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Title: A History of Banks for Savings in Great Britain and Ireland
Author: Lewins, William
Language: English
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      Text enclosed by underscores is in italics (_italics_).



History Of Savings Banks.

A HISTORY OF BANKS FOR SAVINGS IN GREAT BRITAIN AND IRELAND,

Including

A Full Account of the Origin and Progress of
Mr. Gladstone's Financial Measures for Post Office Banks,
Government Annuities, and Government Life Insurance.

by

WILLIAM LEWINS,

Author of "Her Majesty's Mails."



London:
Sampson Low, Son, and Marston,
Milton House, Ludgate Hill, E.C.

[All Rights reserved]

London:
Printed by R. Clay, Son, and Taylor,
Bread Street Hill.



                                 TO

                       THE RIGHT HONOURABLE

                   WILLIAM EWART GLADSTONE, M.P.

                  _CHANCELLOR OF THE EXCHEQUER_,

                            &c. &c. &c.

      THE GREATEST LIVING AUTHORITY ON ALL MATTERS OF FINANCE,

            WHOSE NAME IS NOW INTIMATELY AND DESERVEDLY

                CONNECTED WITH ALL THAT RELATES TO

                    THE SUBJECT OF THESE PAGES,

                             This Work

                         IS BY PERMISSION

                   MOST RESPECTFULLY DEDICATED.



                             PREFACE.


The present volume is offered as a contribution 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
condition of great masses of the people, can scarcely be said to have
found an annalist. I think I may fairly consider that the ground
covered by this work has not previously been occupied. In saying so
much, I do not forget the only book 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 inclination in that direction, or through connexion with
them as employers, take an interest in the progress of the industrial
classes of our country.

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 proposals
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 amongst the other wonderful 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 necessary 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 regard 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 history, 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, with some confidence that they will
find much new and original matter in it, and some old matter put in a
new light.

An Appendix is added, giving the Acts, or clear abstracts of Acts, at
present in force for all the different descriptions of Banks for
Savings, together with some of the latest statistical information
which may be thought of value.

                                                      W. L.

     _London, May 24, 1886._


*.* 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 unreasonably be
expected that I should in some way refer. The first, or the Savings
Bank qualification in the new Reform Bill, concerns Savings Banks and
Savings Bank depositors 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 received with hostility in some quarters
and indifference 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 be manufactured under the one equally as under the other, and it
is not easy to understand why those who support the one "Bye
Franchise" should oppose the other. Little trouble will accrue to
Savings Banks under the Act; and the money forming the qualification
may oftentimes be allowed to remain in the bank, whereas under other
circumstances it might be squandered in unnecessary or unprofitable
expenditure. The distinction 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 who have an equal 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 particular one. Working men who may claim the
Franchise 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 be
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 acknowledgment 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 provident habits, and also of the claims of
others who may not be unduly influenced by the prospect of citizenship
which the Clause may henceforth hold out to them.

Mr. Gladstone's recent proposal to convert the 24,000,000_l._ 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 Government now does with the money
is no concern of Savings Banks. This is put so plainly by Mr.
Gladstone 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
bugbear in all considerations of the subject--will disappear as a
separate item in the National Accounts in the process of redemption
proposed. The entire scheme shows, especially and prominently, Mr.
Gladstone's anxiety to reduce our enormous burden of debt. He here
voluntarily proposes to cripple himself in no small degree in the
matter of his 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
disadvantage; but if he be satisfied to throw the burden equally on
years of prosperity and adversity, surely this is a matter on which
the public generally should feel no fear.



                             CONTENTS.

                                                                 PAGE
                            CHAPTER I.

  INTRODUCTORY CHAPTER                                              1

                            CHAPTER II.

  ON THE ORIGIN OF SAVINGS BANKS                                   18

                           CHAPTER III.

  EARLY LEGISLATION OF SAVINGS BANKS--1817 TO 1844                 45

                            CHAPTER IV.

  ON THE PROGRESS OF SAVINGS BANKS UP 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 FRAUDS                                183

                           CHAPTER VII.

  ON THE DEFICIENCIES OF THE EXISTING SYSTEM, AND THE
    ESTABLISHMENT OF SUPPLEMENTARY SAVINGS BANKS                  226

                           CHAPTER VIII.

  ON PROPOSALS FOR GOVERNMENT SAVINGS BANKS                       269

                            CHAPTER IX.

  ON THE DEVELOPMENT OF THE POST OFFICE SAVINGS BANK SYSTEM       311

                            CHAPTER X.

  ON GOVERNMENT INSURANCE AND GOVERNMENT LIFE ANNUITIES           345

                            CHAPTER XI.

  CONCLUDING CHAPTER                                              377

  APPENDIX                                                        395

  INDEX                                                           437



                              HISTORY

                                 OF

                           SAVINGS BANKS.



                             CHAPTER I.

                       INTRODUCTORY CHAPTER.

    "Archimedes was wont to say that he would remove the world
    out of its place, if he had elsewhere to set his foot, and
    truly I believe so far that otherwise he could not do it.
    I am sure that so much is evident in the architecture of
    fortunes, in the raising of which the best art or
    endeavour is able to do nothing, _if it have not where to
    lay the first stone_."--SIR HENRY WOTTON.


The habit of laying something by in a prosperous season for the wants
of an adverse one is one of the very oldest customs in the world. All
our laws, Divine and human, enjoin the exercise of providence and
frugality as a social, and as a personal duty. These habits which are
inculcated in Scripture as positive duties, and which find 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 everything relating to the
social advancement of the industrial population, 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 stocking, 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
anything; 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 usefulness, increased
happiness in the generations to come." The 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. The
Reform Bill bringing political power to the better class of artisans,
gave a decided stimulus to the intelligence of the people, and an
impulse to the then existing means of education. This political power
brought its responsibilities, and it may be fairly assumed that
increased political knowledge was the result. Whether 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 practical 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 great weight upon his energies.[1]
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
revolution in the means of education for the masses. Many generations
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 education "in extent and comprehension
far more large, and yet 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 century. 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."[2] At the
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
established, and, so far as they went, with certain enough results;
but, if we except the establishment of Sunday schools by Mr. Raikes 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
disgrace 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 misery." "In their education," he goes on to say, "and
_in the circulation of those important political truths that most
nearly concern them_, which are perhaps the only means in our power 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 Raikes
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 clamour 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 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 Continent, 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 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."[3] The cheap press now
finds its way into the 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 instruct, 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 enjoyment 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 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 inappropriately 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 alienum._

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 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 drinking, 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 idleness 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 workshops 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;[4] 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.[5]

The good results of such habits to the industrial classes themselves
and to all portions 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 Poor 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 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 Roman
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
provident 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
rigid-turn, higher principles of duty are superadded; he will do his
work, whatever it is, in every 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,
there are thousands who are utterly careless of such considerations,
and who, in the coarse enjoyment of the present, bury alike all
thought of the past and 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 his work,[6] but too many can say that he is not
provident in his home.[7] The English artisan has been said to be at
once the hardest worker and the hardest spender in the world. He works
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 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 knows
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
depression of trade, be it even of the most transient nature, finds
them totally unprepared for it; those who have been accustomed to the
best wages invariably suffer the most; for, accustomed to the greatest
amount of indulgences, they can do worst without 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.[8]

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 over-estimate the
importance of the subject, we still think it not too much 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 inconsiderable 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 inventions 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 some of our largest
capitalists, have sprung directly from the working classes, and to use
the ordinary phrase, have been 'the architects 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 nation in the world."[9] 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 profitable
investments for 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 competing 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,
"with no individual action, saps no individual self-reliance." "It
prolongs childhood by no proffered leading-string; it valitudinarises
energy 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 defrauded 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 endeavouring 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."[10] Strengthened by such
testimony, 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 us.


    [1] The following table taken from the _Statistical Returns_,
    presented by the Board of Trade, shows in a clear light how much
    of 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:--

    +------------------------+------------+-----------+-------------+
    |                        |Repealed or |           |Diminution or|
    |                        |  Reduced.  |  Imposed. |  Addition.  |
    +------------------------+------------+-----------+-------------+
    |                        |     £      |     £     |       £     |
    |Customs                 | 12,208,604 | 3,291,820 |D.  8,916,784|
    |                        |            |           |             |
    |Excise                  |  5,607,000 | 6,380,000 |A.    773,000|
    |                        |            |           |             |
    |Property and Income Tax | 16,265,000 |14,764,000 |D.  1,501,000|
    |                        |            |           |             |
    |Other taxes             |  2,608,800 |   600,000 |D.  2,008,800|
    |                        |            |           |             |
    |Stamps (including       |  1,428,000 | 2,411,200 |A.    983,000|
    | succession duty)       |            |           |             |
    +------------------------+------------+-----------+-------------+
    |        Total           |£38,117,404 |27,447,020 |D. 10,670,384|
    +------------------------+------------+-----------+-------------+

    [2] 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 with marks. What
    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.

    [3] Speech at Newton-le-willows, July 22, 1865.

    [4] 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, Rotherham. When 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 furniture of substantial value is presented to the
    newly-married pair, paid for out of the subscriptions by the men.
    On one of these occasions it is related, that the head of the firm
    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, 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."

    [5] 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
    result, which, though the original difference was only with eight
    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
    sequel 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 working _ten minutes additional time when
    necessary_, an arrangement which we recommend to other large
    employers of labour and large bodies of workmen. That the masters
    should be acquitted of any selfish motive, they allow the funds to
    be managed and applied by a committee of workmen appointed by
    themselves from their own number.

    [6] "No labourer," says Mr. Smiles in his _Workman'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 quality of workmanship.
    He possesses a power of throwing himself bodily into his
    occupation, which 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 "Voilà! voilà ces Anglais! somme ils travaillent!"

    [7] 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: "Improvidence is too
    tame a word for it--it is recklessness; here young and old,
    married and single, are uniformly and almost avowedly
    self-indulgent spendthrifts. One sees this reckless character
    marring and vitiating the nobler 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.

    [8] 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
    happily the mid years of the century with its younger ones; but it
    has been no mean confluent to the tide of progress, the softening
    of manners, the spread of education, the 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 Review._

    [9] _Quarterly Review_, 1859.

    [10] Mr. W. R. Greg in the _Edinburgh Review_, 1853, p. 406.



                            CHAPTER II.

                  ON THE ORIGIN OF SAVINGS BANKS.

    "It would be difficult, we fear, to convince either the
    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."--_Edinburgh
    Review_, 1818.


Great Britain can with justice, we think, lay claim to the original
establishment of the system of Savings Banks. One well-known
writer[11] 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 institution 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. No withdrawal of money was
allowed. In this 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 Rev. Joseph Smith of Wendover. 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
importance. 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 1799, for the benefit of women and
children in her own village of Tottenham, and under her immediate
superintendence. 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 withdrawn; 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 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 Mr. Spurling, were appointed Trustees.[12]

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 undertaking between
a rich and benevolent rector and his poor parishioners. Still, there
was here the germ of that of which we are in search. Mr. 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 parish relief, if otherwise he could obtain 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 difficulty 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 continually raised against them. "Mr. Malthus,"[13] said Mr.
Whitbread, "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:[14] "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 sum from 20_s._ upwards, but
not exceeding 20_l._ in any one year, and not more than 200_l._ 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. "The plan," added Mr. Whitbread, "will be more amply
detailed in the Bill itself, and such regulations are provided as
will, _with the intervention of the 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 labourer 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 manifested to Mr. Whitbread's plans for securing the
savings of 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.[15]

One at least of the important organs of public opinion 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 persistently 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
_Edinburgh Review_. It commented upon Mr. Whitbread'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 requisite facilities or securities without either
disturbing its neighbours, or withdrawing the attention of Government
or the Legislature _from their proper concerns_."

Before we come to the plans and exertions of Mr., afterwards Dr. Henry
Duncan, of Ruthwell, 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 industrious 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_l._, and the entire amount of the
funds in the bank could never exceed 2,000_l._ A servant might deposit
up to 50_l._, 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 impracticable."[16]
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
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 Southampton was
established, principally through the exertions of the Right Hon.
George Rose, who was appointed president, and who soon afterwards
wrote an account of the undertaking.[17] The exertions of Mr. Rose on
behalf of savings banks will frequently require to be spoken of in
subsequent pages. The Southampton Bank was 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 deposits. One regulation, new
at that period, which was a suggestion of Mr. Rose, empowered the
officiating 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
answerable 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_l._ in the first and second
years, and 25_l._ in any succeeding year. The distinguishing feature
about the Exeter bank was the application, 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_l._ 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_l._, or about a
fifteenth-part of the deposits, were paid as withdrawals.

The original Hertford Savings Bank was a charitable concern, after the
fashion of Mr. Smith's at Wendover. "The Sunday Bank," as it was
called, was established about the year 1808, by the vicar of the
place, the Rev. Thomas Lloyd. Sums of from sixpence to two shillings
were received by the benevolent pastor from his poorer parishioners
after morning service on Sundays, and in this way about 300_l._ 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. interest, which 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 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.[18] It remains to be seen whether
the bank established by Dr. Duncan in his own village answers the
description 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 unsuitable 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 proposals in order to make them suitable to the
general requirements; 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 October,
1816, incidentally referring to Dr. Duncan and his proposals 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 intelligent and wealthy would have
had little knowledge, and from which the lower classes in general
would have derived no advantage."

