by the Secretary for War. In 1847 this Act was amended. In 1849 the Eegimental Benefit Societies were dissolved, and incor- porated with the Military Savings Banks by a new Act ; and in 1859 the whole of the Acts relating to the Savings Banks of the soldiers were consolidated into one (22 and 23 Vict. c. 20). The amoimt whicli any one in the service can deposit is unlimited, though interest is not allowed on any excess over 30/. in one year, except in the case of gra- tuities given for good conduct. When the sum of 200?. is reached, no further interest is paid. The interest allowed must not exceed 31. los. per cent. The whole of the money raised in Eegimental Savings Banks is remitted to the War Secretary, who holds an account with the National Debt Com- missioners, which is kept separately from other Savings Bank accounts, being entitled " Tiie Fund for the Military Savings Banks." Eeturns of all transactions made in these banks are laid annually before Parliament. The Eeturns almost from their commencement have been most satisfactory, and pro- duce sufficient evidence that these supplementary banks were required. The total amount up to this time (1865), standing to the credit of our soldiers in ]Military Banks alone, exceeds the sum of a quarter of a million sterling, and amounts on the average to nearly 20/. for each depositor. This sum, hoM'ever, though large and eminently satisfactory, as indicative of providence and forethought among a class which cannot be called highly paid, does not represent the whole of their savings. It is well known that many go beyond their barracks to deposit such sums as they can spare, seamen's savings banks. 245 acting ou the feeling, which may be well understood, that it is not always advisable that the authorities should know the extent of their savings. What was done for soldiers in 1842 was accomplished for seamen, another class whose interests everybody cares for, in 1854. The Act 19 and 20 Vict, c. 41, regulates Seamen's Savings Banks, established at all our principal seaports under the direction of the Board of Trade, According to this Act the Board of Trade has power to constitute any shipping office established under the Merchants' Shipping Act (1854) a branch bank under its control, and to require any shipping master belonging to that office to act as agent. The money invested in these banks is paid through the Board of Trade to the National Debt Office ; and interest similar to that given by the ordinary Savings Banks is paid to those who so invest their money. As in ordinary Savings Bank manage- ment, the expenses incurred in carrying on the business through the Board of Trade (a department of which is con- stituted as a sort of central bank) and the shipping offices are paid by the surplus interest obtained from Government, with whom the funds are invested. As in the case of Llili- tary Banks, an annual account must be rendered to both Houses of Parliament of all b-ansactions ; but we are sorry to say that these transactions have never been large. Some forty thousand pounds represent the entire capital of the Supplementary Seamen's Banks,* All who know what Jack is ashore — and who does not? — will wonder little at * The deposits in Seamen's Savings Banks — In 1861 were £17,112, and withdrawals £12,681 1862 ,, 17,089 ,, ,, 15,343 1863 ,, 17,098 ,, ,, 14,090 246 SAVINGS BANKS. this result ; he is universally pointed to as an embodiment of Improvidence itself : but when it is known that the ma- chinery ill question is applicable to married sailors, their wives and families, the picture of want of thrift and in- clination to save presents several deplorable aspects. Still more useful and interesting has been the Penny Bank movement, and some account, which must necessarily be brief, will not be out of place here. Before the year 1850, there seem to have been at least four Penny Banks established with a view to attract a poorer class of depositors, or it might be a younger class, than the existing Savings Banks had reached ; and, as " stepping-stones to greater things," Penny Banks succeeded admirably from the very first. Tlie first bank was started, with this very laudable object, in Greenock, in 1857, by a Mr. Scott of that town. The Greenock Savings Bank having, like all the otlier Savings Banks, restricted the amount which could be received to a shilling, and very few of them receiving that amount pleasantly, Mr. Scott thought that the very poor had no safe place in which to deposit their little surplus earnings. Poor people were often enough urged to " take care of the pence, and the pounds would take care of themselves;" but little had been done to help them to care for their pennies, which proverbially and very quickly burnt holes in their pockets when they were compelled to keep them in their own possession. A bank for such sums was started in this town ; and to show liow much it was needed, and how ready the poor were to avail themselves of advantages when they were placed within their reach, we have only to state that 5,000 depositors in the first year of the existence of the Greenock Penny Bank, placed the sum of 1,580^. in it. r THE ORIGIN OF PENNY BANKS. 247 The success of this bank soon began to tell all around ; many private establishments and charitable institutions "were not long in following the example that had here been set. In the followmg year ]\Ir. Queckett, a bene- volent and painstaking clergyman, in the east of Lond(jn, established a Penny Bank in connexion with Christ's Church, St. George's in the East, and the success attending the venture ^^■as still more encouraging and remarkable; nearly 15,000 de- posits were made in this parish Penny Bank in the first year of its existence. It seems that the number of depositors, for some reason or other — probably because that number was enough for one person to control ; the whole of the repayments, at any rate, passed through Mr. Queckett's own hands — was limited to 2,000 ; and so great was the demand, that there were always several applicants for any vacancy that might occur among the favoured two thousand. Two " Penny Banks " were next established about the same period — one at Hull, in August, 1849, and the other at Selby, in the East Piiding of York- shire, in July of the same year. The clergymen and gentry of both towns joined together to form an institution, " which should create and foster habits of regularity and frugal economy among the poorest people, and which should afford an opportunity for the deposit and safe keeping of the smallest sums of money, repayable with interest when required." The Birmingham Penny Bank was established in 1851, and in six years from its commencement had received the enormous sum of 52,354/. in amounts from one penny to one pound. Manv of our readers will be aware of the unfortunate end of this bank, under circumstances which, deeply to be regretted, have had a prejudicial effect on the usefulness of other banks of the same description. Were it not that a new class of 248 SAVINGS BANKS. banks, since establislied, offers considerable inducements to the poorest classes, and tliiis supersedes, tlioiigli only to a limited extent, the necessity even for Penny Banks, such an effect could not but have been considered irremediable, as well as most deplorable. Of the remaining'Penny Banks, the principal ones in England are those of York,* established in f 1854, and excellently managed throughout, and very sue- '. cessful in attracting depositors ; the Halifax bank, commenced in 1856, and equally successful ; the Derby bank, established in 1857, under the auspices of the Eev. J. E. Clarke, one of the most earnest of the promoters of the principles of Penny Banks ; and the Southampton and Plymouth banks, established in 1858. There are no means of obtaining statistics as to the number of Penny Banks in existence, but there cannot be less than eighty or ninety in English towns alone. Over and above the regular public Penny Banks, however, there are an enormous number connected with and doing an incalculable amount of good in private establishments, ragged and other schools, and different religious bodies. In Scotland the movement has progressed even more rapidly tlian in England. Dr. Chalmers always held, and often urged during his lifetime, that far too little was done to tempt the poor, and especially the families of working people, to save their little surplus cash : in commencing his " Territorial Savings Banks," as he called them, in Edinburgh, he was actuated by exactly the same view and the same spirit which afterwards influenced the promoters of Penny Banks. The Penny Bank system flourishes in Glasgow to an extent * To the Honorary Secretary of this bank, Mr. TV. W. Morrell, Ave are greatly indebted for much information on the Penny Bank movement ; and, as an ardent Savings Bank reformer, for much information on our subject generally. ADVANTAGES OF PENNY BANKS. 249 unknown in any other neiglii30urlioocl. In and around that city there were, at the close of 1864, no fewer than sixty-eight Penny Banks in active operation, all of which deposited with the Savings Bank of that place. The total amount of de- posits in these sixty-eight hanks during the year 1864 was 9,386/., and withdrawals to about half that amount. The number of depositors exceeds, at the present time, 24,000. That these auxiliary banks are effecting a great amount of good can well be believed. " The saving of pence," says the report from which these extremely interesting facts are taken, " proves a training to habits whereby ultimately larger sums are saved, and the virtues of industry and providence are cul- tivated and confirmed," and there caimot exist a doubt on the matter. The principles upon which they and aU other banks of the kind were started, and have been throughout conducted, make them peculiarly institutions of a preliminary character for the poorer class of w^orkmen ; emphatically they are, as they have been called, " the poor man's purse." In their operations they are so simple, that few could possibly get per- plexed in dealing wdth them ; and they are best adapted to working populations, because they are open at such hours, generally on Saturday nights, as are known to suit these classes. As the most salutary change is made in a man's habit, perhaps in his character, when he hegins to save, the Penny Bank deserves every countenance and encouragement.* * Any of our readers who may desire fuller information on the subject of Penny Banks, or particulars as to their management— information which we should have been glad to have furnished, had our space permitted— could not do better than get an admirable little pamphlet on "Penny Banks," by the Eev. J. E. Clarke, of Derby. (Bell and Daldy, 1859.) Mr. Smiles, in his Workmen's Earnings, Strikes, and Savings, also devotes a short chapter to describing, in his usually effective way, their results on the provident poor. 250 SAVINGS BANKS. It only remains to add, that the Legislature took the matter up in August, 1859, when it passed the Act 22 and 23 Vict. c. 53, legalizing, as it were, these institutions, by enabling them to invest the whole of their proceeds in Savings Banks. Much that remains to be told of Savings Bank reforms, and of other proposals to supplement the system by fresh provi- sions, may be told in connexion with the life of a gentleman to whom reference has already been made. Amongst those who have devoted much time and immense labour to brinsf about a better state of things in Savings Banks, the foremost place is undoubtedly due to Mr. Charles William Sikes, of Hudders- field. Mr. Sikes, the son of a private banker of that town, was born in 1818. We will pass over his early years, only remarking that he received a commercial education, and, in 1833, entered the employ of the Huddersfield Banking Company, the third or fourth joint stock bank established in this country. Subsequently cashier, Mr. Sikes now holds the position of deputy manager of the bank in question. We mention this, because it has an immediate bearing on the subject : it was while Mr. Sikes was cashier of this bank, — which, like other private banks, received deposits above 10^., and allowed interest at the current rate, — that his attention was arrested to the question of banks for the people. He witnessed a considerable number of instances of workmen, who, beginning with a few pounds, had silently amassed what was to them a little fortune, of one, two, and even three hundred pounds ; and he became deeply impressed, as he himself informs us, not only with the idea that the number of these provident working people was far less than it ought to be, or might be, but that the social and domestic results for MR. C. \V. 8IKES OF HUDDEESFIELD. 251 good that -would ensue would be absolutely incalculable, if bank depositors among the working classes became the rule, instead of the rare exception. About this time — the era of the Free Trade agitation — there was great distress in the manufacturing districts, and Huddersfield, like the rest of the West Eiding towns, was heavily visited. In the neighbour- hood where Mr. Sikes resided, the population was chiefly engaged in the weaving of fancy waistcoatings, and that trade was almost suspended. " Privation and suffering," says Mr. Sikes, "prevailed on every hand, and was frequently borne with silent and noble heroism." He seems to have entered freely -into discussion with working men as to the various remedies for such a state of things, and in this practical way to have penetrated into their thoughts, and to have got at their wants, wishes, and feelings. And for such objects as Mr. Sikes had in view^, the end amply justified the means. There seemed to him only one remedy, to which they might possibly be assisted, but which they themselves must adopt ; whatever was suggested, Mr. Sikes's thoughts would always recur to the comparative comfort of those who had to some extent lived for the future — who had had the wisdom in their better times to remember that rainy days must come at some time or other ; that " luto each life some rain must fall, Some days must be dark and dreary ;" and that the difference between those who had a little store laid by and those who had none, was the difference betw^een hopeful expectancy and comfort, and helpless misery and want. Mr. Sikes tells us that he had already begun to feel, that though much might be done for the working classes by kindly and temperate advice, the greatest share of the work 252 SAVINGS BANKS. of their social elevation would have to be achieved by their own individual efforts ; this feeling, moreover, was strongly confirmed by reading a passage in the late Bishop of Chester's (Archbishop Sumner's) Records of Creation : " The only true secret of assisting the poor is to make them agents in bet- tering their own condition ;" and on this maxim, as a principle, he resolved solely to act. Mr. Sikes came to the conclusion that his work might well lay in endeavouring to stimulate the poor to more provident habits ; and that, if there was any- thing in the constitution of such societies as were formed expressly to foster these habits which stood in the way of the poor man, the obstacles ought either to be quickly removed, or some new organization must be planned to effect this purpose. Though Mr. Sikes never seems to have had any- thing to do with the Huddersfield Savings Bank — having abstained, through motives of delicacy, owing to his con- nexion with an ordinary bank in the same tovra — he was thoroughly conversant with the system, and therefore fully appreciated the difficulties in the way. He was not long in finding out how utterly impossible it was to adapt the system, as it then stood, to the well-known wants and requirements of the workman ; and he early turned his attention to some auxiliary machinery which he thought would meet the case of the younger people, if of no other. He truly held, that if he could do anything to inculcate the growth of frugality in young people, their habits would increase with their years' and grow, in spite of the many inconveniences, amounting as they did to absolute discouragements, which they might meet with afterwards in their connexion with the majority of the old class of Savings Banks. With this end in view, Mr. Sikes addressed a long letter "PRELIMINARY SAVINGS BANKS." 253 to the editor of the Leeds Mercury, in 1850, which was subsequently republished in the form of a pamphlet, and widely circulated, recommending the formation of what he called " Preliminary Savings Banks." There was nothing particularly new in the character of the banks proposed; the novelty was in their adaptation to the machinery of Mechanics' Institutions. Mr. Sikes took up the Penny Bank movement, and showed, with an energy and devotion to the subject which made his exertions quite impressive, how, by the already existing institute, that useful scheme for saving small sums might be proj^agated far and wide. His proposal, to give it in brief, was, that a few leading members of each Mechanics' Institute should form themselves into a " Savings Bank Committee," attending, say, an evening weekly, in one of the class-rooms, to receive the trifling deposits of any member who should choose to "transact a little business" with them. They would only have to appoint a treasurer,, provide a few inexpensive books, and with the exercise of just a little patience and self-denial they might succeed in bringing many round to saving habits. The excellent organization, especially in Lancashire and Yorkshire, of Mechanics' Institutes, would thus wonderfully augment the number of agencies for receiving the savings of the people, and they would thus augment the number most where more facilities were most needed. The '" Preliminary " banks were meant to be merely feeders to the larger banks : so soon as the money of any one depositor reached a guinea, or two guineas, the sum was to be paid into the nearest Government bank, as often as necessary. " If the committee of each institution," concluded Mr. Sikes, in his very interesting letter, " were to adopt this course, taking an interest in & 254 SAVINGS BANKS. their humble circumstances, and in a sympathising and friendly spirit, suggest, invite, nay win them over, not only to reading the lesson, but forming the habit of true economy and self-reliance, how cheering w^ould be the result ! Once established in better habits, their feet firmly set in the path of self-reliance, how generally would young men grow up w4th the practical conviction that to their own advancing intelligence and virtues must they mainly look to work out their own social weKare ! " It is very satisfactory to find that this ad\ice and such considerations had their proper weight with the committees of many of these institutions : Penny Banks were added to their other educational and social schemes ; and Mr, Sikes was further encouraged by the Committee of the Yorkshire Union of Mechanics' Institutes, who more than once alluded to his proposals, and expressed their cordial approval of his plan, and their pleasure that it had been adopted in several places included in their sphere of operations. In the country generally the proposals attracted for some time considerable attention, and led to Mr. Sikes being largely consulted by gentlemen who were desirous of establishing "feeders" to the existing Savings Banks, either in the form of the Penny Bank, or the Mechanics' Institute " Preliminary" bank. He soon came to be regarded as an authority on the subject, and justly so ; many different banks were at this early stage formed as the results of his advice and assistance, and Mr. Sikes seems to have had many gratifying assurances that Iris labours have been far from fruitless, a result in which the philanthropist finds his best reward * The first Preliminary Savings Bank in Scotland was started at Annan, in Dumfriesshire, and Mr. Sikes was consulted about it. A correspondent writing SAVINGS BANKS AND MECHANICS' INSTITUTES. 255 Mr. Sikes's next exertion on behalf of tlie working popu- lation around him was to help them to a proper estimate of the value of provident habits, by the publication, in 1854, of a pamphet entitled Good Times; or, the Savings Bank and the Fireside ;^ an admirable little manual for the class for which it was written, and which deservedly obtained a large sale. Mr. Sikes himself described hoAV he was led to write his pamphlet by hearing, in an extensive intercourse with working men, the most crude ideas as to the utility and virtue of habits of economy and frugality ; and we know no better corrective than a perusal of this little " compendium of practical wisdom " now before us. Up to this time we find that Mr. Sikes laboured very earnestly to spread the knowledge of Savings Banks among the people, and to obtain more appreciation for these insti- tutions. He also, as we have seen, proposed his " Preliminary Banks " on the principle that, as the existing institution did not sufficiently recognise the small attempts at saving habits, this supplementary class of banks would supply the deficiency. He seems, however, to have carefully abstained from saying anything that would tend to lessen the influence or use- fulness of the existing Savings Banks ; but in 1855, the time would appear to have arrived when it became necessary to attempt some reforms in their constitution and manage- ment. It is not at all difficult to comprehend the steps by which Mr. Sikes, with his practical knowledge of Savings to Mr. Sikes a few years ago, says: "It may gi'atify you to know that I sometime since met with the Rev. James Mackenzie of Dunfermline, formerly of Annan, who told me that he had ten Penny Banks at work at Dunfermline ! I helieve the Annan one was father to them all, and you to the Annan one, so that your family is spreading rapidly, and becoming a great multitude througliout the entire kingdom ! " * Groomhridge & Co. London. 256 SAVINGS BANKS. Bank business, would arrive at tlie conclusion that if these banks were to continue to be in any sense the depositories of the money of the poor, they must undergo almost a transformation, and further, that reform must come from within. That this was the conclusion to which he came is evident from the able and exhaustive letter which Mr. Sikes addressed, in 1856, to the Chancellor of the Exchequer, the late Sir G. Cornewall Lewis, on " Savings Bank Eeforms." Mr. Sikes first sought an interview with Sir George C. Lewis, and obtained one, in company with Mr. Wickham, jNI.P. ; and the letter which followed was the result of a request on the part of the Chancellor of the Exchequer, that the different points should be fully and clearly set before him. So far as we have been able to find, Mr. Sikes deseiTes the credit of having been the first to point out the inherent defects in all parts of the Savings Bank system, and the first to suggest an entirely fresh form of management.* Almost all the previous hrocJmres relating to Savings Banks had exclusive reference to the matter of the frauds which had occurred, and the security which depositors possessed in such cases. On this subject. Dr. Hancock, of Dublin, had published two very able pamphlets,'which had originally been read as papers before the Dublin Statistical Society, of * Eeference is due to auotlier gentleman, Mr. Maitland, actuary and subsequently treasurer of the Edinburgh Savings Bank, who now seems to have urged, even before Mr. Sikes did so, English Sa%dugs Bank managers to give to depositors more of the facilities granted by Savings Banks in Scotland. Speaking of 1843-5, Mr. Maitland says, " I met with no sympathy when I urged the duty of cultivating the small deposits of the really labouiiug classes. I was bitterly opposed in my advocacy of giving more hours weekly to the public, and was deemed almost mad when I insisted that we should all pay on demand, at all events sums under lOZ," — Letter from Mr. Maitland to Mr. Sikes, February, 1857. MR. STKES' LETTOR TO SIK GEOEGE C. LEWIS. 257 which Dr. Hancock was secretary. Mr. Edward Taylor of Itochdale had, at a still prior period, written a pamphlet on the same subject. Mr. Sikes, in the Letter we are now considering, adverted at length to the same point, but by no means confined his attention to it. He, on the contrary, dwelt on the dormant state into which many of the banks had sunk ; the extremely unequal way in which they were furnished to the people ; the limited time for which the majority of banks were open ; the various rates of interest allowed ; the inequalities in the contributions to the "separate surplus fund;" the non-establishment, for many years, of new Savings Banks ; and generally, the unsatis- factory state of the law with regard to them. Mr. Sikes, after thus recapitulating in his able pamphlet the imperfections in the organization and management of Savings Banks, advocated the following improvements, viz. : — That the State should give a perfect guarantee ; that there should be a central bank in London to control the whole system, in the same way that the central Money Order Office controlled all money-order operations at the Post Office ; that there should be a vigilant and general audit of all accounts ; that there should be a great extension of the hours during which Savings Banks were open ; a great increase in the number of such banks — the services of private and joint-stock banks to be called into requi- sition in cases where such arrangement was likely to prove economical and advantageous ; that there should be an increase in the facilities for the deposit and withdrawal of money ; that one-fourth of the capital of Savings Banks should be employed in first-class landed securities and railway mortgage bonds, yielding four per cent. Mr. Sikes s 258 SAVINGS BANKS. further proposed that the rate of interest on sums up to 100/. should be three per cent., and two and a half per cent, on all sums beyond. Mr. Sikes felt the difficulty of providing that essential Government guarantee for every deposit, without which any reform in Savings Banks was scarcely worth the name ; but he strongly insisted on the point that if a Savings Bank department was established in London, which shoidd, on its part, insist upon weekly returns, a good and uniform system of book-keeping, and a liabihty to unapprised visits by inspectors from the London office, the entire staff of Savings Bank officials in the country might, to a great extent, be kept honest. Bearing in mind, however, that errors and losses would occur to the best regulated department, he further proposed that the treasury might be made safe by the establishment of a " General Guarantee Fund,"* to which contributions should be made from the " Separate Surplus Fund." These suggestions, if carried out, Mr. Sikes believed would help to form the basis of a system that would restore Savings Banks to the estimation in which they were held during the first twenty years of their existence ; and there can be no doubt of it. The difficulty was, how- ever, in getting such recommendations adopted — either because the then Chancellor of the Exchequer (Sir G. C. Lewis) did not bring his extraordinary poAvers to bear upon the subject, or else there was still something lacking to give a more practical turn to the questions at issue. As subse- quent events have proved, it is more likely to have been for the latter reason that the matter was not persevered in. * This pi'oposition was revivcil in 1862 by Mr. Scratcliley in the last edition of his Practical Treatise, but without in any way mentioning the name of Mr. Sikes as the original suggestor of the plan. MR. SIKES' EECOMMENDATIONS. 259 Everything that an ingenious marshalling of figures, an array of argument, and even eloquence could do, Mr. Sikes did ; but all appears to have been equally unavailing. The Chancellor of the Exchequer made attempts, as we have before seen, in the House of Commons, to improve the organization of Savings Banks, but without success. "Wlien the Committee on Sa^angs Banks was appointed, in 1858, Mr. Sikes was called as a witness. He again de- scribed the plans which he had suggested in 1856, and wliich had undergone little or no modification since that time, and urged the adoption of some of them, — with what success is already known. And here it will be best to dispose of the Committee of 1858, and to show how little it effected, and how little it was calculated to effect. So far as the providing of additional and much required facilities was concerned, it is necessary to describe with minuteness the Committee's deliberations. The Eeport itself, to which the Committee put their names, has been given. It provided, as our readers will remember, for a new Government man- agement of Savings Banks, ad\dsed that increased power shoidd be given to the Commission, and provided actual security for the deposits. This Report was not acted upon ; but even had it been, the reform would only have been partial. So far as relates to the increase of facilities, it left the cjuestion almost untouched. Indeed, mth the con- flicting evidence given, the Committee acted wisely in con- fining their labours to the rectification of existing abuses, and in making as perfect as possible, without increasing, the existing accommodation. The witnesses examined before the Committee were by far the most prominent authorities on Savings Bank management in the kingdom, s 2 260 SAVINGS BANKS. and yet on no single point conld they all agree. This is, we tliink, no unimportant phase of the snbject; on the contrary, it is highly important, as showing how very little conld be eftected for the body of Savings Banks in the absence of anything like unanimity amongst those who best understood the subject. On the question of Govern- ment security and Government supervision, we have already spoken. With regard to the necessity for a uniform system of management, and of course a uniform system of accounts, there was certainly an appearance . of general agreement ; but little attempt to bring it about. Mr. Hope Kicld " thought it woidd be very advisable to assimilate the practice of the different banks more than at present exists (1,895)." Mr. Maitland and Mr. Worthy would like uni- formity, and would give the Commissioners power to enforce it ; " nothing less would remedy the loose system of so many of the banks." "The system of keeping tlie books," said Mr. Craig, of Cork, " in some of the country banks, is most abominable. 1 speak of the vast majority of banks ; some are exceedingly well managed ; but I say, that from the way they make out their accounts for the iS^ational Debt Office, not one in ten is honestly C)r fairly made out (3,759)." Had the Committee deliberated upon a uniform system, which they did not, for all the banks, and had they decided— (a very difficult matter, seeing that each of the seven largest banks in tlie kingdom had different systems of book-keeping)— to recommend some one system, the difficulty would only be half over. Each Savings Bank was independent, and completely irresponsible to any one in such matters as these; but supposing, which was very unlikely, that the trustees could be got to look upon the DIFFERENT SYSTEMS OF BOOK-KEEPING. 261 matter with favour, all would not yet be smooth sailing. The difficnlty of introducing real improvements into Saving Bank management was more than once spoken of and illustrated. Thus, Mr. Boodle told how he encountered great opposition from his own subordinates, in introducing something new into the excellent establishment at St. Martin's Lane. For six months after he started a new system of book-keeping, a conspiracy lasted among the clerks to prevent any change ; wilful mistakes were constantly made, to show that the work under any new system could not be done ; and this continued till a great number of clerks were dismissed, and new officials appointed in their place. Much to the same point was the evidence of Mr. Craig, who described in a vigorous and amusing w^ay, which must have done much to relieve the tedium and heaviness of the investigation, the introduction of his system into the Cork bank, and the necessity for it : — "I saw at once," said he, " tliat there was nothing for it but sweeping every book ont of the bank, and I did so. They (the trustees) gave me authority to do what I liked, and I did. It was all done by me without any interference ; and I managed it in such a way that if the clerks stuck in the middle of it they would have lost their salaries ; they had either to go on with it, or stick fast. I went there myself, with a Mr. Ballard on the o]:)posite side of me, and a manager with each, deterniined to start them fairly. I remained there for a month. I saw that the clerks were very anxious that it should miscarry. I immediatel}' saw what they were about ; I observed that all the books were coming to my side, and few to the other ; they thought to smother me with books. The moment I saw this, I said to little Mr. Abel (who is now dead), ' Do not chatter ; work away ; they are playing a trick upon us.' We dashed through the work ; and, one of the book-keepers coming down after he thought he had well supjilied us with a wheelbarro wful of books, expecting to find them all in arrear, I said to him : ' Why the deuce don't you send us books ! ' When they found they were all done, that stopped all ftrrther opposition ; and thus I taught them to do it, just as you would teach a puppy to swim — if you tumble him into the water, never fear that he will et out." 262 SAVINGS BANKS. Granting that Savings Bank clerks may be subdued alter Mr. Craig's or some other fashion, it would still appear that the indispensable requisites to a complete uniformity of accounts must be something like uniformity in the distinc- tive principles and practices of Savings Banks. We refer to such matters as the limitation in the amount of deposits, the rate of interest, notices of withdrawal, &c. The question of the limit of deposits was discussed liefore the Committee. Mr. Meikle and ifv*. Sturrock objected to any alteration in the limit of deposits which for many years had stood at 30/. for any one year, and 150/. in all. 3Ir. Boodle thouglit the annual limit should be increased to 50/., and the total deposits to 250/. 3Ir. Finneif ^vishe(\. it to be at 50/. and 200/. respectively. 3Ir. Saintshury and Mr. Maitlancl agreed with Mr. Boodle, provided the rate of interest were reduced, and there were ready access to the public funds. Then as to the rate of interest itself, Mr. Maiiland said that the highest rate of interest that can safely be offered should be given for small savings, " though," he said, " lowering the rate would bring Savings Banks back more to what they were intended to be." He also thought the rate should vary according to the market rate of interest. Mr. Boodle objected to a fluctuating rate. Mr. Meikle was of opinion that a fixed rate of three per cent, should be given. Mr. Craig said a rate of 2/. 17s. or 2/. 18s. was satisfactory to depositors. Mr. Worthy thought three per cent, a fair rate of interest. Mr. C. W. Sikes suggested that the interest to deposi- tors should be three per cent, on sums up to 100/., and two per cent, over that sum. He thought a low rate of interest would not deter the working man from Savings Banks. If we turn from this theorizing to what was the practice of different Savings Banks in this and other particulars, we shaU find DIFFERENT KATES OF INTEREST. 263 diversities of operation which not only account for so much difference of opinion, but which rendered unanimity of action almost impossible. It was then, and is still, a very popular notion, that the Savings Banks proper pay a uniform rate of iDterest of three j)er cent, per annum ; nothing can be more mis- taken. "VVlien the enactment was passed establishing the still existing rate, it was generally considered in Parliament that five shillings per cent, was ample enough to pay all expenses of management ; but the fact is, double that amount has not sufficed in some cases. In 1857 there were, according to a Parliamentary Pteturn, no less than thirty-two different rates of interest paid by Savings Banks managers, and had the Eeturn embraced a much more recent period the same diversity would have been shown. Thus, in that year — £ s. d. 31 banks paid interest to depositors at the max'" rate of 3 10 per cent. 107 J> 1) at the rate of 3 215 > " 2 18 4 11 >) )J 2 13 6 , 24 J » ? 2 17 1 12 5> 1 ) )> 2 16 8 78 >) " 2 15 64 , 35 )» I> 2 15 2 )» J ) 2 10 , added to which smaller numbers paid other rates, making thirty-two separate rates.* In accordance with the above table the average cost of management per cent, was, in 1857, — in Scotland 7s. 8d., in Ireland 9^., and in England 6.s. 7d. ; in Middlesex, however, it w^as as nmch as 9s. 2d. Confiuing ourselves to individual banks, we find that the Manchester Savings Bank cost at the same period, in expenses, an average * The Marylebone bank up to 1860 only allowed two per cent, on sums below 30?., but this arrangement has since been modified. 264 SAVINGS BANKS. sum of Is. S^d. per account, the Bloomiield bank Is, 9d., the St. Martin's Place 2s. O^d., the Liverpool bank 2s. 5ld., and the Cork bank 3s. 2d. per account. The greatest expense was shown to be incurred in those banks which dealt largely in small accounts ; hence some of the actuaries openly sought to discourage the taking of small sums. il/r. MciJde thought it was the interest of the banks rather to discourage small depositors and encourage large ones. Mr. Finney showed that they ivere discouraged at the Maryle- bone bank, where a less interest was given to small amounts. Mr. Craig, however, went to great lengths on this point, and grounded his opinions on such facts as the following (3,752) : — " The average cost of a transaction that enters a bank is more than a shilling; there is not a transaction entered in any Savings Bank that does not cost a shilling and a fraction. Now, if you allow a man to deposit a shilling, which costs the bank a shilling, it comes to this, that the manager might as well say to him, ' There is a shilling for you ; pray do not come here again.' The Committee are about seeing whether Government can or not safely undertake to make itself respon- sible for the transactions of 600 Savings Banks scattered all over the country. If so, they must only take such sums and in such ways as will be safe for the public. It wiU not do to allow people's sympathies to run away with them by the mere clap-trap of saying, ' We will take a shilling.' I say that to take these small sums, instead of being a benefit to the people, is merely encouraging them to waste their time." We need not here go out of our way to expose the fallacy of such an argument, further than to point out how entirely Mr. Craig overlooked the fact that he had previously advocated a system of uniformitv of accounts, which would have made this and OBJECTIONS TO SMALL DEPOSITS. 265 other reforms practicable. What was required of the Com- mittee before which he gave evidence, was, the suggestion of such a change in the nature of the institution as that this shilling's worth of thrift should not be sent about its business in the very summaiy manner so graphically described by this gentleman. That the Savings Banks should give such rude discouragements to the budding of provident habits was nothing short of a defect; that it was perfectly possible as well as expedient to offer encouragements to the poorest classes has since been abundantly proved, as we shall soon have to show. We have referred to the varying notices for the withdrawal of money required by different banks ; some required a week, some a month, while in the great majority of banks a fortniglit was required. Mr. Mcikle exx^ressed himself strongly opposed to the English system of giving notice : he said, the Scotch banks required no notice at all, though tliey held a discre- tionary power in certain instances. Mr. Saintsbury urged " a reasonable period." Mr. Worthy thought the notice was a protection against Savings Banks being used for other pur- poses than for accumulating savings. Mr. Silccs strongly recommended that deposits should not be repayable " except after sufficient notice," the extent of which neither he nor Mr. Saintsbury ventured to state. Once more the attention of the Committee was called to the necessity of opening out new banks in localities not well supplied with them. No one, however, was prepared with any scheme for giving extra facilities of this kind, and those hints which were thrown out by members of the Counnittee themselves were either not taken up, or if noticed, only in such a way as to attest the difficulty, rather than the ease or 266 SAVINGS BANKS. expediency with which any movement towards this end would be attended. Mr. Worthy said small banks were exceedingly unsafe ; branch banks under the cognizance of a head office might answer. Mr. MeiUe agreed, and said that at first new banks were seldom self-supporting. Mr. Nicld said it would be impossible that the agency system of Exeter (the only scheme recommended) could be introduced into Lancashire ; the branch banks under the Manchester Savings Bank could not support themselves except they had gratuitous service. Finally, we think the difference of opinion and the diver- sities of operation in the larger and best managed banks* of the kingdom could not be better shown than by the following Eeturn.t If anything could demonstrate the want of some uniform and inexpensive system of Savings Banks, we think a careful examination of the inequalities of every sort shown there might have that effect. Thus we have, we hope, succeeded in showing that at the stage to which we have arrived (and, indeed, much later,) the existing Savings Bank system, as a system, laboured under three or four essential and almost incurable and irremoveable defects: 1, They professed and were expected to give a Govern- ment guarantee for all the money deposited with them, and yet they did not. The real distinction in the matter, to which we need only allude, was and is well enough understood by educated people ; but it was not, we may almost say cannot, be mastered by the poor who were depositors. A depositor paying in liis money to the Savings Bank had no means of * So well managed indeed, that we hope it may be long before they are superseded, however desirable it may be that the bulk of the existing Savings Banks should become merged in a better system. + See next page. % RETURNS FROM TEN SA VINOS BANKS. 267 knowing what was done with it. 2, The country was most inadequately and most disproportionately supplied with banks, OO o O m PI o o -- =sl 1 '^.-i CD •^ 05 ■^ IFI "» CO c I-H CO I-H t^ 10 I-H I-H ■^(^l CO CO (M CO CO (M <>J CO O^ OT ^ >— *-v— ■-^ ■^'rH lO Ci CO T-H t^ Oi »0 00 Otl &D+^ — ' 23S '^ QA »o I-H CO CO -* CD »o ?^ r^ t' ^ 1^ ^<» 'il lO '^l CO Oi ■^ CO -^ ■^ 1-3 CO 01 »o a> CO CO 00 (M <; ^S CO OS 10 CO »o I-H H o CO (M »0 05 (M H lo" CO o ^ 10 -* o *^ ^ x =+J 0" to" i>r of t-T of co" Co" CO u-r "^■? ^ CO 00 CO Cl l^ CO CD CO Oi '^ '^ p~< t^ CO OS CO »o 10 »o CO ^ C i> c:; I-H I-H I-H I-H H T» QJ 4-' • ^ -3 a: s a S S c5 rH X > II S (5 ^ m S w a and the facilities given by existing banks were also most in adequate and disproportionate. Farther, and most im- 268 SAVINGS BANKS. portant, the number could not be increased on the same foot- ing, and no attempt was made to increase the number. Such increase presupposed a certain amount of local philanthropy: and even assuming that this sort of philanthropy is an un- mixed good, an adequate provision of Savings Banks pre- supposes an equal amount of philanthropic zeal in every quarter of the country. And 3, Savings Banks were a serious loss to the country. " Taking the average price," said Sir A. Spearman, " of Government Securities for each year | since 1817, the only years in which prices appear to have j I been such as to produce a rate of interest equal to that paid | were 1847 and 1848." Government, in relation to Savings I Bank money, had necessarily to invest when money was most ■ plentiful, and therefore when securities were dear, and to sell out when they were cheap. To make up for such loss, it is true, Government took to using Savings Bank money to aid it in its own financial operations, to save borrowing or to post- pone borrowing ; but though care was always had to keep a sufficient banking reserve in an available shape, this set-off was not allowed, as we have already seen, without many com- plaints on the part of the managers of Savings Banks. NECESSITY FOR A CHANGE. 269 CHAPTEE VIII. ON PROPOSALS FOR GOVERNMENT SAVINGS BANKS. "I do not imagine that tliere can he any more important end and object of a State than to encourage frugality, and the investment of the savings of the poor, and nothing in -which I shouhl be more tempted to step out of my way to encourage, if I were a legislator ; but I think the great test and object of whatever investment I provide specially for them, must be extreme and perfect certainty, and great facility of conversion. . . . Increase in amount of interest or profit, is as nothing compared to security." — Me. H. Bellenden Kee. For reasons which we have adduced at great length in the last chapter, the feeKng grew that a sweeping change would require to be made in the institution of Savings Banks. Sup- plementary banks of different Icinds were established, and they met in great part the object for which they were designed ; meanwhile, the great majority of Savings Banks took no steps to provide more conveniences for the public, or they were powerless to efiect them.* When reasonable changes were resisted between 1850 and 1860, it occurred to several that agencies might be contrived to do the same work after a dif- ferent fashion, and that this project should be carried out, even were the ultimate result to diminish the usefulness of most of the older banks, or gradually to set them aside. It is to pro- posals having the former object in view that we must now turn. * From this statement the ten or twelve principal banks in the coimtry, many of which are open every day, and all in a Hourishing financial condition, are of course excepted. 270 POST OFFICE SAVINGS BANKS, It is not a little curious that long before Savings Banks were legaKzed by Act of Parliament, and even before Dr. Duncan began his earnest and self-denying efforts to establish them on a safe footing, at least two different efforts were made to pro- mote the growth of provident habits by a system of Savings Banks which should extend throughout the entire country. We refer to Jeremy Bentham's scheme of " Frugality Banks," and Mr. "Wliitbread's " Poor Fund and Assurance Office." The plan of the former is detailed in Bentham's works ; the latter scheme, partly described in an earlier portion of this volume (pages 23-4) was submitted to Parliament in 1807, and a bill, — a full Abstract of which will be found in the Appendix, — founded upon it, actually passed the House in some of its earlier stages. Some of the provisions of this bill were admirable ; and some, owing to the state of the Post Office of that time, would not have been so easily worked through that department as was intended. As it was, the country preferred the class of banks just then rising into notice; and in 1817 the Legislature forgetting Mr. Whit- bread's scheme, gave its sanction and countenance to the banks which had been established on purely benevolent prin- ciples, and which were totally independent of each other. In the course of years, that system liaving been tried in every possible way without producing the safety and convenience so much desired in institutions of this sort, the principle of a uniform plan of banks in connexion with the Post Office advocated by Mr. Whitbread again came up, the story of the proposals for and the introduction of which we are about to tell. Previously, however, we ought not to omit, for several reasons, to give the outline of the scheme proposed by Bentham even before Mr. Whitbread's proposals. The reader rentham's frugality banks. 271 will perceive how thoroughly conversant the philosopher was with the every-day habits of the poor, and how completely he understood their wants and requirements, and sought to provide for them. It is only necessary to add that Bentham advocated this plan as one of many measures of pauper management ; that the scheme was to be generally applied throughout the country, and to be taken up and worked by means of a company ; the place where the banks should be held to be called " ' Industry Houses,' in contradistinction to the ' Public Houses' of Friendly Societies." " Should this not be enough," says Bentham, " the vestry room of each place of worship pre- sents an office as near, and the clerk an officer or sub-agent as suitable, as can be desired."* After fully going into the hindrances to the spread of saving habits among the poor around him, and the difficulties incident to the laying up and improvement of their surplus moneys, — hindrances and diffi- culties which had not yet all been surmounted, — he gives the following comprehensive and exhaustive list, which shows how thoroughly he would have mastered the obstacles of a more recent period : — "Properties to be wislied for in a system of Frugality Banks, commensurate to the whole population of the self-maintaining poor : \\z. " 1. Fund, solid and secure : — proof against the several causes of failure. " 2. Plan of Provision, all comprehensive : comprehensive, as far as may be, of all sorts of exigencies, and at all times, as well as of all persons, in the character of customers : thence the amount of the deposits transferable from exigency to exigency, at the will of the customer, at any time. ' ' 3. Scctle of Dcaliiuj, commensurate to the peculiar faculties of each Tracts on Poor Laws and Pauper Management, included in the Works of Jeremy Bentham, edited by Sir John Bowring, vol. viii. edit. 1843, page 408. The punctuation and the italics of the above extract are Bentham's own. 72 POST OFFICE SAVINGS BANKS. customer : i.e. on each occasion as large or as small as his con- venience can require. " 4. Terms of Dealing sufficiently advantageous to the customer: (the more so, of course the better), regard being had, in the necessary degree to solidity. " 5. Places of transacting business suitahle: adapted in point of vicinity, as well as in other respects, to the convcniency of the ciistomer, " 6. Mode of transacting liusiness accommodating : suited to the circum- stances of the customer in respect of times of receipt and payment, and quantam of receipt and payment at each time. "7. Mode of operation, prompt, consuming as little of the customer's time in attendance as may l)e. " 8. Mode of book-keeping, clear and satisfactory." There can be little doubt from the above extract, that if Beutham did not make a very practical proposal, he had an excellent idea of the description of agency required. Another proposal which shared the same fate as did those of Bentham and Whitbread was ventilated in the QnarUrly MeviewioT 1827, in an article on "The Substitution of Savings Banks for Poor Laws." This was no new scheme, though the agency by which the scheme was sought to be carried out certainly was original. During the eighteenth century the plan of masters compulsorily deducting payments from the wages they were expected to pay to their servants, in order that the money might form a fund for a time of need, was frequently recommended, and even proposed to Parliament. De Foe, in his " Giving Alms no Charity," tells us how at his own period attempts were made to effect a legislative substitution of savings for poors' rates, and to pass Acts of Parliament which " shall make drunkards take care of wife and children ; spendthrifts lay up for a wet day ; lazy fellows diligent ; and thoughtless, sottish men careful and provident." But all the plans, as might be expected, came to nothing. In 1827, however, the Savings Bank principle having become PROPOSALS OF THE "QUARTERLY REVIEW." 273 recognized, and the Post Office machinery tolerably efficient, it was said that the scheme might be made to work. The writer advocated the establishment of a National Savino-s Bank, to which the Savings Banks in the country might con- tribute ; "and perhaps," said the Quarterly Reviewer, as if recognising the fact of the insufficient distribution of banks, " the remittances to be made might, especially in rural dis- tricts, be allowed to be paid into the nearest Post Office, and remitted with its own money to the General Post Office, by whom it might be paid over to the Commissioners of the National Debt." This scheme attracted little or no attention at the time, and nothing came of it. In more than one re- spect, however, it contained the germ of a plan subsequently carried out, and it is not impossible that some of the numerous claimants for the honour of having originally proposed Savings Banks in connexion with the Post Office may have carefully studied the details. And this brings us to the early history of Post Office Savings Banks, and to the numerous suggestions which at one time or another seem to have been made with regard to them. No less in respect to the place which these banks are designed to occupy as important public institutions — the people's prin- cipal purse — (and that their position in the country will at no distant period be a commanding one there cannot be a reason- able doubt) than for their present attained position and intrinsic value, the question of their early history is a matter for most careful investigation, and one which must not be lightly passed over. The matter of the authorship of the scheme was the subject of considerable discussion at an early stage in its history; and that discussion was not without its value in elucidating some points of considerable importance, and as T 274 L'Uisi: OFFICE SAVINGS BANKS. affording materials for more deliberately investigating many claims wliicli have been put forward. It naturally forms part of our plan, not only to offer a description of the working of the new class of banks — as will be done in a subsequent chapter — but to show, as we propose to do here, in a strictly impartial manner, to whom the country is indebted for the agency now in operation.* Confining ourselves at present to the origination of the jorincijjle of Post Office Banks, without reference to the won- derfully simple and efficacious scheme afterwards organized, we find that several different gentlemen had between the years 1850 and 1860, and acting entirely unknown to each other, matured plans, and in one way or another actually pro- posed thein, to remedy the deficiencies of the existing banks, on some such principle as that eventually adopted. To Mr. ■ Sikes, of Huddersfield, however, — of whose previous labours in the cause of Savings Bank reform we have already spoken, — belongs the undoubted merit and honour of having indepen- dently originated and matured a plan of operation more or less equal to the object in view; of having persevered in the object of bringing the matter prominently before the public ; and of being so fortunate as to have proposed his scheme at a period when the country possessed in Mr. Gladstone a statesman of * A little Handy Book on the suliject, published in 1861, by Mr. H. Eise- boroush Sharman, one of the Editors of the Insurance Oazctte, and which deservedly had a large sale, went o\'er verj^ ably, though in a way which produced considerable acrimony from some jiortion of the public press, some of this gi-ound. Though it is open to question whether at so early a date it was not iiremature, and, whether in the peculiar form of a manual for intending depositors, it was wise to enter upon a discussion of these points, it is certain that by means of this pamphlet and other advocacj% ]\lr. Sharman laboured very hard and very zealously to prejiare the public mind for the adoption of the scheme of Postal Banks, and to spread a knowledge of heir benefits after the mensure had become law. DR. HANCOCK ON GOVERNMENT BANKS. 275 extraordinary versatility and power at the head of its financial operations, and who has given abundant evidence of his will- ingness to grapple with uncommon difficulties where a need is proved and the principles of a measure are shown to be sound. As we shall show presently, the same propositions, only dif- fering as to details, were submitted once, if not twice, to Sir Charles Wood when Chancellor of the Exchequer, and once more, by a totally different individual, to Sir George C. Lewis when he held that office. How much, therefore, the measures subsequently carried are primarily due to Mr. Gladstone's sharp-sightedness and energy the reader may judge. Eeturning to an account of those who have been represented as suggesting the principle of Postal Banks, we think the number may be fairly reduced by several names. And in that number we would class Dr. W. Neilson Hancock, of Dublin. Of Dr. Hancock's exertions in connexion with the frauds in Savings Banks, and his descriptioa of the feeling of insecurity which they engendered, we have already spoken ; those exer- tions related exclusively, so far as we can gather from his pamphlets, to a remedy for this grievance. In a paper* read by Dr. Hancock before the Dublin Statistical Society in 1852, and republished in a pamphlet form four years afterwards, we find him saying, that private enterprise had not had a fair trial, — if it had, and failed, then Government should under- take the work, as it did Money Order business : — " That part of the natural business of bankers which consists in receiving deposits from the poor might be undertaken by some public officers appointed for the purpose, just as the granting of Money Orders, another part of the same business, is carried on by the officers of the Post Office. Such an institution * Duties of the Public with respect to Charitable Savings Banks. Dubli 1852. T 2 276 POST OFFICE SAVINGS BANKS. would be called a Savings Bank ; and in it the Government would be refsponsible to the depositors for the acts of the clerks. So that the entire responsibility of management would rest with the members of Government in charge of that department, and the dei^ositors would have perfect security for any money actually paid to a clerk. . . . My own impression is, that if our laws were framed with a view to allow of small deijosits and small investments, private enterprise is quite adequate to supply a complete system of safe investments for the poor. But whether that opinion be sound or not, a Government institution like the Money Order Office, with Government officers and Govern- ment security for those officers, woiUd be infinitely better than the present system of divided responsibility and absence of security." In a further paper, read and published in a pamphlet form in 1855,* Dr. Hancock made no further proposal to- wards the object immediately in our view, although he said — " Tlie Money Order Office of the Post Office shows that a large part of the business of baaikmg for the poor can be cheaply and efficiently conducted by the officer's of a public department. The first step towards the adoption of such muasiu-es is to produce in the public mind a conviction of the utter instability or banks as now constituted, and that conviction I have en- deavoured to create. " We believe Dr. Hancock went somewhat further than this, by calling the attention of the Post Office authorities to the matter though, as he presented no distinct scheme to their consideration, it is not very wonderful that the question should rest where he left it. Though Dr. Hancock does not seem ever to have gone so far as to propose "the opening of banks for the pour in connexion with the Money Order Office," much less to develop a plan which should have that end in view — a construction which has been put upon his references to the Post Office machinery ,f — it is only fair to that gentleman to sav that he was one of the first to recognise * On the present State of the Sai'i7igs Bank Question. Dublin, 1855. + Mr. Sharnian's Handy Book, p. 10, 2d edit. MR. AYRTON AND POST OFFICE BANKS. 277 the merits of such a measure when it was proposed, and to urge its full adoption. Another name, which has in our opinion been very unne- cessarily and erroneously connected with the early history of Post Office Banks, is that of Mr. Ayrton, the member for the Tower Hamlets. To all who remember the strong opposition which Mr. Ayrton offered, not only to the project when before Parliament, but previously to other reasonable reforms in the Savings Bank institution, this association of his name with the origination of the ^Dresent plan must be very amusing; and yet this is an error into which several have fallen, though traceable, perhaps, to one source.* Mr. Ayrton certainly seems to have had a notion, though not till 1858, that the Post Office might be more useful to Savings Banks than it was ; and in the Committee of that year, of which he was a member, he asked one of the witnesses — who was actuary to a bank that had several branches in country places — a series of questions, with the object of eliciting the opinion that it would be an advantage to Savings Banks if money orders could be procured in country places at a cheaper rate than 3d. and 6d., when any person desired to send a Savings Bank deposit to an adjacent town.f In the draft report * Mr. Sliarman's Handy Book, p. 11, 2d edit. t It is pretty generally known, that no profit whatever accrues to the Post Office on orders for wliich tlireepence only is cliarged ; yet in spite, as it were, of this fact, we find that Mr. Scratcliley, in his Practical Treatise, takes up Mr. Aj'rton's proposals, and "recommends" tliat " Money Order officials receive deposits on behalf of the nearest Savings Bank," and "that this should he done at a cost to the depositor of one penny for any sum not exceeding 5?." " It is also, " adds Mr. Scratcliley, " very desirable that tlie valuable privilege of freedom from postage recommended by Mr. Whi thread shovild be granted for the books and documents recpiired to be transmitted on behalf of Savings Banks." Mr. "Whitbread, it wiU remembered, made this one of the cou- ilitions of his scheme of National Banks ; and it is quite evident that none 278 POST OFFICE SAVINGS BANKS. proposed by Mr. Ayrton after the close of the investigation (which was not carried), tlie following clause appeared: — "That the Committee recommend the Postmaster-General to afford every facility practicable for the remittance of money to Savings Banks, but they do not deem legislation in this respect ex- pedient ; " and in our humble view it would have been exceedingly cool if they had ! There can be no question that this simple incident has given rise to the misapprehen- sion to which we have just alluded. We can now come to veritable proposals. Though it is due to Mr. Sikes to say that the fact of prior proposals, with the same object in view, were either forgotten or only came to light for the first time after he had publicly made and urged his plans on the country, it seems not to admit of question that two gentlemen had been, quite unknown to him or the public generally, over the same ground before him, and, whether wisely or not we will not attempt to decide, had desisted from pressing their plans after obtaining an adverse decision with regard to them. So far as the Post Office is concerned, it is only fair to say that the authorities up to quite a recent period have had their hands suificiently full in completing the plan of Penny Postage Eeform which, for several years after the passing of the Act of 1839, was almost held in abeyance ; and that, inundated with crude and unde- veloped schemes, it was requisite that a plan in which so much was involved should be well matured, and go weighted witli the stamp of public approval. Whether, however, the Post Ofiice system was prepared so early as 1851, — the date but National institutions could obtain such a provision. " The valuable pi-ivilege of freedom from postage, " would, we should think, be considered very desirable by a variety of different societies and interests, if only they could obtain it ! THE EEV. G. II. HAMILTUxVS PKOPOSALS. 279 of the earliest proposal, — to undertake Savings Bank business, is a question which, considering the transition state in which it then was, admits of some doubt. In 1852, the Eev. George Hans Hamilton, the Vicar of Berwick-upon-Tweed, and now Archdeacon of Lindisfarne, proposed through his relative, Mr. G. A. Hamilton of the Treasury, a national system of Savings Banks to be worked by means of the Post Oftice,* which it is but justice to say presents many, if not most, of the features of the plan * The following M'ero the details of the revereiul gentleman's scheme, of the authenticity of which we have fully convinced ourselves : — - 1. That deposits from Is. to 10?. be received daily at every Post Office in the United Kingdom at which Post Office Orders are now issued, and the amount forwarded daily to the National Savings Bank, London. 2. That the Postmaster, upon receiving a deposit, do issue a document of acknowledgment to the depositor, with printed instructions attached thereto, directing the depositor to write to the London office, if a receipt be not received by him through the Post from the London office within days. The following advantages would follow : — 1. Universality of oinration, by whicli the Savings Bank system would be fol■tll^^^th placed within the reach of every member of the communitj'. 2. Chea2mess of management. — All rents for offices, and annual salaries to clerks, avoided. Postmasters who are now enabled to issue Post Office Orders, are already admitted to have character sufficient to be entrusted with the receipt of money, which by this system would never exceed one day's deposits. 3. The only expenses of management would be, (1) the London office, which ought to be as near the General Post Office as possible ; and (2) some small payment to Postmasters upon each deposit. In large towns, it may in time be necessary to employ an additional clerk in the Post Office, but in these cases the payment on each deposit would suffice to enable the Postmaster to keep such clerk. 4. It would not interfere with the existing Savings Banks, — leaving it to the public to adopt either the old or the new system as they please. By this means the old system would jirobably be sixperseded by slow degrees, and without hardshiii or inconvenience to any one. Geo. Han.s H.\miltox. ^ 280 POST OFFICE SAVINGS BANKS. eventually produced. Mr. Hamilton met with varying suc- cess ; his proposals were not taken up warmly, but were understood by him to present diiliculties which might ulti- mately be overcome. Had this gentleman persevered in the advocacy of the scheme which he propounded, or had he had the good fortune to have fallen on more favourable times, with Mr. Gladstone as Chancellor of the Exchequer, there can be little doubt that his plan would have been cordially taken up and his name ever associated with it. As it was, his exertions were recognised by Mr. Gladstone when he came to deal with the matter, that gentleman referring on one occasion to the valuable suggestions he had made. It should be added, that IVlr. Hamilton has, since the plans came into operation, urged a modification of one of its features (to be referred to hereafter), and it is little to say, considering the value and the shrewdness of his original suggestions, that he is well entitled to be heard on the point. The other gentleman who somewhat later than ]\Ir, Hamil- ton, and quite unknown to him, made proposals to the same effect, was Mr. John BuUar, the eminent counsel, of the Temple. Mr. Bullar himself informs us that his attention was attracted to the subject by observing the working of a Penny Bank at Tutney, which was established in the year 1850. Being a member of the Committee of this bank, he was led to think much over " the then existing system of Savings Banks, and how some of the defects of the system coidd be remedied." After thinking the matter well over, he drew up the memo- randum which we give verbatim : — It is admitted that the present sj'stcm of Savings Banks is defective, and that a new system is much wanted. Among the defects of the present system are : — Want of perfect security to depositors : risk of loss to tinistees by defaulting clerks, and want of ME. JOHS- bullae's PBOPOSAlSu ■.f% to make dei^ 81 cmee a veek; own Ijsnk^s .' In oirf^ bdisLg jnersi In flse 1; ■%- - ■ rmm-. If tim -•izei ((ez©?jiiit 282 POST OFFICE SAVINGS BANKS. This memorandum was written in November, 1856. Mr. BuUar describes that at that period he was too much occupied to enter into the matter so fully as was necessary, or to agitate by means of the press for some such scheme ; but Mr. Bullar's friend, jNTr. Joseph Burnley Hume (eldest son of the late Mr. Joseph Hume, M.P.), who had some leisure at command, and perhaps some of his father's desire to achieve an amendment of the Savings Bank system, undertook to bring the matter forward in the proper official quarters. He early saw Mr. Frederic Hill, who was in charge of the Money Order department of the Post Office, and learned from him that the same scheme had already been suggested to the Post Office, and rejected after full consideration. A month after- wards Mr. Hume saw the Duke of Argyll, who was then Postmaster-General, and received a courteous hearing from him. The Duke also said that the Post Office had had the question, or something like it, before them, and that he thought the Chancellor of the Exchequer still had something of the kind under consideration ; but gave no definite reply. Subse- quently he saw Sir Alexander Spearman, the Comptroller of the National Debt Office, and Mr. Tidd Pratt. " He gathered from them," to use Mr. Bullar's own words, " that they were with him in principle, but regarded the proposed Money Order department as visionary, and that the Government had under consideration a different scheme, which they pre- ferred."* Having in this way met with enough discouragement to hinder them — or any other person who might be cognizant of the proceedings that had been taken — from going further, * Like Mr. Hamilton, Mr. Bullar has subsequoiitly proposed a plan for giving increased facilities in one direction to depositors, \Yhicli will be referred to at the proper place. MR. bullae's plan IS DECLINED. 283 tliey dropped any further steps to bring about tliis desirable change. Happily, however, — for happy, in one sense, it was, — these schemes and the hitherto abortive attempts to carry them into execution, did not reach the public ear, or others might have desisted from entertaining similar plans. As it was. it was still open to any one else to take up the matter de novo ; and this is what actually did happen. "We can well believe, without the assurance with which he has favoured us, that the next adventurer in these apparently difficult seas had no notion that they had been previously navigated. This cir- cumstance does not take from his merit; but it certainly increased his difficulties. How the matter was eventually brought about in the face of the adverse decisions which we have just given, though somewhat better known, is within our province to tell. In the hands of Mr. Sikes, of Huddersfield, any matter once taken up was not likely to fail for want of thorough ventilation and earnest advocacy. This gentleman had for years interested himself in the extension of Savings Banks. We have already spoken of the fruits of his industrious pen ; and now he was once more to propose in a similar manner, and with his accustomed eagerness, another new scheme which he had carefully thought over and developed in his own mind. Once sure of it himself, he resolved to devote himself to its advocacy ; to bring it not only before the proper authorities, " but before the public, at the proper time." Mr. Sikes evidently did not dally with the matter. As he made no sort of mention of the Post Office in his evidence before the Savings Bank Committee of 1858, we may fairly assume that at that time the idea of using the Post Office 284 POST OFFICE SAVIx\GS BANKS. had not occurred to him. He himself states, that, occupied with a favourite idea which he had long cherished, of brinOTHfr a Savings Bank " within less than an hour's walk of the fireside of every working man in the kingdom," the organization of the Post Oflice suddenly occurred to him, and he dwelt upon it till he had struck upon some scheme for applying the one to the other. As in the case of the other proposals, the leading principle of Mr. Sikes's plan was to employ the machinery of the Money Order Office to collect and forward deposits to a central bank which he proposed should be established in London. Among the principal details of the plan were — the opening in every town, not previously supplied with a Savings Bank, of a Money Order Office, for the reception of Savings Bank de- j)osits ; that the money should be remitted to London in the form of Money Orders ; that the deposits should be in sums of not less than a pound ; and that in return for these deposits or remittances, Savings Bank " Interest Notes " should be issued in London ; and that the interest on these notes should be at the rate of 2| per cent, per annum. That Mr. Sikes did not proceed boldly enough, and that there were some defects and omissions in his scheme,t^we shall have to show further on ; here it is sufficient to indicate in what his plan consisted. On the reasons for a large and comprehensive reform of this kind, Mr. Sikes was most full and explicit ; as, however, we have already been over this ground, and also said nnich in connexion with the name of this energetic Savings Bank reformer, it is quite unnecessary to repeat here his well- arranged statistics and his generally conclusive observations s they are given in the pampldet before us.* Suffice it _* Letter to the Chancellor of the Exchequer, 1859. ME. SI&ESS PROPOSALS. 285 to say, that he adduced abundant evidence to show that additional facilities were required, and that if they were given, a proportionate increase of business would be the result ; that the existing banks were totally inadequate to meet the requirements of the provident poor, much less to stimulate and increase the number of provident people ; and that if his plan, or something like it, were carried out, both objects would be gained. Mr. Sikes argued that in a case of this sort, as in many others, increased facilities would bring increased business, and, in support, he adduced as an instance the Money Order Office itself. Quoting from the Postmaster- General's report for 1856, he gave an extract accounting for the increase of business in that office by the fact of the large additions that had been made to the number of Offices, and to further relaxations in the resu- lations regarding the issue and payment of Money Orders. " The establishment of a Post Office," said Mr. Sikes, with very great truth, " has unfailing influence in developing the correspondence ; and of the Money Order Oflice, the re- mittances of a district." Mr. Sikes then instituted a com- parison which, though not always to the point (for reasons quite obvious), was scarcely an unfair one, of the relative progress of Savings Banks with their small improvement as to facilities, and the Money Order Offices, with their increased facilities. Within the years 1846 and 1858, the former had progressed at the rate of seven and a half per cent.; the business of the latter had increased at the rate of seventy-nine per cent. He then asked if the stagnation in the ousiness of Savings Banks was not to be traced to the non-increase of their number, their absence in many very populous localities, the slight accommodation given, 286 POST OFFICE SAVINGS BANKS. and the arbitrary routine and restrictions imposed. If Savings Banks were worth anything, v/ere they rioi worth improving ? And would not those supplementary banks do much themselves, and very probably cause an improvement in existing ones ? Having matured liis plan in June, 1859, Mr. Sikes com- municated it to Mr. Edward Baines, the member for Leeds, in the form of a printed Letter ; and this gentleman, well known for his wide sympathy with the industrious classes, after studying its details, expressed his warm approval of the project, and engaged to bring it under the notice of Sir (then Mr.) Eowland Hill, the Secretary of the Post Office. That there was now no indisposition — if ever there was — on the part of the authorities to such a measure is evident from the reception it met with at their hands, as shown by the letter below.* Encouraged to persevere, Mr. Baines and Mr. Sikes had an mterview with the Secretary and some of the principal heads of departments at the Post Office, when the draft of a plan was read to them for working such a measure, the official gentlemen con- * Mr. Rowland Hill to Mr. Baines, M.P., 2d August, 1859. " My dear Sir, — With modifications which could readily be introduced, Mr. Sikes's plan is, in my opinion, practicable so fer as the Post Cilice is concerned. " The plan also appears to me to be practicable iu its other parts ; but on these I would suggest the expediency of taking the opinion of some one thoroughly conversant with ordinary banking business, and who is acquainted also with Savings Banks. "I need not add, that if carried into cfTect, the plan would in my opinion prove highly useful to the public, and in some degree advantageous to the revenue. " I shall be most happy, when the time anives for doing '70, to submit it for thf n[iproval of the Postmaster-t!encral. Faithfully yours, "Rowland Hill." Ml{. SIKES ADDRESSES MR. GLADSTONE. 