Henry Duncan, who was the son of a Dumfriesshire clergyman, 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 Ruthwell, 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 class of their fellow
men," and the boast is neither an idle nor a vain one. Mr. Duncan must
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 Schoolmaster," 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 high
authority of that period,[19] "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 _réunions_ 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 prevent their introduction into
Scotland. It is also clear, that though Mr. Whitbread'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 the
columns of this paper, in the course of which some books and pamphlets
on cognate subjects were forwarded to Mr. 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 effecting the gradual
abolition of the Poor's Rate." 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 working 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 pages, in the _Dumfries Courier_,
in which paper he directly proposed to the gentlemen of the county the
establishment of a Bank for Savings in all the different parishes of
the district. "The only way," said Mr. 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
encouragement to industry and virtue; by inducing them to provide for
their _own_ 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
objection 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 institution 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 progress 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 engagements 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 the
savings which might by a reasonable economy be gathered from this
source alone, and could he succeed in supplying the means of investing
these savings securely, affording them at the same time the prospect
of a fair rate of interest, not from charity, but from the resources
of trade, he was confident the hopes he cherished would be
realized.[20] The scheme was started in May, 1810, and savings to the
amount of 151_l._ were deposited under the stipulated conditions
during the first year. In the two succeeding years they rose to
176_l._ 241_l._ and in 1814 to 922_l._

Mr. Duncan's work was far from completed when even his most sanguine
expectations were realized in the progress of the Ruthwell Bank. His
advice and assistance was now continually sought in aid of the
formation of similar institutions, both in Scotland and England. In
1813, "the Edinburgh 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 Ruthwell 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 1814. 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[21] that during his journey to Kelso he passed through the
town of Hawick, and was 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 Ruthwell
Bank wet from the press, which had been taken from the pages of the
_Dumfries Courier_ and supplied by himself. These handbills, which
likewise gave a copy of the Rules 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 his arrival at Kelso an important meeting was held, with the Duke
of Roxburgh 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 frequently were of a
controversial nature, and generally from such people, ardent friends
of the poor, as required consideration 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 well 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 the clearest evidence that Mr. Duncan
laboured with uncommon 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 benefit
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.[22] 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 has 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 Savings 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
Ruthwell had the priority of merit on the score of general advantage.
Pamphlets were written on the subject, not always without bitterness,
and even the great _Reviews_ interfered. The dispute was scarcely
called for at that early period, seeing that posterity is best 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 accounts now before us.[23] 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, Mr. 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 Ruthwell institution consisted of ordinary,
extraordinary, and honorary members. The ordinary members were the
poor who deposited their savings; the extraordinary, those who paid to
an auxiliary fund an "annuity" of 5_s._, or a single donation of
2_l._; and honorary members were those who paid to the same fund an
"annuity" of 1_l._, or a single donation of 5_l._ The general business
of the society was transacted by a Court of Directors, consisting of a
Governor, five Directors, a Treasurer, and one or more Trustees, to be
chosen from the honorary and extraordinary members. The court acted
under the superintendence and control of a Standing Committee, which
consisted of fifteen persons chosen from the self-same kind of
members. Both these bodies were subordinate again to the General
Meeting, composed of all the members of the two courts mentioned, and
all the ordinary members of six months' standing. We scarcely think
there could be any possible necessity for such elaborate machinery. In
circumstances such as the rural population of Ruthwell, were cast, one
would have supposed that rules as little stringent as possible,
hampered with conditions as few as possible, would be needed, to
induce that population to save the trifles they could spare.
Inducements were held out to encourage and reward the frugal and
attentive; and so far admirable: but the system of fines inflicted
upon those who did not deposit a certain sum each year was a
questionable proviso. Mr. Duncan put the case very plausibly in his
_Essay_, where he said the chief defect of the scheme was, originally,
the want of some strong motive for regular payments; and, "as what we
have no pressing motive to do at a particular time we are apt to delay
till it is beyond our power to do it at all," he decided to fix a
small sum as penalty, should not a certain moderate amount be
deposited each year, a decision which we think was neither proper nor
wise. The regulations acted upon in the case of a proposed new member
were, we think, equally uncalled for, and likely to scare the
well-disposed away, rather than induce them to join. Before a person's
first deposit could be received, the elaborate machinery of management
commenced to make inquiries into the age, the family affairs, and
moral conduct of the proposed contributor, and according to the report
which followed, it was considered whether his deposits would be
admitted at all, or if admitted, what rate of interest it would be
proper to allow. The society lodged its money with the British Linen
Company, and got five per cent. interest for it. Four per cent. was
the usual interest allowed to depositors; to those, however, of three
years' standing whose deposits reached 5_l._, an indulgence of the
higher rate of 5 per cent. was made, provided the depositor wanted to
get married; in case of his having arrived at the age of fifty-six; to
his friends in case of his death; or, fourthly, in case the possession
of the money _should appear to the Court of Directors_, after due
inquiry, to be advantageous to the depositor or his family.[24] To put
a climax, as it were, upon this charitable disposition of a man's own
hard-earned savings, we would merely recite the fifth statute, which
directs that "when the depositor shall have become incapable of
maintaining himself, from sickness or otherwise, a weekly allowance
may be made to him, _at the option of the Court of Directors_, out of
the money he has deposited."

The auxiliary fund, to which the honorary and extraordinary directors
were required to contribute, was employed in awarding premiums to
those who were most regular with their deposits, especially to those
regular depositors who should have exhibited proofs of superior
industry or virtue. It may well be thought that, in such delicate
matters as were thus dealt with, differences of opinion would arise,
so it was wisely provided, that any aggrieved member should have the
power of appeal from the Court of Directors to the Standing Committee,
and from the Standing Committee to a General Meeting, whose decision
should be final. "The example set by Dr. Duncan at Ruthwell," says Mr.
Smiles,[25] "was shortly followed in many other parishes in Scotland,
and in most of the principal towns in England," and, so far, we have
seen this is true. What follows is certainly open to question: "In
every instance, the model of the Ruthwell Bank was followed, and the
vital, self-sustaining principle was adopted. The Savings Banks were
not eleemosynary institutions, nor dependent upon anybody's charity or
patronage; but their success rested entirely with the depositors." Our
readers may judge from the details of management which we have given
how far this is borne out by the facts of the case; for ourselves, we
are slow to take from the merit which undoubtedly should attach to Dr.
Duncan. There were, doubtless, many circumstances connected with the
minister's own parish which made the arrangements to which we have
referred more excusable; but there must have been many districts where
the poor would never suffer themselves to be patronized, petted, or
provoked in the same manner. Hence the inapplicability of the details
to the country generally. Real, honest, independent workmen have
always had a great dislike to be experimented upon, "raised," or
"elevated," in the sense that some men use the terms; what was felt to
be required at this early period was, that there should be afforded
some facility for the depositing, without any unnecessary trouble or
annoyance, such small sums as the poor might have to spare, and wish
to save; and that this money should not only be safe, but produce
interest according to its value in the market, and neither more nor
less. That arrangements made with this laudable object should be
accompanied with others which should have the tendency, however
remote, to disgust and repel the poor, was unfortunate, to say the
least. Any interference with, or superintendence over the family
affairs or the private conduct of members, was likely to be, it seems
to us, most irksome, and no less to the poor than to the rich. The
arrangement by which various rates of interest were given to different
classes of depositors, according to their good or indifferent
characters, was eminently arbitrary, if not unfair.

We have already alluded to the Edinburgh Savings Bank, instituted
after the parent bank at Ruthwell, and to some extent upon its model;
the offspring, however, in many points presented a happy contrast to
the Ruthwell Bank, in the simplicity and greater fairness with which
its affairs were managed. As it is now a matter beyond doubt that many
banks formed subsequently were started on the model of the Edinburgh
institution, a few words of description of its principal new features
may not be out of place. All depositors were paid the same rate of
interest; they deposited their savings without any preliminary
investigation of any sort; and whilst the management was not left,
even in part, to the classes it was designed to benefit, contributors
had nothing to do but pay in such sums as suited them, and withdraw at
pleasure, altogether as the classes above them would deal in the
ordinary bank. From the pamphlet published in the same year as that of
Dr. Duncan's, and to which we have already alluded, we are enabled to
give some account of the plan of working in the Edinburgh Bank; and it
is very interesting at this distant period to see how nearly identical
with the modern Savings Bank this early one was, or rather, we think
we ought to say, how closely the example of the Edinburgh Bank has
been followed. The bank, we find, was open every Monday morning
between nine and ten o'clock. No less sum than one shilling could be
received. The uniform interest paid was at the rate of four per
cent.[26] The money might be paid back at any time on a mere demand
and production by the depositor of his _deposit sheet_. Each depositor
was furnished, on making his deposit, with a duplicate of the _leaf of
the ledger_ in which his account was kept; on each succeeding visit he
brought the duplicate with him, and each separate transaction was
entered in the ledger and on the duplicate at the same time. This
arrangement, as might have been expected, soon gave place to the more
convenient bank-book at present in use. It will be observed that up to
this time, and some years subsequently, the Savings Banks had no
connexion with Government, and the funds realized were accordingly
deposited with some banking company, and, as a rule, the interest
received was at a higher rate than has since obtained. One feature in
the Edinburgh Bank, as in other Scotch banks of the period, is unknown
at present. When the deposits of any one person amounted to ten pounds
(the minimum sum received by an ordinary bank), he was presented with
an interest-note upon any banking firm he chose to name for the
amount. Henceforth he held an account with the bank in question,
receiving a higher rate of interest, and a strengthened security for
his money. The Savings Bank, however,--and this is noteworthy,--was
still open to him as a bank for his small accumulations as before, and
until they again amounted to the sum of ten pounds. The Edinburgh
Bank, thus restricted to such small sums and simple operations, was
able to get through its work with little trouble and a minimum of
expense. Perhaps here the endeavour to save expense proceeded to too
great an extent, and resulted in more gratuitous service than the
depositing classes at any time have cared to see. No honest man would
object to have the legitimate expenses of a careful management
deducted from the interest of his savings. In recommending the system
to others, the penurious style in which it was thought not improper to
do the business is manifest in the language adopted. "It can scarcely
be doubted," says the author of the pamphlet, "that in every parish
and district there will be found persons benevolent enough to perform
the office of attending to this work, viz. one hour per week,
gratuitously, by turns; and it will be easy to procure a room rent
free. Thus the only expense of management will be the purchase of
stationery; and for this purpose the saving already described (a small
difference between the interest paid and the interest given) will be
amply sufficient, without lowering the rate of interest allowed to the
contributors. It may be supposed, indeed, that some expense may be
incurred for transmitting to the great house (the banking company
chosen) the money deposited in the Savings Bank." "But we are
persuaded," adds this man of cheap expedients, "that in every case a
safe and free conveyance will be furnished by the principal
proprietors or inhabitants of the parish." The growth of Savings
Banks, and the progress of banking generally, soon left out of view
all such minor considerations as these. Such was the excellent
institution at Edinburgh, and it deserved all the success it obtained.
At first it was thought that its connexion with the Society for the
Suppression of Beggars retarded its progress; and it was not at all
wonderful that this was the case.

Perseverance, and the laborious exertions of its originators,
especially the efforts and high character of Mr. (afterwards Sir
William) Forbes, soon made up what the bank may have lost by this
connexion, and in five years from its formation was in every respect a
decided success. Without ostentation, and without trenching in any
respect on the independence of those who needed their assistance, the
originators of this bank went on, not only in Edinburgh, but in other
Scotch towns to which their influence extended, and with which the
metropolis has always some connexion, and their endeavours to cope
with the improvidence and carelessness of that period resulted, in a
few years, in a complete spread of the principle. What society owes to
the men who at this early date laboured with such zeal and devotion in
behalf of their fellows, little thought has ever been given; the names
of many of them have not even been preserved. It ought to have been
far otherwise. "It would be difficult, we fear," says Francis Jeffrey
in an early number of the _Edinburgh Review_, "to convince, either the
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."[27]

Before we close this notice of original Savings Banks, we would refer
to their establishment in Ireland. The first Savings Bank in the
sister country of which record is made was one established at
Stillorgan in 1815, and was called the "Parochial Bank." The Rev. John
Reade, the parish minister of that place, was not only the founder of
this bank, but also of the second venture of the kind; for, on
removing to Clondalkin, he would seem to have taken his benevolent
disposition with him, and to have repeated the process among the poor
of his new charge. A peculiar arrangement existed in these early Irish
banks, of which no trace is found elsewhere. The deposits of each
subscriber were kept separately, and open to the inspection of the
owner when he brought any fresh deposit, on which occasion he might
count his money if he chose. So soon as the deposits of any person had
reached 1_l._ the money was invested in Stock, and produced interest,
but not till then. Both banks eventually formed the nuclei for
ordinary Savings Banks after the act relating to Irish banks was
passed in 1817. The Belfast Savings Bank, opened in 1810, was the
first formed after the ordinary model, and has always been very
successful.


    [11] Mr. Scratchley's _Practical Treatise on Savings Banks_, 1st
    edit. p. 36.

    [12] See the _Reports of the Society for Bettering the Condition
    and Increasing the Comforts of the Poor_, vol. iii. which contains
    a full account of this earliest Savings Bank.

    [13] "To facilitate the saving of small sums of money and to
    encourage young labourers to economise their earnings with a view
    to provision for marriage, 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.

    [14] _Hansard_, vol. viii. p. 887.

    [15] 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 century afterwards have been carried out, cannot
    fail to strike the reader.

    [16] _An Explanation of the Principles and Proceedings of the
    Provident Institution at Bath_. By John Haygarth, M.D., F.R.S.,
    one of the Managers, London, 1816.

    [17] _Observations on Banks for Savings_. By the Right Hon. George
    Rose. London, 1816.

    [18] _Memoir of Dr Duncan._ By his Son, the Rev. G. J. C. Duncan.
    Edinburgh, 1848.

    [19] _Quarterly Review._ October, 1816.

    [20] _Memoir_, page 98.

    [21] _Ibid_, page 105.

    [22] 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.

    [23] (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 Ruthwell; and Directions for conducting the
    details of business; Forms showing the methods of keeping the
    Accounts, &c._ By the Rev. Henry Duncan, Minister of Ruthwell.
    Edinburgh. 1815.

        (2) _A short Account of the Edinburgh Savings Bank, containing
    Directions for establishing similar Banks, &c._ Second Edition.
    Edinburgh. 1815.

    [24] Duncan's _Essay_ page 27.

    [25] _Workmen's Earnings, Strikes and Savings_, page 37.

    [26]  One clause in the Rules states that "Interest is to be
    calculated by months, as the calculation by days on such small
    sums would be extremely troublesome, and without any adequate
    advantage."

    [27] _Edinburgh Review_, xlix. page 146.



                           CHAPTER III.

         EARLY LEGISLATION ON SAVINGS BANKS--1817 TO 1844.

    "The promotion of economical habits amongst the people is
    so much a matter of national concern, that we cannot
    conceive any direction in which the powers of Government
    would be more beneficially directed than in giving effect
    to schemes calculated to produce such valuable social
    results among the humbler classes of the people."--MR.
    SMILES.


It was not till Savings Banks had been regularly organised in this
country, and not before they had achieved some considerable success,
that the Legislature interfered in any way with regard to them. That
the ruling classes, however, were not slow to encourage these
undertakings is sufficiently manifest, when it is remembered that the
first legislation on the subject dates from 1817, or only seven years
after Dr. Duncan had organised his parish bank; and further, that the
purport and effect of the bill then introduced was not to embarrass
and hamper the new institutions, as was too often the case with new
and partially-tried measures, but to offer them protection and
encouragement. Prior to 1817, Savings Banks were simply voluntary
associations, established, as we have already seen, by some benevolent
gentlemen, who took a sort of leading part in the affairs of their
respective neighbourhoods, and who were actuated in doing so by their
desire to afford to their poorer neighbours help and inducement to
save money. Up to this time the confidence entertained by the poor in
the integrity and well-meaning of the rich was the only security they
had that their money was in safe keeping; and it is only fair to add,
that, so long as Savings Banks were promoted and kept up in this
semi-paternal fashion, that confidence was seldom, if ever, misplaced.
Savings Banks were soon seen, however, to possess germs of national
good which would require greater means of development to be brought to
bear upon them; and it was quite as plainly apparent that the more
they extended, the greater the necessity became that they should be
legally recognised and protected. The first mention of the new
institution in Parliament was made by the Right Hon. George Rose, who
was at the time Treasurer of the Navy, and one of the Committee of
Council for the affairs of Trade and Foreign Plantations, and who, at
the close of the session of 1815, and again in April, 1816, asked
leave to bring in a bill, "to afford protection to Banks for Savings."
Mr. Rose, for the next two years, took a leading part in all
discussions on the subject, as indeed he did on all kindred
subjects.[28] He had written on Poor Laws and Benefit Societies; and,
on account of his having, towards the close of the last century,
carried through Parliament a bill legalizing Friendly Societies, was
generally looked upon as an authority on such subjects. The first
speech of the hon. gentleman on Savings Banks was remarkably able: 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 before 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. gentlemen 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, which 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 sickness, or permanent support when the approaches of age
should unfit him for active exertions. Not that this matter was
applicable only to the poor; a consideration of the subject 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. _Mr. 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 this sort, but the better
classes were afraid of doing so, on account of their apparent
complexity, and because they had not received up to this time the
sanction 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 could 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 Parliament, and he should then say
that many who were accustomed in times of scarcity to solicit
parochial relief would have no excuse for their conduct; if they did
not avail themselves of the opportunity of becoming independent he
would rather punish than assist them. Thus early were our legislators
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 the 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. "There, forgetful of
those petty distinctions which temporary 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 bill might be
extended to Ireland, where, he truly said, such habits as these banks
inculcated were most urgently needed, even more so than in England,
this one-sided debate was closed.[29] The 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 Rules proposed for the management 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 applying 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. Rose 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 Law relief. He contended, that, if they
became generally introduced through the length and breadth of the
country, they would gradually 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. Curwen_, 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 satisfied "it
was an error to imagine they would essentially contribute to the
alleviation of the present distressing situation of affairs." Nothing
short of a measure which 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
another 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. Wilberforce_, 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 originating it
and bringing it to greater perfection. "Whatever difference of
opinion," continued Mr. 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 neighbourhood, 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 proposed 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 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, which would have a tendency to make the poor think that
the 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, notwithstanding, 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[30] is the beginning 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 Rules 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 the account of the
Commissioners for the Reduction 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 3_d._
per cent. per day, or 4_l._ 11_s._ 3_d._ per annum. The Act restricted
the amount which any one depositor could place in a Savings Bank in
England to 100_l._ in the first year, and 50_l._ in any subsequent
year. In Ireland the limitation was 50_l._ 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_l._ had been deposited. The largest amount
received at the National Debt Office during that period from any one
bank was 32,000_l._, remitted from the flourishing Exeter bank; the
smallest was received from a new bank just then opened at St. John's,
Wapping, 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, that it was soon apparent that the increase of
deposits was in a ratio far beyond any possible increase in the amount
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 increase of business. Towards the close
of 1817, 20,000_l._ 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 11_s._ 3_d._ more than the interest yielded by any other
Government security, while Consols did not bring in more than 3_l._
5_s._ per cent. Many, we believe, in the first instance put their
money into the Savings Banks to afford encouragement to their poorer
neighbours 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 people, who too often were swayed
hither and thither at the mere whim of some noisy and ignorant
demagogue. Whether 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 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_l._ 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 remains, 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 alterations in the forms of debenture, gave power to
Justices of the Peace to reject, for a sufficient reason, any Rules
deposited with their clerks, and prohibited the arrangement by which a
person might invest in a Savings 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. Ridiculous as it might seem, it only
reflected the spirit in which many people spoke of the measures which
had recently been passed with regard to the compulsory investments
with Government of the money placed in the banks. In Lancashire, 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. Wilbraham_, 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 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 breaking 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
Government 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. _The 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 Parliament, 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."[31]
_Mr. Brougham_ observed that this was not the first time that such
reports had been circulated, 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 respect to
Savings Banks, it would be well to refer to their progress and
operation in Scotland. None of the Acts passed up to this time in any
way related to the Scotch banks. When Mr. Rose's bill was before
Parliament, its application to Scotland was successfully opposed; a
separate bill was introduced 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."[32] 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 encouragement and protection,
replied in a lengthy and able letter,[33] in which he clearly showed
that difficulties and discouragements 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_l._--was the
difference between the Parish Bank at Ruthwell, 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 interference in
its management, and left every one to deal with it or not, at their
pleasure. The Ruthwell 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[34] passed in 1820, by which it was
provided that charitable institutions might deposit a whole or a
portion of their funds with the Commissioners, no further legislation
on Savings Banks was attempted till 1824. In this year the Chancellor
of the Exchequer (Mr. Robinson) took up the matter where Mr.
Vansittart had left it, and carried a Bill through Parliament still
further to amend the law.[35] With a view to remedy still more
completely 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_l._ and should stand at 30_l._ 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 succeeded 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_l._
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 these banks induced, not only
individuals of rank and property, 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 increasing 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 rich, the Chancellor of the
Exchequer saw no other means of meeting the evil than by reducing the
interest given. He "should feel most reluctant 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 until
now. The same arguments were used at this early period as at different
times subsequently. 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 most able persons would be deterred from accepting
so much responsibility, and would give up 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_l._, or 600_l._ in the aggregate. 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 ridicule and derision, and subsequently the
respect of friend and foe and the confidence of the entire
nation--took up the question 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 institutions 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 have
the matter inquired into, and this expenditure 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 10_l._ or 20_l._ 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_l._ 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_l._ and had paid to depositors for the same 2,703,000_l._
Hence the loss[36] 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
40,000_l._ or 50,000_l._ 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 interest, and some another; some charged much higher for
paid assistance than others, and yet, with unvarying uniformity, he
might have said, the executive granted the same high rate of interest
to all, irrespective of how they disposed of it. The Returns were
ordered _nem. con._ 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:--

  +---------+--------------------+------------------+-----------------+
  |         | Dividends on Stock |   Interest Paid  |                 |
  | Years.  |    Received by     |     Trustees.    |    Difference.  |
  |         |   Commissioners.   |                  |                 |
  +---------+--------------------+------------------+-----------------+
  |         |     £     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   0   2 |  42,486  10   1 |
  |    1824 |  379,411   6   7   |  468,261  12   1 |  88,850   5   6 |
  |    1825 |  450,027  13   0   |  562,759   0   4 | 112,731  13   4 |
  |    1826 |  478,286   5   3   |  592,390  18  11 | 114,104  13   8 |
  |    1827 |  480,851  13   0   |  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 Returns having been 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 was, decidedly, 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 situation 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 untouched, 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_l._ 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_.[37] The
vicissitudes of party prevented this high Government functionary from
carrying out his laudable, but very impossible design. In a few weeks
the Chancellor is on the other side of the House, and another occupies
his place. A bill, however, was introduced on the 5th of June, 1828,
by Mr. Pallmer, which, supported by the new Administration, was passed
through Parliament, and became law in the same year.[38] In
introducing this bill, _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 regulating
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 endeavour 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. Nothing
transpired in the passage of the bill through Parliament 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 the
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. Lewis_, for example,
during the second reading of the bill, proposed a clause for
preventing the National Debt Commissioners from taking more than
20,000,000_l._ 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 Wellington presided as Premier, and one verse ran--

         "To rest from toil our Great Untaught,
            And soothe the pangs his warlike brain
          Must suffer when, _unused to thought_,
           _It tries to think, and--tries in vain_."

_Sir Joseph Yorke_ 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 certainly 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 3_d._ to
2-1/2_d._ per diem, the interest on deposits should only be at the
rate of 2_d._ 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
entitled, "An Act to consolidate and amend the Laws relating to
Savings Banks," and repealed all other Acts previously in force. From
this 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 every 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, would be
appointed by the National Debt Commissioners.[39] The duty of the
barrister would be to certify that the Rules of the proposed bank were
strictly according to law, and this certification, after it had been
made, was to be laid before the Justices of the Peace in Quarter
Sessions, who were empowered under certain circumstances to reject the
same, or any part thereof. If admitted, as they most commonly would
be, after certification, the Rules became binding on depositors and
officers. The interest to be given to depositors, as we have already
stated, was reduced by this Act from 4_l._ 11_s._ 3_d._ per cent. per
annum, to 3_l._ 16_s._ 0-1/2_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_l._ per year, or 300_l._ 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 could not invest more than 300_l._ principal and interest
included. Trustees were not to receive from any one depositor more
than 30_l._ in any one year, nor more than 150_l._ in the whole and,
when the deposit and interest amounted to 200_l._ interest was to
cease. Depositors might withdraw their money and again subscribe,
providing they did not do it to a greater extent than 30_l._ in any
one year. Deposits might be withdrawn from one Savings Bank and placed
in another. Should a depositor die leaving any sum exceeding 50_l._
the same was not to be paid without probate or letters of
administration. Administration bonds for effects under 50_l._ 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 considerable importance, the
bill provided that once in each year the Trustees of every Savings
Bank should make a Return 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.

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 we 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 deferred annuities through
the medium of Savings Banks, and to grant them on so small a scale as
to place them within 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 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 providing 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 unfortunately it was lost in the House of
Lords--which would have made the legislation of 1833 less necessary.
_Lord Althorp_ 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_l._ a-year. He would propose
to make the sum 20_l._ 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 commenced,
the whole of the money subscribed should be paid to him or his
executors. The tables would be calculated at the rate of 3_l._ 15_s._
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 calculated 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_l._ a-year. 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
10_l._ and 10_l._ 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. Brotherton_, 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_l._ or
800,000_l._ 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 labour, gave his remarks
weight, when he trusted that the clause in the bill of 1828, which
provided that Accounts of Savings Banks should annually be laid before
the Government, 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, where the Trustees had neglected to furnish proper returns,
the Commissioners had exercised the power which the law gave them,
_and had closed the banks_ till the Accounts were sent up.[40] 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.[41] 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 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 Government 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 Government 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 independent 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 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[42] extended the bill for consolidating and
amending 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 1844, so we will 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 original founders of Saving Banks, and had
always taken a deep interest in them. It was far from him to do
anything to interfere with their usefulness in the country, only the
country ought not to be put to large and increasing expense over them.
He compared the rate of interest given before and after 1828, and now
stated that on this latter rate the country lost from ten shillings to
fifteen shillings per cent. on the entire amount of deposits. The
average annual loss to the public up to the time he was speaking, and
from 1818, had been 75,000_l._ If this money went to the provident
poor he would not so much care; but if all was paid to depositors,
that might not be the case. Of the 500 Savings Banks in existence in
1837, to whom the Commissioners paid 3_l._ 16_s._ 0-1/2_d._ per cent.
interest, 412 of them paid to the depositors only 3_l._ 6_s._ 8_d._,
and 88 of them paid 3_l._ 8_s._ leaving of course a large surplus,
after every expense had been paid, in the hands of both sets of
trustees. Hon. gentlemen might say that this surplus money was
required by law to be invested in the Surplus Fund account at the
National Debt Office; but the act, in leaving it to the trustees to
say what they themselves deemed "surplus," defeated its own ends, and
without doubt had opened a door to fraud. Mr. Hume made a motion that
the House at its rising should go into committee on the 9th Geo. IV.
c. 93, which fixes the rate of interest to be given, and to permit the
Chancellor of the Exchequer to reduce that rate to an equality with
that which is received in the public funds. He thoroughly believed
that the security afforded by Savings Banks was a matter of far
greater importance than the amount of interest which was paid. Mr.
Hume then referred to a subject which was made matter for great
discussion, and which a committee of the House of Commons treated at
great length some years subsequently. This was the power which was
supposed to rest with the National Debt Commissioners, of using
Savings Bank money for the exigencies of the State; "the dangerous
power," as Mr. Hume characterized it, "to change the money they had in
charge from funded to unfunded debt." He said the Commissioners had
paid thirty-five millions sterling from 1817 to 1838, for the purchase
of Stock and Exchequer bills, and had received from the sale of Stock
and Exchequer bills seventeen millions, leaving more than a similar
amount then standing in their names. He urged, "that as the whole of
the deposits were by law payable in cash, and that as sums under
10,000_l._ could be demanded in five days, and even larger sums at
fourteen days' notice, the public might in a time of panic, such as
they had recently passed through, legally make demands of cash, and so
produce a heavy loss to the Government, and greatly inconvenience, if
not endanger, public credit." He gave a recent example, taking five
months of the year 1832, when the country was at its greatest height
of political ferment. The money transactions of the English Savings
Banks in

                      Deposits.   Withdrawals.
                          £           £
     March 1832 were   46,841       93,947
     April   "         33,447      107,534
     May     "         28,345      114,677
     June    "         25,515      368,976
     July    "         47,574      140,682[43]

_The Chancellor of the Exchequer_, who at the time of which we are
speaking was Mr. Spring Rice (the late Lord Monteagle), was quite
unwilling to take the course recommended by Mr. Hume. He was sure it
would tend to shake the security of the deposits, to which the loss
which Mr. Hume had spoken of was a mere trifle. He admitted, however,
that if Parliament could have foreseen the extent to which Savings
Banks would so soon have arrived, wiser arrangements would undoubtedly
have been made. People certainly did not want all the inducements to
save their money which it was once thought they did require. Still, he
was not for changing the rate; Government paid more than they received
as interest, but he declined to argue the matter as a mere money
question. Mr. Hume might say that depositors cared more for security
than interest, but he (the Chancellor) said, that if they reduced that
interest, the depositors would rush to take out their money. Nor did
Mr. Rice speak without the book. He produced a paper in which was
described the effect of the various commercial and political panics on
Savings Banks, and in distinction to this the result of the reduction
of the rate of interest in 1828. So far as it went, the Return is
conclusive and instructing.[44] In the commercial panic of 1825, the
total amount withdrawn was 361,000_l._; in the political panic of
1832, 550,000_l._; in 1828, when the interest was reduced by 14_s._
per cent., no less a sum than 1,500,000_l._ was withdrawn. The
Chancellor would not say that under no possible circumstances should a
reduction take place; a time might come when it might be done wisely
and discreetly, though he believed it would never take place without
creating some degree of uncertainty and risk. The depositors in
Savings Banks were not the class to be experimented upon, and he would
not have it said of him by persons out of doors that he had commenced
reductions in the public expenditure by cutting down the interest
payable to the poorer classes, who, after all, he believed, were the
principal investors in Savings Banks. One other little item of
statistics Mr. Rice gave before he sat down, which is very
interesting, and much more convincing than his other arguments. He
gave, from a Return which we have not been able to find, the amount of
interest which had been paid _in money_ since the establishment of
Savings Banks and, on the other hand, the interest which had been
credited to depositors _and made into principal_. In the former case
it was 286,000_l._; in the latter, or interest made principal, it was
9,271,000_l._ Finally, the Chancellor believed, that to pay depositors
interest at the rate of the value of money in the market would be a
death-blow to Savings Banks altogether! If Mr. Hume, in his pursuit of
economy, tried to enforce it by dividing the House on the subject, his
duty would be to resist. _Mr. Goulburn_, as the spokesman of the
Opposition on financial subjects, condemned the proposition as likely
to cause distrust amongst all classes connected with Savings Banks. So
far from thinking that the interest ought to be reduced, or could be
reduced, with safety--and this remark is curious, viewed in the light
of subsequent events--"it was only by great care and good management
on the part of those who superintended such banks" that expenses could
be paid. Time, however, works wonders, and among other things, brings
its revenges. The financial reformer, who from the first had the best
of the argument, had not long to live to see a change, and to find
that change brought about under the direct auspices of one who only
six years before, in the words just quoted, had strenuously opposed
his motion. We must leave Mr. Goulburn's bill of 1844 to be described
in a subsequent chapter.