287 cerned assuring them that tins miglit be done "with great ease and simplicity." The next step which Mr. Sikes took was to place himself iu communication with the Chancellor of the Exchequer ; and as a preparatory step, he printed his scheme afresh, extending it somewhat, in the form of a Letter to Mr. Gladstone. The communication was met by a cordial acknowledgment, in which that right lion, gentleman pro- mised his best attention in examining the scheme, not only on account of the interest attaching to the subject, but " of the authority with which it was invested," in proceeding from the quarter whence it did. The letter was then given to the public, and immediately attracted general attention, and warm expressions of approval. It was read before the ►Social Science Association which met in Bradford in the autumn of that year. Lord Brougham having also mentioned the matter in his inaugural address. For a few weeks it was a common subject of discussion, public opinion being some- what divided as to its advisability as well as practicability. Several Liberal newspapers, however, went warmly into an advocacy of the principles of the measure, if not of the measure itself; and in the early part of November, 1859, the members of the Huddersfield Chamber of Commerce strengthened the hands of their townsman, by passing an unanimous sentence of commendation upon it ; and not only so, but they resolved to send Mr. Sikes's tract to all the Chambers of Commerce in the kingdom, recommending them to support the plan, which several of them even- tually did. During the interval, when the ball was kept rolling in this manner, Mr. Gladstone had amply fulfilled his promise 288 POST OFFICE SAVINGS BANKS. to give the subject his best attention, as sufficiently appears from a letter which, belonffin^- now to the history of Post Office Savings Banks, we append below* Expressions of opinion on the advantage of some such scheme still con- tinued to be sent to Mr. Gladstone and ]\Ir. Sikes, which must have encouraged them both to persevere, and which made it very apparent that the public had made up its mind not to allow the matter to drop — at any rate, quietly. The most important petitions sent to the Chancellor of the Exchequer emanated from Liverpool, Leeds, and York ; but a resolution passed by the Dublin Statistical Society, pre- sided over by Dr. Whately, the late Archbishop of Dublin, and signed by Dr. W. Neilson Hancock as secretary, deserves special notice, were it only for the weight attaching to Dr. Hancock's own name.t In answer to these and similar * Mr. Gladstone to Mr. Sikes, SOtli November, 1859. •' Dear Sir, — I have read with much interest your tract on Post Office Savings Banks, and have discussed the subject \vithSir A. Spearman, who has also had some communication with the Post Office authorities. " The difficulties are very serious, chiefly in connexion with the question of interest and the mode of account for it. "At the same time there is so much of promise in the plan on the face of it, that we are unwilling to let it drop without a most careful examination. " If you are likely to be in London, or were disposed to come hither, personal communication on details might be of advantage. Sir A. Spearman would be most ready to see you for the purpose of entering into them fully, and I should be very desirous myself to give any aid in my power at the proper time." + "The Council of the Statistical Society of Dul)lin having had under their consideration the plan of Post Office Savings Banks proposed by Mr. C. W. Sikes of Huddersfield, desire to record their entu-e approval of the principles of his plan, and consider it to be specially applicable to Ireland, where a well-founded feeling of distrust in Savings Banks as now constituted has been produced by its being demonstrated that the depositors have not Government security for their money. That the Council believe that Post Office Savings Banks with perfect Government security would be very suc- cessful iu Ireland, and could be readily managed with a central Savings Bank THE POST OFFICE AUTHORITIES DEAL WITH IT. 289 memorials, Mr. Gladstone seems to have generally replied that the matter was under his most careful consideration ; "that he received with cordial satisfaction this expression of opinion, proceeding from persons well qualified to judge, and that he earnestly hoped it may be practicable to frame a plan by which the objects in view may be extensively attained." And now the curtain may be said to have fallen upon the scheme, and for fully twelve months it is beyond the public gaze, and entirely beyond public criticism. We find that now and then Mr. Sikes was busy during the period in answering objections to his plan, with as much energy and good sense as he had previously displayed in his advocacy of it, before he had the good fortune to enlist the services of Mr. Gladstone in its behalf. Now, however, it may be said to have passed out of his hands, and to have fallen into those of others, who, no way averse or unfriendly to his project, saw that it would be necessary largely to re- model it, in order to make it fit into the macliinery, (of the working of which Mr. Sikes was necessarily ignorant,) upon which it would have to be engrafted. Furthermore, among much approving criticism of the scheme, there had been not a little feeling exhibited among influential organs of the public press, that Mr. Sikes had not gone far enough in his proposals, and that on some points the details were in Dublin, as Government Stock is trcansferable in the Bank of Ireland. That the Council direct the Secretary to bring these resolutions under the con- sideration of the Chief Secretary for Ircdaud, with a view to their beiug transmitted by him to the Chancellor of the Exchequer. By order, " W. Neilson Hancock." At the same meeting the Council elected Mr. Sikes a Corresponding Member of the Society. U 290 POST OFFICE SAVINGS BANKS. not nearly so liberal as they ought to be made. As an ardent friend to the Savings Bank system, Mr. Sikes had iloubtless well considered the objections which Savings Bank managers were likely to urge ; and, to stave off opposition on the part of many of his friends, had apparently sacrificed a detail here and there in a matter where boldness of action was most essential to success. If one thing is more clear than another in the history of our great reforms, it is that the projector who plunged right into the stream was always surer of ultimate success than lie who paddled about in the shallows, or kept as close as possible to the brink. In this way, therefore, it seems to have come about that not only must modifications be made, but steps must be taken to perfect tlie plan, and present it in such a shape as a measure of reform as should silence cavil and complaint. Twelve months for such a work might seem long — might, indeed, be unnecessary ; but few will say that the ^Bieme, — so much remodelled as fairly to be considered a new one, did not amply atone for the delay. The task of adopting Mr. Sikes's proposals just as they oi'iginally stood, and which proposals the Post Office au- thorities had generally acquiesced in, seems to have been abandoned on account of the practical difficulties which stood in the way ; one of which INfr. Gladstone indicated in the letter we have already given. The object now, therefore, was to originate a mode of working altogether independent of ]\Ir. Sikes's plan, in which the desirable modifications to be made in Mr. Sikes's scheme should also be introduced. Before, however, we show how this was eventually accomplished, it is necessary to say in what these important modifications consisted. DIPOKTANT OBJECTIONS TO ME. SIKES'S PLAN. 291 1. Mr. Sikes's scheme was proposed to be worked by a Commission who should preside over a central bank and employ the agency of the Post Office. Such a division of authority would have been unprecedented, and miist have led to confusion and gi-eat expense, if even it could have been so arranged. 2. The Commissioners were to have been empowered to receive Money Orders as deposits and acknowledge them in the form of an expensive descrip- tion of " Interest ISTotes." The Money Orders and the "Xotes " themselves would have required all the surplus interest to have been expended upon them, and there would have been little chance of the scheme turning out self-supporting. 3. Mr. Sikes proposed to open only 1,527 Money Order Offices as Sa\'ings Banks. He proved at gi-eat length that the system he proposed was not only the best, but the cheapest ; yet at the solicitation, we believe, of several Savings Bank actuaries, he did not go the length of including any town where provision had been made for provident people. This, of coru'se, restricted the inhabitants of 600 towns to the dearer mode of operation, though the cheajier one was shown to hold out anticipations of producing by far the best article. Such considerations could not, we should imagine, weigh with the Post Office when once the matter was taken in hand, and no arbitrary test of the above nature could ever have been entertamed. 4. Most unsatisfactory, however, was the proposal to make 11. the minimum sum that could be received. There were thousands of depositors in the ordi- nary banks whose average dej)Osits were not half that sum. Moreover, the plan was designed to meet the wants of the poorest ; to encourage and foster the habit of small sa\dngs among those who had not yet begun to save. ISTo provision, therefore, could have been more imfortunate ; and it is well that ]\Ir. Sikes's fears —such as, that if a less sum were taken the measure would not pay — were soon shown to be groundless. It is not our intention to trouble the reader with much detail as to what passed during the preparation, or, we may call it, the organization of this interesting and beneficent mea- sure. It is, perhaps, sufficient to say, that differences of opinion rose upon it — that some of the authorities of the Post Office thought Mr. Sikes's scheme, with many important modifications, might be worked; while others of them held that no amount of alteration would enable the department to work it by means of Money Orders. In this way several months passed in dis- cussion, and it is scarcely too much to say, that but for the unceasing vigilance of Mr. Gladstone, who continued to urge u 2 292 POST OFFICE SAVINGS BANKS. further efforts to overcome the natural obstacles that presented themselves, the temporary fate of many a good measure might have been the fate of this. It was wlien matters were in this state of abeyance, and ^\'hen the difficulties in the way fairly threatened to over- whelm the scheme altogether, that a gentleman, since pro- minently connected with all that relates to Post Office Banks, was induced to turn his attention to the subject. Mr. Chet- wynd, one of the staff officers of the Money Order Office, took up the matter of applying the Post Office machinery to Savings Banks ; and, discarding all the other plans for working then in dispute, addressed the Postmaster-General in November, ] 860, and proposed a plan which he thought would, notwith- standing all the difficulties that had been experienced, meet all the reasonable requirements of the case. Mr. Chetwynd's scheme was based on the principle that Savings Bank business might be done " through the various Money Order Offices in a much more economical manner than by the issue and pay- ment of Money Orders ;" and that the plan should be so com- prehensive as not to need the restriction which had been previously put upon it that sums under 1/. could not be received, — that sum, as Mr. Chetwynd truly said, being " so large as seriously to reduce the value of the benefit proposed to be conferred on the provident portion of the public." The following outline, necessarily brief, gives all the ma- terial points of the plan proposed, and which has in its integrity been since carried out, and forms the basis of exist- ing arrangements : — 1. That every holder of a Money Order Office shall act as an agent of a Central Savings Bank, and shall receive deposits of any amount within the limit fixed by statute. 2. That he shall enter each deposit in a numbered depositor's book, to be ME. CHETWYND PROPOSES A NEW SCHEME. 293 kept by the depositor, and in an account to be forwarded to London daily with his Money Order account. That on the occasion of a first pa3nuent, the ilepositor shall make the declaration prescribed by statute, and also sign his name in his depositor's book. 3. That the holder of the Money Order Office shall charge himself in his Money Order account with the total of the deposits thus received. 4. That this account should, on arrival in" London, be regularly examined by the examiner of the Money Order accounts ; and that when this has been done the daily schedule shall be forwarded to the Central Savings Bank. 5. That the Central Savings Bank shall immediately send an acknow- ledgment for eveiy deposit direct to the depositor through the Post Office. 6. That a depositor who may wish to withdraw mimey, shall give notice in writing * to the Central Savings Bank, and shall receive therefrom a warrant for the required amount, payable at the nearest Money Order Office. 7. That in presenting this warrant for payment, the dej)Ositor must also present his depositor's book. 8. That the holder of the Money Order Office shall enter withdrawals in the depositor's book, and shall account for the money he shall pay, in the same manner as already described in the case of deposits, and shall be credited with the sums daily. 9. That the depositors' books shall be forwarded to London annually, in order that they may be compared with the ledgers in the Central Savings Bank, and in order that the interest due may be inserted in them. The first step which appears to have been taken in regard to the scheme of Mr. Chetwynd was to refer it to ]\Ir. Scuda- niore, who then filled the office of Eeceiver and Accountant- General, — an office the holder of which is at the head of the financial operations of the Post Office. After going care- fully over the plan which had been submitted to him, he came to the conclusion that it was the best of those which had as yet been framed ; " that it will be productive of very great advantages to the working classes, and that it will be self-supporting." He also characterised it as exceedingly simple, and thought, that if the execution of the plan were difficult, that difficulty would be due to the amount rather than to the nature of the business to be transacted. In con- junction with the projector, Mr. Scndamore then proposed ^ Forms for doing so were immediately afterwards providsd. 294 POST OFFICE SAVINGS BANKS. some important modifications and additions to the plan,* and proceeded to enter fully into arguments and calculations to show that it would offer the largest amount of convenience to the public, and be at the same time the least expensive mode of operations so far as the State was concerned. Into these and other purely technical matters there is no need that we should further enter, beyond saying that, so recommended, the scheme was warmly approved by the Postmaster-General ; and in a month from the date of Mr. Scudamore's report, it fell into the hands of Mr. Gladstone, and became, as it were, the property of the nation. How the Legislature dealt with it will fittingly bring this chapter to a close. On the 9th of February, 1861, il/r. Gladstone took the first step towards bringing the subject forward in Parliament, by moving a resolution in the House, of which he had previously given notice : — " That it is expedient to charge upon the Con- solidated Fund of the United Kingdom of Great Britain and Ireland the deficiency, if any such should arise, in the sums which may be held on account of Post Office Savings Banks, to meet the lawful demand of depositors in such banks, in the event of their being established by law." This, which was according to the usage of the House the first necessary pre- liminary, provided that the burden of the measure should be thrown upon the State. Mv. Gladstone stated f that in sub- mitting this resolution he did not wish to pledge members * Such, for example, as the extraordinary facilities now eujo^'ed for tlio depositing and withdrawal of money— of which we shall sjieak in the pro^jer place. Suffice it to say here, that these facilities had never been dreamt of for a moment outside the Post Office ; that they were such fiicilities as no agency but the post-office ever attempted to give, ajrd, more than that, could not possibly have given. t His speech on the occasion has not been reported verbutiru, or we would never have ventured to have given it in the third person. MK. CHETWYND'S scheme IS ADOPTED. 295 either to the principle or tlie details of the bill which he intended to found upon it. His sole object was to afford new facilities for the deposit of small savings to those who did not possess them, or possessed them imperfectly. He would not only like to do this, but also to improve materially the exist- ing facilities, so as to enable many more to take advantage of them ; but this was a more difficult problem, — an object often attempted, yet little accomplished. The main difticulty, the responsibility of trustees, had baffled all attempts to deal with it. How true this was, the reader who has followed us in our account of the legislation on the subject will readily believe. In this difficulty he had been led to see if they could not avail themselves of another description of machinery alto- gether, " recommended by its incomparable convenience," for the purpose of carryiug out the same objects for which Savings Banks were originally set on foot. He then went fully into such statistics of the number and conveniences of existing banks as those which we have already furnished, and com- pared that machinery with tlie Money Order system at the Post Office and its ramifications all over the country. JSTot only were the Money Order Offices open every day for a consi- derable nu.mber of hours, but the Postmasters were open and adec|uate to the transaction of increased business. Mr. Glad- stone then dwelt on the want of facilities, which, he said, exercised an important influence on the amount of the savings of the x>oor ; "the experience of this winter, 1860-61, must have demonstrated to anybody w^io thought u^^on the subject, that the resources of this class had not of late years increased in proportion to the rate of wages and the improvement in their standard of living." A smaller portion of their gross income was, he thought, laid by at that moment than was 296 POST OFFICE SAVINGS BANKS. laid by twenty years before. He was sanguine enough to expect tbat, if readier means were afforded them of laying by in a season of j^rosperity, their ability to cope with the dis- tress of the future must be largely increased. Now, the banks which he intended to propose would afford these means ; and not only so, but under the arrangements of the measure, he would answer for it that the Post Office machinery should be applied carefully and gradually — the most neglected districts to be supplied first. Mr. Gladstone then went into the object and details of the measure. His proposal was that the Post Office should receive and return deposits, with interest, in the same way as iVIoney Orders were dealt with, charging merely a fair remunerative price for the work performed. In one respect the principle upon which the new banks would be founded would be essentially different from that of the old ones. The latter had been established with the notion that the State might very fairly offer to the labouring classes a certain premium by way of inducing them to make deposits ; but while he was far from desiring to cast any censure upon the principle, he did not deem it right in the present case to hold out to depositors the expectation of obtaining any high rate of interest. He proposed to give a rate of interest 10s. less than that given by the ordinary banks, with a proviso that it might be increased to that rate, if found necessary, " and within certain limits." Mr. Gladstone provided an ample set-off against a less remunerative return for the money, in the security which he now proposed to give for its safe custody. The responsibility of the State on account of Savings Bank money had always been a subject of the greatest difficulty; he argued on this occasion with perfect reasonableness, as many of his pre^ MR. GLADSTONE INTKOUUCES HIS MEASURE. 297 decessors in office had argued before, that the State could only be responsible for the acts of its owu officers ; and as up to this time no plan had been devised by which the State could participate in all the proceedings of Savings Banks, it was impossible to carry out the principle of a perfect Govern- ment guarantee. AYhat, however, could not be done with the old banks, might and should be done with the new. In his proposals there was something so essentially different from anything they had been accustomed to, that a Government guarantee was an easy and a possible thing. The money would be received by Government officials: it would be in- vested by these servants in Government securities; and it would be inexcusable to refuse a Government guarantee for the full amount. Hence the motion which he had made. The only effective form which this guarantee could take was the technical one, to pass a resolution providing that if any difficulty arose in the means of meeting the lawful demands of lawful de- positors, that difficulty might be met by a charge on the Con- solidated Fund. Mr. Gladstone, in concluding, hoped honour- able gentlemen would not be alarmed at his resolution, as he would expressly state then that the great basis of this new arrangement was that it should be self-supporting.* Mr. Francis Crossley (now Sir Francis) went over the ground of the very deficient means of investment for the surplus cash of the poor, producing statistics of a kind with which our readers are now sufficiently familiar, and stated that it was impossible to over-estimate the advantages which must accrue to certain classes in the country from the carrying out of the proposals which had been submitted to them. " A great deal of fault," said Mr. Crossley, " had * Hansard, vol. clxi. p. 262 ; and Times newspaper, 1861. 298 POST OFFICE SAVINGS BANKS. been found with the improvidence of the working people in not saving money, but let them first see what the Government had done to help them. Tlie State provided beer-shops in every street for working men to spend their money in as fast as they earned it ; but hitherto he did not think it had been sufficiently forward in giving them facilities for saving their money." He then alluded to the fear which working men had of the ordinary banks, from their masters being connected with them, and who from that connexion would be able to see what they were able to save. " Under the Postmasters, this would, or should be, different." The country was indebted to Mr. Gladstone for the amount of attention he liad bestowed on the proposals of Mr. Sikes. Mv. Crossley concluded : He " did not think Government ought to seek to make a profit on the new business ; nor did he think tliey ought to lose by it. The working classes of the country did not want charity, they only wanted a fair field and no favour, and it seemed that at length they were about to get it. If at any time the rate of interest could be raised without loss or inconvenience, he hoped it would be done." Colonel Sylvs said that no praise could be too high for anything of this sort, which tended to induce the working classes to lay by against a bad time. He contented himself with referring to two or three subjects con- nected with the mode of working the scheme. M7\ Artliur Kinnaird thought the scheme simple and practical. He " heartily congratulated the Chancellor of the Exchequer on having at last succeeded in one of the fondest hopes of his heart — that of creating a two and a half per cent, stock." Mr. Glad- stone at once demurred to this, and stated that he had no notion of establishing a national hank. The money which came into the hands of Government li\' means of the bill would FIEST DISCUSSION OX THE SCHEME. 299 simply be applied as under the existing Savings Bank law. Mr. Gladstone, in closing the debate, took the opportunity of referring to Mr. Sikes, " who had devoted a great amount of labour to the subject. He felt greatly indebted to him. At the same time, the bill was not intended to embody altogether Mr. Sikes's plan, though this was a matter of detail into which he would not then enter." Three days after this discussion the Post Of&ce Savings Banks bill was introduced into the House of Commons pro forma by Mr. Massey, the Chancellor of the Exchequer, and Mr. F. Peel. ]\Ir. Sotheron Estcourt on this occasion com- mented on the importance of the bill, and objected to a first reading without an explanation of its provisions ; all that was known of it being that the Government were about to frame on its provisions banks of deposit on a gigantic scale, and thus by a merely formal proceeding were about to lay the foundation for very important consequences. The Chancellor of the Exchequer moved the second and principal reading of the bill on the IStli of March, 1861. Mr. Estcourt, whose intimate acquaintance with such subjects made his remarks carry considerable weight, made a long- speech. He first expressed his doubts whether the persons employed by the Post Office would ever be able to perform the additional and important duties which would be assigned to them. Government were undertaking a great risk. " No doubt the plan would become popular, for several reasons ; the Post Oflice Banks would absorb not only all future deposits, but also a great part, if not all, of those which had been made in the existing banks themselves."* It would be for the House to decide whether this result would be good * Hansard, voL clxi. p. 2190 ; aud Times, 1861. 300 POST OFFICE SAVINGS BANKS. or bad, or what could be done that the two kinds of banks need not come into collision. Mr. Estcourt threw out several hints as to how this might be done. They might, for ex- ample, limit the sum to be received at post offices, so that the new might not come into competition with the old class ; or they might dovetail the new system into the old, by making the Post Office Banks auxiliary and subsidiary to the ex- isting banks. Much had been done in the way of trying to amend the constitution of the old class of banks, without effect ; and he thought that, looking to the probable result of the new arrangement, it would be far better to look the evil fairly in the face, and supersede at once the okl by the new kind of banks, or at least say which of the two ought to be retained. This speaker further apprehended that the Post Office Banks would not take root in the villages, where they were most wanted, and would be almost exclusively confined to the towns where they were least needed, and where they would overthrow the existing Savings Banks by drawing away their deposits. Though Mr. Estcourt seemed to feel strongly on the different points touched upon by him, he concluded by stating that he should not oppose the second reading of the bill. Mr. W. E. Forster said, in his opinion the scheme would provide good Savings Banks where none now existed, and, a very desirable matter, safe banks where they did exist. He thought it was not possible that the one class of banks could dovetail into the other ; and if it was, it was not desirable. Where Government took the responsibility, it ought to have the control. Mr. Thompson Hanlmj hoped that the pro- posed scheme, if found practicable, M'ould entirely supersede the existing banks, and the sooner the better. Mr. Baincs followed in the same strain ; he would not regret if the new DISCUSSION ON THE SECOND READING. 301 banks superseded the old, inasmuch as that result could only l»e brought about by the proved superiority of the new system. The member for Leeds said, " he had been assured by Sir Rowland Hill, and all the gentlemen whose departments at the Post Office would be charged with the carrying out of the plan, that it would work exceedingly well;" and he could state that, tliough it differed materially from his plan, Mr. Sikes of Huddersfield was a " hearty supporter " of the scheme which the Post Office had adopted.* Mr. Gladstone could not say whether the old would suffer from the new banks ; if they did, it would only be because the latter were the safest and the best. AVhether or no, the object of the bill was not competition with the old banks. He wanted to supply facilities which at present did not exist, and the first duty of the Postmaster-General would be to look to the establishment of Savings BanlvS in those places where no banks existed, or where the accommodation was very narrow. As to their application to the Money Order Offices of the country, it would be gradual and slow, and so as not in any way to endanger the machinery of the Post Office ; the Postmaster-General would select at first a moderate number to be opened, and extend them in proportion as he found occasion, the test and index of the occasion being the demand for such banks by the public. Mr. Gladstone then referred to the rate of interest which would be allowed, and said that in this respect the Post Office Banks would have some- what less attraction ; " the present banks were established on * That this was tlie case appears fui'ther from the cii-ciilar which Mr. Sikes addressed to ever}- member of the House before the second reading, iii which he expressed his cordial approval of the bill, aud craved the support of members iu carrying it through Parliament. '302 POST OFFICE SAVINGS BANKS. the principle of giving a bonus ; the new system must be strictly self-supporting." He would not feed them at the expense of the Post Office, or any other revenue, and in that case the rate of interest must be such as can be safely paid. With regard to the forebodings of Mr. Estcourt relating to the risks which Government would run, Mr. Gladstone stated that the system of Savings Banks had been established for forty- five years, during which time they had had every description of speculation, the severity of a commercial crisis, the pres- sure of a dreadful famine, and almost every trial that could befal a new system ; and although the Government was always holding a great amount of money at call, there had been but a small pecuniary loss, in comparison with which loss the establishment and progress of such a system was immea- surably of greater value. After stating that he thought " the Post Office machinery admirably suited for the purposes of the new measure," the bill passed the second reading. The bill was introduced into Committee on the 8th of April, 1861,* where trifling alterations were made in several of its clauses. Mr. Slancy, who had paid great attention to subjects of this nature, hoped that the deposits would not be restrained, as under the old system ; he thought no limit should be placed upon the providence of the labouring classes. Mr. Vance, an Irish member, alluded, as he did on subsequent occasions, to what he considered the centralizing tendencies of the scheme. He thought Dublin ought to l^e the centre of operations for Ireland as under the Money Order system. The principal opponent of the measure on this occasion was Mr. Ayrton, the member for the Tower Hamlets, who in some quarters has been credited with tlie advocacy of the scheme * Hansard, vol. clxii. ISGl. MK. AYKTON ON THE MEASURE. 303 before this period. In a long speech, ISIr. Ayrton took ex- ception to most of the details of the measure as they were i\ow proposed, and to the principles of the measure as a whole. ^Ir. Ayrton held that data enough had not been presented to enable members to form an opinion as to whether the scheme would pay or not. " It was all very well to talk of subjects being self-sustaining, and even economical, but under such statements our expenses had gone on continually increasing." He adduced at length the case of the County Courts bill, and the Government Super- annuation Allowances bill, which he said were introduced and passed under some such pretences. It would be the same with the Savings Banks ; the Government woidd never be able to keep to the two and a half per cent., but would have to 1)6 guided 1 »y the rate allowed to other bankers. " The scheme of a national bank," continued the honouraljle member, " hoivever plausible it might look at the outset, would lead to the most serious consequences." The Committee which sat on the subject, and of which he, the speaker, was a member, came to the decided and unanimous conclusion that it was desirable to separate the operation of banking for the people from the Xational Treasury. It was thought that these national banks would act as a powerful inducement to the working men to entrust their money to the Government rather than to their own Benefit Societies, which were regarded as too much associated with Trade Societies. In his opinion Benefit Societies and Trade Societies had been the means of regenerating the people, and were eminently conservative ; aiul it was not expedient to discourage these societies by means of the proposed banks. Nor was this all. It was desirable tluit the countrv gentlemen should take an interest 304 POST OFFICE SAYINGS BANKS, in the welfare of the working people surrounding them ; and to supersede their exertions by mere stipendiaries of the State would weaken that social system on which the liberties of the people were mainly founded. 3Ir. Alderman Sidney, " as one conversant with figures," ventured to say, that if the scheme were carried out, our national establishment must be greatly augmented ; and if it proved successful, "the establish- ment that would be required would be of the same gigantic proportions as the Bank of England!" It was absurd to think that depositors would be satisfied with less interest than the national creditor. The scheme, he believed, was founded upon error ; it w^ould interfere with the self-working of existing establishments, and would entail a large expense upon the country at large. The Chancellor of the Exchequer replied, especially aiming his powerful shafts at Mr. Ayrton. He said he would not follow that gentleman through his speech, as that was a task beyond his powers. Mr. Ayrton often gave the House notable examples of his discursive powers ; but he (Mr. Gladstone) never knew an occasion on which the honour- able gentleman had more signally distinguished himself than on the present occasion. " AYhen he rose into the air on eagle wing, he passed over the limits of time and space, and was not subject to any of the conditions that bound the efforts of ordinary mortals." However, to confine himself to just that which bore on the subject before the Committee, he was strongly opposed to the principle of making the working classes pensioners on the Exchequer ; he would do his best to provide against such a result. He did not know, and could not tell, what amount of business the banks would attract ; he expected it would be gradual, and the develop- ment of the agency would be gradual. The extension of the MR. GLADSTONE ANSWERS OBJECTIONS. 805 system would be in precise proportion to the demand ; and the expense would be throughout proportionate to the exten- sion. The opinion of the Post Office authorities was, generally, that the work would be done much cheaper than in the ordinary banks ; for sixpence or sevenioence against one shilling for each transaction. Some even thought that the work might be done cheaper than the work in the Money Order Office. Once started, any tendency to excess would, of course, be corrected ; but it was impossible to argue on any assumed number of deposits. He had a sanguine hope that every statement he had made would be verified, and that the measure would entail no charge upon the public. Again and again the question was asked and argued, whether it was meant that the new banks should be sub- versive or auxiliary to the old. To this question, which was asked on this occasion, Mr. Gladstone gave it as his opinion that the one class of depositors who preferred perfect security would patronize the new banks ; whilst another class who wished to act under the immediate view of their local supe- riors, would prefer the existing banks. In reply to Mr. Briscoe, he said he would not limit the establishment of the new banks to those places where no other sort of banks existed, — though, of course, the Post Office would commence opera- tions there first. Such an arrangement would exclude the great centres of trade and population, — our large towns — which were not sufficiently served with banks. An important discussion took place on the 10th clause of the Act relating to the investment of the fund deposited in the Post Office Banks. Sir H. Willoughhy, as he so often did before, con- demned the system of operating on the Stock-market with this money. Mr. Gladstone replied, that the loss which was X 306 POST OFFICE SAVINGS BANKS. SO often dwelt upon in connexion with the old banks was nothing like loss ; " the money so deposited with Govern- ment had enabled successive administrations to effect an economy in the management of the public money transcend- ing ten times over the charge the State had been put to." He saw no reason whatever to alter the arrangements in this particular. The amendment which Sir H. Willoughby pro- posed was then negatived without a division. Three days afterwards the bill passed the third reading and was sent up to the Lords. No time was lost in bringing the bill forward in the House of Lords. It was read a first time on the 15th of April, and a second time on that day week. The conduct of the bill in the Lords was naturally committed to the Postmaster-General, Lord Stanley of Alderley. On this occa- sion his lordship went over* the ground covered by the bill — the insufficiency in number, and the inadequacy of accom- modation of existing banks, and the insecurity as regards repayment until the money had actually reached the hands of the ^National Debt . Commissioners. Lord Stanley added that Savings Banks had by no means increased in number in proportion to the population, or to the increase of the money circulating among the working classes. He adduced several facts and a quantity of statistics on this head similar to those which we have already given to the reader. From these facts it was obvious, that when a working man formed a good intention to invest his small savings, there was a great danger that he would spend his money, if there were no means of his depositing it, or if he could not do it comparatively easily. He then spoke * Umisard, vol. cbcii. p. 880 ; and Timrs, April 23, 1861. LOED STANLEY OF ALDEELEY ON THE MEASUEE. 307 of the losses caused by the faihires of Savings Banks. Eeferring to Mr. Whitbread's proposals in 1807, Lord Stanley stated tha. this measure was very like the scheme then proposed, which actually passed through the House of Commons in that year; that Mr. Sikes had originally proi^osed something similar in an admirable letter to Mr. Gladstone ; and that the Government, with the assistance of two able gentlemen in the Post Office department, had matured the present plan, which he proceeded very clearly to describe. Lord Stanley, in concluding, said it was some- what remarkable that nine-tenths of the depositors in Savings Banks were domestic servants and clerks, and that only one- tenth belonged to what are usually known as the " working classes ; " yet large numbers of these latter are in receipt of wages far exceeding the incomes of many who possessed Savings Bank accounts.* He hoped that working men, when they received their wages, would be induced, before going home, to invest a portion of them at the receiving houses they would pass ; if so, the result to them and the country could not but be highly beneficial. The banks must be looked upon as an experiment. If an extension should « The plirase " working classes," applied to the industrial population, seems as inaccurate as the phrase " lower orders," applied generally fifty years ago, is obnoxious. The distinction does not lie in this class being "working" while others are "idle " peoj)le. Something very different indeed is the fact. The tendency of late years has been that professional people should work harder, and "working " people less, and very few men who live by their pro- fession work fewer hours than the handicraftsmen of our towns. Lord Stanley might have gone even further in his comments on the earnings of the indus- trial classes. Even putting aside the important consideration of how much the professional man spends of time and money in preparing himself to work at all, a great and ever increasing number of the wage-receiving class have now as good incomes as many hundieds of the less successful classes above thf-m, while their expected or necessary expenditure is in almost all cases very much smaller. X 2 308 - POST OFFICE SAVINGS BANKS. be demanded, it could only be by reason of the greater security and greater facilities they would offer. Lord Colchester, an ex-Postmaster-General, admitted the merits of the plan, but doubted the ability of the Post Oflfice officials to carry on the work in every town. Among the Lords, however, the strongest and bitterest opponent of the measure was Lord Monteagie of Brandon (once Chancellor of the Exchequer as Mr. Spring Rice).* He made a long speech on this occasion. He thought it was wrong to establish new banks, or to make them rest on the de- ficiencies of the old ones, inasmuch as it was easy to improve the latter. He went into the history of Savings Banks, and endeavoured to show that their progress up to 1850, (a fact which no one disputed,) had been far from slow. As, however, it was the period principally between 1850 and 1860 when they were most stationary, this w^as the time with wliich he should have dealt. He expressed an opinion that the Post Office would not be equal to the work. He strongly urged the inexpediency of giving in- creased funds to the Chancellor of the Exchequer, with which to speculate. And this measure would tend to* destroy the healthy feeling which was growing up between the higher and the lower classes, through the medium of Savings Banks. Not only did the higher classes give their time and energy to the work of Savings Banks, but they gave their money too ; and Lord Monteagie was unlucky enough to cite the case of several noble lords who paid a thousand pounds each to atone for their neglect in con- * News of this able nobleman's death has just reached us ; but, though bearing in mind the spirit of the well-known maxim, we see no reason to alter our text. LOED MONTEAGLE ON THE MEASURE. 309 iiexiou with a Hertfordshire Savings Bank, and the fraud there, which we have previously described at length, " Such was the spirit," triumphantly exclaimed the noble lord, "which this bill proposed to crush." Not less unfortunate w^as Lord Monteagle, as the result has proved, in his endeavour to be amusing and prophetic. " The only comfort," said he, " which I have derived from the speech of the noble lord who moved the second reading, was his assurance that the measure was to be of an experimental character." Under such circumstances he would not trouble the House with a division, as he would await without much anxiety the result of the " experiment ! " Next year, they would see whether the working of the new system would compare with that "which for nearly half a century had been the glory of England, and had served as a model for all Europe." Lord Eedesdale also strongly opposed the bill, but he did not bring to its consideration much of the practical know- ledge of the preceding speaker. He "frankly owned" that, from what he understood " would be the manner of keeping the accounts, they would soon get into a state of confusion, out of which extrication would be almost im- possible." From the confusion of the above sentence, it is not impossible that the attempt to understand the mode of keeping the accounts had confused the speaker. Curiously, too, the same speaker objected to one of the most convenient clauses of the bill. He called the proposed mode of transfer of deposits from one bank to another, an unnecessary arrange- ment, saying it would be much hctter that the parties them- selves should take it out of the one, and put it into the other bank. Acquaintance with the habits and wants of the poorer classes would have convinced Lord Eedesdale to 310 POST OFFICE SAVINGS BANKS. the contrary. Lord Eedesdale said, in concluding, that " he was afraid the scheme would produce much disap- pointment to the public, and a great loss to the nation." The Marquis of Clanricarde gave a very qualified and hesitating adhesion to the bill. Lord Stanley of Alderley satisfactorily replied to the arguments that had been adduced, and the bill was then referred to a Committee of the whole House. On the 2oth of April the bill passed the Committee. Four days afterwards. Lord Monteagle again opposed it, saying that he saw, "with great alarm and regret," what seemed to him to be meant to produce a break-up of ex- isting Savings Banks, and the substitution of the action of a salaried Government department for what he might call a great public charity, directed by benevolent persons acting gratuitously in their own neighbourhood. He went over the ground he had taken only a few days before, but in a spirit very much more subdued and less confident ; and when the bill passed, he entered a long and laboured " pro- test " against it {vide Hansard, vol. clxii. page 1213, where many more of Lord Monteagle's " protests " may be found). The Post Office Savings Bank Act, which we give in exUnso^ received the Eoyal Assent on the 17th of May, 1861. * See Appendix (F.) THE POST OFFICE SAVINGS BANK BILL. 311 CHAPTEE IX. ON THE DEVELOPMENT OF THE POST OFFICE SAVINGS BANK SYSTEM. * ' Should the Post Office Savings Bank biU become law, and should it also answer, we shall then possess an institution the convenience and value of which it will be impossible to over-estimate, and the author will deserve the thanks of the country. The country will recognise at once the universal boon of a bank maintained at the public expense, secured by the public resiiousi-~ bility, with the whole empire for its capital, with a branch in every town, open at almost all hours, and, more than all, giving a fair amount of interest," —Times, March 20, 1861. " I have been asked," says Mr. Edwin Chad wick, " by several M.P.'s and others what I thought of Post Office Savings Banks. I have answered them, that I know no measure of late years affecting the condition of the working and the lower midelle classes which appeared to me so excellent in principle. I am disposed to say, as Sir Kobert Peel said with reference to the Encumbered Estates Act, that it is ' so thoroughly good a measure, he wondered how ever it passed. ' " We have already seen that the Post Office Savmgs Bank bill was rapidly and successfully passed through Parliament, and did become the law of the land. The Act " to grant additional facilities for the depositing small savings at interest with the security of Government for the due repayment thereof," received the Eoyal Assent on tlie 17th of May, 1861. The author of the bill has the best claims on the thanks and gratitude of the country. The press and the people of this land have, almost with one accord, been loud 312 POST OFFICE SAVINGS BANKS. in their praise ; and the three-quarters of a million of de- | positors, most of them attracted to saving habits by the facilities he then for the first time offered them, joined in silent thanks. The scheme for working this measure, organized in the* Post Office after repeated requests from Mr. Gladstone, accomplished to a great extent under his oversight, and then carried through Parliament by his administrative ability and convincing eloquence, will ever cause his name to be most prominently associated with the new system ; and among the many triumphs of his skill, this one will stand out with distinct prominence on the . page of history. The Post Office Savings Banks have not only " answered," to use the phraseology of the "leading journal," but they have attained a marked position, and have been, in every respect, an eminent success. Not nearly so much, however, with regard to their present condition, as to their manifest and inevitable destiny in the future, the Postal Banks are entitled to a high place amongst the social institutions of the country. In every department of hibour, the new banks have become, and must yet become to a far greater extent, most effective J agents in the social and moral improvement of the people, and will give tenfold effect to the endeavours which have been made, in so luany directions, to better the condition of the masses. Next, perhaps, to the repeal of the Corn Laws, this is the greatest boon ever conferred on the working classes of this country ; and next to the scheme of Penny Postage itself, the scheme of Post Office Banks is the greatest and most important work ever undertaken by the Govern- ment for the benefit of the nation. Whatever differences of If opinion may exist as to the claims of the present Ministry '* J THE SUCCESS OF THE POST OFFICE BANKS. 313 to public gratitude, there cau, we should imagine, be but one opinion now as to the vast advantages conferred upon the bulk of the people by the measure of 1861. The success of the Post Office Banks has been of the most complete kind. Whether we consider, as we shall now proceed to do in proper order, the amount of the business done ; the nature of the business done ; the in- fluence of these banks on the provident habits of the community ; the results upon those small banks which more especially have partaken of the character of elee- mosynary institutions ; and the manner in which the business of the Postal Banks has been organized and per- formed, the scheme has far more than realized the antici- pations under which it came into existence. As to the Amount of Business done. The interval between the passing of the Act and the 16th of September, 1861, was occupied, it appears, in completing the arrangements for the conduct of the measure, including the appointment of Mr. Chetwynd to control the scheme he had originated, and a staff of superior and subordinate officers with which to begin the business ; and on that date operations were commenced by the opening, in England and Wales, of 301 Money Order Offices as Savings Banks. The grounds upon which the fu'st places were chosen were unquestionably the best that could have been adopted to test the feeling of the country with regard to the scheme itself. They were, (1) Avoidance of all collision with existing banks which sup- plied a fair amount of accommodation ; (2) The selection of important and thickly-populated districts, making that selection embrace the widest possible area, and leaving no inconsiderable tract of country without the required accom- 314 POST OFFICE SAVII^GS BANKS. modation ; (3) To meet the wishes of the public, so far as these wishes were indicated by memorials or requisitions to the authorities ; and (4) To take care that the postmasters of selected places were trustworthy, and capable of trans- acting the business efficiently. Had the scheme failed under such conditions as thus seem to have been imposed, little hope could have been held out that it would ever have been successful : as it happened, however, the banks were found at once to supply a great public want. The authorities seem to have been so far encouraged, that in six weeks an enormous addition was made to the number of banks. 254 were opened in the month of October following, 338 iii November, and 784 in December, making the entire number of 1,629 new banks open to the public at the end of the year. On the 3rd of February, 1862, the benefits of the measure were extended to Ireland, by the opening of 300 banks ; on the 17th of the same month, 299 banks were opened in Scotland ; and by the end of six months from the original commencement of the plan, there were in the United Kingdom no fewer than 2,532 Post Office Banks in existence. 400 additional banks were opened in 1863 ; and at the end of 1864 the total number of banks was increased to 3,219. Up to the present time (March, 1866), the number of Post Office Banks is 3,369, of which, 2,469 are in England and Wales, 525 are in Ireland, and 375 are in Scotland. There is now a Government Savings Bank not only in every town in the United Kingdom, but in every large village ; * * Whenever tlie Post Office of a village or hamlet is advanced to the dignity of a Money Order Office, it will also be opened for Savings Bank business. NUMBER OF POST OFFICE BANKS. 3l5 and over and above this already ubiquitous and compre- hensive arrangement, the large towns of the country have each a number of new depositories for savings proportionate to their size and population. Thus, in the metropolis, at the present moment of writing (April, 1866), there have been provided the extraordinary number of 452 Post Office Banks ; in Manchester, there are 26 ; in Liverpool, 25 ; in Bir- mingham, 22 ; in Edinburgh, IS ; in Glasgow, 18 ; in Dublin, 15. In the three months of 1861 during which the 1,600 banks were in operation for portions of the period, 25,729 persons opened accounts with them, and deposited money to the extent of 167,530/. in deposits of the average amount of ?>l. lis. lOcl At the end of the next year (1862) 180,199 persons had opened accounts in these banks, depositing 1,947,139/., and withdrawing less than a quarter of that sum. Year by year, up to the present time, as appears by the ac- companying table, the increase of deposits, and the increasing number of new accounts, are far more than proportionate to the increase of facilities ; and, as showing the firmer hold that these banks have taken on the community, this fact is most satis- factory and gratifying. Equally so, and a most convincing proof of their success, is the account of the total amount of business shown to have been transacted up to the 31st of December last. Up to that date these banks have received from no less than 857,701 depositors, in 3,895,135 deposits, a sum of money amounting to 11,834,896/. ; * the withdrawals during the same period of four years numbering 1,011,379, * Up to tlie end of Fcliruary last the total sum reached exceeded twelve millions sterling,— a sum which it took the original old banks, with no com- petition, eight years to realize. 316 POST OFFICE SAVINGS BANKS, and amounting to 5,619,251/. There were in December last, 611,819 open accounts, the amount standmg to the credit of these accounts being 6,526,400/. O) M '^ < pq m C5 |2i 1— ( !> < Ul H o I— 1 h lO tq «o O oo T— * H Hi ^ O O) PM r2 (11 a -M o CI fi fl> o +J o .\ •T-! I-H fO OO O J-l a ^ to 53 W a m OJ -l-> ■4-' ^ o m o a fH • 1— 1 5 bC !zi ■-3 o rt +j ri r=1 CO w >J p -»! H n2^ *^' (35 CO -*l I-H ■^ •^ '^ bC c 5 Cq Oi o I-H r -iT oo" oT ss CO (M CO I-H I-H ■* o oo CO CO f >o 3 CO CO CO (N CO < o «!-' O OJ Ci o CO CO ° « CO CO o o T-H (31 -M 4^ lO 1— 1 (M o o OO S 'rfl P C ^ t- t^ T-H o 05 ^ 2 i=i o ^ lO >o I-H CO S^ »— ( o CO CO t^ 00 ^Q I-H <>f co" CO I-H I-H Cm O 05 eo CO 00 (M (35 lO ^ -fJ -^ 1^ -* CO o CO o'io (O lo 00 t^ CO I-H -Q o «« gg- ■» oq" f »o" -* a -^ T-H o (33 g» »o oo I-H i-T eo I-H co" . J. o -M • r~i • • ' • ' -t^ CO • S^^o ^ ^ ^ -M .$ ri P CO (M CO -* »o CO ^ CO CO CO CD • T-H ^ (30 cc oo 00 a« 1-H I-H 1—1 I-H tH ^ ^ ^ ^ ~i-j o "-• d 03 c3 a £ CO (V CD (L> < >^ >H >^ CH In the ten years ending N"ovember, 1861, the annual average increase in the total number of Savings Bank de- INCEEASE OF SAVINGS BANK DEPOSITORS. 317 positors was at the rate of 34 per cent. In one year from tliis date the increase in the number of depositors — taking the depositors of the ohl banks and the Post Office Banks together — was at the rate of 6f per cent. That this increase was altogether o^ying to the introduction of tlie new system, scarcely requires proof: a few of the old Savings Banks, Edinburgh, Glasgow^ Liverpool, and Birmingham for example, increased their business during 1862 ; but the aggregate of the old Savings Banks lost more business than the few gained. Again, in all cases, the gain of the Post Office Banks was far greater than the loss of the old banks.* Throughout the entire kingdom the old banks lost 55,000, and the Post Office Banks gained 160,000 depositors. The rate of increase shown in the first year has been con- tinued wdth inconsiderable variations up to the present time, and, in his last Report, the Postmaster-General, in ^dew of all the facts of the case, states : " On the whole, it seems reason- able to expect that the annual increase in the business of the Post Office Banks will for some time be from 130,00.0 to 140,000 in the number of depositors, and from 1,400,000^. to 1,500,000/, in the capital of depositors."! The correctness of these calcu.lations will not depend to any appreciable ex- tent on the increase of facilities, such as the opening of new banks : the Post Office Banks have already been so widely established that little additional accommodation will be * Thus, as we learn from an authentic account, in Bristol the old Savings Banks lost 700 and the Post Office Banks gained 2,000 depositors ; in Dublin the same relative proportions were 400 loss and 1,400 gain ; in the county of Kent there was a loss on the one hand of -3,500, and a gain on the other of 9,300 depositors ; in Middlesex, the old banks lost 12,000, and the Post Office Banks gained 42, 000 depositors. t Report on the Post Office, 1864. 318 POST OFFICE SAVINGS BANKS. required for some time to come. It is made to depend, we should imagine, on the principles of Post Office Banks be- coming more and more widely known, and their facilities more and more appreciated. This has clearly been the experience of the last two years. In 1864, 161 new banks were opened, and the increase of depositors was at the rate of 42 per cent. ; in 1865, only 73 new banks were opened, and yet the increase in the number of depositors was at the rate of 40 per cent. As to the Nature of the business done. Some idea of the nature of the increased business done may be gathered in several ways. First and foremost the number of Post Office- Savings Bank depositors represents an enormous number of accessions to the list of frugal people who have perhaps for the first time begun to save, and of those who, more prudent and less confiding in their fellows, seek the security of the State for the safe custody and prompt repayment of their savings. It is a somewhat remarkable fact, that of the total amount which had up to the end of last year been deposited in Post Office Banks, not much more than a million and a half (allowing for money transferred other- wise than by means of the regular transfer certificate) had been withdrawn from the old Savings Banks. Moreover, out of this large sum more than half seems to have come to the Post Office Banks through the voluntary closing of Savings Banks on the old principle, — the Birmingham Savings Bank contributing a third of the whole amount. From these facts, it seems quite clear that the business acquired by the Post Office Banks, at any rate up to this time, is almost entirely newly-created business, and that NATURE OF THE BUSINESS DONE. 319 the older Savings Banks have only been interfered with to a trifling extent. Besides the amount already referred to, other sums might undoubtedly have been placed with the older institutions^ had there been no competition; but by far the greatest proportion is plainly derived from sources hitherto unreached, and consists of money which no amount of persuasion could divert from the hundred forms of indul- gence to the older channels of economic hoarding. The Post Office Banks, further, seem not only to have attracted a public of their own, but to have created, as it were, a fresh race of provident people. All kinds of Savings Banks have been established to give, in some form or other, facilities for the deposit of small savings. ^XHien the new banks commenced, the average amomit of a single deposit in the existing banks was, and had been for some time, 4/. Qs. 5d. ; during the first year of the existence of the Post Office Banks, the average amount was only 3/. Is. 9c?, But this average has been still further reduced. The Post Office authorities, describing more recent operations,* state, that as the nature and advantages of these banks became known to the poorer classes, and as new banks were opened from time to time in rural districts, and densely populated portions of our large towns inhabited by those classes, a gradual re- duction in the average amount of each deposit has taken place, and that that amount has for some time ranged between 21. and 3/., whilst the average amount of each sum deposited in the old Savings Banks has not undergone any marked alteration. The conclusion which has been arrived at is the only one possible, viz., either that the Post Office Banks have reached a poorer class of depositors than the old banks * Report on the Post Office, 1864, yi. 13. 320 POST OFFICE SAVINGS BANKS. have been able to attract, or that in increasing so many fold, as we shall have to describe, the facilities for the more freqnent deposit of small sums, they have at the same time, and proportionately, increased the inducements to frugality, and removed the temptations to wastefulness. Still dealing with the peculiar nature of the new business, it is very important that one fact should not be lost sight of In our opinion, it completes the evidence as to further ac- commodation being urgently required by the poorer classes. In those towns and districts which before 1861 were con- sidered to be well supplied with sufficient and well-managed institutions, the success of the Post Office Banks has been most marked. Thus in Edinburgh, the rate of increase in the number of depositors rose in one year from 3^ to 5f per cent. ; in Dublin, from 4| to 7 per cent. ; whilst in the county of Middlesex, where, before the Post Office Banks were established, there were " forty-one prosperous and ex- cellently managed banks, which seemed to hold out all needful inducements to prudence and frugahty," no less than 30,000 persons were added to the roll of Savings Bank depositors in the year following the introduction of the new banks into that county. The rate of increase before 1861 was 2^ per cent.; in 1861 and 1862, it was at the rate of 10 per cent. The average amount standing to the credit of each de- positor in the Post Office Banks has for some time ranged between lOZ. and 11/., and is not expected to exceed that sum for some time to come. Of the whole number of depositors, about four per cent, have balances due to them of 50/. and upwards. A general idea of the mass of depositors may be gathered from the above facts, and they may be CHxVRACTER OF THE NEW DEPOSITORS. 321 supplemented by the following table, which, though only the result of an estimate, is near enough for our purpose. In March, 1865, a certain proportion of the open accounts in the Post Office Banks was examined, in order that some idea might be obtained of the occupation of the entire number, — from which it seemed probable that the 524,340 depositors were made up pretty much as follows : — • Females, Male Minors, and Trustees .... 285,769 Mechanics and Artisans, Domestic and Farm Servants, Porters, Policemen, Labourers, Boat- men, Fishermen and Seamen 140,513 Tradesmen and tlieir Male Assistants, Farmers, and Clerks of all kinds except those mentioned below 53,756 Males of ho stated occupation, Professional Men and their Clerks or Assistants 31,353 Males engaged in education 6,692 Persons in the Army and Navy 4,682 Persons employed in tlie Revenue Departments . 2,570 Total . . 524,340 Of the entire number of Post Office Savings Banks, ninety- one out of the 3,369 have failed to obtain depositors. Of this number, 23 are in England and Wales, 5 are in Scotland, and 63 are in Ireland. It is impossible satisfactorily to account for the failure in so many cases, or, in the absence of information as to the particular localities to which facilities have been offered in vain, to say whether there may not be some special reasons, other than indisposition to save, which may have operated against the transaction of business. Among the great number of banks established in England, there must unquestionably be some poor and sparsely populated districts Y 322 POST OFFICII SATDTGS BA^KS. I ! to which they have penetrated ; whilst in Ireland, which | contributes nearly three-fourths of the nonneffectlTe banks, j these districts mnst be still more numerous, and the popn-| lation stiR less able to save. Add to this, the feet that in| more than one large district in the sister coraitry" the tmevons frauds in the old class of banks have Irffc an indelible impression on the minds of the people, — if they' have not, as one authority states, destroyed all thoughts of provident habits, — ^and that this impression is not likely to be ef^ced in the chronic agitation which has for i^ long pre- vaiLed in Ireland, and the only wonder is, that more of its 525 Post Office Banks are not non-effective. As to ih& Results of the jS'e-LC £ ' ^ ; ■ " ■ '_ ' ' ' • ■ ■ -/-s. Before the Post Office Banks were estabiisiied, o^S ; : ' .. ,:y Savings Banks were open in the United Kingdom toj the receipt cA small savings. Of their distribution throughout the countij and the accommodation which they gave, indnding the number of hours the bulk of them were open, we have already spoken in a previous chapter. The Post OflBcel Rinks were no sooner established and business feiriy conM menced than two very important results followed in banks on the old establishment. The first was, that some of the more important Savings Banks< increased their aocommo^ dation to the public, — the duration and ficequency of thi time allowed for doing business being extended : the second was, that the trustees of many of the old banks came to th* resolution to close their institutions, on the groond that theii time and benevolence were misspent in competing with thi new banks, which enormously increased the accommodation ^-^--vx- h^d ivipTT Tkowerless to afibrd. THEIK RESULTS ON THE OLD SAVINGS BANKS. 323 Tlie best possible test, not only of the influence of the new banks, but of their marked superiority and adaptability to the wants of the country, is found in the fact, that since 1861, no Savings Bank on the old principle has been es- tablished. If it be not desirable to establish new banks, it cannot be a matter of much concern to the country how soon the hulk of the existing banks on that principle give up their charitable business. We say bulk advisedly, for many of these banks do not partake, in the ordinary sense of the word, of the character of charitable institutions. Prom a careful and impartial view of the whole subject, it seems to us, that no measure short of the abolition of the Post Ofiice Banks can keep alive those of the old Savings Banks which cannot compete with the former in the quality and the amount of their accommodation. On the other hand, no one who has at heart the interests of those classes which Savings Banks seek to benefit woidd wish to see the existence of any institution shortened, ^Yhich, while profitably ministering to a great public want, is neither subsidized by the State, nor conducted so as to leave an impression on the depositor's mind that it is charitably ministering to his necessities. Those which cannot give the necessary facilities, must succumb sooner or later ; those which answer to the latter requirements, may still have a long course of honour and usefulness before them. Before 1861, there might be no option or alternative to the existing order of things ; the institution of Post Ofiice Banks has supplied both. Twelve months after the organization of the Post Ofiice Banks the trustees of thirty-five of the old Savings Banks had closed their banks. Up to the present period (March, Y 2 324 POST orricE sowings banks. 1866), sixty additional banks have followed the example thus set them ; this making a' total of — exclusive of Penny- Banks — ninety -five banks which have transferred their business to the Post Office. The least important of these institutions was that of Dumbarton, established in 1846, and which had but 83/. of capital. The most important bank on the list is Birmingham, originally established in 1827, and which had, on the 20th of November preceding the date of closing, a capital of 583,461/. The fact of the Birmingham Savings Bank coming over, formed the one necessary assurance that the new system had obtained, not only the confidence of the country, but the tacit acquiescence of those w^ho managed large businesses of the same nature. It was very properly argued at the time, that if a majority of such trustees as those of Birmingham could come to the conclusion to hand over their well-managed and flourishing bank to the Government, any bank might do so.* The following Eeturn, which has been carefully compiled, is of sufficient interest and importance to occupy the pro- minent place we assign it.t * This Transfer was settled in November, 1863. The trustees and managers at a special meeting deliberated whether or not to carry on the Bank " under the increased responsibility imposed on trustees by the 11th clause of the Consolidation Act (1863), or to empower the managers to transfer the deposits to the Post Office Savings Banks." They resolved by a majority of two to take the latter step, and the transfer was made immediately afterwards. + Since this Return was completed, the trustees of two other banks have given notice to close. The one, a small bank at Castle Wellan, in Ireland, and the other, the Leighton Buzzard Savings Bank, make, with the Hun- tingdon Bank, a total of ninety-eight transfers. KETUEN OF CLOSED SAVINGS BANKS. 325 ETURN coutainiug the Names of Savings Banks Closed cliiring the years 1861 to 1865 inclusive, together with the Date of Establishment, the Nximber of Hours open per Week, and the Capital on the 20th November preceding the date of closing of each Bank. Name of Bank. Date of Establish- ment. Number of Hours open per Week. Capital on 20 Nov. pre- ceding the date of closing. Remarks. England. £ Ambleside .... 1857 1 2,503 Andover 1827 2 4,121 Baldock 1816 4 17,573 Bermondsey . . . 1856 1 3,131 Biggleswade . . . 1816 7 10,496 Billericay .... 1860 1 2,290 Birmingham . . . 1827 12 583,461 This Bank ranked Bishop's Castle . . , Blackpool .... 1861 1859 1 1 1,988 2,197 fifth or sixth in the Empire. Bodmin 1839 91 •"2 54,638 Bowdon & Altrincham 1823 4 49,183 Braintree .... 1859 1 7,510 Brixton 1860 14 2,300 Bromley 1816 2 to 3 22,496 Buntingford . . . 1845 2 monthly 5,127 Burford 1826 1 11,100 Canterbury .... 1816 8 149,572 Closed on account Carshalton .... Chesham .... 1817 1851 1| 1 11,198 3,379 of the fraud pre- viously spoken of. Cheshunt .... 1850 2 1,535 Chipping Norton . . 1860 5 5,694 20 Nov. 1863. Chipping Ongar . . 1858 2 fortniglitly 3,476 Clapham 1816 1 to2 28,411 Clayton West . . . 1861 1 494 Cleobury Mortimer 1859 1 2,580 Coddenham .... 1818 4 15,729 Covent Garden . . . 1816 2 18,125 Cuckiield .... 1836 1 7,191 Dartford 1816 2 26,549 Deptford 1816 2 30,712 T. « \ 326 POST OFFICE SAVINGS BANKS. Name of Bank. Date of Establish- ment. Number of Hours open per Week. Capital on 20 Nov. pre- ceding the date of closing. Remarks. England (continued). £ East Dereham . . . 1854 1 8,840 Enfield . . . 1839 1 132 Epping . . . 1817 3 monthly 16,023 Evesham . 1839 2 24,516 Finchley . . . 1859 3 1,428 Fleetwood . . 1852 1 5,033 Halstead . . . 1816 1 20,742 Hartlepool . . 1844 2 6,617 Holloway 1856 u 10,632 Holt .... 1861 1 1,448 Hornsey . . . 1819 1 101 Hoxton . . 1843 8 494 This was the first Kirby Stephen Leatherhead Leclilade . . 1846 1860 1844 1 1 1 6,957 592 4,636 Bank which trans- | IVrred its business | to the Post Office. Lutterworth 1822 6 36,332 Lymington . 1818 2 1,394 Mausiield 1818 5 64,671 Market Harboio 1838 1 24,659 Melbourne . 1855 1 2,552 Old Kent Eoad 1859 2 3,538 Over Darwen 1860 2 1,071 Pimlico . . 1860 5 1,900 Poulton-le-Fyld 1822 1 30,822 Eawtenstall . 1836 2 240 Rochford . . 1818 2 9,887 1 Eomsey, New E all 1859 1 408 Rugby 1818 2 46,839 Saddleworth 1824 4 6,001 St. Alban's . 1859 1 4,140 Sedbergh 1859 3 monthly 850 . Sheerness 1818 1 4,128 Shiffnal . . 1819 11 monthly 15,851 * The Huntingdon Savings Bank has given notice to close. Tlie capital of the Hunts Savings Bank amounts to £60,000. EETUEN OF CLOSED SAVINGS BANKS. 327 Name of Bank. Date of Establish- ment. Numljer of Hom-s open per Weelc. Capital on 20 Nov. pre- ceding the date of closing. Remarks. Emjlaud i,coutiuued). 1 £ Soutliwold .... 1858 2 moutlily 1,248 Staveley .... 1854 1 1,457 Tredegar .... 1855 2 1,726 "Wallasey . . . 1843 ll 3,229 WalsaU .... 1825 2 48,492 "Wandsworth 1816 1 1,269 Watford .... i 1817 4 fortnightly 38,968 West Bromwich 1 1846 7 27,491 "West Ham . . . , 1819 2 17,739 Weston-super-Mare . 1850 34 3,644 Wales. Bala 1849 1 14,386 Carnarvon 1854 2 159 Dolgelley . . 1819 ^36 to 48 30,291 Llangollen . . 1852 6 monthly 3,841 Machynlleth. 1834 36 10,166 aierthyr Tydvil 1853 2 3,745 Narberth . . 1857 2 2,242 Newtown . . 1856 1 2,960 Portmadoc . . 1846 11 2,732 Scotland. Dumbarton .... 1846 10 83 Fort "William . 1859 G 2,023 Glencoe . . . 1859 2 396 Leith .... 195 Date and hours not Oban .... Stranraer . . 1840 1860 12 4 106 1,533 given in Return for 1861. Ireland. Ballymena . . . • 1860 2 1,455 Bray .... 1819 2 4,512 Carndonagh . . 1860 4 906 Gorey .... 1822 1 2,550 Lisburn . . . 1838 2 2,674 Strabaue . 1821 2 16,081 328 POST OFFICE SAVINGS BANKS. It ought to be stated that the Act of 1863, for amending the \ I Post Of&ce Savings Bank bill, offered considerable inducements to the winding np of the then existing banks. Its principal objects were to relieve those trustees who were desirous to close, from liability with regard to the accounts of depositors who had not applied for repayment of their money, or for certificates to enalde them to transfer their deposits to Post Office Banks, and also to make the transfer of the accounts of minors compulsory on the authorities of either class of banks on the application of the proper parties concerned. More im- portant than either, however, was an addition made to the bill before it was allowed to pass. This addition consisted of a clause empowering the trustees of any old Savings Bank who should desire to close their bank, to compensate their paid officers out of the Separate Surplus Fund. This was a welcome and very proper addition to the bill, and tended materially to mitigate the inconveniences likely to arise from the officials, perhaps of many years' standing, being thrown out of employ- • ment. The Birmingham Bank, when it transferred its busi- ness, took advantage of this clause to compensate its officers accordingly ; and this course has subsequently been followed by other banks. We have left ourselves little space to describe what remains to be told of the manner in which the husiness has heen organized and performed. Happily, however, those parts of the system with which the public have more especially to do, have not wanted numerous and faithful exponents ; by means of the newspaper press, shoals of official and non-official tractates, handy-books, magazine articles, and public lectures, the public have been made fidly aware of all the practical details of a MANNER OF PERFORMING THE BUSINESS. 329 scheme which is at once so simple and so satisfactory in its working, and which is at the same time as capable of inde- finite expansion as it is of infinite power for good. It is indispensable, notwithstanding that these details are now so well known,* that we should rapidly glance at some of them, prior to speaking of the special advantages which these arrangements have made possible. With regard to De2J0siting Money. By the Post Office Savings Bank bill any person who will subscribe the re- quisite declaration that he is not a depositor in any other Savings Bank may now, on every working day of from six to ten hoiu's' duration, deposit any sum not less than one shilling, and not more than 30/. in one year, in any of the 3,300 places in the United Kingdom where the Post Office has been opened as a Savings Bank ; also, that for every pound so deposited for a month or more, interest at the rate of 2/. 10s. per cent, per annum shall be paid, and that while the money remains in the hands of the Post Office the credit of the British Government shall be staked for its due repay- ment when asked for. . Any person wishing to become a depositor in a Post Ofiice Bank has only to go to that Money Order Ofiice which is most convenient to him, subscribe the statutory declaration, and pay in to the postmaster or receiver the amount he wishes to deposit, and a bank book will be handed to him, properly * The fullest information on these matters may be gathered, in cases where the reader is not thoroughly familiar with them, from many sources. In addition to the Act, and the Eegulatious for the Post Office Banks, three little manuals may be specially mentioned to which reference may profitably be made. (1) Handy Book on Post Office Savings Banlcs. London : Stevenson, 1861. (2) Post Office Savings Banks : a few Plain Words concerning them. London : FaithfuU and Co, (3) My Account vnth Her Majesty. Reprinted from All the Year Eoiind and the British Workman. 330 JTUOX uriiUC; OA V 1J.^^-I^^ jjo^y^t.^. numbered, and on wliicli his name, address, and occupation will be -oTitten. The amount handed to the postmaster will be found entered as a first deposit in the proper column of the book, and this entry will be attested by the signature of the postmaster, and stamped wdth the official stamp of his office. From the moment the depositor gets his book handed to liim he possesses, for all practical purposes, a sufficient guarantee for the absolute safety of his money. This is, however, not the only security he has ; and to explain the further process it is necessary to follow the money after it leaves the depositor's hands. The postmaster before giving up the book is required to enter the full particulars of the transaction in a single line on a Form of daily Savings Bank account supplied to him for the purpose. At the close of each day the local postmaster adds up the total amount received by him during that day on Savings Bank account, and, adding that sum to the account of Money Orders issued during the same day, sends the entire account to the chief ]\Ioney Order Office in London. On its arrival at this office the account undergoes a primary check, and is then sent to the Savings Bank department, where it is thoroughly examined in all its details. In the first place, an acknowledg- ment is filled up and addressed* to every depositor named in the account. The account is then sent to the ledger branch, where its particulars are copied into the books of the depart- ment; and subsequently, but on the same day, to ensure accuracy and afford a check, each acknowledgment is com- pared by different officers with the entries made in the ledgers, * Tlie well -known Form itself which in one piece of paper gives the acknow- ledgment, and folded, leaves room for the address, was designed and registered by Mr. Walshe, of the Post Office. ACKNOWLEDGMENT OF DEPOSITS. 331 and tlien despatclied by the same night's post to the address furnished by the depositor* The receipt of this acknowledgment completes the de- positor's parliamentary title to repayment in full of principal and interest. Shoidd the depositor not receive his acknow- ledgment within ten days of making the deposit, application must be made (and it may always be made free of postage) to the Postmaster- General for it. Experience has shown that no depositor has been put to the trouble to write tivicc for an acknowledgment, and but a very small modicum indeed have written at all. Practically three days would suffice for the operations required in England, and four for the greater part of Ireland and Scotland ; but in some few cases the longer period of ten days is necessary. Were it not for the check, moreover, which the department thus obtains upon its own officials, and the confidence which the arrangement gives to depositors, the acknowledgment might perhaps be dispensed with, inasmuch as the postmaster's entry in the de- positor's book is not bad evidence that the money has reached the hands of a Government official, — a fact which, if it could not be disputed, would not, we should imagine, be set aside. In every subsequent case where a person adds to his first deposit, exactly the same routine is followed. He may, how- ever, if he desires it, or requires it, continue his deposits in another bank from that in which he originally opened his account ; nay, if he chooses, he need not make two deposits in any one bank, but may take a tour throughout the country, or, if he lives in London, may go all round the metropolis to * Acknowledgments are received in most parts of England by retiirn of post, or within thirty-six hours ; in some parts of Cornwall and Wales two days, and in some parts of Ireland and Scotland three days, are required. 332 POST OFFICE SAVINGS BANKS. the 450 banks there, and see which he likes best, and no one will interfere with his freedom of choice. And thoucjh a depositor of this curious description would give additional trouble, the routine of the work is so simple that he would not embarrass the department in any way.* With regard to WithdrawiTig Money. A person having once run up a score in the Post Office Banks, may withdraw it with great readiness and with extraordinary and unexampled facilities. A depositor who requires some, or all, of his money, has only to go to whichever Post Office Bank he likes best, in whatever part of the country he may happen to be at the time, and ask for the usual printed Porm. He must fill up this Form with the number of his deposit-book, the name of the office where he commenced to make his deposits, the amount he wants, and the place where he wants it paid, and adding his name, address, and occupation, send the Form (which needs not to be post-paid, is addressed on the back, and provided with an adhesive seal,) to the Postmaster-General and wait the result. Follomng the fortunes of this notice, we find that it arrives in proper course at the chief Savings Bank. The signature attached to it is there compared \\'ith the signature of the original declaration, and if, on comparison, there be no grounds for suspecting anything amiss, the notice is sent to the ledger keeper in charge of the account of the particular depositor. If it be found that he has a proper balance in the bank to meet his claim upon it, a warrant for payment is at once pre- pared. This warrant is an order to the postmaster named to pay the amount wanted ; and after the amount of the warrant * The departmental arrangements for these cases, technically spoken of as " cross entries," need not be further explained. EESPECTING APPLICATIONS TO WITHDEAW MOXEY. 