    [28] Mr. Rose's exertions in this respect were only ended by his
    death, which took place in January, 1818, at the age of
    seventy-four. "His whole life," says a contemporary, "was the
    continued and strenuous effort of a powerful mind to promote the
    welfare of the state and the happiness of his fellow creatures."
    In contrast to this testimony, which cannot be called exaggerated,
    we might refer to William Cobbett's bitter tirades against Mr.
    Rose, which, indeed, may with some readers form the most
    convincing evidence of the merits of the statesman. In Cobbett's
    "New Year's Gift to Old George Rose," published in the _Register_
    of 1817, and to which choice production we shall again refer,
    there is an elaborate and embittered attack upon the latter, in
    the course of which Cobbett stated that the amount of the
    sinecures which Mr. Rose and his sons held would furnish ample
    funds for all the Savings Banks then in existence.

    [29] From a bare record of the debate in question to be found in
    _Hansard_. Third Series. 1816.

    [30] Act 57 George III. c. 130.

    [31] _Hansard's Debates_, vol. xli. page 1392.

    [32] This cognomen was given to Mr. Duncan more than once in the
    House of Commons about this period.

    [33] _A Letter to W. R. K. Douglas, Esq. M.P. on the Expediency of
    the Bill brought by him into Parliament, occasioned by a Report of
    the Edinburgh Society for the Suppression of Beggars._ By the Rev.
    Henry Duncan, of Ruthwell. 1819.

    [34] 1 George IV. c. 83.

    [35] 5 George IV. c. 62.

    [36] We shall see subsequently that this loss was more than made up
    in other ways.

    [37] _Times_, March 13, 1828.

    [38] 9 George IV. c. 92.

    [39] 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
    acquaintance 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,
    without the necessity of each party appointing an arbitrator. In
    1846, under the 9 & 10 Vict., he obtained the appointment of
    Registrar 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.

    [40] _Times_, April 17, 1833.

    [41] _Hansard_, vol. XVII. Third Series. 1833.

    [42] 5 & 6 William IV. cap. 57.

    [43] _The Westminster Review_ of this period thus refers to Mr.
    Hume 's motion for a reduction of interest rate for Savings Banks:
    "We are ignorant of any good reason why the public should receive
    these deposits on other terms than those which would be settled
    between individual and individual in a common mercantile
    transaction. Admitting to the full importance of giving
    encouragement to economical habits, we deny that the payment of
    bounties is necessary for such a purpose, or that more is
    requisite than to extend to the parties that superior
    accommodation and greater security for investment which it is in
    the power of Government to afford. This should form an inducement
    adequate to every salutary purpose. All that is given as interest
    beyond the market price of money is simply a premium upon fraud."
    Vol. IX. Old Series.

    [44] But it did not go far enough; the years 1826 and 1831 are the
    years which ought to have been taken.



                            CHAPTER IV.

        ON THE PROGRESS OF SAVINGS BANKS UP TO THE YEAR 1844.

    "They to whom this subject is indifferent may censure our
    minuteness; but those who, like us, regard the
    establishment of Savings Banks as marking an era in
    political economy, and as intimately connected with the
    external comfort and moral improvement of mankind, will be
    gratified to trace the rise and progress of one of the
    simplest and most efficient plans which has ever been
    devised for effecting these invaluable
    purposes."--_Quarterly Review._ 1816.


Arrived at the year 1841, when Savings Banks have had a legislative
existence for a quarter of a century, it may be well to stop and pass
the period in review; to endeavour to show the progress made by these
institutions during this time; and to exhibit, so far as we are able,
their effect upon the general progress of the country. We have up to
this point dealt principally with the legislation on Savings Banks,
and have taken little account of what was said or done with respect to
them out of Parliament, after the year 1817. At this early period
there were frequent and warm discussions out of the House as to their
value and utility. When they first began to attract public attention,
"the friends of the working classes" were nearly equally divided
between their advocacy of them and the Friendly Societies. When Mr.
Rose, who had strongly advocated the formation of these societies, saw
the benefit that Saving Banks were calculated to render to the poorer
classes, he cordially took up their advocacy; and although he urged
that there was scope enough for all societies which inculcated the
duty and practice of providence and frugality, he was loudly accused
of leaving his first love, and advocating the Savings Bank plan for
some political purpose. We cannot give the reader a better idea of the
way the industrial classes were beguiled, and the kind of influence
which was only too often brought to bear upon them at this period,
than by giving some extracts from a paper to which we have previously
incidentally referred. In his "New Year's Gift to old George Rose,"
Cobbett reminds Mr. Rose, that after all he had done for them, he had
at length "left Friendly Societies in the lurch, and taken to _the
bubble of Savings Banks_." Cobbett, however, said that he could see
through the change, and he shows the amount of his penetration by such
argument as the following:--In "friendly societies Mr. Rose found that
'the members got drunk and _talked_--the naughty rogues.' Yes, and
even politics too! And it might have been added," continues the writer
and proprietor of the _Register_, "that they very frequently heard one
of their number read--the _Register!_" The object of Savings Banks, or
at any rate, parliamentary interference with them, was nothing else,
Cobbett considered, "than to get the pennies of the poor together, but
to keep their owners asunder." "What a bubble!" repeats Cobbett. Then
addressing Mr. Rose in the first person, he tells him how, in his
opinion, "the company of projectors who, in the reign of George the
First, wanted a charter granted to them for the purpose of making deal
boards out of sawdust, just saves you from the imputation of having,
in the Savings Bank scheme, been the patron of the most ridiculous
project _that ever entered into the mind of man_." Another person of
Mr. Cobbett's stamp, though one who aspired to greater knowledge of
all questions connected with trade and currency, and who really paid
closer attention to such subjects, was Mr. Thomas Attwood--"Currency
Attwood," or "Little Shilling Attwood," as he was variously designated
in some parts of the country. Whenever he could get an opportunity in
Parliament to speak of Savings Banks, we have seen that he invariably
clothed his ideas in a vocabulary of prejudiced invective. And he
repeated himself outside the walls of the House whenever he had the
chance. "Savings Banks," we find him saying on one occasion, "besides
costing the nation so much, were a nuisance;" "Savings Banks were a
sort of screw in the hands of the Government to fix down the working
classes to the system." On these expressions, and others of a like
tendency, as texts, those minor demagogues who went "on stump,"
preached for many a day. Considering how such men treated the
institution of Savings Banks, it is wonderful that they progressed as
they did. That they kept many from using these institutions is beyond
a doubt. Such men had a surprising power over the labouring classes,
and though that power was often used for good, too often it only
excited distrust and apprehension when distrust and fear were least
needed and most dangerous. The true friends of the poor--and there
have been many such at all times--said, in effect, "We have reason to
believe that much money now spent unnecessarily might be saved for
seasons of want and old age, if the poor had the means offered them of
putting that money by easily, safely, and profitably. We have exerted
ourselves to get such places established, we give our best exertions
to have them conducted properly, and we advise all who have money to
spare to intrust it to this safe keeping." Cobbett, on the other hand,
put his printers to work to say "What a bubble! At a time when it is
notorious that one half of the whole nation are in a state little
short of actual starvation--when it is notorious that hundreds of
thousands of families do not know when they rise where they are to
find a meal during the day--when of the far greater part of the whole
people much more than half of them are paupers; at such a time, to
bring forth a project for collecting the savings (!) of journeymen and
labourers _in order to be lent to Government_, and to form a fund for
the support of the lenders in sickness and old age!"[45] It would be
idle to show the fallacy of such reasoning, even admitting the facts
of the case to be as they are here stated. Suffice it to say, that in
this way did such men pander to the prejudices of the uneducated. Many
thousands of industrious workmen who had had no training, and who
could not discriminate between real and imaginary evils, were thus too
often flattered into believing that they had more than their share of
the truth, honesty, and manliness of the age on their side, and that
the upper classes were against them on every side and in all respects.
All this is pretty well over now.[46] Just as the sun expels the mists
of the morning, so have education and a free press opened the eyes of
the people to their true interests, and shown them which class of men
have most wished for and best worked to promote these interests.

It was not, however, only by such men as Cobbett that Savings Banks
were misinterpreted and misrepresented. Like every other new and
untried measure, it had to run the gauntlet of an educated as well as
an ignorant opposition. It was a very usual thing to find the
discussion on the utility of Savings Banks waxing warm in the most
important organs of public opinion. For example, the _Times_ newspaper
early took a decided stand against Savings Banks, and tried to
maintain its position, as we shall see more fully subsequently, long
after the country had given them a pretty unanimous verdict of
approval. Just after the period of which we are speaking, a
correspondent in the then, as now, leading journal, thought himself
able to trace in Savings Banks, "a great source of mischief; and that
to them,"--though in what manner it is not attempted to be
proved,--"may be attributed a considerable portion of the distress
which has been so long felt, and which does not appear to diminish in
most of the manufacturing districts." "God forbid," ejaculates this
remarkable genius, "that I should desire to encourage improvidence
amongst any portion of society; but there is a wide distinction
between parsimony and extravagance, and these banks have literally
made misers, and held out a bonus for them to become so." But even
this is not all: the same spirit, says our authority, which actuates a
man in becoming a miser, will operate to prevent their making use of
their petty accumulations. "With the habit of parsimony the mind
becomes degraded, and the workhouse or an application to the
dispensers of parochial relief lose their horrors." It is almost
useless, seeing that now few could be found to advocate such views, to
reply to them. They are based on the assumption, which we take to be
utterly erroneous, that a poor man is less at liberty to lay out his
mite at interest than his richer neighbour; or that if he did so, the
step was more likely to lead to his becoming a miser than his
wealthier neighbour who had all his money in the funds. It is less
necessary to argue the point, inasmuch as the aim of this nonsense is
made quite apparent by the writer concluding with an elaborate
eulogium on Benefit Societies for working men. "They could there,
provide," says he, "at a very trifling expense, against sickness, want
of employment, and numerous other casualties; while, on the other
hand, there would be no need to deprive themselves of the common
necessaries of life in order to add to their hoard." But here again
the fallacy of the argument is clearly apparent. The allowance from a
Benefit Society, then as now, in case of sickness or distress, would
be, generally speaking, quite inadequate to the circumstances
requiring it; and how could it possibly be more likely that a person
in this situation would be more independent of parochial relief than
one who had a fund of his own to look to, or perhaps a livelihood at
his command. Such warfare as this went on uninterruptedly for several
years; the advocates of Benefit Societies running down Savings Banks,
and _vice versá_, not in all cases seeing that the two might exist
together, and that each was well calculated to supply a want which the
one or the other class of institutions did not meet. There can be no
doubt, however, which institution suffered most from these
discussions. The most decisive proof of the improvement which was seen
in the condition and the habits of the labouring classes during the
first quarter of the century was the progress of Benefit Societies
from 1802 to 1820. In the former year there were 9,622 of these
societies; in the latter year there were nearly five times that
number. The people during this period had not improved in comforts and
conveniences as they did subsequently; they progressed in the more
skilful use of the same, or even diminished means. These societies
made a deep impression upon the population, and in the same proportion
the people were recovered from the control of their appetites and
passions, and from that propensity to use without restraint those
means of immediate gratification which distinguishes all ignorant
people of whatever rank. Notwithstanding all this, the Friendly
Societies were beset with difficulties, and in the discussions to
which we have alluded their opponents made the most of them. Perhaps
the well-meaning might better have assisted the poor in instructing
them how to reform the management of these societies, and by showing
them the principles upon which they could be most safely established.
However it was, there can be no question that, either from their
inherent defects or the comparison of the benefits to be derived from
the one as against the other institution, Savings Banks soon took the
place of Benefit Societies in the public estimation, and progressed
when, comparatively speaking, the latter declined. In the evidence
given by Mr. Lloyd, the founder of the Hertford "Sunday Bank," before
the committee on the Poor Law previously referred to, he assigned as
one of the causes which had promoted the success of Savings Banks the
evils arising from Benefit Clubs or Friendly Societies, as then
constituted. "There is always," he said, "a regulation, that when
two-thirds of the members choose to assemble and agree to break up the
club, they can; the consequence is, that the other one-third, the old
members, who ought to be deriving an assistance during the last period
of their lives from these clubs, are deprived of it." He had known six
clubs which had been broken up in this way. The following extract from
a report of a committee which was appointed to investigate the rival
claims of Benefit Societies and Savings Banks so admirably sums up the
whole argument, and says so much with reference to both institutions
which is no less true now than then, that we feel confident our
readers will not object to have it reproduced here.[47] "Benefit
Societies have done much good; but they are attended with some
disadvantages. In particular, the frequent meetings of the members
occasion the loss of much time, and frequently of a good deal of money
spent in entertainments.[48] The stated payments must be regularly
made; otherwise, after a certain time, the member loses the benefit of
all that he has formerly paid. Nothing more than the stated payments
can be made, however easily the member might be able at the moment to
add a little to his store. Frequently the value of the chances on
which the societies are formed, is ill calculated; in which case,
either the contributors do not receive an equivalent for their
payments, or too large an allowance is given at first, which brings on
the bankruptcy of the institution. Frequently the sums are embezzled
by artful men, who, by imposing on the inexperience of the members,
get themselves elected into offices of trust. The benefit is distant
and contingent; each member not having benefit from his contributions
in every case, but only in the case of his falling into the situations
of distress provided for by the society. And the whole concern is so
complicated, that many have hesitation in embarking in it their
hard-earned savings. With such disadvantages who would not rather
choose the simple, secure mode of investment offered by the bank--free
(as the banks were at that time) from them all? But if they must have
the Benefit Society, with its contingent and distant benefits, working
men should not rest here. Thousands of the working classes could well
afford to pay their weekly sums to secure their sick and burial money,
and yet have enough to spare to provide against the other rainy days
of their life. A poor man's savings are continually liable, while in
his own custody, not simply to professional thieves, but also--and
there is far more danger of it--to be pilfered by himself and his
family. They are often lost by being intrusted to improper hands; they
are still oftener worse than lost in the ale-house or the gin-palace,
and the money which properly taken care of might give the means for
occasional enjoyments of a harmless kind, providing for the legitimate
wants of his children, or which might support all during the
intermissions of employment to which all are exposed, may be worse
than squandered."

It was thus that the institution of Savings Banks lost, by being cried
down by the leaders of the people, and by the discussion which
continued as to their merits; and thus that they gained, by a close
comparison with the kindred institution of Friendly Societies. The
loss, however, was but temporary. In ten years from the date of their
legal formation the deposits in Savings Banks amounted to upwards of
sixteen millions sterling, and this sum had been contributed by no
fewer than four hundred thousand persons. A writer of the period
characterizes the progress made by institutions such as these "as one
of the most striking manifestations of virtue that ever was made by
any people;" and he seems to have had some good grounds for the
opinion. "For persons merged in poverty and totally deprived of
education, as the English population have heretofore so generally
been, it is not easy or common to have much of foresight, or much of
that self-command which is necessary to draw upon the gratifications
of the present for those of a future day." And though, as we have
previously seen, the money here deposited could not have been put
there by persons exclusively of the industrial class, yet it is clear
that many of the labouring community did possess means beyond what
were needed to procure them the necessaries of life, and that these
institutions exactly met the want which was felt in not having the
means to safely dispose of that little surplus, and to call it in when
the need arose for it. The year 1827 was the year, it will be
remembered, after one of the most terrible financial crises that this
country has ever passed through, and yet, though the average amount of
money deposited in Savings Banks in one year before this time had only
been about 1,100,000_l._, no less a sum than 859,734_l._ 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.[49]

                             TABLE 1.

    Showing the Amounts invested by Savings Banks with the
    National Debt Commissioners from 1817 to 1841, with the
    Total Capital of all the Banks at the end of each year:--

    +-------------+-----------------------+--------------------+
    | Year ending |     Total amount      |  Total Capital at  |
    |  20th Nov.  | credited to Trustees, | the close of each  |
    |             |  including Interest.  |        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       |       4,740,188    |
    |    1822     |       1,849,264       |       6,546,690    |
    |    1823     |       2,205,272       |       8,684,662    |
    |    1824     |       3,149,151       |      11,720,629    |
    |    1825     |       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       |      14,860,188    |
    |    1831     |       1,037,629       |      14,698,635    |
    |    1832     |       1,099,368       |      14,416,885    |
    |    1833     |       1,448,751       |      15,324,794    |
    |    1834     |       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    |
    +-------------+-----------------------+--------------------+

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 enormous surplus was returned. In 1825, as
if to mark the coming storm, there is a heavy fall in deposits. In
1826, the tables were turned, not only in a figurative, but, so far as
we are concerned, in a literal sense. The circumstance can be only too
well explained. The _Quarterly Review_ of that time gives a glowing
account of the increased wealth of all classes, especially those of
the trading community.[50] "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.[51] 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 republics, which had just then
been effected, all sorts of proposals for mines were started; the El
Dorado had to be found now, if ever.[52] In the session of 1825, 438
petitions 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 worthless. Then came
the panic,--and then the crash. Commercial houses first failed, big,
substantial firms, which were supposed to have the wealth of Croesus
at their back, came down thunderingly. "Many 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 the 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.[53] How things were restored to their original
condition, and how promptly the Government acted during the terrible
panic, we need not stay to tell. Savings Bank deposits fell from about
three millions in 1825, to less than half that sum in 1826. More money
was withdrawn 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 withdrawn to
supply emergencies. In this way were those people rewarded who
preferred a safe deposit with a reasonable interest 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 had 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 condolences. 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 this occasion that Sir Robert 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 Bank was perhaps twenty miles 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 rebound, 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 interest allowed on deposits
was reduced by 14_s._ 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 artisan class; and as the
former looked more to the interest given, while the industrious
classes thought most of the security offered, it is no wonder and no
calamity that the connexion which the higher classes had formed with
Savings Banks was now dissolved. 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 artisan 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 to show that a time like that was likely to tell
largely against such institutions as those under consideration. The
time was one of great anxiety among all classes, and amidst the
uncertainties and anticipations which followed in rapid succession, 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 history, but the working classes brought hardships upon
themselves. Led by intemperate and impracticable men, many thousands
of the more ignorant beguiled themselves into believing that the
Reform 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 progress of Savings Banks continued to be eminently
satisfactory. There was a transitory cloud in 1837, and another in
1839, caused by exceptionally hard times, such as a bad harvest and
scarcity of food, and distress in the manufacturing districts caused
by unusual reverses in trade, when again the funds laid by came
opportunely in aid; but, with these exceptions, the Returns 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.

  +--------------+-------------+--------------+-------------------------+
  |              |  Number of  | Total Amount |         Increase.       |
  |  Year ended  | Depositors. | of  Deposits +------------+------------+
  |              |             |  from 1817.  | Depositors.|  Deposits. |
  +--------------+-------------+--------------+------------+------------+
  |              |             |     £        |            |            |
  | 20 Nov. 1825 |   358,160   | 13,769,988   |     ---    |      ---   |
  | 20 Nov. 1830 |   430,166   | 15,739,907   |    72,096  |  1,969,919 |
  | 20 Nov. 1835 |   587,488   | 17,705,228   |   157,322  |  1,965,321 |
  | 20 Nov. 1840 |   824,162   | 22,915,940   |   236,674  |  5,200,712 |
  +--------------+-------------+--------------+------------+------------+

Taking the year 1841, on account of the facilities for calculation
afforded by the census of that year, we find that up to the 20th of
November, 1841, the total number of Savings Banks in the United
Kingdom was 555, 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 the fact that until within six years of the period we have
reached, or 1835, none of the acts relating to Savings Banks had any
reference to Scotland. The average amount of each deposit in 1841
was--in England about 30_l._; in Ireland 29_l._; and in Scotland
12_l._ 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 103.

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_l._
was 203,604. In 1844 they had increased to 564,642, or nearly three
times the number.[54] The amount of the deposits in the first instance
was 1,473,389_l._; in 1844 it reached 3,654,799_l._ 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, as that the Poor Law Amendment Act
increased in this way the efficiency of Savings Banks.[55]

What assistance these Savings Banks must have rendered during the
crises through which the people passed between 1817 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 undoubted 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,[56] carefully compiled from the best sources of
information on such subjects, and which we think is calculated to show
the good influence of Savings Banks in a somewhat new and striking
light.

                             TABLE 3.

    Showing the Increase in the Deposits of the Savings Banks in each
    English[57] county, between 1834 and 1841, and the Decrease in the
    Poor Rates during the same period:--

  +--------------+----------+----------+---------+--------+-------------------+
  |              |          |  No. of  |         |Increase|    Expended in    |
  |   County.    |Population|Depositors| Amounts |   of   |Relief of the Poor.|
  |              |    in    |in Savings|   of    |Deposits+---------+---------+
  |              |   1841.  | Banks in | Deposits|  since |   in    |   in    |
  |              |          |   1841.  | in 1841.|  1834. |  1834.  |  1841.  |
  +--------------+----------+----------+---------+--------+---------+---------+
  |              |          |          |     £   |    £   |    £    |    £    |
  |Bedfordshire  |   107,937|    3,584 |  111,526|  35,016|  77,819 |  41,063 |
  |Berkshire     |   160,226|   12,020 |  359,676|  64,152| 100,183 |  74,708 |
  |Bucks         |   155,989|    4,657 |  128,025|  61,140| 124,200 |  74,007 |
  |Cambridge     |   164,509|    3,831 |  121,777|  24,423|  96,497 |  72,158 |
  |Chester       |   395,300|   15,302 |  554,400|  89,325|  92,640 |  77,698 |
  |Cornwall      |   341,269|   12,915 |  492,013| 101,980|  93,037 |  85,063 |
  |Cumberland    |   197,912|    7,538 |  211,741|  65,313|  43,067 |  36,867 |
  |Derby         |   272,202|   10,099 |  321,897|  84,964|  72,721 |  55,238 |
  |Devon         |   533,731|   49,866 |1,492,072| 289,154| 210,825 | 195,402 |
  |Dorset        |   174,743|   11,470 |  412,628| 110,350|  84,293 |  80,097 |
  |Durham        |   324,277|    7,023 |  201,354|  17,596|  79,399 |  66,639 |
  |Essex         |   344,995|   14,413 |  428,202|  86,941| 239,946 | 170,356 |
  |Gloucester    |   431,307|   25,526 |  818,157| 190,324| 161,449 | 130,321 |
  |Hereford      |   114,438|    8,350 |  211,251|  41,430|  56,683 |  43,512 |
  |Hertford      |   157,237|    3,785 |  113,425|   1,195|  85,799 |  61,250 |
  |Huntingdon    |    58,699|    1,765 |   52,001|  13,594|  35,884 |  25,329 |
  |Kent          |   548,161|   33,392 |  945,273| 219,416| 343,878 | 208,786 |
  |Lancaster     | 1,667,064|   65,402 |1,980,143| 369,473| 253,405 | 260,227 |
  |Leicester     |   215,855|    6,803 |  173,581|  31,329| 100,857 |  70,423 |
  |Lincoln       |   362,717|   18,451 |  497,509|  82,035| 161,074 | 103,894 |
  |Middlesex     | 1,576,616|  176,849 |4,521,589| 598,329| 582,412 | 435,606 |
  |Monmouth      |   134,349|    3,099 |   76,651|  23,416|  27,626 |  24,819 |
  |Norfolk       |   412,621|   18,336 |  527,300| 162,298| 306,787 | 182,229 |
  |Northampton   |   199,061|    8,410 |  243,600|  29,157| 140,179 |  86,148 |
  |Northumberland|   250,268|   12,862 |  459,390|  69,321|  71,983 |  64,649 |
  |Nottingham    |   249,773|   15,763 |  420,345|  13,951|  66,030 |  57,721 |
  |Oxford        |   163,573|   10,246 |  285,713|  28,324|  80,616 |  76,474 |
  |Rutland       |    21,840|        No Savings Bank.     |   7,008 |   7,453 |
  |Salop         |   239,014|   16,452 |  557,190|  69,543|  84,493 |  57,571 |
  |Somerset      |   436,002|   22,019 |  679,072| 105,153| 176,286 | 157,022 |
  |Southampton   |   354,940|   23,942 |  687,473|  99,324| 203,466 | 142,507 |
  |Stafford      |   510,206|   15,368 |  452,306|  84,399| 120,512 |  95,242 |
  |Suffolk       |   315,129|   11,972 |  348,176|  89,939| 245,509 | 138,228 |
  |Surrey        |   582,613|   31,250 |  749,199| 159,068| 261,501 | 199,477 |
  |Sussex        |   299,770|   15,709 |  420,570|  84,190| 246,626 | 145,013 |
  |Warwick       |   402,121|   22,291 |  468,270|  93,168| 158,159 | 102,828 |
  |Westmoreland  |    56,469|      942 |   24,719|   1,920|  22,283 |  17,607 |
  |Wilts         |   260,007|   11,706 |  413,941|  97,140| 173,925 | 133,573 |
  |Worcester     |   223,484|   12,218 |  401,330|  53,978|  81,612 |  62,958 |
  |Yorkshire     | 1,591,584|   69,545 |2,105,866| 435,129| 418,742 | 372,166 |
  +--------------+----------+----------+---------+--------+---------+---------+

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 their 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 diminution
in the amount spent in the relief of the poor. It may be said that
many considerations ought to enter into such calculations as those we
are making, and that at best such statistics only prove that the same
causes, such as abundance 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
necessarily produce frugal people and provident habits, though it
often enough leads to unnecessary and vicious 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 this country first made paupers, and
then promptly maintained them. It is, 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,
leaving him to form his own conclusions. And with all respect to those
who framed the measure of 1834, which was very beneficial to the
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 have led to this improvement. Still, taking
the 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_l._, giving a yearly average of
6,800,000_l._ In the ten years ending 1832, the amount of poor rates
was 62,900,000_l_., or a yearly average of about 6,200,000_l._ 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_l_. within ten years. The advancement is
still more clear, if we take the case of the large centres of
population, but this is perhaps, unnecessary.

The Returns, however, of the Registrar General may be supplemented by
Revenue Returns for the same period, from which the improvement in the
condition of the industrial classes may be made still more palpable.
In 1814 the consumption of tobacco was 15,000,000 lbs.; in 1832 it had
increased 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 consumption 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 consumption 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, but with the poor it was very different. For
example, the amount of silk imported during the period of which we
have spoken varied but little, while the imports on the article of
cotton wool, the staple fibre of the masses, increased from
152,000,000 lbs. in 1820 to 259,000,000 lbs. in 1832, or an increase
of 70 per cent.[58]

Enough has been said, we hope, to show the gradual progress 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 supply of
intoxicating drinks creates in many cases a demand for them--as well
as to give them direction and encouragement, we have endeavoured to
prove their 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 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 artisan from the path of his
true 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 bitterness, 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 question were
calculated to work a mischievous 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 power 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
propitiated or defied,[59] we need only give the following extracts:--

    "A labourer sixty years of age has, by hook or crook,
    saved 500_l._ We know such a case. The 500_l._ is the
    plague of his life. It would be a mercy to swindle him out
    of it, except that he would probably feel a good deal at
    the loss. Could he forget it, he would be both a happier
    and better man. To begin with, 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 squander it,
    not in dissipation, but in the mere feebleness and
    incontinence of ingrained poverty."

Another extract striking at the root of all habits of providence and
thrift:--

    "When a labourer has saved 50_l._ or 100_l._ then the
    greatest difficulty comes: what is he to do with his
    money? 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_l._ in
    his pocket has a very fair prospect of the union workhouse
    before him. He is not commercial enough to open a shop,
    and small farms are obsolete. He may, to be sure, shut his
    doors against all his kith and kin, _and buy a selfish
    annuity with 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 be
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 expenditure 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 independence, 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
inculcate 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 those mishaps and sicknesses which might be termed its days of
foul weather." In such case the money will 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 inculcation 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 vicious or
unnecessary expenditure at the best seasons, in order to its forming a
reserve for needful subsistence or additional comfort at another
period. "A domestic servant," says another article of the _Times_,[60]
"at the age of fifty-five or sixty, finds she is incapable of further
employment. She has saved 80_l._ 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_l._?... Across the
Channel such a sum would be a mine of agricultural wealth. On this
side the Channel 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_l._
in hand is better than nothing and an immediate resort to the parish.
To say that the 80_l._ would always remain 80_l._ and would not melt
away like snow before the sun, would 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 degree, and in the same degree
to rescue herself from becoming a burden upon other people, was, so
far as it went, a solace and a blessing to her. Once, and only once
more, the _Times_ declared that "investing money in Savings Banks was
mere hoarding," nothing more than the creating of misers.

    "It is most melancholy to notice the few helps and
    encouragements to thrift and husbandry which our present
    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 this heavy burden upon the labourer,
    where is the 'little finger' of help contributed by
    society. We 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 cannot
    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 dry, so pure, so transcendental,
    as to be above humanity, especially that very form of
    humanity found in the English agricultural labourer."