333 has been entered in tlie ledger, and checked by a superior officer, who certifies its correctness, it is at once sent off by post to the address furnished by the X)erson -vvithdrawing. At the same time, and by an admirable system of manifold writing, — suggested by Mr. West of the Mail Office for the use of other branches of the Post Office, and which has been with great advantage applied to Savings Bank operations, — the post- master himself is furnished in fac-simile with a copy of the warrant sent to him in the nature of an advice. When the postmaster is apj)lied to for the money in question he carefully compares the warrant with the advice to pay, in the same way as he deals with the familiar money order ; he also compares the signature to the receipt on the warrant with the signatiire in the depositor's book ; and if he be satisfied with the scrutiny, he pays the money, entering the transaction in the withdrawal part of the depositor's book, and signing and stamping the book accordingly * ^\Tien the paid warrants are returned to the chief office, and when the postmaster sends up an account of the day's transactions, the accounts and entries are checked in the chief Money Order Office and the chief Savings Bank, in much the same way as described in the case of deposits ; the whole being arranged to provide an admirable system of check in which two branches of the Post Office, — viz., the chief Money Order Office and the Pieceiver and Accountant-General's Office, — as well as the chief Savings Bank, are immediately concerned.f * The depositor's book must, of course, be invariably presented in eveiy transaction, and when the depositor has obtained repajTnent of all his balance the book must be given up in order that the account may be closed. t We regret that we cannot find space to describe more minutely the system adopted, as also so much of the internal arrangements of the chief Savings Bank as have been permitted to be made public. We maj"- say, briefly, 334 POST OFFICE SAVINGS BANKS. When the Post Office Savings Bank bill was introduced into the House of Commons, the proviso that the scheme to be founded upon it should be self-supporting, formed an important consideration in the statements of the Chancellor of the Exchequer, and was strongly urged by other members. It appears that from the first the operations have not only been self-supporting, but exhibit each year an additional amount of assets over liabilities, as the balance-sheet for last year (given in the Appendix) will show. According to the Parliamentary Paper 'No. 523, it was estimated that the cost of each transaction in the Post Office Banks would be 7d. ; the actual average cost of each transaction up to the present time has been 6|fZ. We have no doubt, as bearing on the point of the cost of the Postal Banks, the following estimate (which, as proved by the actual result, has been so accurate) will possess an interest to the general reader. It is an estimate of the cost of One Hundred Thousand transactions under the Post Office Savings Bank bill, assuming the pro- portion of deposits to withdrawals and of transactions to accounts to be the same in the Post Office Banks as in the however, that the Chief Savings Bank commenced operations in a part of the biiilding at St. Martin's-le-Graud, but was soon driven to seek more accommoda- tion. Its location is now in St. Paul's Churchyard, where, in spite of large premises, we believe, it once more became restricted as regards room, and has since acquired additional space. The office is presided over by a Controller, who is aided by an Assistant Controller and two principal clerks. The staff comprises a large number of permanent clerks of different grades, and an enormous number of temporarj" clerks employed upon the more routine work. The office itself is divided into four branches, — the Deposit Branch, the Withdrawal Branch, the Account Branch, and the Corresijondence Branch. For the benefit of all those who are interested in Savings Bank management, we hope that an interesting paper, read by authority, by Mr. Chetwynd, the fiist Controller, before the Congres International de Bienfaisance, in .Tune, 1862, may soon be reprinted. It gives every detail which it is desirable to know. COST OF TRAKSACTIONS IX THE NEW BANKS. 335 existing Savings Banks, when the former shall be in full operation : — £ s. d. Estimated cost of receipts and payments by Postmasters 210 Estimated cost of transmission to central office, includ- ing check on receipts and payments, &c 690 Estimated cost of keeping accounts with depositors, including calculation and entry of interest, periodical comparison of depositors' books, check on with- drawals, preparation of general accounts, stationery, and other miscellaneous items and general manasre- ment 1,750 2,650 To which may be added, 10 per cent, as a margin for omissions or errors of computation 265 Total cost of 100,000 transactions . £2,915 We will now conclude this chapter with a rapid survey of the peculiar advantages of the system of Post OflSce Banks, mth some remarks on what may be called the deficiencies of the system. The system of Government banks seems exactly to meet the poiuts most required by those whom the older kind of banks had no power to attract, as well as of that considerable class who, rather than not save at all, would save under incon- veniences which they were powerless to remove. For years it was impossible to provide the conditions and meet the wants of the poor in these respects, but there can be no doubt that they have now been met. These conditions, these wants, were absolute and unquestioned security for their money ; despatch, both as to depositing and ^vithdrawing money ; and secrecy in the transactions in which they should engage. With regard to Security. Tlie Post Office Banks being part of the machinery of Government itself, offer the highes* 336 POST OFFICE SAVINGS BANKS. possible security, — the whole credit and solvency of the British Government being guarantee for the perfect safety of the deposits * As to Bcsixdch. To the poorer classes, as much, and perhaps more than to any others, time is money. Their time is not their own, and now a few minutes may be stolen from the dinner- hour, or an opportunity may be snatched as the labourer passes to and from his work, to do that which before was no ordinary or agreeable task to him. The unparalleled con- venience which attends the transaction of his business contri- butes to this despatch and this saving of his time. Should misfortune overtake him, he may withdraw the whole of his deposits within two or three days ; should his occupation compel him, or his tastes incline him, to move frequently about from place to place, he has only to carry his bank-book about with him, and he may withdraw sums at his convenience at any Money Order Office in the kingdom; and thus, though he may have originally deposited his money at the Land's End, he may draw it out when at John o' Groat's, or in some remote nook of Ireland. This arrangement is, Ave understand, taken advantage of to a large extent. The advantages offered in the quick withdrawal of money is also a most important feature. Enormous sums of money are wasted by the poor in * The operations have not been carrietl on altogether without fraud. The cases, however, only serve to show how secure the depositors really are from loss. Ill 1863 the then Postmaster of Beverley embezzled Savings Bank money, when the authorities at once announced to the depositors that it should be made good. This instance, and another in which a clerk was concerned, are, we believe, the only cases of the kind ; but if they were con- stantly occurring, —which it is now next to impossible they should be — it woiUd not matter a pin-head to depositors, who, the moment they pay in their money into the Post Oflice, and obtain a deposit Iwok, stake tliat money on the National credit. SECRECY IN POST OFFICE BANKS. 337 borrowing for an emergency; tliere can be no doubt that much money has been and is wasted even in waiting till the time arrives to get the money out of the ordinary Savings Bank. " If a poor person," says an intelligent writer, " wants 4:1. immediately, he would give 25 per cent, for it," Few could lose in having to wait a couple of days for their money.* Then as to sccrecT/. None are more jealous of their little savings being known than the poorer classes : a large number of operatives have cogent reasons for secrecy, or, at any rate, privacy. Indeed, it seems to have been agreed upon that, if these classes cannot keep their savings quiet, many will not save at all. The wage-receiving class are naturally and properly averse to bringing their savings under the notice of their masters or their masters' friends. Savings Bank managers, even when not masters of workmen themselves, are generally local dignitaries well known to such.f In the Postal Banks there is, or need be, no occasion for particular observa- tion ; the officials are required to conciliate confidence ; to observe the strictest secrecy ; and it is our conviction, gathered after no inconsiderable experience, that nowhere so much as in * The facilities existing for withdrawing accounts from one class of banks and placing them in the other tend also to despatch and convenience. By means of transfer certificates, to be had at anj' Savings Bank, a depositor may transfer his account without ever seeing his money. + The Secretar}' of a Vrorkmen's Building Society was examined before Mr. Slaney's Committee (1850) on the Investynents for the Sarinr/s of the Middle and Loicer Classes, when the following evidence was elicited : — "I think that one reason why the labouring man does not invest in the Savings Bank is, that the fact of his being able to save money is used as a pretence why his wages shoiild be reduced, and he carefully excludes from the knowledge of his employer that he is able to save. I have found that the workmen of one district go to a distance to find a Savings Bank, and will not go to their own. Their names are called loudlj' and officially, and it becomes whispered about that so-and-so is a saving man, and may therefore work for less wages. "- • Vide Evidence of Mr. \V. ConjKr. Z 338 ■ POST OFFICE SAVINGS BANKS. Government offices is the work conducted without distinctions of class. Next to the advantages of which we have just spoken, is that secured by the an^augement to undertake the receipt and accumulation of small sums. A working man may now take his shilling to the Savings Bank as readily as his master may take his pounds, and the former will have no occasion to feel that he is made the object of a charitable clause. In seeking to bring a working man to put by a shilling in its bank, the Government hopes to induce a habit of saving, and may fairly expect to take his larger sums when saving habits have been induced. Mr. Gladstone's decision to take sums as low as a shilling was almost universally accepted as a wise one. Mr. Gladstone had long interested himself in the con- dition of the workman, and no one knew better than he that the labouring classes are not suddenly masters of whole pounds, and that, when they are in the act of accumulating it, the temptations to break in upon the little stock laid by are ever present, and are often too strong to resist. So far the principles of this important measure are admir- able ones, scarcely admitting of question, almost beyond criti- cism : they have rendered the action of the banks simple, facile, all-comprehensive, and ubiquitous. The rate of interest given is, however, perhaps on the border-land, as it were, between unquestionable and questionable policy. The interest given to depositors in Post Office Banks is at the rate of two pounds ten shillings per cent, per annum, or one halfpenny per pound per month. That this rate is satisfactory to a large section of the people of this country, or that the other attrac- tions of the Post Office Banks amply counterbalance the disadvantage of the low rate, is evident from the enormous ON THE KATE OF INTEEEST, 339 sum — twelve millious sterling — deposited in those banks in little more than four years ; at a time, too, when the old Savings Banks, which are enabled to pay ten shillings per cent, more than the others, have put forth their best efforts to keep the business in their hands, when all kinds of allure- ments have been held out to those who have su]*plus funds to dispose of, and when the rate of interest ruling in the Money-market has been, as it still is, exceptionally high. These facts ought perhaps to close the case, and make the interest rate, if not on£ of the recommendations of the measure, at any rate a part of the scheme which does not detract from its merits as a whole. As, however, this is a point upon which some little soreness is felt and expressed in different quarters, we may be excused for here urging a consideration or two. This soreness has originated, to no little extent, from the consideration of the inequality of the rate allowed in the ordi- nary Savings Banks and the Post Office Banks ; this feeling is kept up by the consideration of the fact, that that inequality still exists and is likely to exist. The old Savings Banks deposit their funds with Government, and are allowed interest on their money at the rate of SI. 5s. per cent. ; the Post Office Banks, of course, deposit their money with Government, and are allowed interest at the rate of 21. 10s. per cent. Out of the fifteen shillings per cent, difference between the two rates, an average of half of it is given by the old banks to their depositors. Now it is well known that the average cost of each transaction in the Post Office Banks is little more than half the average cost of a transaction in the ordinary Savings Banks. If Government can still afford to pay the old Savings Banks the higher rate of interest, it might afford, at z 2 340 POST OFFICE SAVINGS BANKS. the lowest computation, to give ten shillings per cent, more to depositors in the Post Office Banks. If Government catmot afford to pay the higher rate, it ought to discontinue its charity, which, like all other charitable doles, excites discontent amongst those who think they have, and really have, the right de facto, if not de jure, to share it. That the rate should be equalized in one way or the other admits, we think, of little question ; but that the Government should pay no more than it can pay without loss admits of less. Eeverting to the consideration of the actual Post Office Bank rate, it is perhaps unhkely that the small tradesmen class — except where such persons lodge their money at the PostO ffice merely for security — feels satisfied with it. Hap- pily, however, this is a class which does not need to be considered, and which scarcely will be considered. The Government offers no factitious allurements or inducements to any class of the population ; and if it did, would be certain to confine the inducements to those portions of the poorer classes who stand most in need of encouragement. And as for the rest, the Post Office Banks do not in any way interfere, as j\Ir, Gladstone has recently said, " with the labouring, man's liberty of choice, or the liberty ol choice enjoyed by anybody else ; if he thinks he can do better with his money than by cariying it to the Government Savings Bank, by all means let him do better with it." A low rate of interest is given for the principal deposited ; but then that principal is guarded with uncommon security, and can be moved, added to, or withdrawn from, with the greatest possible convenience. And these terms, theoretically and practically, suit the industrious classes, whoever else they do not suit. Practically they meet the wants and satisfy the demands of a ON THE RATE OF INTEREST. 341 large section of depositors, or the banks would not Lave shown such an extraordinary amount of success. Nor are we in want of authorities who assumed, theoretically, that this would be so. " If Government give security," said a shrewd witness before the Sa\'ings Bank Committee of 1858, "they should pay less interest, on the principle that Chubb's locks cost more than the ordinary ones." Dr. Chalmers took great interest, as our readers must already know, in Savings Banks. His argument was, that the ready receipt and payment of small sums together with safe custody was everything, and the rate of interest quite unim- portant ; he more than once said, that " the result of high interest had been to swamp our Savings Banks as a national system." This question of interest was largely discussed in Mr. Slanev's Committee of 1850. In that Committee Mr. John Stuart Mill was asked whether perfect security or a high rate of profit was most sought after by the industrious classes ; to which he replied : " In the case of the working classes no doubt security is the main object, and it is so in the case of all whose savings are small." In the same Committee, ]\Ir. J. M. Ludlow, an eminent barrister, gave it as his opinion that " the poorer a man is, the more important to him is the safety of his investment, independently of the question of profits ; " and in answer to a similar question addressed to him, the secretary of a working man's building society said, that " the certainty of security is the most powerful inducement to investments among the working population." Thus, while it doubtless admits of question more than the other details, no serious fault need be found with that clause which provides the rate of interest to be given Equalization 342 POST OFFICE SAVINGS BANKS. in the rate of interest of all Savings Banks connected with the Government is far more necessary than that the standard of the one should be raised to the standard of the other. The days have gone by when any dole of charity should be held out to working men as an inducement to save : it is more than questionable whether those days should ever have arrived. The working classes do not want charity at the hands of the public ; they long wanted security and reason- able facilities : and when these were provided, as they have been, they were willing that the rest should be left to them- selves. All interest given more than the money actually produces or may fairly earn, is repugnant to them ; or if it is not, it ought to be made repugnant to them. The deficiencies, if we may so call them, of the Post Ofl&ce Savings Bank system, to which we promised to allude in closing this chapter, are those features which have been inherited from the parent system, and consist of restrictions which, we think, are now as unnecessary and undesirable as they are hampering and vexatious. By section 14 of the Post Office Savings Bank bill it was ordered that " All the provisions of the Acts now in force relating to Savings Banks as to matters for which no other provision is made by this Act, shall be deemed applicable to this Act so far as the same are not repugnant thereto." Under this legislation all the restrictions which were thought — especially during the earlier history of Savings Banks — to be necessary to confine these institutions to the poorer classes, have been continued down to the present time. The principal regulations to which we refer are, the Declaration wliich is required from any one open- ing an account, and the lirnitation of deposits to 30Z. in any one year, and 150/. in all ; and that when deposit and interest LIMITATION OF DEPOSITS. 343 together reach 200/. all further interest shall cease. The reader who may have followed us through our account will be aware of the reasons which actuated the Legislature in making these arrangements.* These reasons do not now obtain. ISTo steps are taken (and we have never heard that it is intended ever to take such steps) to confine the benefits of the Post Office Banks to the labouring classes. Why, therefore, these classes, or any other class allowed to deposit in these banks, should be restricted to any amount — or, at any rate, such a small one — it is difficult to understand. To the poor this restriction forms a barrier to saving habits ; with regard to any other class, the amount might he as unlimited as it is in the Funds. As a set- off against the unremunerative character, to say the least, of small deposits, no limit should be placed on large ones. It is obvious, that the larger the sums invested the greater will be the success and the profits of the scheme, the more remote will be any prospect of loss, and the more certain will be the creation of a permanent marketable stock of Two and a Half Per Cents. We are glad to find that this restriction has not escaped the notice of many who are entitled to be heard on the subject. The Rev. G. H. Hamilton, who made, perhaps, the earliest modern proposals for Post Office Banks, suggested that tlie limit should be " from one shilling to ten pounds per day ; " and since the passing of the Act he has made exertions, hitherto without success, to get the limitation extended to include those sums. Mr. Bullar, also equally entitled to respectful attention, has likewise made subsequent proposals having in view, to some extent, the granting of facilities for investing larger sums. * Vide p. 59. 344 POST OFFICE SAVINGS BANKS. It is interesting to find that the Post Office Savings Bank system has just been introduced into our Australian colonies, and not a little curious and instructive to find that some of the provisions go much further than we have yet ventured at home. The main feature of the "Post Office Statute, 18G5," is an echo of the English Act, but in several of its provisions its scope far exceeds the latter in liberality. No declaration is needed ; instead of 30^. in any one year, the colonial depositor in Victoria is only debarred from exceeding 50?. in a fortnight, and the interest given, which is at the rate of four per cent., is not withheld to any deposited amount under 1,000?. Liberal as are the colonial authorities in Victoria, those at Queensland far surpass them. In the Post Office Banks at Queensland there is no limit whatever to the amount which may be deposited ; interest is allowed at the rate of five per cent. ; and this rate of interest is paid on all deposits without limitation of any sort. Making all due allowances with re- spect to the relative position of our colonial possessions at the antipodes and the mother country, it seems clear that the former have advantages over us in the matter of their Govern- ment Banks, and we commend the example of the Victorian Legislature to our own, and trust that the only marked defect in our Act may soon be remedied. EARLY LEGISLATION ON THE SUBJECT. 345 CHAPTER X. ON GOVERNMENT INSURANCE AND GOVERNMENT LIFE ANNUITIES. " It is difScult to estimate too liiglily the importance of the tendency of the people to save their earnings, or the duty of removing every obstacle and affording every facility to its operation. It is a matter of deep interest to the Slate ; for the man who has invested a portion of his earnings in securities, — to the permanence and safety of which the peace and good order of society are essential, — must be a tranquil and conservative citizen." — W. Rathbonk Greg. "Ah ! who can tell how many a soul sublime Has felt the influence of malignant star, And waged with fortune an eternal war ! Checked by the scofl" of pride and envy's frown. Or poverty's unconquerable bar, In life's low vale remote, has pined alone And dropt into the grave unpitied and luiknown." — Beattie. Proposals for a Governmeut Insurance Office, like those for National Savings Banks, are not, as many have been led to think, the product of the thought of the last few years. In 1807, for example, Mr. Whitbread, in bringing forward his Bill for Poor Law Pieform, earnestly advocated, that, together with his plan for the investing of their savings, some means should be provided for the poorer classes by which they might insure their lives under the responsibility of Government, Both as regards his plan of Savings Banks and his plan for Government Insurance, Mr. Whitbread was fuUy half a cen- tury before his age. The different schemes for the purchase 346 GOVERNMEXT ANNUITIES AND INSURANCE. of Government Annuities and the Acts under whicli they were carried out are already familiar to the reader. The Act of 1834 we may repeat, however, was the beginning of legislation on the subject. The principal emendation* in the Act 16 and 17 Victoria, c. 45, passed in 1853, was supposed to be in the introduction of a clause providing that a person buying a Government Annuity could also insure the payment of a sum of money at death. Notwithstanding this amend- ment, the Act was not nearly so productive of good as might have been expected. In the matter of Insurances effected under the arrangements of 1853, the Act has been for all practical purposes quite inoperative ; and from 1834 to 1864 the whole of the annual payments in respect to Annuities did not reach 200,000^. In the latter year 6,500 annuities were in force, the amount represented by this number being 140,000^. This is, in brief, an account of how matters stood in 1864 ; and it is little wonder that it should now begin to be felt that some fresh steps were required ; that there should be an entirely new organization for the work ; and the aboli- * We have not space to go over the ground of the change -, nor is it neces- sary, seeing how imperfect was the amendment introduced in 1853. Mr. McCulloch, however, in his Statistical Acemmt of the British Empire, vol. ii. p. 712, may be said to iave summed up in the following sentence the reason which sufficed to induce the Legislature to amend the Act of 1834: — "The influence of the Act (1834), so far as it extends, is subversive of accumulation, and goes to encourage the selfish and unsocial propensities by tempting indi- viduals to consume their whole property diiring their lifetime, without caring anything for those who might come after them. Had Government give facilities to the middle and lower classes for insuring sums for their wives aud children in the event of their death, it might have been highly advantageous. But the system they have set on foot does not encourage providence, but ex- travagance ; and if extensively acted upon, would be so very hostile to the public interests, that it would have to be put down by legislative interference." We should think that there could not be much chance of successful legisla- tion if it were based upon such arguments as the foregoing ; and successful it was not. PRELIMINARY STEPS ARE TAKEN. 347 tion of all unnecessary restrictions, especially that which required that a person must deal perforce both in insurances and annuities. The institution of Post Office Banks, which had been rendered possible by the superior organization con- sequent on the introduction of postage reform, had already demonstrated how the Post Office machinery could reach every part of the country, and how well it could bear the additional weight put upon it. Nor was this all. From the experience of two or three years, those who were best able to judge of the burden this machinery could bear without difficulty were those who now proposed to add fresh wheels and contrivances to be worked by the already existing motive power. A few words will suffice to show how the further proposals which we have to describe in this chapter were originated. Government Annuities at this time were, under the authority of an Act spoken of in a previous chapter, allowed to be granted either directly through the National Debt Office or through the medium of the ordinary Savings Banks. To a certain extent many of the Savings Banks had availed them- selves of this Act, and granted both Immediate and Deferred Aimuities. Among the banks which, as we have already shown, transferred their business to the Post Office Savings Banks soon after the establishment of the latter, were some which had done a little of this business ; the question there- upon arose whether the Post Office Banks should not take up the duty which devolved on the old banks, and receive the payments for the Annuities as they fell due. The result of this was, that the gentlemen who in the Post Office had or- ganized and so far directed the machinery of the Postal Banks not only proposed to carry on the business which others had in this way begun, but they advised that the operations them- f<&y Of THl \„ 348 GOVERNMENT ANNUITIES AND INSURANCE. selves sliould be extended, and that this extension would be a legitimate offshoot of their original scheme. Mr. Scudamorc and Mr. Chetwynd, the gentlemen in question, held that if the Post Office Banks were to become agencies for the purchase and payment of Annuities, there would be a considerable increase in the number purchased. They then proceeded to sketch the outline of a plan on which it would be possible to undertake the work, and showed how the course of the busi- ness in respect to the Annuities would be easy, simple, and comparatively inexpensive. The most important feature of the plan was, that the purchase and payment on account of Go- vernment Annuities should have no immediate connexion with the Post Office Savings Banks ; and that the purchasers of the former should not necessarOy be depositors in the latter. With regard to Insurances, the following sentence occurs in a report which, referring to Mr. Whitbread's proposals, the same gentlemen presented. " We believe that the time may come when the propriety of attaching to the Post Office Savings Banks a scheme of Life Assurance will again be seriously considered by the Legislature. The frequent appear- ance and disappearance of bubble insurance companies, which have been productive of very disastrous consequences during the last few years, may probably induce a serious considera- tion of the subject at no very distant date." AVhen the Commissioners of the National Debt came to speak of the former of these proposals, they reported " that in their judgment, the greater the extent to which the system of annuities can be carried, the greater will be the amount of benefit conferred on that class of the community on whose behalf and for whose security it was the pleasure of Parlia- ment to authorize the grant of such Annuities through Savings MR. GLADSTONE'S PROPOSALS. 349 Banks and by this department. The machinery of the Post Office will give the opportunity to Lord Stanley largely to extend these benefits, and the Commissioners will gladly unite with him in doing so." On the lltli of February, 1864, Mr. Gladstone took up this further scheme — the matter of Insurances and Annuities having been combined in the plan of operations prepared, during the interval. He tlien moved for leave to bring in a " Bill to amend the laws relating to the purchase of Govern- ment Annuities through tlie medium of Savings Banks." The Chancellor of the Exchequer briefly explained his object in bringing about the new measure. He wished, without any unnecessary interference with private establishments, to assist in offering increased facilities for the extension of frugal habits among the industrial population. This had been the principle upon which Postal Banks had been founded, and now this new scheme might be regarded as an extension of the principle. Mr. Gladstone wished, " under the altered circumstances of the times and the improved machinery at command, to further other measures intimately connected in their ultimate object with the Savings Banks themselves." Sums, he explained, could at present be received both for the purchase of annuities, and even for the granting of life insurance policies, but the arrangements were hampered by restrictions so as to render the law almost inoperative. Thus, Deferred Annuities could only be purchased in large amounts, and Insurances could only be effected where the persons had previously purchased these Annuities. He thought it qiute possible to alter the system so that small sums at frequent intervals might be received ; and not only so, but the restric- tion as to effecting an Insurance, which was not only incon- 350 GOVERNMENT ANNUITIES AND INSURANCE. venient, but unreasonable in itself, might be clone away with. The person who wanted an Insurance was not the most likely person to want an Annuity also ; they were, indeed, generally people of different classes, or at any rate different habits of mind. The Chancellor of the Exchequer, after stating that he would give these increased facilities and remove this unneces- sary restriction, obtained leave to proceed with the measure.* His simple statement of the scheme was not long in securing ample criticism ; some of it was friendly, much more of it adverse. Then a certain class of Insurance Offices and the principal Friendly Society organizations believing their in- stitutions menaced, set to work to get up an agitation. The measure was represented by one class of persons as embody- ing the very questionable principle of Government interference wdth private enterprise, and taking as it were the bread out of the mouth of institutions specially got up for such purposes. Others pretended to criticize the proposals disinterestedly ; they dwelt on the difficulty the I*ost Office would find in attempting to do the work, and that, if officers of higher attainments were obtained, they would require proportionately higher remuneration. Savings Bank deposits might be managed, though that was not thought likely three years before ; but how all the details of Life Insurance proposals and the intricate calculations necessary to the Annuities business could be got through, was above comprehension ! It was represented by leading articles in influential papers that there would be but a poor security against fraud; little supervision, and probably that little would not be exerted ; and everybody would conspire to defraud the Government. "As it is intended," said one respectable organ, " to assure the lives of the poorer classes * Hansard, vol. clxxv. p. 479. OPPOSITION TO THE MEASURES. 351 cMefly, all payers of poor-rates and officers of the Poor Law Unions would have a bias, to say the least, in getting those persons assured who would otherwise be likely to leave their families a burden upon the parochial funds." " It cannot be denied that a few isolated instances of bad faith have occurred among insurance companies, yet as a class there is none to excel them for high and honourable dealing, and there is no pretence for interfering with their operations or invading their privileges. Why should not Government open a drapery or a dry -goods store?" This latter effusion, which appeared in a letter to the Times, was prominently printed, and headed, "A New Instance of Proposed Paternal Legislation."* A more organized opposition soon, however, showed its face. The actuaries of some of the Insurance Companies met and discussed the measure, and came to the conclusion that, as it might only be the thin end of the wedge, the measure ought to be opposed. The smaller Insurance Companies eagerly fell in with this conclusion. During March petitions were got up in great numbers from Insurance Companies and Benefit Societies, and when they were presented to the House of Commons several voices were raised in support of their prayer. On the 4th of March, Mr. Gladstone moved the committal of the bill. Mr. Turner, Mr. Powell, Mr. T. Hankey, Sir Minto Farquhar, and several other members, protested against * " Seriously speaking," said another writer, who signed, " One well behind the Scenes," in the Times of 18th February, and had been indulging in all kinds of pleasantry on the impossibility of the Government undertaking Life Insurance, "if Mr. Gladstone must go into business, he had better take an easy business first, and have Government ginshops at one comer of the street, and Government tobacco-shops at the other, and leave the delicate matters of Assurance for the present." 352 GOVERNMENT ANNUITIES AND INSURANCE. going on with the bill without an opportunity for full dis- cussion, and most of them expressing great dissatisfaction with the Government proposals relating to Life Insurance, the Chancellor endeavoured to separate the bill into two parts, to pass that having reference to Annuities, and to defer the consideration of the clauses relating to Insurances to a subsequent period. The debate was adjourned. Three days afterwards Mr. Gladstone made a long and elaborate speech in defence of his proposals, and addressed himself with great earnestness and power to the task of disabusing the public mind of the many erroneous im- pressions which within a very short time had taken possession of it. The history of his proposals was a short and simple one. In the autumn of the previous year the Registrar of Friendly Societies, in his Eeport for 1862, had recorded an unusual number of very gross abuses and violations of trust on the part of those Societies. The Eeport was in fact full of a multitude of complaints from persons in all parts of the country, who called for redress. So important had the facts been regarded that at least two important journals* had published several articles calling attention to the scandalous condition of these iiistitutions. It had been suggested to him (Mr. Gladstone) that the subject of small life assurances, having already received in principle the sanction of Parlia- ment, ought, under these circumstances, and the fact of an excellent machinery in connexion with the Post Office being ready for use, to be again considered by the Government. He agreed with this view of the case, and 'had now proposed to take action upon it. It is almost impossible to give an account in detail of the speech which followed ; next to • ' 'J'lie Tinux ;i!i(l tlic Daily Tdr.jraph. MR. GLADSTONE DEFENDS HIS PLAN. o53 the Budget speech, it was the longest which Mr. Gladstone made in the session of 1864. We can, however, and ought to describe its principal points. J\Ir. Gladstone observed that no one considered Savings Banks, Annuities, or Insurances to be, abstractedly, matters desirable for the Government to deal with. But the Post Office Savings Banks which that House had legalized, though interfering distinctly with other interests, had produced great and lasting results ; so likewise had the Factory Acts, though they likewise had greatly inter- fered with the liberty of private action. This bill, however, prohibited nothing whatever. " I do not deny that it is Govern- ment interference, or that it requires justification or apology; but I do deny that we are to be frightened and terrified by clamours respecting centralization, or respecting undue assump- tions of power by the Executive." " All that is requisite in such a case is to show that what the Government proposes it can do safely, and likewise that what it proposes it can do justly." Well, this bill, which was represented as entirely novel in prin- ciple, simply offered to such members of the community as chose to avail themselves thereof, certain facilities for self-help. It had not grown out of any consideration of the case of Assur- ance Societies, but from a consideration of Friendly Societies, and of the wholesale deception, fraud, and swindling perpetrated upon a helpless and defenceless portion of the community. Mr. Gladstone then referred to some deputations of the largest Friendly Societies that had waited upon him, and begged him not to interfere " with private trade and private enterprise ;" and answered that these very societies were virtually and substantially subsidized by the Government. After show- ing that they were exempted from different duties, and received, like Savings Banks, more interest from the money invested A A 3o4 GOVEKNMENT ANNUITIES AND INSURANCE. with Government than the money realized, Mr. Gladstone held that nothing could be more plain than that Parlia- ment was justified in looking to their circumstances. The country was overrun with them, and it was necessary to inquire if they were safe. Instead of finding them safe, he found them promising to pay amounts of interest which it was impossible to pay under fair and honest management. Such were the reasons which had induced him to interfere. He had, however, chosen a very mild form of intervention, and, he thought, a proper time for the remedy. The remedy, indeed, in this case was precisely analogous to that adopted in the case of the Post Office Banks. "In the case of the Post Office Savings Banks," said the right hon. gen- tleman, "we had to deal with Loan Societies oftering the most attractive terms to the public, promising them a rate of interest which could not possibly be paid under anj' sound and honest management, and then ending in disappoint- ment or ruin. We did not attempt the foolish task of prescribing laws by which, all Loan Societies should be regulated, and under which alone the poorer classes of the community should be permitted to lend their money. That was utterly impossible. You could not possibly defend the poor man against the abuses and dangers into which he might choose to run head fore- most with his eyes open ; but what you did was this : — you said, ' It is but just to them, and it is expedient and politic in the highest sense, in discharge of the most sacred duty of the Legislature, that we should give to the poor man, to the owner of small savings, the advantage of a scheme which will possess no meretricious attractions, which will not pi-oniise a high rate of interest — on the contrary, the rate will be a low one — but which will offer an absolutely certain security.' That is precisely the basis of the scheme now before the House." After describing the success of the Postal Banks, and speak- ing of those who had taken the principal part in carrying the measure into practical operation, and arguing from their suc- cess, their ability, and their judgment, that the same persons were entitled to the confidence of Parliament, Mr. Gladstone went on to rebut many of the objections and arguments whicli had been advanced against the j'lan. He showed that tlie MR. GLADSTONE DEFENDS HIS PLAN. 355 Post Office could, equally with the great majority of existing Insurance Societies, attend to the selection of good lives; that the attitude of the leading Societies in regard to his proposals was either that of neutrality or favour. He said that the smaller Societies had protested loud enough ; but, he asked, what cause had they to be afraid of Government competition? " We cannot possibly offer such terms as they can ; on the contrary, we must exact such conditions as few private Societies ask." He offered, how^ever, perfect security ; and if that was a thing valued by the people, there was no reason why it should be withheld. Besides, however, this perfect security, Mv. Gladstone pointed to two other considerable ad- vantages which the Government would offer, viz., more favour- able terms on the dropping in of policies, and facilities for the migratory portion of the "population, similar to those we have seen depositors possess in the case of the Post Office Banks. After speaking of the steps which would have to be taken to guard the Government against loss, and to make the mea- sure entirely self-supporting ; after referring to what he called the "fugitive character" of many insui'ance companies, and eloquently denouncing their proceedings; to the failure of numerous Friendly Societies,* and the ruin and disappoint- ment entailed on thousands thereby, Mr. Gladstone brought his long and remarkable speech to a conclusion by summing up as follows :t — " I have endeavoured to prove that Parliament hy legislation is seriously compromised and responsible for the present state of things, and is bound to do what it believes to be best to mitigate the evils of that state of things. I have endeavoured to show that the plan which I propose, if it does compete * Between 8,000 and 9,000 of these Societies have failed since the passing of the Friendly Societies Act. It has been calculated that about 100 Societies fail in each year. t Hansarrl, vol. (dxxii. p. ISSl. A A 2 u 3')6 GOVERNMENT ANNUITIES AND INSUEANCE. with sound institutions, must so compete with them at a disadvantage from the essential conditions under which it is right and proper we must work. 1 have endeavoured to show that the wide fieUi of the labouring classes is not occupied by sound institutions — nay, that it is not fully occupied even by sound and unsound institutions, such is the enormous breadth of the subject. I have shown, I think, that the present condition of many of these Friendly Societies — indeed, I might go further, and, speaking generally, might say that the present condition of these Societies is more or less unsatisfactory. Some of them we cannot call merely unsatisfactory, but must term them either rotten or fraudulent. It is impossible for the State to assume the direction and regulation of these Societies so as to secure in the management of their atiairs a safe method of assurance ; and what we propose is, I believe, the most prudent, the safest, and the most satisfactory mode of proceeding that can be adopted. I make my appeal not to any one class, or to any party. I forget that I am a member of the Government, except so far as regards my responsibility as such. I recollect the sacred trust we have in hand, and I entreat honourable members to keep in view the serious nature of that trust, the importance of the object, and the consequences involved; and I am certain they will not be prevented by any sentiment of political or party feeling, or of hostility to the Government, from gi\'ing their careful consideration to this question, and from determining in their own minds and hearts how the British l.egislature can best acquit itself of this important part of its obligations to the mass of the British people." Mr. Sheridan, after replying vehemently to what he called a personal attack on himself on the part of the Chancellor of the Exchequer when dealing with unsonnd societies, disputed the need for the measure no less than the principle upon which it was founded. As the spokesman of Insurance Offices and Friendly Societies, Mr. Sheridan further contended that the Post Office would never be able to manage all the details of the business, and that, even if it did, the Government must eventually be losers. " Tliey might shut their eyes for a time," said the member for Dudley, " but Government would ulti- mately have to come to that House Avith shame, and with something like humiliation, to confess that their experiment in commerce had failed, and that the result had been to saddle the shareholders with a loss — those shareholders being the already overburdened tnxpayers of the country." THE DEBATE ON THE BILL. 357 Lord Stanley avowed his approval of the principles of the bill. He thought it a great experiment, but an experiment which might very possibly result in a reduction of pauperism. He urged the fullest discussion ; said it would do the bill no harm, but might on the contrary tend to perfect its provisions. The speech of Mr. Gladstone too, he thought, was a reason why the matter should not be hurried. Mr. Gladstone had made statements which, however true they might be — " and I am afraid that there is a good deal of truth in them — I wish I did not think so," — might require to be answered, and to give an opportunity to answer them would only be fair play. After pointing out one or two defects in the provisions, Lord Stanley promised his valuable aid by saying, that he should be prepared to go into Committee on the bill with a very sincere hope that it would pass, and that they might find it, or make it, a workable scheme. Mr. Hibhert and Mr. Rochick both warned the House against suffering a " Constitutional Govern- ment" to be converted into what was termed a " Paternal Government," In a characteristic speech, the latter gentle- man held that whatever concerned the individual was best left to be done by the individual himself ; that the Govern- ment was sure to fail, as it had failed before, in interfering in matters of this kind ; and that the effect of such measures would be to make the people a set of helpless imbeciles totally incapable of attending to their own interests. Mr. Ncivdegatc and Mr. W. E. Forster approved the measure, but urged full consideration of it. Mr. Bovill spoke very strongly in favour. He beKeved, from the facts which had come within his own knowledge and had been elicited in courts of law, that Mr. Gladstone had rather understated than overstated the delin- quencies of Fyiendly Societies and Insurances Companies. 358 GOVERNMENT ANNUITIES AND INSUEANCE. One of the effects of the Chancellor's speech, he thought, would be that a cloud of error and prejudice which had been raised against the bill would be dispelled. On the other hand, Sir Minto Farquhar, Mr. Ayrton, IVIr. Urquhart, Mr. Henley, Mr. Baines and othei*s, either expressed strong objections to the bill as a whole, or else took exceptions to some of its provisions. The debate was then adjourned. During the interval, and when the bill was under discussion in the House, a great meeting of the working classes was called in London, and held in Exeter Hall, Mr. Ayrton pre- siding. The object of the gathering was to petition against the measure ; but independent working men — by which is meant those who had no interested motives in opposing the scheme — mustered so strongly on the other side, that the Chairman could not decide on which side the majority lay. There were other public meetings held, some in favour, others in opposition ; and although hundreds of petitions were pre- sented from members of Friendly Societies, most of which were got up on one form, there were many others of a far more important character emanating from Corporations and Boards of Guardians, who expressed a hope that the House would not withhold so great a boon to the working classes. On the 17th of March, Sir Minto Farquhar, in a long speech, moved that the bill should be referred to a Select Committee. Mr. Horsfall seconded the motion. Both members replied to Mr. Gladstone's attack on Friendly Societies, though witli little effect. Several members warmly supported Mr. Glad- stone, and thought no cause had been shown for delay. Mr. Estcourt, while approving the principles of the measure, saw great difficulties about it, and thought it ought to be referred to a Committee. Mr. Goschcii, in an able speech, which showed A SELECT COMMITTEE IS PROPOSED. 859 that he had mastered the subject in all its bearings, answered the objections which had been raised to the bill, and said that though he represented in that House more insurance managers and directors than any other member, he was not afraid to say that the opposition to the bill was entirely owing to the efforts of those who fancied it would deal a blow at their private interests. He was convinced of the wisdom and policy of the measure, which was well worthy of the character of the right honourable gentleman who had proposed it, and which would without doubt leave a mark on the history of the session. The debate was again adjourned. A month afterwards the debate was resumed by Mr. Ayrtoii in a very long speech, during which he attacked the Post Office Savings Bank system ; stated that just when they were most prosperous, 1859 and 1860, Government had brought out their scheme, which was working and would continue to work with telKng effect upon the old banks. So with the pre- sent proposals ; they would interfere with safe private agencies. "The Government would pursue a much better plan," con- tinued Mr. Ayrton, " if they were to encourage the establish- ment of associations among the people themselves ; for it was through the exercise of local administration that a nation became most fitted for the enjoyment of political rights." In place of this, " they proposed to place a stipendiary of the Crown in every parish' and hamlet to institute an examination into the private affairs of individuals." Mr. Hubbard thought the proposed measure one which they ought and might very well entertain. He looked upon it simply as an extension of the principle of the Post Office Savings Banks, which had now received the sanction of the entire country. Mr. Gladstone then replied. After referring to some of the 360 . GOVEENMENT ANNUITIES AND INSUKANCE. objections that had been made to the measure itself, he said he would not object to submit it to a Select Committee ; but he could not consent to refer the whole subject-matter to a Com- mittee, as that would indefinitely postpone legislation on it. He believed that the public were growing more and more in favour of the plan, and that this feeling would be increased as its objects and provisions became better understood. He also stated that, during his long public life, he himself had never received so many letters as he had upon this measure from all classes of the community, and all expressing approval and gratitude for it. A few days afterwards a Committee was appointed, to consist of Mr. Gladstone, Mr. S. Estcourt, Mr. M. Gibson, Mr. Henley, Sir M. Farquhar, Sir S. Northcote, Mr. Horsfall, Mr. Goschen, Mr. Charles Turner, Mr. H. Herbert, Mr. Hubbard, Mr. Sheridan, Mr. Ayrton, Mr. Hodgkinson, and Mr. Paget.* After an ineffectual attempt to enlarge the scope of the inquiry, which partook of the nature almost of a party struggle, — 104 members voting with Sir M. Farquhar, and 127 with the Government — the Committee commenced its sittings. The bill as amended by the Committee was passed on the 20th of June. On this occasion many of its members described the benefit whicli the bill had received from the inquiry, and none now complained of the limited nature of that inquiry. It originally consisted of three clauses ; it came out with seventeen, sixteen of which were new. It provided that no policy of Life Assurance should be granted for more than 1001. ; and^ not to interfere unnecessarily with Friendly Societies, that none should be granted for less than 20/. Ifr. Estcourt, espe- cially, warmly espoused tlie measure. " No one now more desired to see it passed than he did. If a master or employer Jidusard, vol. clxxiv. p. 147-t. THE BILL BECOMES LAW. 361 wished to make a provision by way of annuity for a faithful servant in his old age, he could do so with perfect security under the bill." He also thought, " that if the working classes of this country did not derive great advantage from the mea- sure, it would be their own fault." Sir M. Farquhar was equally hearty in his praise of the scheme, and speaking of Mr. Gladstone said, " The country had every reason to thank him." Mr. Gladstone observed, that it was a matter of great satisfaction to him that as the bill entered the House in peace and quietness, so it was likely to quit it with general expres- sions of good will. The bill was carried through the Lords under the charge of Lord Stanley of Alderley, and, passing through its several stages without discussion, receiA^ed the Eoyal Assent July 14, 1864, and arrangements were ordered to be made to carry its various clauses into practical operation. During the long recess the Tables were prepared under the eye of the Commissioners for the Eeduction of the National Debt ; and, working in harmony with the Commissioners and with a common purpose, the Post OfEice authorities at the same time arranged the Eegulatious under which, and the organiza- tion by means of which, the whole of the plans should be carried out. The Eegulations themselves were, we understand, arranged under the immediate superintendence of Mr. Scuda- more, one of the two gentlemen who organized the Post Office Banks ; the machinery chosen for the purpose was that of the Keceiver and Accountant-General's department. At the commencement of the session of 1865 both the Tables and the Eegulations were laid before Parliament and received the proper sanction. The Tables, like all ordinary Insurance Tables, show the various kinds of benefit which Government 362 GOVERNMEMT ANNUITIES AND INSUKANCE. can now offer to the community, and the price at which these benefits may be purchased. The Eegulations, on tlie other hand, describe the means to be used to obtain these benefits, and give in full the conditions under which any kind of purchase may be made.* The principal features of the new measures taken together may be stated, simply, to consist in a person now being able to insure his life for any sum between 201 and 100/. ; that he does this on Government security; that he may do it without buying an annuity ; tliat he may pay his premiums of insurance in almost any amount, and at almost any period that will best suit his convenience ; and lastly, that, attended with the ^same facilities and advantages which only an institution like the Post Office can offer, a person may now purchase a Government Annuity, either immediate or deferred, of not more than 50/. a year, either with or without the proviso of " money being returnable " in the event of death before the annuity falls clue. It only remains for us to seek to draw the attention of our readers to the special inducements which the Government now holds out to the practice of a wise economy and frugality, prefacing our account with the remark that a careful study of the " Eegulations " from which we glean it, will well repay any time or thought which the masters of workmen, as well as working men themselves, may give to them. And hrst as to Insurances. In the course of a short period, * Both Tables and Regulations may be obtained quite easily at any Post Office opened for the transaction of this business, and an Abstract of the Regulations, entitled Plain Rules for the guidance of Persons desiring to Insure their Lives or to purchase Government Annuities, has been and still is distributed widely, and may be had gratis from any postmaster or letter receiver. FEATURES OF THE NEW MEASURES. 363 — for the offices for the transaction of both kinds of business are being opened rapidly, — every one of the three thousand and odd money-order offices of the United Kingdom, em- bracing, as is well known, every large village as well as the numerous receiving offices of our large towns, will be formed into an Insurance Agency. Wlien this is the case, — and to a great extent it is so already, — any person, whether male or female, and hoth if man and wife, of not less than sixteen years of age and not more than sixty, will be able to propose for an insurance on his or her life in a sum of not less than 201. and not more than 100/. The steps which a person pro- posing to insure must take in those places already on the list, and the steps which must universally be taken when the whole of the agencies are arranged, may be easily compre- hended, and need but few words. If he wants to insure on the security of Government, he must go to the nearest Post Office and apply for the proper printed form. With this form, to which is attached every necessary instruction for his guidance, almost all his trouble begins and ends. It is true that tlie questions pro]JOunded are many, and that they are most minute, and may be thought by the poorer classes who are unused to this sort of thing unnecessarily precise and tantalizing. Any one, however, familiar with the routine of the ordinary Insurance Societies, will not fail to see that the Government are scarcely more rigid than they are, and that, if there are more questions to be answered, it is simply because of the varied modes and unique facilities now first offered to the choice of the insurer. The insurer must fill up this form, and must furllier produce certificates of age or baptism, and furnish the names and addresses of two householders who know him and can speak as to his identity. "What follows. 364 GOVERNMENT ANNUITIES AND INSURANCE. and indeed a great part of the foregoing, is simply the course followed by all well-managed Insurance Offices in the kingdom. The proposal is forwarded to London, the referees are corre- sponded with, and, if all seems right and straightforward, the person seeking an insurance policy is desired to present himself before the appointed medical referee in order to go through the indispensable examination. The doctor examines the proposer, questions him to the extent he thinks proper, takes down his answers, and then gets the person to sign his name to what may be called his deposition. If nothing unsatisfactory" occurs, the policy is made out in the way the proposer originally desired. The contract being duly drawn up, the insurer may pay his recurring premiums at any of the Offices which have been opened, or which may be opened, as shall at any time be most convenient to him. As in the case of Savings Bank depositors, the life insurer will be furnished with a "Premium Eeceipt-book," and whenever he makes a payment he must produce this book, when the clerk or postmaster will enter the amount, sign his name in the way of receipt for the pay- ment, and stamp the date of the transaction and the place of payment with the ordinary official dated stamp. With regard to the time at which the insured must pay his pre- miums as agreed upon, whether yearly, quarterly, monthly, or fortnightly, the arrangements are necessarily strict ; but every means will be, or at least ought to be taken, to make him understand his agreement. If he should fail, say through forgetfulness, to make his payment, he will not be hardly dealt with ; for, on an application that the contract may be renewed and the production of evidence of good health, the Postmaster-General will renew the contract, only fining the now TO EFFECT AX INSURANCE. 1^05 j)erson in the sum of four shillings if he is insured for 60/., and eight shillings if he is insured for more than that sum. Once more : should the insured wish to surrender his policy, he will be allowed to do so after the expiration of five years from the date of it, and will receive at least one-third of all the sums he may have paid during the time he has held it. The authorities have not as yet, we believe, stated exactly how much they will be able to offer for surrender policies ; but this is scarcely a matter which can be considered pressing, as no policy will acquire a surrender value till 1870. Then there are the hinds of jjayment under which a person may now purchase the benefits of Life Insurance through the medium of the Post Office. And certainly the most impor- tant arrangement, associated as it is with several novel features, is that of paying down the premium in one sum. Not that this need be the wdiole transaction of a proposed insurer. He may make his policy, if we may employ such a term, cumulative. Thus, if a person doubts whether he will be able to pay regular premiums for a number of years, he may perhaps be able to effect a small insurance, say of the lowest sum allowable, 20/., by the payment of a single premium. He may afterwards find himself able at subsequent periods to effect another small insurance, — and this he will be allowed to do, even if it only be to the extent of five pounds, — and may thus, whenever he has the money to spare, at regular or irregular intervals, go on increasing the original amount in transactions which, while complete in themselves, continually augment the sum to be received at death.* We are not * Thus, at the age of thirty, a person with 8/. 145. 9r/. to spare may buy an assurance of 20Z. to be paid at death. Two or three years after- wards, and afti'r a ]irosperous interval, he may be disposed to inereasc tliat 366 GOVERNMENT ANNUITIES AND INSURANCE. informed in Plain Rules whether the insurer will in each case have to pass a medical examination, or produce certifi- cates of health ; but there can scarcely be a doubt that he will be required to do one or the other. The proof of age, however, and other particulars which the insurer furnished in the first instance, will doubtless suffice for all subsequent negotiations. The principal objection to insurance effected by a single payment, at any rate among the poorer classes, is apparent. It is not that they can make better use of their money ; as a security against an early death or reduced circumstances no better investment could be found for a working man who is in possession of a sufficient sum with no pressing need for it. The real difficulty is the one of keeping his savings until they amount to a sum sufficient for any object of this kind. Here, however, the institution of Post Office Savings Banks may be of service ; and this has not been lost sight of by the authorities, who offer them as a medium for the collection and keeping of such fugitive sums as may be most easily spared with a view to taking a Life Insurance premium. Thus, all a workman has to do is to put his savings into the Post Office Banks in such amounts and at such times as will best suit him ; and when he has saved a sufficient sum for the purpose, the Postmaster-General will direct that the transfer of the amount shall be made from the Bank to the Insurance Office .•luiount to 25/., 40/., or 50/. Suppose the latter sum, and lie has attained the age of thirty-three, he pays down another sum of 13/. 13s. lOd, and then finds himself insured by these two single payments in the sum of 50/. when- ever death may occur. Of course he may stop here ; but he may also, if he thinks fit, go on adding, at such intervals and' in such amounts as inay best suit his convenience, to his original policj-, till at last it ac(|iiires the value of 100/. now TO EFFECT AN INSURANCE. 3G7 without the necessity of the depositor seeing the money. Of the general plan of paying the premium in one sum we can- not speak too higlily. Those whose wages or salaries are not fixed and regular, or those who are liable to be thrown out of work — and few are not — could not do better than employ their savings in securing such a provision ; and the younger the better, seeing how young and old are alike taken in the grip of the Destroyer. Not the least of the advantages following from this kind of insurance are the absolute freedom from all risk of lapses, from either carelessness or more serious causes, and the fact that the policies on this principle will have the highest surrender value. Should the person wishing to insure not like, or liking not be able, to take out a policy after this fashion, he may choose one of several other methods. If he thinks he can more conveniently pay a small premium every year, he is at liberty to do this in different ways. If at thirty years of age he will pay a pound a year, he may secure for his friends forty- three pounds at his death ; if he prefers to pay two sliillings a month, he will secure forty-six pounds ; and for an annual payment of two pounds six and sevenpence, he may secure payment of 100/. to his nearest relatives, immediately on 'proof of death. Again, if a person thinks, as many do think, that his payments should cease at a certain age, he may insure on that principle. Commencing at thirty years of age, and paying two pounds thirteen and tenpence a year till he is sixty, he may secure 100/. ; by paying two shillings a month, between the ages of thirty and sixty, he may effect an in- surance of forty pounds at death. It will be understood that these are only a few specimens of the working of these Tables, given more especially to show the characteristic features of 368 GOVERNMENT ANNUITIES AND INSURANCE, tlie plan. By consulting the Tables themselves, any person may plainly see how it will affect him to insure by any of the above methods ; and he may calculate his payments either at the times we have given, or at other times, such as half-yearly, quarterly, fortnightly, or weekly, with great nicety. We will only refer at any length to another very im- portant provision made for the carrying out of this useful and important public measure. It has to do, as indeed almost all the provisions have, to a great extent, with the w^ants and necessities of working men, especially such as must pay their premiums by small and frequent instalments. Seeing that working men are proverbially slow to look the distant future in the face, we urge, in the strongest terms, the claims of the provision in question on the attention and study of all large employers of labour. In no way could masters better fulfil the heavy moral responsibilities under which they lie to the less educated portions of society whose energies they employ, than by co-operating with them in the way of advice and assistance, in such a plan as that which remains to be described. The arrangement in question has doubtless been suggested by a scheme which, for several years, has been in full and excellent working order in the Tost Office itself We think it was in 1859 that Mr. Scudamore of the Post Office devised a plan, which Avas np[»roved by the then Postmaster-General, by means of wliich and the concurrence of a large number of first-class Insurance Companies a considerable number of Post Office employes were enabled to make suitable provision for their families. In connexion with this plan, substantial assistance was given, In those who took tJiis rational and npcossarv step, HOW MASTEES OF WORKMEX COULD HELP. 369 out of the Void j\Ioney-order Account. Under the arrange- ments then made, the Insurance Companies give the required policies to any officer of the Post Office, without any direct or preliminary payment, looking to the Post Office authorities entirely for the collection of the premiums as they become due; the. latter, on their part, deducting the payments at such times as are agreed upon from the regular salaiy or wages of the assured persons. Thousands of Post Office officials, from the highest to the lowest grades, have insured their lives on this principle ; they are not only assisted to do so, but secured from all risk of default, while the de- ductions are so small as to be scarcely perceptible.* The success of the plan has led to its partial adoption by the pro^metors of large private mercantile establishments, where it works well; and this again has doubtless led to the extension of the plan, by means of the Act and the machinery we are considering. It is now perfectly easy for any of the other Government departments, for railway companies, merchants, manufacturers^ and other large employers of labour, to make arrangements under the 32d clause of the Regulations, to do for their workmen (and we are at a loss to understand why this has not been done before) what the Post Office authorities have done for their servants. The clause to which we have alluded provides, that if boards of management or masters of workmen will undertake to collect the sums by means of deductions from the wages of their officers or servants, with a view to paying the premiums over to the officers of the Postmaster-General, then the latter * Many postmen and rural lettpr-carriers are insurod in this way for a suni of ]on/. B B 370 GOVERNMENT ANNUITIES AND INSURANCE. shall, " if he think fit, make arrangements with the said employers for such purpose, and shall constitute the de- partments, offices, or places of business of such employers, offices for the receipt of proposals, and for the receipt of premiums and instalments ; and shall pay to such employers such remuneration for the work done by them, or their officers or servants, as shall be agreed upon between him and them." Surely, with all such facilities, and with such inducements to the workman to make provision for those who are nearest and dearest to him, — this provision to be payable at once, on the security of the nation, when he is no longer able to contribute to their support, — little persuasion should be needed to make him do that which is now one of the first duties of a man who has a wife or family dependent upon his exertions. It is only too true that workmen and the less educated portions of the lower middle classes may be blinded and cajoled into believing that those institutions will serve their interests best which, depending upon all kinds of meretricious attractions, promise immediate benefits for little payment, but only end in disappointing, if not in swindling them. It seems to us, however, that those who, like the majority of large employers, have both the capacity and the opportunity for directing these classes aright, are not only warranted, but, in all fair- ness, are expected to attempt to do so. We must now speak of the Eegulations for the purchase of Government Annuities. It is well to make provision for our famihes after we have left them ; it is no less wise to make some provision for old age, or for the misfortunes of life. Many a working man, taking the expression in its widest significance, sees little before him in the future but HOW TO PURCHASE AN ANNUITY. 371 a life of hard, unyielding work. There is a time, however, after which bodily strength must rapidly fail, even supposing that nothing has occurred during his years of toil to break him down prematurely : many a hard worker lives on long after the grasshopper has become a burden, and is little cared for, it may be, if he has never cared for himself. Let philosophers inveigh as they will on the selfishness of such conduct, that man has acted wisely who, under some such circumstances, has taken care to relieve himself of thought and much anxiety by having something in the shape of an Annuity to look forward to in his declining years. " Most men, as old age comes on, find themselves every year less and less able to procure by their labour those comforts which every year become more and more necessary to them. A man, by paying small sums out of his earnings while he is strong and active and in full work, may purchase an Annuity to commence as old age comes on him, and which will take the place of his salary or wages when he can no longer earn a livelihood." In these words the Postmaster- General introduces his new Annuities' scheme, and offers to sell these Annuities through his department to any one who will comj)ly with the Regulations. The commencement of an Annuity transaction must be exactly similar to that described in connexion with an Insurance. After obtaining a form of application, the person must reply to the cpiestions which it is deemed necessary to ask, and then return the paper to the Post Office for transmission to the Postmaster - General. For obvious reasons, he will not be required to say anything about his health, nor to pass any medical examination. The Government must take care, in insuring a person, that B B 2 \ 372 GOVERNMENT ANNUITIES AND INSURANCE. he is in good health ; on buying an Annuity, the person, himself should take care that he is not in bad health, or otherwise he might rush into a bad bargain. Almost the only preliminaries gone through in the case of Annuities are, a satisfactory proof of age, and answers necessary to identification. If the authorities in London are satisfied with the answers and the references given, a policy or contract is entered into by the Post Ofl&ce on behalf of the Commissioners of the National Debt, setting forth, that, in consideration of certain payments made at certain periods, the payment of a certain sum is guaranteed to him as an Annuity on the security of Government. As in the case of Insurances, the person seeking to purchase an Annuity has the choice of several kinds of annuity, and of annuities of any amount up to 50/. a year. He may purchase an Immediate Annuity, though in this case the purchase-money must always be paid in one sum. Thus, if he be twenty years of age and will pay down the sum of 198/. 3s. M., he can begin to receive an Annuity of ten pounds a year for life, however long that life may extend. Women, we must add, seeing that they are usually longer livers than men, must pay more than men. He may pur- chase also a Deferred Annuity ; that is, an annuity payable after a given term of years from the commencement of the purchase. This Deferred Annuity may either be purchased in one sum, or by a yearly payment over that given term. If the former, it may be for any amount between one pound and fifty pounds per annvim, to begin at a certain period ; in the latter case, the amount may range between four pounds and fifty pounds, to begin immediately after he has com- pleted his payments. Deferred Annuities may also be pur- HOW TO PUECHASE AN ANNUITY. S73 chased gradually, or on the same cumulative principle spoken of in connexion with Assurances, and just according as a person finds himself able to spare the money ; or they may be purchased by annual payments in the same manner, be- ginning on a small annuity, and increasing it from time to time as he finds himself able to increase his annual payments. Ouce more, by making payments half-yearly, quarterly, monthly, fortnightly, or weekly, during a certain number of years, he may purchase a monthly allowance of any amount from four shillings to foiu- pounds a month, immediately after that term of years. Tlie first Tables which were ready in time for the operations for the purchase of Deferred Annuities were those known as the " Non-returnable Tables," under which money paid was not returnable in the CA^nt of premature death, but " altogether sunk and lost." Soon afterwards, however, the " Eeturnable Tables," which had been under preparation from the first, were brought out. Now, therefore, if the annuitant chooses, he may purchase a Deferred Annuity with the proviso, that if death occurs before he should have reaped any benefit all the premiums shall be returned to his representatives ; and also, that, at any time during his life before his Annuity is due, he may have his payments returned to him, subject of course to some deductions should he choose to close his account. In all the above cases it is difficult to explain the method of working without giving examples ; but the interested reader may receive, as he will doubtless seek, every inform- ation from the popular Abstract which will be presented to him free, on application, and from the Official Tables which may be seen at anv Post Office. It onlv remains 374 GOVERNMENT ANNUITIES AND INSURANCE. to add, as regards the payment of Annuities or Monthly Allowances, that they will be made half-yearly or monthly, as the case may be, at any of the offices opened for this business, i.e. eventually every Money Order Office ; and that if a person be prevented by age, infirmity, or illness, from going to a Post Office to receive this allowance, it will be taken to him by an officer of the department. As the operations of the Govei'nment Insurance and Annuity Office have only extended over a few months, and as the scheme is only in process of introduction into many localities, it is manifestly impossible to get exact information respecting the amount of business done, or tell how far the prediction, freely hazarded soon after the measure became law, as to its importance and utility, is likely to be realized. In the Eeport of the Post Office recently issued, the Postmaster - General states that this information will be supplied, in proper course, in his Eeport for 1865. Meanwhile, the following facts, which have been ascertained by the examination of some hundreds of pro- posals, will probably interest some of our readers. The average age of the persons who make Life Insurance proposals to the Government is thirty-five years ; the sum for which they propose to insure is, on the average, 76/. Out of the whole number of persons, — 40 per cent, propose to pay their premiums annually. 25 „ „ ., „ monthly. 22 „ „ „ „ quarterly. 6 „ „ „ „ half-yearly. 6 „ „ „ „ weekly. One proposer in each hundred proposes to pay his pre- mium in one sum ; and twenty-three per cent, wish tlie PROGEESS OF THE NEW MEASURES. 375 payment of their premiums to cease on their attaining the age of sixty. The proposals come from all classes of the community; thus — per cent. Clerks in public and private ofhces contribute 32 Porters, messengers, letter-carriers, and labourers 22 Mechanics, artisans, and skilled labourers . . 18 Tradesmen 17 Clergymen, and professional men generally . . 6 Women 6 Of those who make proposals for the purchase of Annuities, 56 per cent, are men, and 44 per cent, are women ; and the amount of Annuity which they propose to purchase is, on the average, 26/. The average age of the proposers for the purchase of Annuities is fifty-eight years.* A longer time will doubtless be necessary to develop this further measure into the same successful operation which has followed the adoption of the scheme out of which it sprang. It is more elaborate than the Post Office Bank scheme ; it will appeal, as has been properly said, to a higher class of men, to a higher quality of prudence. Time, perhaps, more than anything else, must mature it into success. It rests entirely with the public, — especially with employers of labour, and the more intelligent portions of the working and small tradesmen class, — whether or not * It will be remembered that under the Act 16 and 17 Vict. c. 4o, a person could only insure his life on condition that he purchased an annuity. It is not so generally known that in the course of eleven years not one pro- posal for this twofold contract was ever received. It is not a little remarkable that now, this arrangement being no longer compulsory, one in every hundred proposers for Life Insurance also proposes for the purchase of an Annuity. 376 GOVERNMENT ANNUITIES AND INSURANCE. the unique and compreheusive facilities which we have been engaged in discussing shall have been framed and offered in vain, or whether or not a new era has dawned on those who are desirous of making small, sure, and safe investments for their own old age, or provision for those they may leave behind. We wait, as it were pen in hand, to chronicle the result. Mean- while, those who have the interests of the humbler and more defenceless portions of the community at heart could not do better than endeavour, at any rate, to spread a knowledge of a scheme which, while benefiting the people individually, must also, by giving to each a stake and an interest in the prosperity of the country, tend to increase the stability of existing institutions. In justice to Mr. Gladstone and the Legislature, it ought to be widely known and remembered that these measures have not been originated to be a source of profit to the revenue of tlie country ; that, however successful they may eventually be, they will bring no gain to the National Exchequer. The Tables of working, and the mode of working, have been prepared with great care ; the former by eminent actuaries, and the latter by equally eminent official men : and although some of this care and attention have had for their object the security of the Government against loss, the premiums are intended to cover the lia- bilities and working expenses, and no more. If, therefore, those classes who can do it will not now secure themselves against misfortune and disaster, it is plainly no one's fault but their own, PRUDENCE AND ECONOMY. 