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 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
Dorsetshire--"poverty-stricken Dorsetshire," as it is called by the
_Times_ itself--the Savings Banks return for 1843 averaged more than
2_l._ a head for the entire population, while in Lancashire, with its
highly-paid manufacturing population, it only averaged 1_l._ Nor is
this a solitary instance. The rural population throughout the country
are by no means the least frequent visitors to Savings Banks.[61]

Far more important, however, in their disastrous results than those
attacks from without, were the blows levelled at 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 undertakings. 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
probability of a misapplication of the funds, Government 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 obtained 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 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 iniquities 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 kind 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 ingenious instances of an
accumulation of frauds on record. The other case occurred in connexion
with the Hertford Savings Bank in 1835. The Dublin fraud brought to
light earlier than this date deserves the first place, not only on
this ground, but because it was greater in extent and deeper in
villany. No one can read of the numerous cases of fraud which have
occurred at different times in connexion with the Irish Savings Banks
without feelings of deep indignation. The influence, it is quite
clear, is felt in Ireland to this day. The Irish people are quite an
exceptional people, with whom forethought 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 impulses--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_l._ out of the total
of 2,800,000_l._ 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 recklessness, and referred to their
treatment as full excuse for any amount of subsequent improvidence.
And men will hesitate before they blame them.

The Cuffe Street Savings Bank at Dublin 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
well-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 100,000_l._ The bank began on an
unpretending scale enough, to judge by the appointment and pay of its
only salaried official.[62] This person was a Mr. Dunn, who combined
in 1818 the functions of sexton to the parish with which 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,"[63] he 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 perfect
tool. Without making him his confidant--for the actuary was too
cunning, as it seems, for that--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 satisfaction 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. Lannigan
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 suspicions 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.[64] For five years it is said
this unseemly contest went on, and although this trustee succeeded so
far as to get more than one sub-committee appointed, nothing came of
it: the committee were too prejudiced in favour of their servant to go
the right way to work in investigating the matter, or they were too
easily blindfolded by him to find anything out. Mr. Lannigan, 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 appropriated 6,000_l._ to his own use.
The trustees then communicated 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 Mr. Tidd Pratt.
That gentleman went 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 adjudged in 208 cases,
and to the amount of 11,864_l._ Of this sum 7,500_l._ were to be paid
by the trustees out of the funds remaining in the bank, while the rest
claimed up to that time did not consist 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_l._ 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 have 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
without remark_ the yearly statements as usual, though 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 Government observing that year by year the bank was getting
into a worse financial position,[65] 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 Returns were _not
sent_. The Returns, worthless as they were, had been regularly sent,
and thus the Executive was powerless. After another crisis at this
period, the bank finally went down in 1848, the liabilities amounting
to the sum of 56,000_l._ and about 90_l._ to meet it. The number 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 occurred 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 Commissioners, who had known the state the bank was in
for fifteen years, and had never zealously interfered.[66] This member
also stated his intention to move for a Select Committee 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 debate, will be
referred to in their proper place in the next chapter.

The results of this fraud in Dublin and the neighbourhood was most
disastrous; not only so, but years afterwards, 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, 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[67] 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.

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, 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_l._ 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 commence
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 noblemen, 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 depositors could be made to feel
secure. "It was no trifling matter. When Savings Banks were first
formed, but few individuals could ever have expected that the sums
subscribed would amount to what they now were."[68] 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 Richmond 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 Savings
Banks. He trusted that, in this instance, "the trustees would be found
liable for the whole of the deficiency." 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 the consideration of this change we leave till the next chapter.


    [45] _Cobbett's Register._ January, 1817.

    [46] Nearly, but not quite. Injury is still done by false and
    mischievous teachers of working men; and the latter resent what
    they consider their wrongs and grievances in ways which are
    equally unjustifiable, if not exactly similar to those adopted by
    their fathers. Those who would do real service to the working
    classes are those who take up and expose the fallacies of living
    demagogues, by which the latter are misguided and led to injure
    themselves by strikes, combinations, and hostility to capital and
    machinery. And educational reformers will do the State good
    service in endeavouring to get lessons taught in political economy
    to those who will be at some future day our mechanics and
    artisans, and who from continued ignorance of the inevitable laws
    of supply and demand, of the value, even to them, of the security
    of property, of the laws which regulate the operations of the
    market, may possibly fall into the errors and the mistakes of
    their predecessors.

    [47] _Report of the Committee appointed by the Highland Society of
    Scotland to consider what is the best mode of forming institutions
    of the nature of Savings Banks, for receiving the deposits of
    labourers and others._ Edinburgh, 1815.

    [48] Nine-tenths of the existing Benefit Societies are still held
    at public houses. This arrangement must always be, so long as it
    exists, a theme for reprobation. There cannot be many greater
    anomalies than this of the association of the club and the cup,
    the bane and the antidote, saving and wasting. Speaking on this
    point, the Rev. J. B. Owen justly remarks that the strange
    association "together verify the old pagan fable of the tub of
    Danaus full of holes, whose daughters were condemned to be
    perpetually filling it, while all that was so laboriously poured
    in as wastefully and hopelessly ran out." Or, as some one else has
    put it who has employed the same figure more strikingly:--

               "Like Danaus' tub
                Is the public house club:
          Their customers' mouths are the holes;
                Ill spared is the 'chink'
                That's wasted in drink,
          To the bane of their bodies and souls."

    [49] See next page.

    [50] _Quarterly Review_, vol. xxxii. p. 189.

    [51] "Many a man in that year," (1825), says Miss Martineau, "set
    up for a banker who would, at another time, have as soon thought
    of setting up for a king."--_History of the Thirty Years' Peace._
    Lord Liverpool complained afterwards of the system "which allowed
    any petty tradesman, any cobbler or cheesemonger, to usurp the
    royal prerogative, and issue money without check or control."

    [52] 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 supply of the whole world." 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 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 no more."

    [53] _Annual Register_, 1826.

    [54] _Progress of Savings Banks._ A series of tabular views, 1829
    to 1841, by Mr. J. Tidd Pratt. London. 1845.

    [55] _Companion to the Almanac_, 1839, p. 131.

    [56] See next page.

    [57] We give the statistics as relating to England only. Scotland
    is out of the question, not merely on account of the slow progress
    of Savings Banks there, but more especially because of there being
    nothing analogous in Scotland to our English system of Poor Law
    relief.

    [58] The mortality at the commencement of the present century was
    1 in 40; in 1831 it was 1 in 58; and in 1841, 1 in 62; showing
    conclusively that the masses of the people were better housed,
    better clad, and, best of all, better fed.

    [59] Miss Martineau's _History of the Thirty Years' Peace_, vol.
    ii. p. 88.

    [60] _Times_, September, 1844.

    [61] To make this statement more clear, we append a later Return,
    which, on other grounds, is interesting, as showing which classes
    of the community resort most frequently to Savings Banks. It
    speaks 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.

     +----------------------+---------+--------------+----------------+
     |                      |Number of|    No. of    |Average Deposits|
     |     Counties.        | Accounts|Depositors to |  per head of   |
     |                      | open in | every 100 of |   Population,  |
     |                      |  1858.  |  Population. |      1858.     |
     +----------------------+---------+--------------+-----------------+
     |   AGRICULTURAL:--    |         |              | £    s.   d.   |
     |Berkshire             |  16,393 |     9·64     | 2    12    7   |
     |Devonshire            |  61,558 |    10·33     | 2    18   11   |
     |Dorsetshire           |  14,134 |     7·67     | 2    12    2   |
     |Yorkshire, East Riding|  25,091 |    11·35     | 3     6    1   |
     |                      |         |              |                |
     |    MANUFACTURING:--  |         |              |                |
     |Lancashire            | 117,927 |     5·80     | 1    12    4   |
     |Yorkshire, West Riding|  63,334 |     4·77     | 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.

    [62] _Vide Report of the Select Committee appointed to Inquire
    into and Report upon the circumstances connected with the failure
    of the Cuffe Street Savings Bank_, 1849, from which our account is
    derived.

    [63] "I am certain," said a reverend witness, "that he was a very
    correct man until the temptation of such an enormous quantity and
    overflow of money got into his hands."--_Report_ (36).

    [64] 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
    _extremely warm contests_ there on that account, because he was
    not a man very capable of explaining his meaning."

    [65] The whole of Dunn's defalcations, which were found ultimately
    to amount to about 40,000_l._ were not found out till this year.

    [66] Great attempts were made to show, at this time, that the
    Government had grievously neglected its duties, and that the
    Arbitrator exceeded his. From the anomalous and unsatisfactory
    state of the law, which occasionally placed the Commissioners and
    the Certifying Barrister 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.

    [67] Dr. Hancock, in a pamphlet entitled, _Duties of the Public
    with respect to Charitable Savings Banks_. Dublin, 1856.

    [68] About sixteen millions sterling.



                            CHAPTER V.

     LEGISLATION ON SAVINGS BANKS FROM 1844 TO THE PRESENT TIME.

    "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
    Review._


It will be remembered that in the third chapter we described 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 Robert Peel's administration, was
meant in great part to provide against the constantly 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 uncertain state of the
law. The great fraud on the Dublin Bank is described as having come
upon many trustees like a thunderbolt, and, aware that they were not
spared by the judicial bench[69] in cases of the kind, they now
threatened open rebellion. Mr. Goulburn received, as he stated
subsequently before a Committee of the House of Commons, a large
number of notices from such officers that, if the 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 bill (7 & 8 Victoria,
chap. 83,) on the 2d of May, 1844, to amend the laws relating to
Savings Banks.[70] The principal matter with which the bill dealt was
the liability of trustees, but this was by no means the only one.

Second only in importance was the proposal to again reduce the rate of
interest. The remarks with which he introduced his proposal to reduce
the interest rate are curious, to say the least, when viewed in the
light of the speech to which we have previously referred. He felt
confident, he said, that the country _had no right_ to pay upon these
investments 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 conclusively, 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 reducing the rate from 2-1/2_d._ per cent. per
day, to 2_d._ 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_l._ to 20_l._ and to make the total amount which
could be deposited in any Savings Bank, 120_l_ instead of 150_l._[71]

A further proposition, which provided for another wide-spread evil in
the same direction, was one requiring that no 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.[72] This clause was
carried without any trouble, as it met such a palpable evil; provision
was made, however, 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 managers 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 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 willing to be 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 declaration of
this sort were not made, he was liable for nothing.[73]

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 cashier who should so take money out of course, and not account for
it at the very first meeting, to be guilty of a misdemeanour, 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 this Act), but under
the charge of the National Debt Commissioners. The old arrangement
likewise for depositing the Rules 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 Rules 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 certifying 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,[74] received
the Royal 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 for alluding on one of
these occasions 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 likely to be brought about. This was clearly a case of patience
and obstinacy rewarded.[75] The bill, however, Mr. Hume stated,
scarcely went far enough for him, 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 that those who had
20_l._ in the Funds should be dealt with in exactly the same manner as
those who had 1,000_l._ In this, however, we cannot help thinking Mr.
Hume went 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 with the member for Montrose; but he could not
concede it: a poor man with 20_l._ 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, consisting 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,
Mr. H. Herbert, Mr. Herries, Mr. Hume, Mr. Reynolds, Mr. Poulett
Scrope, and Mr. Ker Seymour, was appointed to inquire into the state
of the Irish banks. As already 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 extraordinary 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, "has proceeded
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 conclusion. 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 _Chancellor of the
Exchequer_, Sir Charles Wood, in moving the Bill to amend the Law of
1844, appears[76] to have urged that the clause requiring the trustees
to voluntarily assume responsibility had completely failed; that few
trustees would take the responsibility upon them, and that,
consequently, depositors were losing faith in the banks;[77]
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 the appointment 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
inspected, examined, and verified with the books of the institution 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 proposals, much agitation
prevailed among Savings Bank officials, which was ultimately made to
extend to depositors.[78] 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 Savings
Bank system. _Sir Henry Willoughby_, who for some years before this
time, and till his death, took much interest in this and cognate
questions, 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 institutions. This gentleman then
referred to the quietness with which Government had introduced such an
important bill, "not having given such a notice as was invariably
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 by the country, there might have
been opposition from managers of Savings Banks, but there could not
well have been so much dissatisfaction expressed by the Press, or by
the body of depositors, whose interest every clause of the bill was
meant to conserve. Sir Henry Willoughby also on this occasion gave
utterance to the feeling which was in many other minds, and which 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 by the Government
than those that related to the Savings Banks." 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 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,[79] and that the
smaller concerns could not afford to pay for auditors out of the small
surplus of interest which went to pay expenses, 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, however 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;[80] why not
make 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 direction, no one now doubts; had not
the perverseness of Savings Bank officials prevented the Government
from making its provisions 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
March, 1849, _Mr. Reynolds_, the member for Dublin, moved for the
appointment of a Committee to investigate into the case of the Cuffe
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. Reynolds, who had access, of course, to the
best sources 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 insolvency. 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_l._ Mr. Reynolds added, that he had no hesitation in
saying, under the peculiar circumstances of the case, that the
Government ought to make good the loss.[81] 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 responsibility of trustees; in proportion, however, as
that responsibility was reduced, so he, Mr. Napier, thought the moral
responsibility of the commissioners increased. "Precisely in the same
degree as the trustees were relieved, should the 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. Herbert_, the member for Kerry, proposed an amendment,
extending the inquiry to this Tralee and Killarney banks, and also to
the single case of failure in Scotland, at Auchterarder. Mr. Herbert
dwelt upon the case of these frauds in an able manner, but we reserve
the consideration 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
momentous, and as involving the consideration of the most important
national questions. "It was of the greatest importance 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 which 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 legislation had
brought upon the Government, rendered prompt assistance by saying
exactly the 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.[82]

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. Reynolds subsequently
found out to his evident chagrin and disappointment. The Government
had clearly not been sufficiently on the alert, and hence they had
been beaten in the first particular; they secured themselves however
against any further defeat. In the following April, Mr. Reynolds
proceeded according to usage to nominate his Committee, which he
wished should consist of eight English and seven Irish members. The
Chancellor of the Exchequer objected, and wished for the reappointment
of the Committee of the preceding session. Mr. Goulburn promptly
assisted by saying, that it would be a reflection on the Committee 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. Reynolds, Mr. Herbert, Sir Henry
Willoughby, stoutly contested the point, which ended in the names of
two additional 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 Government in regard to them, and succeeded in
resisting any change by an adverse majority of 111 to 74. The whole 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 the 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
Committee 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 inquiry." 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. Reynolds
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. Bullar, Mr. Ker Seymour, Marquis of Kildare, Mr. Adair, Mr. G.
Craig, Mr. W. Fagan, Mr. Bramston, Mr. J. A. Smith, Mr. H. Herbert,
Mr. Reynolds. This Committee sat thirteen days, and examined nine
witnesses, including several officials connected with the Cuffe Street
bank, Mr. 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 recommended nothing to the House.