377 CHAPTER XT. CONCLUDING CHAPTER. "And when I shall go to my account, and the great Questioner whose judgments err not, shall say to me, ' What didst thou with the lent talent ? ' I can truly answer, ' Lord, it is here ; and with it all that I could add to it — doing my best to make little much. ' " — Ebenezer Elliott. The above words of the brave Corn Law Ehymer refer of course to far higher duties than any with which we have dealt in this volume. That application may be made of them even to our present subject is nevertheless clear, and we leave the thoughtful reader to make it. Eeal economy and fru- gality are virtues, and as such are inculcated in the Christian code ; neglect of them is condemned both by the moral and the religious code. Christ expressed the very spirit of economy, care of little things, a prudent thrift, and avoidance of all waste, when after miraculously feeding the multitude in the desert He instructed His disciples to " gather up the fragments that remain, that nothing be lost : " and it is at least noteworthy, that this injunction immediately fol- lowed another, wherein He warned the same men against the greed of life, telling them that a man's riches did not consist in the abundance of his possessions. 378 CONCLUDING CHAPTER. This may be perhaps a very fitting opportunity to say that a great deal depends upon the motive and the object for which such virtues are cultivated ; that it is very possible to attach far too great an importance to mere habits of saving : the motive for saving may at times be vicious, and the pur- pose for which and the manner how the hoards once scraped together may be applied, more vicious still. This is so pal- pable that we need not dwell upon the subject. Not less so is the wise medium course to be followed. The difference between those who cultivate and those who neglect frugal and economical habits may be expressed simply in the former having bread enough and to spare, and the latter having bread for to-day — and not always that — but none for to- morrow. It is by the capacity of looking forward in the present moment to the possibilities of to-morrow that the civilized man is distinguished from the savage ; it is by the readiness with which provision is made for possible emergen- cies that the wise man is distinguished from the fool. Eeal economy, aided by prudence, is a virtue. Cicero says that " the best source of wealth is economy ;" but it is also the best source of comfort, self-respect, and independence. Prudence thinks of an adverse season amidst the prosperity of a good one ; and Economy arranges for the bad time. Prudence thinks of two very possible and one certain contingency in the life of every human being ; and Economy weighs the chances well and provides for the worst — it provides for the incidence of failing health, and for the chances of losing, through one of the many eventualities of life, worldly position, or the means of breadwinning ; and it also does something to provide for that time when the anxieties, the joys, and the sorrows of life shall be hushed in death. SAVINGS BANKS ARE PRELIMINARY MEANS. 379 It is well, therefore, and it is almost indispensable, that tliese habits should be cultivated ; it is well also, and quite indispensable, that means and provisions should be used to this end. The first stone which the learned Wotton refers to in the motto on the tirst page of this volume, is without doubt the first act in the habit of economy; and we have been endeavouring throughout the course of this history to point out with some approach to accuracy the exact spot where a person may lay this indispensable "first stone," where he may probably best lay the second or third, and how possibly he may commence with the superstructure. Savings Banks and the other provident measures of which we have spoken are priucipally to be regarded as preliminary means, the first or stepping-stones to higher things. When a man has become, for example, a depositor in any of the numerous kinds of Savings Banks, he has only taken, as it were, the first step on the road to competence ; but one step leads to another.* A very slight knowledge of human nature will show that when once a man gets his foot upon the round of the social ladder, and keejDS it there till he is secure of his footing, he is soon ambitious of taking the next step. So true is this regarded, that in common parlance many kinds of journeymen are said to have made their fortune when they have saved their first pound. When George Stephenson's wages were raised to twelve shillings a week, he declared " he was now a made man for life ; " * "To save money," says Mr. Greg, "and to have invested it securely, is to have become a capitalist. To have become a capitalist is for the poor man to have overleaped a great gulf ; to have opened a path for himself into a new world ; to have started on a career which may lead him, as it has led so many originally not more favoured by foitune than himself, to comfort, to reputation, to wealth, to power." 380 CONCLUDING CHAPTER. when he had saved his first guinea, he proudly said to one of his mates, that he " was now a rich man." And in one sense he was right ; he had taken the first step ; and fur- ther, " The man who," says Mr. Smiles, " after satisfying his wants, has something to spare, is no longer poor." We have said that Savings Banks are preliminary means. We think, however, that they are the safest initiatory steps that could be taken by those of the labouring classes who wish to rise from small beginnings to those higher things spoken of* Thousands of people of small means are con- tent with them ; with the Savings Bank they begin, continue, and end, and many of them have had reason to congratulate themselves upon having taken such a course : they have been saved endless trouble and disaster, have in the great majority of instances felt that their earnings were safe, that the profits were not going up and down like those of their neighbours, but were always steady, always to be relied upon, and always calculable to a penny. That these returns are really not so insignificant as many suppose, and that if small earnings are allowed to accumulate at compound interest they must make a decent provision against the winter of life, the following case will demonstrate.f The late Mr. Thomas Allen of Gledholt, Huddersfield, on the 28th of March, 1818, gave to each of his seven servants a sovereign to become depositors on the opening of the Huddersfield Savings Bank. * •' I have studied the matter to the core, and it has resulted in a firm con- viction, that were all the many valuable schemes which have been devised for ameliorating the condition of the masses conjoined, for safely, surely, and reasonably meeting the exigencies of every-day life, the Savings Bank single- handed would outvie them all."— Mr. James Frame's Tracts on Savings Banks. t We are indebted to Mr. Sikes of Huddersfield for the particulars of this case. 30 9 150 200 160 9 8 200 CO-OPERATIVE SOCIETIES. 381 On that day Esther Sykes became a depositor to the extent of 11. She continued to deposit the Sa\'ings from her wages £ s. d. from that time to the 21st of July, 1828, amounting to 119 11 Interest accruing from 1818 to 1828 This sum of £150 being allowed to accumulate by in- terest until 1836 became From 1836 interest on this sum had to be withdrawn half-yearly, which from 1836 to 1863 amounted to Esther Sykes died March, 1863, aged 78, and her executors received from the Bank the sura of . . . Thus in this interesting case the cash deposited at different times amounted to 119/., and the total amount of interest on that sum was 240/., of wliich 160/. was paid to the depositor herself during her lifetime, and 200/. to her executors. It is not a little curious, nor is it surprising, that five of the relatives and legatees of this Esther Sykes should have gone to the Huddersfield Savings Bauk to deposit the money left to them. Of the other promising provident measures adapted to the requirements of the industrious classes, the most important, but at the same time a somewhat hazardous one, is that of co- operative societies. These societies, though beset with diffi- culties, are doing a good work in many localities. The stronghold of the system, be it remembered, is in a town where, OMang to the cupidity of the manager of the Savings Bank, the savings of years were swallowed up, and, in consequeuce, habits of accumulation in this form were rooted out from among the people. The co-operative principle can be directly traced to the wide-spread distrust created by this gigantic and far- 382 CONCLUDING CHAPTER. reaching fraud. It remains now to be seen whether a higher intelligence and a greater power of self-government than is generally found in large associations of working men will not be indispensable to the progress of these societies. Per- sonally, we have little hesitation in affirming that the real progress of these classes will be safer, and not only safer but quicker, if the bulk of them will leave combined enterprises of this nature to those of their fellows who have already saved money enough to enable them not only to enter into such business, but to lose in the venture. Once a man has run up an account in any of the people's banks — whether the old or the new banks does not make much difference — he might, and perhajis ought to risk a proportion in such societies, which, where properly and prudently managed, are very beneficial to all connected with them.* The same remarks apply to Building Societies to a great extent ; though here perhaps there is little of the risk which besets all kinds of large and small joint-stock companies. Unfortunately, however, the working-class element, which was prominent at the origination of building clabs, is being Mr. W. B. Chorley, author of a Handbook of Social Intercourse, &c. &c. ■was asked his opinion on co-operative societies, that opinion to be inserted in the Co-ope)-ator, the Society's organ. Mr. Chorley gives it very candidly, the Editor with equal candour giving it insertion. " The working man's earnings should be absolutely safe. Post Office Savings Banks are the only means of deposit which I am warranted in unconditionally recommending under all circumstances. I am far from saying that in peculiar cases and districts the workman may not act judiciously in joining co-operative stores ; but it cannot be extended beyond a certain point with success, and I fear that any attempts to push or rapidly extend the i)lan over a large area will prove a mistake ending in failure and loss." . . . Mr. Smiles in his Workmen's Earnings, Strikes, and Savings, a reprint of articles from the Quarterhj Review, and Mr. Greg in his Provident Investments, a reprint of an article in the Edinburgh Review, express similar views on the co-operative principle as applied ex- clusively to the working classes as those we have quoted from Mr. Chorley. BUILDING SOCIETIES. 383 rapidly eliminated from them in most localities, and almost everywhere the tradesman class predominates* The working classes, if they have not been saving their earnings for years, cannot command and pay, with that regularity necessary in such enterprises, the instalments due ; and hence they either do not venture to join at all (except where the club is on a very small scale), or if they do, they ultimately withdraw from them.t Fifty other different objects might be mentioned for which the working classes require the means of accumulating the trifles they can save with the object of employing some of the money on higher kinds of investments when it has amounted to a good round sum ; the purchase of a cottage, of an annuity, of a life insurance policy, are only a few of them. In this way the Savings Bank not only assists the industrious classes by offering machinery expressly fitted for their present ad- vantage, but does an equally beneficial work in leading them on safely to higher and more important investments. Let it be granted that Savings Banks fulfil all, or most, of the conditions which we have assigned them and ask for them, what then remains to be done to make their advantages * The first Benefit Building Society which can be traced was founded in 1815 under the auspices of the Earl of Selkirk. It was a village club com- posed of some working men in Kirkcudbright, in Scotland. Other institutions of a similar kind followed, and were called "Menages," and soon afterwards the principle was introduced into England. In 1836 the first Act was passed with regard to them. + " A Building Society of which I am a trustee started some five years ago with a considerable majority of working men ; but in the course of its opera- tions (on looking over the list to-day) I find there are very few who can be strictly called working men left. The punctuality of the payments, the fines, and those arrangements^ which are essential to the proper working of a society, acting upon men who are occasionally thrown out of employment, and with- out means altogether, have compelled them to withdraw themselves." — Evi- dence of Mr. W. Cooycr. Cominittee on Provident Investwents. 1850. 384 CONCLUDING CHAPTER. better known, and to bring them still more within the reach Ji of those classes for which they are specially designed, and ' to which they are specially applicable ? It may indeed be questioned whether, having provided the facilities, society should not now leave the matter where it is, to the operation of advancing intelligence, to the growth of economical know- ledge, and to the increase in the experience of the poorer classes. Working men are tired, and to our own knowledge have long been, of hearing of societies and organizations for their elevation ; * they know perfectly well that their " eleva- tion" — for which no doubt too few of them care — must begin, continue, and end in themselves. The better class of workmen laugh at many schemes designed for their benefit ; and although there may be odd instances of men who seem not to be above being turned into an " object," it is simply repellant to the great bulk of them.f * A large volume might be compiled which should simply give a bare in- dication of the aims of such schemes and societies, including one set forth in a MS. volume which we have seen in the British Museum, entitled, Grecvoiis Grones for the Poore, done by a Welhvisher, down to the latest benevolent scheme, and its list of patrons beginning with an Archbishop and ending with the Squire. + Savings Banks are not free from an amount of patronizing, which is only veiy rarely appreciated by the workman, though it may delight the very small shopkeeper class. Mr. Boodle, in his examination before a Savings Bank Committee, in 1849, thought fit to relate a very ludicrous instance of this, which, though told to show the amount of confidence reposed in the names of some trustees, reallj^ proves something very diff'erent. "At one time," says Mr. Boodle, "the late Lord Spencer was attending as manager, and a depositor put in a sum of money ; he looked at his book when it was returned to him, and finding the name of ' Spencer,' asked the actuary who it was. The actuary replied 'Lord Spencer.' The man said, 'You do not mean that this is Lord Spencer ? ' When reassured, he said, ' Then I will give another sovereign, ' and actually did put in another sovereign." This must have been a red-letter day in this person's history, though it reasonably admits of doubt whether the incident would be niattf^r of personal gratification to Lord Spencer, the wise and excellent Lord Althorp of the Lower House. ], MASTERS AND WORKMEN. 38.') A working iiiaii, though lio may not like to be " raised," may like to be advised how he can best help himself : and such advice is quite necessary and legitimate under certain conditions and in certain circumstances. It altogether de- pends, it appears to us, upon the person who does it and the manner in which it is done. First and foremost it seems to be not only necessary but right that masters of workmen should endeavour to influence those under them ; that they should — "Relinquishing their .several 'vantage posts Of wealthy ease and honoiirahle toil " — do something to direct aright those energies from which they have benefited, and which if rightly developed may also in time lead their possessors to comfort, to reputation, even to wealth. A master's duty to his workmen, as we remember to have seen it expressed somewhere, scarcely ends when he pays them their wages. The men may be thoroughly inde- pendent, and after accomplishing their stipulated work may be, and feel that they are, their own masters : but there are nevertheless divers opportunities for masters, without claim- ing or assuming superiority, to benefit those employed under them. The master is pretty generally under the pressing responsibility of superior knowledge and greater experience ; and he who sees how the worldly position of his men can be safdy improved, and does not at least attempt to suggest or help to this improvement, can scarcely be said to fulfil the duties of his position. An employer may, indeed, be too conscious of his dignity, and, standing on the lofty pedestal reared for him or which he has reared for himself, throw down with a lavish hand bounties upon his men ; and they will not be accepted, and perhaps ought not to be : but c G 386 CONCLUDING CHAPTEE. • let him show a personal interest in them, prudently advise them, " show a wisdom that shall bridge the gulf " that separates the two, and he will not only do much to destroy the feeling, which has become almost instinctive among work- men, that the master is somehow selfishly acting for his own ultimate benefit, but he will awaken a confidence, become the object of the men's esteem, and wield an enormous influence over them. Let so much as this be granted, or even let part of it be granted, employers of labour may not only turn their thoughts to such schemes for savings as we have been engaged upon, but they may easily arrange, in conjunction with the proper authorities, branch schemes such as de- scribed in the last two chapters, to be suited to the varying circumstances of the case. If they are convinced of the benefits of the one, let them advise ; if they wish to give reasonable help, let them act. Without reference, however, to the Government schemes just referred to, the State sets an admirable example to all large employers in the provident arrangements whicli have been made for public officers ; and we think there must be much in the provisions in question which might be turned to good account in, and be made applicable to, large private concerns. Few Government owployes should ever come to beggary ; if they have not been prematurely cast aside, either by wilful misconduct or gross carelessness on their own part, they cannot come to the parish : further, great numbers of them are assisted to make provision for their families at their death. Nearly all Government servants may be said to have bargained with their masters at the time they entered the service, not only for a fair day's wage for a fair day's work. MASTEES AND WORKMEN. 387 l)ut for nearly all the provisions of a Friendly Society during sickness ; for a Deferred Annuity when they are past work, or after a certain aQ;e ; and in some instances — it ou^ht to be in all — for assistance towards insuring their lives for the benefit of their family. It were idle to say that none of these considerations enter into the original contract, and have had no influence on tlie scale of remuneration paid for actual work ; it were far more to the point to say that departments of Government compel their servants to be provident and to prepare for sickness, old age, and death, and make it involuntary in the case of sickness and old age, by taking the necessary payments upon themselves. Of the scheme of Life Insurance at present in force in the Post Office, for example, we spoke in the previous chapter. With I'egard to sickness, a certain time is allowed for full pay ; another definite period for half-pay. In respect to Superannuation Allowances, which we have termed the De- ferred Annuities, it is true that at one time civil servants were required to pay towards it out of their salaries ; but this has been discontinued by Act of Parliament, and the present arrangement may simply be considered as a small rise in the rate of wages — the deduction being compidsory on all classes alike. Why should not a similar plan, or at any rate the principle of it, be urged upon private employers? Spite of some of the difficulties which would at once present them- selves, we believe that there is little impracticable about it, and little that might not be surmounted. Even if it should be found impossible to apply such arrangements to many concerns, there is still the admirable machinery designed in connexion with the Annuities Act of 18G4 ; and we again c c 2 388 CONCLUDING CHAPTER. commend the plan to the attention and candour of large employers. We think that to a very large extent the influence which masters must exercise over their workmen, or which they could not fail to exercise if they were to show a proper degree of interest in their subordinates, has never yet been exercised. If reason, persuasion, entreaty of a certain kind, alike fail — as they may often have done — to induce saving habits and due provident provision for themselves and families, we confess a difficult problem presents itself. This difficulty has been felt for years. Forty years ago the Quarterly Revieiv, in an able article, said that Savings Banks ought to have formed a sinking fund before that time for the abolition of poor rates : " If the present state of things continues," says the writer, " it should become a question whether the master ought not to deposit in the Savings Bank at least a shilling in the pound of all wages paid by him, to be placed to the account of the individuals whom he employs." Several times since this was written, the Quarterly Review has returned to the charge. For many years our system of Poor Laws has rigidly assessed property for the relief of poverty, and secured the necessaries of life for all the destitute, no matter how largely they themselves may have been answerable for tlieir destitute condition. With some beneficial changes the law stands the same, and is scrupulously enforced. It is very clear that many men's wages are so high in good times, that, if they worked steadily and lived with moderation, they might easily reserve out of them a fund of supply against times of want, which would carry them through till their trade revived. The immense power in the MASTERS AND WORKMEN. 389 hands of the working classes to promote their own self- dependence is illustrated by the enormous sums spent by these classes alone in mere indulgence ; and it is shown again, in the immense funds raised amongst them to support combinations and strikes. That thousands will not use the means they have is proved by their excesses, their pro- digality, the recklessness of their expenditure, the division of the days of the week into days of work and days of gross and obstinate idleness ; and in much of this — regarding the result which follows to themselves, their wives and families, if they have the misfortune to have them — there is perhaps more real delinquency than in many of the crimes for which penal statutes have been framed. The question is at any rate admissible, whether the same power which can order a compulsory payment of rates to support the poor, might not, and ought not, to restrict the means by which men are made and kept in poverty ; or whether the same laws which make the frugal support the improvident should not also compel the improvident to do something to support themselves. This prmci'ple is indeed recognised by Government, as we have already shown, in the arrangements made for its own servants ; it is there- fore not a question so much of principle as of degree, and whether the Government should insist on a measure of coercive contribution applying to others beyond their control. " I have often thought," said the late Mr. J. Silk Buckingham, in a letter now before us, " it would be perfectly wise and just to pass a law compelling all employers of labour of every class, age, and sex, to deduct five per cent, from the wages or salaries of all in their employ, to be invested in the Government funds for a Deferred Annuity after sixty years 390 CONCLUDING CHAPTER. of age, giving power to the labourers themselves to make further additions as they saw fit on the voluntary principle. If it should be said that no Government has a right to make people provide for themselves by force of law, I am sure they have as great a right to do this as to make the honest, sober, and industrious part of the people pay in poor rates and taxes for maintaining paupers and criminals, who have become so chiefly through want of prudential conduct in youth."* Finally, it is upon those who will not, and cannot by any available means, be brought to apply the remedy of provident investments during the heyday of life for themselves, that we think some such arrangement as that upon which the Govern- ment insists on employing civil servants, should be brought to bear, and that, only as a dernier ressort, our Legislature should consider whether it were not possible, and within its province, to apply a more complete and direct remedy by force of law. Formidable obstacles, we repeat, may be * " For tlie last twelve years," says a living practical pliUanthropist, "I liare been considerably engaged in the administration of Poor Law Relief. I could not disguise from my reluctant notice the painful fact of how large and overwhelming a percentage of applicants for relief had been, for long periods of their life, in the habit of earning wages, the surplus of which remaining over and above the cost of their maintenance, would, if properly invested, have secured them an honourable independent subsistence for the unproductive residue of their lives. Their frugal contemporaries, whom they scandalized by their example (and it might have been said, derided for what they con- sidered their meanness), they further tax with the biu'deu of their subsistence. They commit a constructive injustice upon their more provident fellow- citizens ; and when society inveighs against the gratuitous pauper, not because he is poor, but because he has viciously made himself so, society is not unjust in such a retaliation upon its trespassers. The gracious law of England, which makes the Poor Law compulsorj', would deal with scarcely more than even-handed justice were it to compel some kind of club payment too. And if it were an infringement of the liberty of the subject to compel my neighbour to support a club, it is an infringement of my liberty to compel me to support my neighbour." — Meliora, edited hy Viscount Inges/rr, vol. ii. MASTERS AND WORKMEN. 391 imagined, and actually would be experienced, in either case ; but they could easily be smoothed by the fifty years' experience which the country has had of Savings Bank management and the conduct of provident schemes gene- rally, and they may very possibly be entirely removed by the far-reaching, simple, ancillary measures of the last four years. 14 APPENDIX. i APPENDIX. (A.) An Abstract of the Provisions of Mr. Whitbread's Bill, as amended by Committee, '■'■for establishing a Fund and Assurance Office for Investing tJie Savings of the Poor ." (1807.)* This Bill provided that the Office of the Pool's Fund should he under the management and direction of so many Commissioners as his Majesty should see fit to appoint under his royal sign manual ; that they should subscribe an oath to execute their powers and trusts faithfully and honestly ; that any two of them might together execute the duties of the Office ; and further, that the said Com- missioners might, with the approbation of the Lords of the Treasury, appoint some person properly qualified to conduct the business, under the title of Accountant, and also such cashiers, clerks, and servants as they should find necessary. It provided, that any person who should subsist wholly or princi- pally by the wages of his or her labours should be entitled to the benefits and advantages of this Office, under and subject to the following Rules and Regulations of the Office of the Poors Fund. 1. That any proj)er person may so pay to ther Accountant, or remit through the Post Office, any sum not exceeding five pounds. 2. That no person remit or pay more than 20/. in any one year, nor more than 200/. in the wliole. * Referred to at some length at page 23, and other portions of this work, where the preamble of the hill is given. f THE ' TJNTVERSITY « 396 APPKNDIX. 3. That when any sum is remitted through the Post Office, the Postmaster of the place from which the money is sent shall keep a proper record of each transaction, and adopt such measures as the Postmaster- General shall from time to time direct ; and that each Postmaster shall receive for his trouble, from the person paying in the money, one penny in the pound upon the value thereof 4. That cash accounts with each person shall be opened in the principal office in London, and that the money which may be paid or remitted shall be laid out each week in the purchase of perpetual annuities, the annuities so purchased to stand in the name of the Commissioners of the Poor's Fund. 5. That, after such purchase, the proportion of each person, from the amount contributed, shall be credited in a stock account, he or she being debited in the cash account for the sum expended. 6. That the dividends as they become due be likewise carried to the credit of the said persons; and on the sums amounting to ten shillings, the same shall be payable to him or her. 7. That the dividends may be allowed to accumulate, but prin- cipal and dividends must not exceed 20^. in any one year, nor 2Q01. in all. 8. That any person entitled to the annuities purchased in this manner who may wish to sell the whole or part, will be allowed to do so on signifying the desire personally, or in writing. In either case the person shall be furnished with a form of request for the purpose, and, when properly filled up and attested, the annuities shall be sold. 9. That the sale of all annuities desired in one week shall be made on some one day in the next. 10. That after the sale the proportion due to each person shall be carried to hie or her cash account, and the money be payable forthwith. 11. That the Accountant shall make out and sign a warrant for the sums called for, the person giving a receipt on the warrant when it is paid. 1 2. That persons entitled to the money may authorize in writing APPENDIX. 397 aiiy other person t) receive tlie warrant, and after signing the waiTant the money may be paid to sucli other person. 13. That any person residing beyond the limits of the two- }>enny post (London) may have such warrant transmitted through the Post Office. 14. That when a sum is paid to the cashier or other officer for the purchase of annuities, a proper receipt shall be given ; that when a sum is transmitted through the post, the receipt shall be at once sent through the post ; and that when the money has been laid out in such purchases as were ordered to be made, the certifi- cates of such purchases, with their amount and denomination, shall be sent to the purchasers, or such other persons as they shall ap})oint. 15. Provides for the investment of sm all surpluses, and the payment of the dividends upon them. 16. Provides tliat no payment, gratuity, or reward shall be allowed to be made to any person employed in the Office of the Poor's Fund over and above the regular salaries determined upon. Other clauses of the Act provided that the expenses of the Office should be defrayed by such sums as were secured by the dividend, interest, and accumulations of the surplus arising from unclaimed dividends, the remainder of the expenses being borne on the Consolidated Fund. With regard to The Poor's Assurance Office, the Bill provided for the appointment of the principal conductor, who should be called "the Actuary," in the same manner in which "the office of Ac- countant " was to be created for the former business. It provided for the calculation of Tables, which Tables should produce " sufficient funds to answer the payments to be assured, as well as the charges and expenses of the establishment and manage- ment of such Assurance Office ; " that these Tables should be varied ; that they should be approved by the Lords of the Treasury, who should make them public in such manner as they saw fit. 398 ArrENDix. The persons who were entitled to tlie henefits of the Poor's Fund should also be entitled to the benefits of Assurance Office under the following Rules and liegulations of the Poors Assurance Office. 1. That any person desirous of insuring his life shall deliver <>i- send the usual particulars to the Assurance Office. 2. That in every case proof of age and proof of sound health should be produced ; the affidavits in each case to be sworn to before a Justice of the Peace. 3. That, in the case of any misrepresentation being proved in the original proposals, the sums paid shall be forfeited. 4. That the Actuary may require any persons proposing to insure to attend personally at the Assurance Office, providing they live within the limits of the London twopenny post. 5. That no payment for any assurance, whether annually, half- yearly or quarterly, shall be less than ten shillings, 6. That no annual payment, nor the entire yearly amount of payments, shall exceed five pounds ; that no assurance shall Ix; made for more than 200/. ; or if a gross sum and an annuity shall both be assured to the same person, the whole shall not exceed the value of 200/. 7. Provides for fines for arrears according to the time which has elapsed, and for renewing a policy which may have become void. 8. That all money received shall be vested in transferable annui- ties, as in the case of the Poor's Fund, 9. Provides for payment on proof of death — the affidavit to be sworn to before a Justice of the Peace. 10. That the rules for the management of the Assurance Office, and the remuneration to be paid to its officers, shall be settled on the same basis as those for the Poor's Fund. The Act then goes on to provide that the Commissioners shall ])o empowered to frame rules for the guidance of the officers of each Office ; that the Commissioners to be appointed shall deliver to the APPENDIX. 399 Governor and Company of the Bank of England a true and attested copy of their commission or appointment ; that this shall be their authority for transacting business with the Bank, and shall be received and admitted as evidence in all courts of law and equity, and before all judges and magistrates, of the due and legal appoint- ment of the Commissioners, and authorizing them to exercise all the powers and authorities granted to them under the Act. The Act then further provides that all dividends, &c., shall be exempted from the tax on property, and from the stamj) duty on probates and letters of administration. That the policies and other instruments shall be exemjjt from stamj) duties. That all letters and packets shall be sent by or through the Post Office, to or from either of the two departments, exempt from the l^ayment of all postage. The Act concludes by making provision for the punishment of forgery and perjury. 400 APPENDIX. (B.) i An Abstract of the Provisions of the Consolidated Act of 1863, entitled "An Act to Consolidate and Amend the Latvs relating to Savings Banks." (26 & 27 Vict. cap. 87.— 28tli July, 1863.) Sec. 1. Provides for the Repeal of previous Acts and parts of Acts, as set forth in the following Schedule : — Date of Act. Title. Extent of Repeal. 9 Geo. IV. c. 92. An Act to consolidate and amend the Laws relating to Savings Banks. The whole. 3 Will. IV. c. 14. An Act to enable Depositors in Savings Banks and others to purchase Government Annuities through the medium of Savings Banks, and to amend an Act of the Ninth Year of His late Ma- jesty to consolidate and amend the Laws relating to Savings Banks. Sections 21, 22, 25, 28, 29, 30, 31, 32, 33, 34, and 35. 5 & 6 Will. IV. c. 57. An Act to extend to Scotland cer- tain Provisions of an Act of the Ninth Year of His late Majesty to consolidate and amend the Laws relating to Savings Banks, and to consolidate and amend the Laws relating to Savings Banks in Scotland. The whole. 7 & 8 Vict. c. 83. An Act to amend the Laws relating to Savings Banks, and to the Pur- chase of Government Annuities through the medium of Savings Banks. The whole. 11 & 12 Vict, c. 133. An Act to amend the Laws relating to Savings Banks in Ireland. The whole. 17 & 18 Vict, c. 50. An Act to continue an Act of the Twelfth Year of Her present Majesty for amending the Laws relating to Savings Banks in Ireland, and to authorize Friendly Societies to invest the whole of their Funds in Savings Banks. Section 2. 22 & 23 Vict, c. 53. An Act to enable Charitable and Provident Societies and Penny Savings Banks to invest all their Proceeds in Savings Banks. The whole. 23 & 24 Vict. c. 137. An Act to make further Provision with respect to Moneys received from Savings Banks and Friendly Societies. The whole. APPENDIX. 401 Sec* 2. Provides that persons who may have formed or shall form any society or institution of the nature of a hank to receive deposits of money for the benefit of persons depositing the same, accumulating at compound interest, and repayable when required, hut, after the necessary expenses have been met, deriving no benefit from such money, shall have the benefit of this Act if they wish it. The conditions annexed are, that such persons shall cause the rules and regidations for the conduct of the business to be entered, deposited, and filed, as shall be afterwards directed. Further, that no bank, the rules of which shall not be sanctioned and approved by the National Debt Commissioners, shall be entitled to the provisions of this Act. (a) Sec. 3. Savings Banks under the Act shall keep a book in which shall be entered the rules of each bank, and these books shall be open at all reasonable times to the inspection of depositors. When any of the rules are altered, such alterations to be entered in the book. The rules not to be in force till such alteration is made, (a) Sec. 4. Two written or printed copies of rules shall be sent by Savings Bank trustees to the certifying barrister, who must certify that they are according to law ; the certificate of the barrister to be paid for by a fee not to exceed one guinea ; and the barrister, after certifpng the rules, to return one copy to the trustees and transmit the other copy to the National Debt Commissioners, (a) Sec. 5. Every Savings Bank certified under the provisions of this Act to bear the title of '^ Savings Bank certified under the Act of 1863;" any other bank, company, or person adopting this title, to be declared guilty of a misdemeanour, and punishable accordingly. * Many of the clauses of the Cousolidatiou Act having been taken entire from previous Acts, and only part of the provisions being new, we propose to distinguish those clauses originally passed in 1828 (9 George IV. c. 92), with the letter (a) ; those passed 3 AYilliam IV. c. 14, by (b) ; in 1844 (7 and 8 Victoria, c. 82) by (c) ; in 1848 (11 and 12 Victoria, c. 133) by (d) ; and under 25 and 26 Victoria, c. 75, by (e). All the other sections of this Act not so marked are new provisions introduced in 1863. D T) 402 APPENDIX. Sec. 6. Eequires that the following regulations shall be adojited and enrolled among the rules of all Savings Banks : — (1) The treasurer, trustees, or managers shall not derive any benefit from dejDosits, nor directly or indirectly have any salary, allowance, profit, or benefit whatsoever beyond their actual expenses for the purposes of the bank. The expenses of management, including the remuneration to paid officers, does not come within the meaning of this clause, {a) (2) That not less than two persons, being trustees, managers, or paid officers employed for this specific purpose, shall be present on all occasions of public business, and be parties to every transaction of deposit and rej^ayment, so as to form a double check on every such transaction. (3) The depositor's pass book to be compared with the ledger on every transaction of repayment and on its first pro- duction after the 20 th of I^Tovember in each year. (4) The depositor to produce his book at least once in each year for this examination. (5) No receipt to be taken or money paid except at the bank and during the hours of public business. (G) A public accountant or auditor, not of theu" own body, to examine the books of the bank, and to report the result, not less than once in every half-year, and to report to the committee of management the correct amount of the liabilities and assets of the bank, (7) That a book containing an extracted list of each depositor's balance, omitting the name, but giving the distinctive number and separate amount of each, checked and audited as above, be open during the hours of public business for the inspection of any depositor. (8) The trustees or committee of management to hold meet- ings at least every half-year, and keep minutes of their proceedings in a book to be provided for the purpose. (9) In the case of banks having branch agencies, the rules to APPENDIX. 