On the 13th of May, 1850, the same gentlemen were reappointed under
the self-same conditions as in the previous 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.[83] This
report, for which all the members except Mr. Reynolds 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 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 unwillingness to
run the risk of creating a discredit of these institutions;" 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 Majesty's
Government, they recommend the case of the depositors in the Cuffe
Street bank to the favourable consideration 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 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 intentions of Parliament, and wound up
by the following important paragraph:--

    "Your Committee have observed 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
    responsibility 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 conviction, which this inquiry has forced upon
    them, of the urgent necessity for further legislation, if
    those 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 country, 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 proposed that a grant of 30,000_l._ 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 depositors were paid, the poor creditors of other insolvent
banks would likewise have to be paid. Generally, however, the House
felt with the Committee; it was altogether an exceptional case, the
claims of the former being, as Sir Charles Wood expressed it,
"something between equity, sympathy, and charity." _Mr. Bright_, a
resident of Rochdale, 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 willingly 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 118 members voted
for it, and 39 against it. We may as well say here that several
attempts were subsequently made to get the remaining 30,000_l._ from
Government, but without avail.[84]

It will not be difficult for the reader to understand the position of
affairs up to 1850. The law was clearly unsatisfactory; 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 the question in its every detail. The only difference of opinion
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. Nor is it at all 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 them, 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
considerations together--the great increase of business, and the no
less certain decrease in the first ardour attending such
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.[85] 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.

At this stage in the history of Savings Banks, the Chancellor of the
Exchequer came forward,--as the reader has already learnt from the
Report of the Committee of 1850,--with a bill 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 all
reference 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. Referring 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 fairly meet the case by making such
arrangements as "would end in the State bearing nearly the whole
responsibility as regarded the receipt and payment of money." What he
proposed was to alter the enactment that the treasurers of Savings
Banks should receive no emolument, _and to vest the appointment of
Treasurer in the hands of the Commissioners for the Reduction of the
National Debt_. The existing treasurers might in most cases be
continued, and if they wished to work for nothing, they might still
have the option; but he insisted on the Government reappointing such
officers, and upon having a control over them. To this officer, or
some one acting for him, all payments should be made over--the receipt
and payment of money by any other person to be declared illegal.[86]
He considered that this arrangement would guard against the
possibility of fraud. The treasurer and secretary, acting for
different interests, as it were, could scarcely be guilty of
collusion, and the one would in all cases act as a check upon the
other. If this plan were agreed to, the Government would of course be
responsible for every farthing paid to the treasurer.

This was the great and distinguishing feature of the measure which the
Government was disposed to adopt; but there were other features in the
bill of considerable importance, which ought not to go unmentioned.
Thus, it proposed that the Act of 1844 should be repealed, and that
trustees should be responsible for their wilful neglect or default, as
in the Act of 1828. It was clear, however, that under the appointment
of treasurers the responsibility 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 examined, the auditor in
each case comparing the book with the ledger of the office.[87] 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 introducing 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 communications I have
received from all parts of the country, depositors think much of their
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_l._ and that the rate of interest should be
reduced from 3_l._ 5_s._ to 3_l._ for trustees, and 2_l._ 15_s._
instead of 3_l._ 0_s._ 10_d._ to depositors.[88] The Chancellor of the
Exchequer concluded by expressing the wish that the bill of which he
had given the principal clauses, should be discussed 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 established: 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.[89]

It, however, was not to be settled so soon. Before we refer to any
further expression of opinion on the subject in Parliament and the
ultimate decision in the case, it is only right that we should present
the other--the Savings Bank--view of the matter, 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 from other Savings Banks, who naturally looked
to the St. Martin's Place institution for advice and guidance. At a
meeting 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
management as to render it extremely difficult in some, and impossible
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;"[90] (4) that the
grand principle on which well-conducted Savings Banks have hitherto
been so efficiently managed, viz., "that of having the constant
superintendence of gentlemen unconnected with the receipt or payment
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 recommendations;" that, although they urged that
frauds were comparatively 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 measure 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
resolution 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. Of course he agreed with the proposal to
reduce the rate of interest and the limit of the total amount of
deposits, remarking on the latter subject that he had known many cases
where Savings Banks had been taken advantage of in a way that, he was
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."
_Sir Henry Willoughby_ opposed the bill; he thought the proposal to
reduce the rate of interest would be "an extremely 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 Chancellor 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. Mr. Crawford spoke of the Rochdale
depositors, Mr. Fagan of the Killarney depositors, and Mr. Herbert of
the Dublin and Tralee depositors. _Mr. Slaney_ thanked the 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 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 Government 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 the managers of Savings
Banks, and the considerable misunderstanding which prevailed relative
to the provisions of the bill, he reluctantly consented to withdraw
it.[91] Several members took the opportunity to urge that the
Chancellor should bring the matter forward the first thing in next
session; but the Savings Bank interest proved still stronger in 1851,
and again Sir Charles Wood got nothing done, and never heartily took
up 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 relating 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 contributions 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 underwent alteration and amendment, a great outcry was
raised, 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 assurance 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 Government 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 Royal Assent. Such a measure,
whatever the poorer classes might think of it, was well calculated to
spread the spirit of independence amongst them. The State did well 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 prosperity, a provision against those risks to which all
the poorer classes are liable, of falling through unexpected
contingencies 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.
Herbert_, 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 long 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 the
subject."[92] 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, though the resolution before the House was
apparently justified by the circumstances, it would not be becoming in
them to divide the House after what had been promised. The question
was surrounded with difficulties, but notwithstanding these
difficulties it was the paramount duty of the Legislature to grapple
with 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 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
Chancellor of the Exchequer in Lord Derby's first Ministry; but he had
scarcely time, supposing him to have had the disposition, 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 investigation 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. Gladstone gave notice that the
subject must be taken up, and if possible settled. A bill[93] was
allowed to pass the second reading without discussion; but when the
subject came up before Committee in July of that year, Mr. Gladstone,
compelled to succumb to the wish that Parliament should be prorogued,
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.[94] 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 time present could often be well applied to proposals to
defer desirable matters of legislation to a future session. No mention
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 proposal 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 that 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,[95]
providing it were ready at call and the stipulated interest were
given,--the stability of the country being surely a sufficient
guarantee for its safety. Savings Bank authorities, on the other hand,
disputed 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 governing 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.[96]

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 withdrawn, 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 those speeches of previous
Chancellors already described,--he proposed the first reading. Then
came the dissolution of Parliament, and its forcible postponement for
one more session.[97]

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 expedient to amend the laws relating to Savings
Banks, and to provide for the establishment of Savings Banks with the
security 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 contested some of the details. The
greatest objection to the bill when last introduced being the
provision to limit the total amount of deposits to 100_l_., 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 wished 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 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 shackles of which they can
reasonably complain, and that no securities are demanded on behalf of
the public beyond what are absolutely necessary."[98] _Sir Henry
Willoughby_ 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 Goderich_ 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 improved 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 honourable 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
grievances 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 a long 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 conducive 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 committee was eventually appointed, was made chairman of it, we
need only give the concluding part of his speech on this occasion:--

    "He earnestly wished that this session would not pass
    without a Government Savings Bank bill becoming law, and
    he hoped the honourable gentleman would persevere with
    this bill; but even should the bill pass, 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 concurred 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 public that information which
    they ought to have."

_Mr. Glyn_ and _Mr. Maguire_ approved the 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.[99] After
demolishing the man of straw which Mr. Ayrton had set up, the bill was
carried without a division. So far things went on prosperously, 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 with 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 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 misunderstanding existing among the local administrators
of Savings Banks. He thought his proposals had not received the
approbation which he conceived their merits justified.[100] 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. Fagan, Mr. Cowan,
Mr. Grogan, Mr. J. A. Turner, Mr. Henley, Mr. Whitbread, Mr.
Bramstone, Mr. Adderley, Mr. 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 following
eminent actuaries or other officials of the principal Savings Banks in
the kingdom:--Mr. Edward Boodle, of the St. Martin's Place bank; Mr.
Shopland, Exeter; Mr. Wortley, Finsbury bank; Mr. Saintsbury,
Moorfields bank; Mr. J. Hope Nield, Manchester; Mr. Maitland,
Edinburgh; Mr. Meikle, Glasgow; Mr. Sturrock, jun., Dundee; Mr.
Jameson, Perth; Mr. D. Finney, Marylebone bank; Mr. Hatton, Brighton;
Mr. Deaker, Dublin. Mr. W. H. Grey, a Government actuary, and Mr.
Edward Taylor, of Rochdale, attended to give evidence on the subject
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 summary of the Report 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 Committee was brought before the
House of Commons, where the subject was warmly discussed. In this way,
all the important 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 experience in such matters. Sir A.
Spearman gave a full account, in an examination lasting over four
days, of the mode in which investments were made at his office, and of
the principal financial operations connected with these investments.
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 subject 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 their 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 the witnesses
left the box without offering some practical suggestion, or
recommending 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 needful was a
Government guarantee for the absolute safety of all deposits; and
although Mr. Craig and others thought that this should be supplemented
by a staff of Government inspectors, regarded the change as
imperatively required.[101] It is impossible, however, that we can at
any greater length give the recommendations 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 Report 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.[102]

    1. That the 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 carried 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 intervals, the
    meetings of the Commission; that three shall be a quorum;
    and the minutes of each meeting duly recorded and signed
    by the Chairman.

    6. That the Rules and Regulations relating to the receipt
    and payment of all moneys, 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 Commission, 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, within the year
    ending on November 20, in each year, be audited by the
    Commissioners of Her Majesty's Audit.

    8. That monthly accounts of the receipts and payments of
    all moneys, and of sales and purchases of stocks and other
    securities, be prepared by the Commissioners, 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, within one week of the
    following month.

    9. That the annual accounts, containing the receipts and
    payments 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 Commission 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-third
    of the whole, in other securities than those now
    authorized to be purchased with those funds; those
    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 ground of reducing the
    present rate of interest allowed to the banks, but the
    whole subject of the estimated deficiency be referred to
    the consideration 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 acquire security for the deposits therein
    guaranteed by Parliament, and that such Savings Bank shall
    have a special title.

    15. That the Commission may appoint such officers as may
    be requisite for the proper audit and inspection of such
    accounts, and for obtaining due compliance with such
    regulations.

    16. That no banking concerns should be permitted to assume
    the name of Savings Banks, except such as have had their
    rules duly certified.

    17. The rules of every Savings Bank shall be in force only
    after they have been certified by the Barrister, to whom
    no fee shall be payable.

    18. That the responsibility of trustees be enacted in the
    same terms as in the Act 9 Geo. IV. c. 92.

    19. That the present limits of yearly and total amounts of
    deposits payable on demand be maintained.

    20, and last. That whenever any deposit shall amount to
    150_l._, the Commissioners may, with the consent of the
    depositor, invest a portion of that deposit in the
    purchase for the depositor of 100_l._ stock, the interest
    on which shall be received by the Commissioners and placed
    to the depositor's account.

Arrived at this point, and in order that the general reader may
properly understand the next attempt made at legislation on behalf of
Savings Banks, we ought to say something in the way of explanation as
to the disposition of the funds of Savings Banks after they reach the
hands of Government. By the 57 Geo. III. c. 105, the money paid in on
Savings Banks account was to be invested in Three-and-a-half per Cent.
Bank Annuities.[103] Subsequently, the law was altered, by which the
money might be invested in Bank Annuities or Exchequer bills. The
purchases of Stock are made upon the order of the Comptroller-General
by the Government broker; but no Exchequer bills are bought, except
under the special direction of the Chancellor of the Exchequer. The
practice is, when the balance at the bank appears to be larger than is
necessary, gradually to apply it to the purchase of Stock at the price
of the day. It appears that between 1828 and 1844 Stock was sold to
the amount of 8,166,511_l._, and purchased to the amount of
8,816,400_l._; Exchequer bills were bought to the amount of
19,888,100_l._, and sold to the extent of 13,041,500_l._ Sir Alexander
Spearman stated that he had, on his own authority, bought Stock from
time to time, as the state of the balance required it; he contended
that he had legally such authority by virtue of his office, and he did
not hold himself responsible to give any explanation of his
proceedings to the trustees or managers of banks.[104] This was just
what Savings Bank managers and trustees did not agree with, and it was
an interpretation put upon the statute which even experienced
statesmen disputed.

Mr. Wortley told the Committee of 1858 he considered the system of
mixing up the Savings Bank funds with the Government money very
injurious to Savings Banks. Mr. Boodle strongly objected to the
practice of dealing in Stock and Exchequer bills, and of exchanging
one for the other. He said Mr. Goulburn had been induced to
discontinue the practice, and to publish an account of the different
transactions, but that the practice had been revived in 1853, had
continued ever since, and in a worse form than ever. Lord Monteagle,
who spoke very strongly on these points, stated that the present use
of Savings Bank money was entirely at variance with the original
design; that the Commissioners had no power to change the securities,
and thus become active agents in the Stock Market.[105] Lord Monteagle
expressed strong objections also to the power of funding Exchequer
bills bought for the Savings Banks at the price of the quarter at
which they were bought. Sir A. Spearman, who was somewhat unfairly
left to bear all the brunt of every attack of this kind, on account of
the Committee neglecting to call upon any of those five members of the
House who were or had been Chancellors,[106] stated that the Savings
Bank fund on the 20th of November, 1857, was 34,399,082_l._ Stock;
whereas, if there had been no investment in Exchequer bills or bonds
since 1853, the amount would only have been 34,207,371_l._ Stock.[107]
Mr. Boodle dwelt upon the reputed losses which the country had
sustained through the Savings Banks, and declared that if there had
been any loss, it had been occasioned by the State not treating the
funds exclusively as Trust Funds. In this matter, Mr. Boodle
undoubtedly had the best of it. "Whenever any bill is introduced into
Parliament on Savings Banks," said this gentleman, "this loss is
thrown in the teeth of Savings Banks, and used as an argument,
sometimes for reducing the rate of interest, at other times for
reducing the limits of deposits, either annual or in gross. Therefore,
it acts most detrimentally to the depositors; and it has gone out that
the Savings Banks are an enormous expense, whereas we are perfectly
satisfied that, if this money were properly administered, there would
be no expense whatever.[108]"

That Savings Bank money was not only used for financial purposes, but
turned to extremely profitable use, there can be no doubt: hence
complaints of loss could only be made by persons but partially
acquainted with the facts. Mr. Hume indeed, had he been cognizant of
the profitable way the funds were used, could scarcely have complained
about the loss to the State so often as he did. Mr. Gladstone at this
time, and subsequently, never missed an opportunity of putting the
matter on the proper footing, and to set it forth that, instead of a
loss, the funds had been a source of considerable gain to the State.
In 1834, when Lord Althorp was Chancellor of the Exchequer, and Lord
Monteagle himself (as Mr. Spring Rice) Secretary of the Treasury, they
determined to reduce the interest on the Four per Cents. Those who
held money in the Funds and were dissatisfied with the reduction were
paid off out of the Savings Bank money (without which, indeed, the
reduction could not have been earned through), and a saving to the
country of 53,000_l_. a year was the result. Mr. Goulburn, using the
power he had in the same way, or with the money of Savings Banks to
fall back upon in case of need, effected a saving of 750,000_l._ a
year in reducing the rate of interest from four to three and a half,
then to three and a quarter, and eventually to three, per cent. Not
less useful were the funds of Savings Banks in the time of the Crimean
War. By means of Ways and Means bills, the Chancellor of the Exchequer
raised the necessary funds to meet the heavy demands, and thus
effected an enormous saving of money, which would have been sunk in
transacting a loan.