403 provide for the due receipt and accounting of all moneys received ; for the presence of a second part}^ to every transaction ; and for a periodical examination of the depositor's book. Sec. 7. Provides that the trustees of every Savings Bank shall transmit weekly returns to the National Debt Office, giving such particulars as the Commissioners shall direct, showing the week's transactions and the cash balances remaining in the treasurer's hands. Sec. 8. The treasurer, actuary, or cashier, and every paid officer of a Savings Eank entrusted with the receipt of money, to give security by means of bond or bonds, with one or more sureties, to the Comptroller-General of the ISTational Debt Office, (c) Sec. 9. Provides that any officer receiving deposits and not paying them over to the managers shall be guilty of a misde- meanour, (c) Sec. 10. The moneys, goods, chattels, and effects of all Savings Banks to be invested in the trustees for the time being, (ci) Sec. 11. No trustee or manager of Savings Banks in Great Britain shall be personally liable except — (1) For moneys actually received by him on account of said banks and not paid over in the usual manner. (2) For neglect or omission to comply with the above recited regulations as to the maintenance of checks, the audit of accounts, the holding of meetings and the keeping of the minutes of the same ; (3) Or for neglect in taking security from his subordinate officers. Sec. 12. Trustees or managers in Ireland may limit the amount of their responsibility by declaring in writing that they are willing to be answerable for a specific amount only, which shall not be less, however, than lOOZ. At the same time Irish trustees, &c., to be liable for amounts actually received by them and not accounted for. (d) and (e) Sec. 13. Provides that the treasurer or any trustee may be D D 2 404 APPENDIX. required, on a demand from not less than two trustees and three managers, or from a meeting of trustees and managers, to pay over all the moneys remaining in his or their hands, and assign and transfer or deliver all securities and effects, books, papers or other property, to such persons as may be appointed to receive them : proceedings to be taken in case of any neglect or refusal to comply with the demand, (a) Sec. 14. Provides that executors, &c., of officers of Savings Banks shall pay money due to Savings Banks, in. case of death, bank- ruptcy or insolvency, before any other debts whatsoever, (b) Sec. 15. The trustees of Savings Banks shall invest aU the money received by them in the Banks of England or Ireland; and no sum or simis shall be paid or laid out by trustees in any other manner or upon any other security whatever, except only such sums of money as from time to tune must remain in the hands of the treasurers of such banks to answer the exigencies thereof. This provision not to prevent any depositor withdrawing his money from a Savings Bank and investing the same in any other secm-ities. (a) Sec. 16. Provides that trustees of Savings Banks may receive money from depositors and apply it for their benefit in any other manner agreed upon, (a) Sec. 17. Provides that central banks may invest the money of branch banks in the manner already described, (a) Sec. 18. Provides penalties for false declarations for the purpose of paying money into the Banks of England or Ireland, (a) Sec. 19. The Commissioners of the N"ational Debt to invest the money paid into the bank in the purchase of bank annuities. Exchequer-bills, or parliamentary securities of whatsoever kind created or issued, or any stock or debenture guaranteed by authority of Parliament ; the interest arising from the money so invested to be in like manner invested as above, (a) Sec. 20. Makes it lawful for any three or more National Debt Commissioners to execute and to do all matters and things required by the operations of this Act. (h) Sec. 21. Money invested with the Commissioners to be allowed APPENDIX. 405 interest at the rate of three pounds five shillings per cent, per annum, (c) Sec. 22. Interest due from the Commissioners to be calculated half-yearly up to JS'ov. 20 and ]\ray 20, and carried to the account of Savings Bank additional principal. No interest to be allowed on any fractional part of a pound, {a) Sec. 23. Interest arising to depositors may be calculated yearly, or twice a year, and carried to the principal. Interest to depositors not to exceed three pounds and tenpence per cent, per annum, (c) Sec. 24. Trustees of Savings Banks to appoint an agent who shall be authorized to receive money from the Commissioners for repayment to depositors. The agreement for the appoint- ment of this agent, signed by two trustees, shall be deposited with the Commissioners ; but it may be revoked and another apjiointment made. Sec. 25. Trustees may draw for the whale or any part of the sum placed in the hands of Government by drafts on Commissioners ; interest to be added by the cashiers of the bank, (a) Sec. 26. Drafts exceeding 5,000?. must be signed by four trustees, and their signature must be attested by separate witnesses, Avho may be managers or other creditable persons. Drafts for 10,000?. not to be paid before fourteen days after the receipt of such drafts, (a) Sec. 27. EepajTuent of more than one draft of 10,000?. to any one bank not to be made in any one day. (a) Sec. 28, Trustees may receive in person, instead of through the usual agent, payment of drafts properly executed, (a) Sec. 29. The surplus after paying necessary expenses of banks to be paid over to the Commissioners for investment in a separate account ; and trustees may draAV upon such surplus fund fur the purposes of the Savings Bank by certificate, (a) Sec. 30. Deposits of minors may be taken, and repayment may be made before the person has attained the age of twenty-one. (a) Sec. 31. Eepayment to be made to a married woman who may have deposited money, unless the husband of such woman shall give notice in writing that he requires payment to be made to him. (•) 406 APPENDIX. See. 32. The funds of charitable societies, penny banks, &c., may be deposited in Savings Banks ; if witli the approval of the Commissioners, without any restriction as to the amount ; and without that approval, to the extent of 100^. per annum, or 300^. in the whole, (e) Sec. 33. The funds of any friendly society, legally enrolled and certified, may be invested without any restriction as to amount, provided a copy of the rules of such society is deposited with the Savings Bank, (d) Sec. 34. The receipt of the treasurer, trustee, or other officer of any such charitable institution, penny bank, or friendly society, shall be deemed a sufficient discharge for any money deposited and withdrawn from the Savings Bank, (a) Sec. 35. Members of friendly societies, penny banks, &c., may also subscribe to any Savings Bank, (a) Sec. 36. No sum to be taken in a Savings Bank without the depositor discloses his name, profession, business, and residence ; these particulars to be entered in the books of the office, (a) Sec. 37. Persons allowed to deposit as trustees on behalf of others ; but repayment can only be made with the receipt of the triistee and also the person or persons for whom the trust account has been held. Sec. 38. Provides that it shall not be lawful for depositors in any one Savings Bank to deposit in any other Savings Bank. A decla- ration to this effect must be made at the time of the first deposit. The penalty on a false declaration to be forfeiture to the sinking fund of all deposits. The declarations to be filed, and a copy with the penalty attached thereto to be annexed to, or printed in, the deposit book, (a) and (c) Sec. 39. Deposits of more than 30/. cannot be received in any one year, nor more than 150/. in the whole ; and when principal and interest together amount to 200/., interest shall cease till it is brought below that sum. (a) This prohibition not to extend to accounts opened before July 1828. A depositor may close his account and make further deposits as a new depositor. APPENDIX. 407 Sec. 40. Depositors may transfer tlieir accounts to any other Savings Bank by means of transfer certificates, the form of which is presented in Apx)endix (C). Sec. 41. In the case of a depositor dying and leaving any sum exceeding 50^. the money must not be paid except upon the pro- bate of the will of the deceased depositor, or letters of administra- tion of his or her estate and effects. No duty to be paid on probate when the estate is under 50^., provided the person claiming such probate or letters of administration produce a certificate of the amount of the depositor's interest in the bank at the time of his death, (a) Sec. 42. Administration bonds, &c., for effects not exceeding 50Z. sterling shall be exempted from stamp duty, {a) Sees. 43, 44, 45. j\Iake provision for payment when depositors die without a will, to those who appear to be next of kin, &c. (a) Sec. 46. Makes provision for payment on the death of an ille- gitimate depositor according to the statute of limitations. Sec. 47. Adapts the provisions of the Act as to intestate depo- sitors to the law of Scotland, (b) Sec. 48. Provides that any dispute arising between the trustees of Sa\^ngs Banks and any individual depositor or his representa- tives, the matter in question shall be referred to the barrister appointed by the Act, and " whatever award, order, or determination shall be made by the barrister shall be binding and conclusive on all parties, and shall be final to all intents and purposes without any appeal." (c) Sec. 49. On being referred to, the barrister may inspect any book or books belonging to the bank in question, and may administer oaths to witnesses ; false evidence to be perjury, and the ofi'ender prosecuted and punished accordingly, (c) Sec. 50. Is^'o powers of attorney given by trustees or depositors, no drafts or orders, no instrument of appointment or instrument for the revocation of any appointment, no determination or order of the revising barrister, nor any other instrument whatever re- quired to be given, issued, signed, made, or produced in pursuance 408 APPENDIX. of this Act, to be subject to or charged with any stami? duty or duties whatsoever. («) Sec. 51. Provides for the appointment of auditors in Ireland, whose names shall be sent up to the National Debt Office without delay. ( ii •'rS' o ?i w cq ^ 1^ O ■ .^ o 1» ■ § S ^ 03 w to h3 o 55 » • ""^ I— I fcC.S "^•5 o o o o O o >^ -4-' ~ — ^1 C3 > 3 1—^ CO rh O r, o .2 o o o a 51 en ^^ jj!; 4^ O "-■ GJ O "e t^ «o T—I •? ■;:? *-> ^ -t^ i^ S rf r^ 03 ^ ^ »^ ^ -r^ r- . '^ CO 00 ^ 'S ir?^ ^ ^ 02 ^Sg-=2^ l^ CO VO i^ Oi t^ ^ 0" T— ( to 2 >5^^ «, r' M 7-H t^ 00 .a^ 2 o § s i-T t^ CO CO ■e +3 o -3 ^3 ^ Oi -* 1— t rii «'SS c n'S^o ^ IT. . CO Ci eo e.- ^ H rH c-1 :: r7 =0 l-H ount pal an to the (Nov. ig £3P ill aceo ate Su: 00 CO T-H r— 1 t^ 00 ^ J^ Ifi" cq p-r CO .S o ^^ CO r-f 10 .5 c § r; =3 C5 05 £~ f-^M oT 1—t o~ CO -^ fl ^ r~^ ?-H ^ oT 1— t l-H Cj O^J cl| &D 10 ■* OS +J p <» T—i l-H ^ *-H -JJ SH rt 0^ CO .— I !>. c-;:^ to l^ l^ ^ CD' ■<1< as CO 2 ■»" I-H >o r- oS »-H CO ~f ^ 10 m OQ oT a; ^ ?o CO >o =K oT oT oT 55 075 t^ 00 2 g c-^ T-l »o CO m'" g. 0" kO 6 ^ o> 05 3 02 . — ^— V . — ' — / • ' V ^ p_j . CO - is ^ ll «1 CO ■ = tl ea . w 'T3 1 M •p =3 if 3 O-IJ ^ iJ £ c^ K cs 1^ ^ CO i$ CO CO 00 eo" cpl o C3 I— t GC r I I APPENDIX. 42 a POST OFFICE SAVINGS BANKS. Ak Account of the Sums due to all Depositors in Post Office Savings Banks throughout the United Kingdom on the 31st March, 1865 ; of the Expenses of Management of the Post Office Savings Banks to the same date ; of the Amount standing to the Credit of the Post Office Savings Banks, on the same date, in tlie books of the Commissioners for the Reduction of the Xational DeVit ; of the Balance in the hands of the Postmaster- General at the same date ; and of the Amount of any Loss sustained by the Post Office Savings Banks from Frauds committed in the Transmission of Deposits, or otherwise. Liabilities. Total amount of deposits, from 16th SeptemV)er, 1861, Z s. d. £ s. d. to 31st JIarch, 1865, of the interest allowed and added to principal on 31st December, 1S61, .31st December, 1862, 31st December, 1863, and 31st December, 1864, and of the interest allowed and paid on closed ac- counts Tip to 31st March, 1865 9,217,809 8 7 Deduct— Repajnnents to depositors, from 16th September, 1861, to 31st March, 1865 3,851,883 14 6 Total sum due to aU depositors in the Post Office Savin gs Banks in the United Kingdom on the 31st March, 1865 5,365,925 14 1 Surplus of assets over liabilities 41,000 2 1 5,406,925 16 2 Assets. Total amount of the sums paid by the Postmaster-General to the National Debt Commissioners for investment, and of the interest received on such investments, from 16th September, 1861, to 31st March, 1865 .... Deduct — Amount which has been repaid by the Commissioners for the Reduction of the National Debt, on account of 103,506^. 12s. lld.,*beingthe amount paid for the expenses of manage- ment of the Post Office Savings Banks from 16th September, 1801, to 31st March, 1865 Amount of sums transferred from Po.st Office Sa\ings Banks to Savings Banks £ s. d. 91,848 7 4 5,255 19 5 £ s. d. 5,487,728 6 10 97,104 6 9 £ s. d 5,390,624 Balance remaining in the hands of the Postmaster-General to be paid over 29,147 15 9 12,845 19 8 Deduct— Amount of loss through the defalca- tions of a former postmaster of Be- verley Amount of loss by the frauds com- mitted by J. W. Tliorne .... Amount of expenses of management paid by the Postmaster- General during the quarter endedSlst March, 1865 ; not recovered from the Post Office Savings Bank Fund at that date 1,093 14 1 94 11,658 5 7 16,301 16 1 5,406,925 16 2 * According to the Parliamentai-y Paper Xo. 523, 1861, it was estimated that the cost of each transaction would be 7d. The actual average cost of each transaction has been 6J(i. 426 APPENDIX. CO CO CO K — c ^ T- ^ IS < tT CO « O ►J < ? >■ s « t. O *" a a: S Pi o w " !a o =flo CO o ■^ o o T— I t- CO CO cS CZ! - o Is- O S5 P o o g I— I ?,-^co PS !rt ^Q ««. P5 < f^ "Zi (15 o 03 '-' t- 3: >> g^ O - „ fH ° a o c . g cio ^ ta "= CD O o rO P QJ c-i c": © o o = g> V; '/3 0-. ^ s ^ g S 'm ' ~; o o o l-H H ^ OQ o O P5 CC CO I— t in la »* 1=1 «t? *-" QO" Ci cc o CO < ■^ O o Pi CO CO o o o iC o l-H I-H t- CO OS l-H CO '^ i-H CT. CO l—i I' 1— < PI .a g 1 p o 02 t/2 J J < <: O O 03 •<* o Tt< ■a y • -d CO • o cS m .a . ^ o ^ !3 • o Pm -♦J 7*^ Ph > c„ O o o ^■gS" H'^a S-* < •i I o <^ 3 • is ■< r-H O ^- ■*^ 3 c; jj o s ■ O ' o o * o ■ ^ CO t>» • PJ • fi "X •o * OJ • V ^ Pi chi • p< • r^! • cj fC) • > . (D «§ a s s (U ■ o CO CO 1— 1 «o 00 I-l -^ T-H ;_, CD rH rt rJ2 d o s CJ o (D '53 o CO I— 1 PC o m o CO o -4^ -M O <4-H O >J ^ < O o s M +2 3 s OQ %-< o o ^_3 O o ^ r-H ^ ^ s H g t— ( *7^ ?; Q !> c c ^ Ci < +2 O § '~: Ti a? -^ 2 <1 H o -^ ^ o 4^ r- O 3 h- 1 P H o CB Ph 3 r-; .&■ O ^ P +3 'id.' o H *c5 Cj o o p4 .s 02 Ph S CO p s 'Jl ^ W "A ^ w r^ W fi o 'S o 1— t ^ O "^ ft . _ '^ its' r3 CO g t« "^ .-I o ,. „ Ch o o D a a O I) o o o u o 43 CO "=tj (M co" o CO CO o ^ cu C3 o o I— ( o to -* 00 CO rH (M CO >o -5 S o o -?! ft O lo Ph CO CO o CO S J =^ a ^ CO "* C O ^ CO , , kO 1=1 ^ CO o oo I-H P-, * ^ '^ 0) . cc r4 4- , a- +3 o (» 4^ ■Ji CD o f— i 'Ti rH o o —J O 4-3 ft s ^ •rH ■II o T-H CO 4-1 ci ■ t>3 o ■s o o ?4 r4 S 4-3 'rt ^ 6 4-3 HH o Ct4 • I-H^ o c O o Eh o I-H o kO~ 00 o T-H o oo 428 APPENDIX. .=rt o o o ■^__ to 00 (M <4i o Oi o" OS oo o oo -* o OS CO o CO l^ OS OS OS 00 50 CO I-H T-H T— 1 CO 1— 1 o -. 05 C5 -tJ c o a CO 1—1 I-l t— o oo Cii >-H CS ^ (N CO ^ o CO .T! CO oo 05 00 Q a: ci rt j:5 o -S o3 !^ p: 05 fcO fcc 05 C5 O §1 tT S5 '2 S O 05 O 05 05 Q O 05 - Pi -3 T-l 05 O in CO .- >» S 05 a ^ CO S. 9 "^ -►^ .S -^ 05 Ph pi o o pi 60 . PI P 05 > Pi 05 ft P! o o o p o o 05 PC? .o 05 P o a a o O 05 05 bfl -^ o o <1 o c3 -^ CO oo -a 05 05 CO o o (-- CO 05 •I • 05 SO 05 p 05 Pi > • .3 j^ ' -M r-J O p-t O P • c2 p 05 a 05 to ci P SO 03 o O 05 CO CO P- P 03 ■<*< t; ^ p ■y lo 5 9 oo p CO p cc p ^^ P< 05 05 ^ CI a o » P oo «5 o P cS O CO '-S So - -u += w p. p £ P P ^ i 05 CO P o o tsO ^ S CO a Si " 13 p oi • — 4 P3 APPENDIX. 421) o rC -M ^ c o ;h t^ aT k> s <1 K (K e lO g to oo > I— 1 f^ ^^ a> Oj o fz: Q p £3 ^ 17^ rH '^ -> o o CD O o rt ^ CD h CD CD Uc CD CD r^ ^ +3 &- 'a bD a CD a a , t» cS o f-' jg -< o 10 CI -* pH c^ IT. to ^ to to 00 (M 10 iin to to" =*< tt-l o c3 bO O ^ jJ P5 .2 CD ID 5 52 a ^ ^ C CO 430 APPENDIX. (I-) As the last sheet of this work was passing through the press, the Postmaster-General's Report for 1865, to which reference has already been made, has been printed. The information therein given respect- ing the progress of some of the measures which we have had under consideration is so important in itself, as well as illustrative and corroborative of our text, as to justify us in making the following extracts. These extracts, Avhich are here given in his Lordship's own words, plainly shoAV the deep interest he takes in those schemes, which have all been commenced during his term of office, and carried out under his immediate oversight and direction. Post Office Savings Banks, The dejDositors in Post Office Savings Banks increased in number during 1865 at the rate of 29 per cent. ; the total sum deposited increased at the rate of 30 per cent. Durmg the first part of the present year the business has increased in a stiU greater proportion. In the first nine weeks of 1865, the number of deposits was 258,917, and 48,777 new acco;ints were opened ; in the first nine weeks of 1866, 331,027 dej)osits were made, and 58,472 new ac- counts were opened. " It it evident, therefore," says Lord Stanley of Alderley, " that great as had been the progress of the Post Office Banks up to the close of last year, there are good grounds for ex- pecting a greater progress hereafter. And I am happy in being able to state, that the Scheme which was framed for the conduct of the Post Office Savings Banks, before any one of them Avas established, has been found to work well in each and all of its parts, and to admit of any expansion of business, no matter how great or how sudden that expansion of business may be. The APPENDIX. 431 officers "by whom this Sclieme was framed calculated, as a matter of course, upon a large and constant growth of business ; but sudden augmentations, arising from causes which could not be foreseen, have been by no means unfrequent. In the first week of the present year, for instance, no less than 10,000 new de- positors entered the banks ; but even under such sudden and unexpected augmentations of business the scheme of operations has been found to work well." 01 o a ^ S a C) o Cl o Ol ^ '^-' n o r^ o CO o ^ c o p o rr -W W -M cS a~ ,=; n ^ ■i-i > m < ■^ w fl f=H m i^ +-* O <^fH O l-H w O Ah C3 «*H r> o ^^ ro a> E/3 fl ci; pi a: pq « o tl) O s o Oi ,£1 +j n -M WJ o >o C T— ( S i^ 0/ ^>< s o t) tx; o Eh OS r— 1 ■puU8[UBa 901JJ0 |SO« »- (H fc, fa P6< fc &4 fo 5 P 9 o O ^ "S2 c a ^ 1, H-tO APPENDIX. 433 Insurances. " Of the whole number of persons whose proposals have been accepted : — 501 decided to pay their premiums - annually. 20 „ „ - half-yearly. 81 „ „ - quarterly. 5 „ „ - six times a year. 181 „ „ - monthly. 3 „ „ - fortnightly. and 1 8 have paid their premiums in one sum Of the whole number of persons who have commenced to pay premiums, 8 have allowed their policies to lapse by default, and 14, having defaulted, have on application been re-admitted. In no case, however, have I found it necessary to impose the pre- scribed line for default. The total smn iusured at the present time is 60,874^., and the gross annual premium income, exclusive of the sums received in single payments, is 1,924^. Of the whole number of proposers, 866 have been males, and 68 females. In a very few cases it has been necessary to charge an extra premium for extra risk, arising out of somewhat defective health ; and in the case of a few married women, who were preg- nant at the date of the insurance, it has been thought right to add to the first premium, but only to the first premium, a special premium of 10s. per 100^. to cover the risk attendant on confinements. No deaths have occurred up to the present time amongst the persons insured" Annuities. ''Since the commencement of business, 238 proposals for the purchase of Annuities have been received ; of these, 4 have been dropped, 4 are under consideration, and 230 have been accepted. F F 434 APPENDIX. Of the proposals which have been accepted, 150 have been for the purchase of Immediate Annuities, the amount of annuity pur- chased being 3,430^., and the purchase money being 39,774^. Of the remainder, 15 were for the purchase, by immediate payments, of Deferred Annuities, the amount of deferred annuity purchased being 232^., and the amount of purchase money paid down being 1,543Z. The remainder, 65, were for the purchase of Deferred Annuities by annual or more frequent payments, the amount in course of purchase being 1,368?., and the amount of purchase money annually payable being 759?. Of the 238 intending annm- tants, 103 were males and 129 were females. The remaining six proposals were for insurances on joint male and female lives. "While the Government Insurance and Annuity Act was under consideration by the Legislatiu'e, an opinion was expressed that Friendly Societies which had undertaken to provide, in return for a single subscription, sick pay, old age pay, and death pay, would do well to make arrangements for the transfer of their old age and death risks to the Government, by payment, of course, of a proper consideration, and to confine themselves to dealing with the liabilities contingent on sickness. I have recently received a pro- posal from a large Friendly Society for the transfer of its old age risks to the Government, and the terms of the arrangement are now under consideration. I am informed, moreover, that other proposals of this kind are likely shortly to be made. On the whole, I am able to conclude my observations on this subject by stating, that the Scheme framed for the conduct of Insurance and Annuity business has worked smoothly and well ; that the checks estabhshed for the protection of the Government have hitherto proved sufficient for their purpose ; that the ad- vantages of the measure are gradually becoming known to the classes for whose benefit it was devised ; and that, looking to all the circumstances of the case, and the steady and continued growth of the business, the success of the measure may be regarded as established." APPENDIX. 435 Government Annttities and Insurances granted under Act 27 & 28 Vict. Cap. 43. LCCOUNT showing the Number and Amount of Sums received and paid, and the Number md Amount of Contracts granted by Her Majesty's Postmaster-General, under authority of the Act 27 & 28 Vict. c. 43, from the Commeneement of Business on the I7th April, 1865, to the 31st December, 1865, together with the Number and Amount of Contracts in 2xistence on the 31st December, 1865, and the Amount paid for Charges of Management. iccount showing the Number and Amount of Sums received and paid on Account of Government Annuity and Insuraaice Contracts from the Commencement of Business on the 17th April, 1865, to the 31st December, 1865. ish received for the purchase Annuities, viz. : — Immediate unities . . referred An- ties. Money returnable , Money re. .iruable . No. 87 27 40 Amount. £ e. d. •22,738 9 9 84.5 7 10 497 7 6 la.sh received for Quity Contracts . Fees on ash received from the Com- isioners for the Reduction of National Debt for payment Annuitants : — Income Tax £ s. d. 430 5 If, 8 Receipts. No. 154 lash received on account of [itracts for the payment of lus at Deatli 1,076 £ Amount. & s. d. 24,081 5 1 139 14 429 8 4 l,lfi5 13 1 25,816 6 By Cash paid to the Commis- sioners for the Reduction of the National Debt for Investment on Account of Suras received for the purchase of Annuities . By Cash paid to Annuitants, viz. :— Cash paid Warrants issued, but not cashed at date £ s. d. 423 IS 4 5 10 By Cash paid to the Commis- sioners for the Reduction of the National Debt for Investment on account of Premiums re- ceived on Contracts for Sums payable at Deatli By Balance remaining to be paid to the Commissioners for the Reduction of the National Debt on the Slst December, 1865, viz. ; — On account of An- nuity Contracts, including Fees On Account of Con- tracts for Sums payable at Death . £ s. d. 1,174 10 4 161 13 1 Payments. No. Amount. 33 £ s. d. 23,046 8 9 429 8 4 984 1,356 3 5 25,816 6 J F 2 436 APPENDIX. (II.) An Account showinrr tlie Number and Amount of Contracts entered into by Her Majest; Postmaster-General from the Commencement of Business on the I7th April, 1865, tot 31st December, 1865, and the Number and Amount of Contracts in existence on the 31 December, 1865. Contracts for Anmiities granted from the commencement of business on the 17th April, 1S65, to the 31st December, 1S65, viz. : — Contracts. No. Immediate Annuities Deferred Annuities, Money not returnable . Deferred Annuities, Money returnable . . £ s. rf. 2,100 I 4:J8 4 511 10 1H2 Contracts for Sums paj'able at Death granted from the commencement of business on the 17th April, 1865, to the 31st December, 1865 . . . Contracts for Annuities in existence on tlie 31st December, 1865, viz. : — Immediate Annuities Deferred Annuities, Money not returnable . Deferred Annuities, Money returnable . . Contracts for Sums payable at Death in existence on the 31st December, 1865 JB s. d. 87 2,100 20 438 4 25 511 10 547 132 544 Amount. £ s. ii:< .S,049 14 40,649 2 4 3,049 14 40,349 2 4 l> i (III.) An Account showing the Amount ]iaicq. Money Order Office : great progi-ess of the, 285 ; assists in the business of Post Office Banks, 330 ; 333 ; all the offices to be Post Office Banks, and agencies for Annuities and In- surance business, 313 ; 375. Money of Savings Banks : security of, 56 ; Mr. Gladstone sj^eaks of the Government use of, 158 ; benefits derived from the use of, 174. Monteagle, Lord, of Brandon, is ex- amined before the Committee of 1858, 167 ; opposes the Post Office Bank bill, 308; makes a "protest" against it, 310. N. National Debt Office, 155 ; mode of proceeding in, with reference to Savings Bank matters, 1 70. Naval Savings Banks : projiosals for, Ajrpcndix, 413. Neild, Mr. J. H., of Manchester, examined before the Committee of 1858, 165; speaks as to increased facilities causing increased business, 241 ; instances the Liverj)ooI Sav- ings Bank, 242. Newport, Isle of Wight, fraud in Sav- ings Bank, 208—9. Nineteenth century, the century of the working man, 23. Number of Savings Banks in- adequate, 238 ; of hours during which thevwere open in 1861, 239 ; of Post Office Banks, 314; of old banks which have transferred their business to the new banks, 325 et seq. 0. Officials of Savings Banks, tlie change from paid to unpaid, au1 et seq. ; rules, &c. of the, 37 — 40 ; character of the, 58. S. Savings Banks : not an object of controversy, 16 ; the founder of, 28 ; the first bill for regulating, 65 ; compared with Friendly Societies, 85 — 6 ; their results on the general jn-ogress of the country, 1824 to 1840, 104 ; their merits disputed, 106 — 7 ; frauds in, Chapter Yl. p, 183 et seq. ; progress of 227 ; list of counties without, 237 ; number of, in 1860, 236 ; absence of facilities in, 239 ; number of hours they were open in 1860, 239 — 40 ; return re- lating to the ten principal, 267 ; the . principal defects of the SaWngs ' Bank system, 266 — 8 ; results of Post Office Banks on, 322 ct seq. ; list of those trsnsferred to Post Office system, 325 et seq. ; and Government Annuities, 348 ; are preliminary means, 380 ; are safe and productive, 381 — 2 ; Abstracts of Acts relating to, Ajjpendix, 400 et seq. Scotch Savings Banks : early Acts relating to, 57 — 8 ; the Consolida- tion Act of 1828 extended to, 74. Scudamore, Mr., reports on Mr. Chetwpid's plan of Post Oflice Banks, 293 ; on a scheme for work- ing Government Annuities, 349 ; superintends the arrangements for introducing the measure, 362 ; de- vises a plan for assisting Post Office employes to insure their lives, 369. Seameu's Savings Banks, 245 — 6 ; Act regiilating, 4l2 — 13. 444 INDEX. Secrecy in connexion with Post Office Banks, 337. Security of Savings, the most im- portant consideration, 51 ; erroneous impression as to Government se- curity, 133 ; in Post Office Banks, 335. Sharman, Mr., Handy Book, 274 ; 276 ; 329 note. Sheridan, Mr., M.P., on Friendly Societies, 357. Sikes, Mr. C. W., of Huddersfield : is a witness before the Committee of 1858, 164 ; his evidence, 167 note ; 174 note ; on the increase of facilities, 242 ; some particular of his life, 250 et seq. ; proposes Pre- liminary Banks, 253 ; writes a pam- phlet called "Good Times," 255; addresses Sir G. C. Lewis on Sav- ings Bank reforms, 256 ; his recom- mendations, 257 — 8 ; Government Banks, 274 ; proposes Post Office Sav- ings Banks, 283 et seq. ; adckesses Mr. Gladstone on the subject, 287 ; de- fects of Mr. Sikes'splau, 291 ; sup- ports the Government scheme, 301. Slaney, Mr. M. P. , on Savings Banks, 73 ; 151. Smith, Rev. Thomas, of Wendover, establishes one of the first Savings Banks, 20—21. Southampton Savings Bank, origin of, 26. Spearman, Sir Alexander Y., 155 ; gives evidence before the Committee of 1858, 166 — 7; explains the mode of investing Savings Bank money, 170 — 71 ; on the Government loss, 268. Stanley, Lord, of Alderley, takes charge of tlie Savings Bank Money bill in the House of Lords, 181 ; introduces and carries through the House the Post Office Savings Bank bill, 306 et seq ; carries the Govern- ment Annuities bill through the Lords, 362 ; 431. Statistics, relating to Savings Banks, 91 ; 227 ; to Post Office Savings Banks, 315 et seq. ; to Savings Banks, Post Office Banks, Govern- ment Anmrities, &c. A^JiJondix, 424 et seq. Stillorgan Bank, the first Savings Bank in Ireland, 44. Sunday Bank, the, at Hertford, 27. Surplus Fund of Savings Banks, 64 ; Mr. Hume on, 75 ; can be a])plied to compensate Savings Bank offi- cials, 328. T. U. V. Taxation, removal of, 4. Taylor, Mr. E. of Rochdale, is ex- amined before the Committee of 1858, 196 ; 199 ; writes a pamphlet arising out of the Rochdale frauds, 233 ; ou Government security, 257. Times, The : on early Savings Banks, 84 ; commences hostile criticism on Savings Banks, 105 — 8 ; on frauds on Savings Banks, 235 ; on Post Office Banks, 311 ; on Government Insurance, 352. Tottenham, an early Savings Bank at, 20. Tralee Bank fraud, 184 et seq. Transfer certificates, copy of, &c. Ajipendix 417. Treasurers, Government proposals for, 145. Trust accounts, legislation on, 125. Trustees, Liability of : 60 — 61 ; un- satisfactory state of the law regard- ing, 111 ; mentioned in connexion with the Hertford Bank fraud, 120; legal decision on, 123 ; Sir C. Wood attempts to regulate the, 132. Vausittart, Mr. M.P., on Savings Banks, 48 ; speaks of the safety of Savings Bank money, 56. W. "Wages, increase in the rate of, 230. Wakefield, Mrs. Priscilla, establishes a bank in 1799, 19. Wellington, Duke of, on military banks, 243 note. AVendover, an early bank at, 20. Whitbrcad, Mr., M.P. introduces his Poor Law bill, 21 ; ])roposes a Poor's Fund and Poor's Insurance Office, 23 ; further reference to his proposals, 270 ; 346 ; provisions of his measui'es. (See Appendix A). Willierforce, Mr., on Savings Banks, 50. Willoughby, Sir Henry : opposes Sir INDEX. 445 C. Wood's bill of 1850, 150 ; 177 ; is a member of the Committee of 1858, 164 ; speaks in the House on the subject, 176 ; assists in bring- ing in a bill to remedy the defects of the law, 179 ; 182 ; opposes the Post Office Bank bill, 306. "Withdrawals, notices of : a subject of dispute, 265 ; concerning, in Post Office Banks, 232—3. Wood, Sir Charles: proposes to amend the law of Savings Banks, in 1848, 131 ; opposes the motion for a Committee on Irish Banks, 137 ; proposes compensation to the Cufl'e Street depositors, 141 ; brings in an important measure in 1850, 144 ; explains its provisions, 145 — 7 ; withdraws it, 151 ; replies to a vote of censure moved by Mr. H. A. Herbert, 155. Worcester Savings Bank fraud, 225 note. Working classes, improvements in the condition of, 10 ; do not need charity, 342 ; 385 ; like to be ad- vised, 386 ; duty of employers to, 386—8. THi; KND. r.nvr.oK : printBD by r. clav, son, and T.sYLor;. Post 8ro, }mce Qs. Second Edition, thoroughly Revised, Corrected, and Enlarged; with a Photographic Portrait of Sir Rowland Hill. HEB MAJESTY'S MAILS: A HISTORY OF THE BRITISH POST OFFICE AND AN INDUSTRIAL ACCOUNT OF ITS PRESENT CONDITION, BY WILLIAM LEWINS. LONDON: SAMPSON LOW, SON, & MARSTON, Milton House, Lddoate Hill. OPINIONS OF THE PRESS. Edinburgh Review for July, 1864. " We. strongly recommend this book to those wlio wish to be fully informed on the subject, as an interesting and generally accurate account of the history and working of the Post-office Mr. Lewins relates the operations of the Post-office with great spirit and fidelity in his very entertaining and instinctive volume, to which we again very willingly refer our readers. Notliing gives a more complete conception of the marvels accomplished by division of labour and well-organized administration ; but it would lead us too far from our immediate object to cite these amusing details." Saturday Review. " We decidedly wanted a good consecutive history of the rise and progress of the Post- ofBee in this country, in connexion both with the public requirements and with the revenue ; and we bear our cordial testimony to the great care and diligence which have clearly been bestowed by Mr. Lewins on what would seem to have been to him a labour of love. Her Majesty's Mails deserves to take its stand as a really useful book of reference on the history of tlie Post. Mr. Lewins's summary of the period of postal reform is kept within the narrowest possible limits ; but, limited as it is, it constitutes one of the most interesting sections of his extremely interesting volume. . . . The amount of detailed information on the conduct and circumstances of postal work is as large and as varied as could possibly be crammed into his space ; but it is hopeless and endless to pursue the interesting track of Mr. Lewins, whose manual we heartily recommend as a thoroughly careful and useful performance." Reader. " In conclusion, we have only to say that Mr. Lewins's book is a most useful and complete one, one that should be put into the hands of every young Englishman and foreigner desmng to know how our institutions grow. " London Review. " The present volume fills a marked and not very creditable gap in the literature of social histor>', and fills it well. Mr. Lewins has collected a large body of facts, illustrating the slow development of a vast department of the State, and often throwing a curious light on e.xtinct conditions of society; and this he has done in a popular and agreeable manner. The author speaks of his book as the fli-st of a small series. If they are aU executed as well as this sketch of Her Majesty's Mails, they will form a very interesting and valuable collection." Chambers's .Journal. " It is impossible in our space to do justice to the variety of material which Mr. Lewins handles, but we wiU conclude, as we began, by commending his very nicely-got-up volume as a sound, sensible, satisfying, and, in suitable places, a sprightly book." Daily News. " The work before us is full of interesting particulars relating to all the branches of the Post-office ; but, besides this information, Mr. Lewins's book contains a vast amount of miscellaneous knowledge, which is in the highest degree useful and interesting. He has written, in fact, a most excellent book, wliich will be welcome to all classes of readers — to the grave and gay, to the gatherer of curious items, and to the student of human progress in its broadest and highest aspects. " The Press. " The author has fairly exhausted the subject, and all who wish for an able and carefully- written history of the Post-offlce should peruse Her Majesty's Mails." Illustrated London News " It would be difficult to mention another book of the same size where an equal amount of information and eutertainment could be obtained. " Manchester Examiner and Times. " Our notice does not require extension to exliibit the very readable, and, in some places, amusing contents of Her Majesty s Mails. Intensely mterestiug are the facts. The Post- office is a great subject ; but it is now shown to be deeply interesting. It might have been treated as a matter of £. s. d., of dry statistical detail, or of departmental information. Mr. Lewins has treated it in all these forms, but given to liis narrative the point, pungency, and pleasantness of a genuine story." Home Nev.^s. " Tlie information is full, minute, and as interesting as it is undoubtedly valuable. The publication is considerably more absorbing than nine-tenths of the novels and romances bought by the hundred at the circulating library. In addition to its merits of industry and accuracy, it exhibits so much literary skill as to make it worthy of a permanent place in the private library." Birmingham Post. Tlie book will find its way into the hands of all interested in the subject, as a clear, popular sketch of a most invaluable reform. ... It is weU worth reading, and one which gives a full description of a wonderful piece of State machinery in a pleasant and popular form." London Examiner. " This is a very useful, and, at the same time, a very amusing book ; useful because of the full and clear historical aecoimt which the author gives of tlie great estaljlishment of which he treats, and amusing from the variety of curious details connected with it. Mr. Lewins's well-written book ^vill well repay perusal." .ifhenceiim. ■ " As a history of the postal system, and a description of its present condition, Mr. Lewins's book leaves little to desire. Mr. Lewins enters largely into all the details descriptive of the Post-office as now organized ; and this part of the book is complete in every respect." MancMster Guardian. " We do not know of any work in which the mode of transacting the Post-office business is described with such minuteness and precision as in his, nor in which the history of its rise into its present importance is traced with so much care." Civil Service Gazette on the Second Edition. " There is no department in the State in which people have so universal and direct an interest as the Post-office. To eveiy person, from the highest to the lowest in the land, at all seasons and hours, the performance of the postal ser\-ice is a matter of the deepest concern. Yet, strange to say, xmtil Mr. Lewins supplied the want, there was no authentic and consecutive history of the English postal system, describing its first establishment, its subsequent development, and its present marvellous state of effective organization. To write such a work and write it well required literary ability of no ordinarj' kind, and a free access to official archives and documents w;is indispensable for the satisfactory performance of the task. Mr. Lewins has had the latter advantages, and in working up his abundant material has displayed much judgment as a condenser, and considerable taste as an author. His history of the' Post-office is not a dry detail of facts, but an animated and most interesting, as well as authentic, narrative of postal administration from its earliest small beginnings' to its present prodigious expansion. No one can glance through the book without becoming convinced of its high stati.stical and literary merits. The earliest portions of the work are judiciously compressed, but those which refer to the introduction of the penny-post reform, and the organizatitm and machinery now in operation, are full and explicit ; and the whole is presented to the reader in a form most engaging and pleasing, as well as instructive. The woi-k was published last year, and was so well received that a second edition has been called for. It is that which now lies before us, and it is but justice to Mr. Lewins to observe that he has spared no pains in revising and in part re-writing his ori"inal history to make it as complete and accurate to the present moment as possible. To all who take an interest in the Post-office, its rise, progress, present organization, and curiosities, we can strongly recommend Her Majesty's Mails as a most entertaining and instructive volume." |l I ' I £" / / V / \ ■ t