We have already made the reader acquainted with Mr. Gladstone's
opinion on the right of the State to use the money entrusted to it for
safe keeping; nothing could be more vigorous than his language already
quoted. Mr. Gladstone endeavoured to carry a change in the law
relating to the investment of Savings Bank moneys in 1855. He now, in
the session of 1860, came forward and offered a bill to remedy some of
the grievances complained of in the Committee. His proposals were now
substantially the same as those of 1855. He voluntarily proposed to be
shorn of his strength as Chancellor by the House agreeing to cancel
Savings Bank Stock to the amount of thirty-one millions of pounds; and
to open a new account for this money, to be called "State Deposit
Account, No. 1," virtually giving the money the fullest security of
the State, and placing it entirely beyond the reach of his operations.
The remaining amount, then about ten millions, Mr. Gladstone proposed
should be allowed to be invested at the pleasure of the finance
minister as heretofore. One would have thought that at any rate this
bill would have been allowed to pass quietly; but it was not to be.
The bill proposed was based on two of the recommendations of the
Committee of 1858,--namely, those which suggested that the power of
funding Deficiency and other bills should be done away, and that the
dealings in the stocks should be under the review of the House; but
members complained that a bill had not been prepared to embrace _all_
the recommendations. _Sir H. Willoughby_ and _Mr. Estcourt_ took this
view. In long speeches they both upheld the decision of the Committee,
and asked for a bill dealing with the entire subject; the latter
gentleman said that the "barren discussions in Parliament were acting
to the prejudice rather than to the support of the excellent
institutions with which they dealt. There were not above 600 of these
useful institutions in the whole kingdom, whereas they ought to ramify
through every parish and every village of the kingdom." _Mr. Malins_
and _Colonel Sykes_ followed, and complained that Government should
have neglected to deal with the entire subject. _Mr. Gladstone_ made
up for the lack of supporters by a long and able speech. He admitted
that it was most desirable to have a bill for the management of
Savings Banks, but the general subject had no relation to the mode in
which the money of Savings Banks was invested. Better at the end of a
session carry one or two points, and put an end to grievances which
had been loudly complained about, than bring in a measure only to
withdraw it again. He had been charged with ignoring the labours of
the Committee. He had not done so, for the bill was founded on part of
their labours; he _had_ considered the report, "but consideration does
not necessarily involve adoption." He was compelled to decline many of
the suggestions of the Committee. Where, however, he agreed with them,
he had lost no time in taking action: hence the proposed bill. "From
speeches of honourable gentlemen," concluded Mr. Gladstone, "it might
be supposed that a dreadful bill had been introduced, giving
exorbitant powers to the Chancellor of the Exchequer. The fact is,
however, that there is not a power given which he does not already
possess, and in one or two respects the surrender of powers is very
large." "It is impossible that Savings Bank funds can now be used by
Government as a trust; they must be reserved for the discretion of the
House." The bill for the first time gives a positive title in law to
the deposits in Savings Banks, and it will further provide a true
account,--"for nobody has ever yet seen a true account,"--of the
National Debt; and for these reasons Mr. Gladstone hoped it would be
allowed to pass into law. _Mr. Thomas Baring_, and _Mr. Ayrton_,
unconvinced by the Chancellor's arguments, opposed the bill; and _Mr.
T. Collins_ contented himself, as usual, with dividing the House on
his motion to throw it out. The motion was negatived by a majority of
twenty-four, and there was a similar majority on a motion for
adjournment made by Sir Henry Willoughby. On the 20th of July, 1860,
the bill was considered in Committee, and the discussion was taken on
the first clause--the existing stock to be cancelled--when Mr. Hubbard
approved of the measure. By the bill the greater part of the money of
Savings Banks, viz., that treated as a book debt, would be placed
beyond the reach of jobbery. Sir Francis Baring spoke in favour of,
and Sir H. Willoughby, Mr. Hankey, and Colonel Sykes again opposed,
the clause. The opposition to the measure had gathered strength since
the last occasion;[109] and on a division, the Savings Bank managers
once more triumphed by a majority of 38, in a morning sitting and a
House of 192 members.

A few days afterwards the _Chancellor of the Exchequer_ proposed the
fourth clause of the defeated bill, or that which gave the
Commissioners an uniform power of holding and dealing with all stocks
under Parliamentary guarantee, and stocks and securities, under
whatever name, that constituted the National Debt. At present, Mr.
Gladstone stated the Commissioners had power to hold Terminable
Annuities, but no power to sell them. There ought to be a uniformity
of power with regard to these securities, and this bill, which was
founded on the fourth clause, gave it. He had only been induced to
take the matter up again by finding an unanimous feeling in the House
for this proposition. _Mr. Estcourt_, in speaking for the clause,
hoped the Chancellor would soon bring in a measure on the general
subject. So he did, soon afterwards, but not the kind of measure Mr.
Estcourt desiderated. When this bill reached the Lords, it was rather
violently opposed by Lords Monteagle and Redesdale; and on a division
the voting was found to be equal. According to usage, the bill was
thrown out. The Government, however, re-introduced the measure, "as a
matter of urgency;" and though there was an outcry in the Lords
against it, no less than in the Commons, for interference with what
was considered a Money Bill, the clause passed, and received the Royal
Assent on the last day of Parliament.

Mr. Gladstone, thwarted in all his attempts, except in the last
insignificant case, to bring about a better state of things in
connexion with the management of Savings Banks, determined upon
another course of action altogether. He, and other statesmen who had
preceded him in his office, had tried their best to improve the
existing banks, but they had been persistently hindered and obstructed
by the force which Savings Bank officials could bring to bear. For
some time now Mr. Gladstone must have had under his eye several
proposals which went to the very root of the matter upon which so many
difficulties had from time to time arisen, and which promised a
thorough and substantial reform. He bent his great energies in this
direction; saw his way, not only out of a dilemma, but to the
origination of a simpler and more perfect system; and may be said
henceforth to have left the friends and partisans of the old Savings
Banks to look after their own interests. With the legislation relative
to the scheme of Post Office Savings Banks, with which Mr. Gladstone's
name will always be prominently associated, we shall deal in a special
chapter, and will therefore hasten to describe the remaining steps
which the Legislature has taken with regard to Savings Banks proper up
to the present time.

Left to themselves, the leading Savings Bank authorities in the
House--viz., Mr. Estcourt, Sir H. Willoughby, and Mr. Ayrton--obtained
leave, on the 11th of March, 1862, to bring in a bill "to Amend the
Laws relating to the Security and Management of Savings Banks."[110]
The points sought by the bill were, briefly, (1) to enforce upon all
local banks the regulations of the well-managed ones; (2) to repeal
the Act of 1844; (3) to force an auditor upon every bank and define
his duties; and, lastly, to provide for the security of the
depositors, by enacting that no transactions should take place except
at the office, during office hours, and in the presence and with the
signature of more than one person. Mr. Estcourt, who briefly explained
the drift of the bill, intimated that they were not desirous of
altering the relation in which Government stood to Savings Banks, or
of interfering in any way as to the disposition of the money. Mr.
Gladstone, after stating how completely Government had been baffled in
their attempts to alter the law regulating Savings Banks, expressed
approval of the bill, though he reserved the right of Government to
take any steps they chose at any subsequent stage.[111] On the 20th of
May this bill shared the fate of all preceding attempts to place these
institutions on a sound basis, by being withdrawn. Savings Bank
managers had again interfered, and this time they went against their
devoted friends. _Mr. Estcourt_, on withdrawing the bill, said he had
received numerous representations from managers that his measure was
"inapplicable" to them; and "only that day an influential body of
managers of great experience, and fully to be depended upon," had
waited upon him, requesting him to withdraw it; and if he would
consent to this course, _they_ would endeavour to devise some scheme
which should meet the requirements of the various establishments. Mr.
Estcourt's measure was unquestionably a good one, but it involved too
much trouble and risk to trustees: hence its defeat. _Mr. Gladstone_
thought it was high time that those gentlemen should take their turn
in devising a scheme. If they proposed a real improvement, Government
would make no objection. Referring to the Post Office Banks, Mr.
Gladstone said: "Undoubtedly, however, the main question had been
disposed of; they were now able to say to the people of England who
were disposed to lay by their savings, with a moderate interest and
with a perfect security, the Government had provided some 3,000 places
where these savings would be received." _Mr. Henley_ was much
discouraged with the difficulties everybody found in the way of
legislation. He was "disposed to think that the well-managed banks
might go on as usual," but rather than "tinker" at the others, "the
very small banks under the old system, which would not afford the
proper machinery for perfect management, ought to be urged to hand
over their business to the Post Office Banks." _Mr. D. Griffith_ "for
once agreed with the Chancellor of the Exchequer;" he was glad to hear
the Post Office Banks were working so well, and expressed his opinion
that "they would ultimately swallow up all the old banks."[112]

In March, 1863, Mr. Gladstone brought forward once more his
propositions relating to the investment of Savings Bank money. He
moved--

    "That it is expedient to amend the laws relating to the
    investment of the moneys of Saving Banks, and to create a
    charge for such Savings Banks upon the Consolidated Fund,
    in place of certain perpetual annuities now standing in
    the names of the Commissioners of the National Debt; to
    give the power for converting certain other amounts of
    such perpetual annuities into certain other annuities, and
    to provide for the due payment out of the Consolidated
    Fund of any deficiency which may arise from insufficiency
    of the securities to meet the legal claims of the trustees
    of such Savings Banks."

After considerable discussion, the bill (26 and 27 Vict. c. 25) was
sent up to the Lords under the charge of Lord Stanley of Alderley, and
received the Royal Assent on the 8th of June, 1863.

We come now to the last item of legislation on the subject of Savings
Banks. On the 14th of April, 1863, Sir H. Willoughby and Mr. Ayrton
obtained leave to introduce the bill which, according to promise, had
been prepared by a convention of Savings Bank managers. To a great
extent this measure "to Consolidate and Amend the Laws relating to
Savings Banks," was identical with the one which Mr. Estcourt
introduced and withdrew during the previous session. The managers had
met during the recess, and had consolidated into one the eight Acts,
or parts of Acts, which then governed their establishments. Mr. Tidd
Pratt, on being consulted in the matter, certified that the new Act
"would constitute a fair and just measure of improvement." Mr.
Gladstone, too, it seems, had been furnished with a copy, had
suggested some trifling emendations, which had been frankly adopted
and embodied, and was therefore disposed to offer no captious
opposition to it. Not only so, but he thought it creditable to the
gentlemen who had it in charge, and, so far as it went, likely to be
effectual. Several clauses were altered, struck out, or inserted, and
the bill, known as the "Consolidation Act," received the Royal Assent
on the 28th of July, 1863. Of this Act (26 and 27 Vict. c. 87, a full
description of which will be found in the Appendix)[113] we shall
speak in a subsequent chapter, when we come to consider the law at
present regulating Savings Banks.


    [69] 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 former judge, after giving a decision
    against the trustees in the case, said, "The case could not be
    made too public," and he "trusted that it would operate as a
    warning to the trustees of Savings Banks generally." Sir George
    Rose "fully concurred" 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 were
    incumbent upon them, their 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 that might ensue."

    [70] Speaking of Mr. Goulburn, when he first took office, a
    contemporary said, "He possesses that degree of talent which
    renders him highly respectable without exciting any invidious
    feeling. He is content to be useful without 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. Goulburn's legislation for Savings Banks scarcely bears out
    this estimate.

    [71] 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 10_l._ in one year, instead of 30_l._,
    or it might go to 15_l._; "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_l._

    [72] In this same Committee, Mr. Pratt stated that in the course
    of his investigations in Ireland he had found one man who had had
    seventeen books out of one Savings Bank, and money to the extent
    of 520_l._ lodged there, altogether his own property, but which he
    represented himself as holding in trust.

    [73] Only four sets of directors of banks, and these banks of very
    insignificant size, made a declaration of the kind in question
    between 1844 and 1848.

    [74] 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 officers 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_l._ 6_s._ 8_d._ to
    trustees and 3_l._ 0_s._ 0_d._ to depositors, and 3_l._ 5_s._
    0_d._ and 2_l._ 18_s._ 4_d._ were proposed against the Government
    plan, eventually carried, of 3_l._ 5_s._ 0_d._ and 3_l._ 0_s._
    10_d._ respectively. It was declared that the difference of 4_s._
    2_d._ 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 not more than 3_l._ 0_s._
    10_d._ 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 doors there was a regular combination;
    deputations waited upon the Chancellor 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. Martin'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_l._ 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 amount of
             deposits from 30_l._ to 20_l._ in each year, and
             the total amount of deposits from 150_l._ to
             120_l._ will be highly injurious to the interests
             of the depositors."

         2d. "That the reduction in the rate of interest from
             2-1/2_d._ per cent. per day to 2_d._ 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, requiring 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."

         4th. "That the proposed alteration respecting the
             liability of trustees and managers of Savings
             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.

    [75] 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,) "considering him a good judge as to
    how far impudence might be carried with impunity." 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, give it to Mr. Hume smartly, as
    was its wont, and congratulated him "on his generous, though
    rather startling, acknowledgment of the source of all his
    strength."

    [76] His speech on the occasion does not seem to have been fully
    reported.

    [77] The trustees of four small banks made the declaration: those
    of Tonbridge, Ashby-de-la-Zouch, Fareham, and Carshalton in
    Surrey.

    [78] At a meeting of the managers of the principal Savings Banks
    held on the 29th of August, 1819, it was resolved: "That this
    meeting has read with mingled feelings of pain and alarm the
    clause in the proposed bill virtually requiring trustees and
    managers of Savings Banks to give security or 100_l._ 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."

    [79] Mr. Brotherton, 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.

    [80] 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 witness, in answer to
    a 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.

    [81] _The Times_ and _Morning Chronicle_ strongly advocated the
    same view.

    [82] _Hansard_, vol. civ, pp. 22-54.

    [83] During the interval, Mr. Reynolds, member for Dublin, who had
    obtained the Committee originally, became Lord Mayor of Dublin,
    and Mr. Gibson Craig became Sir W. Gibson Craig. Mr. J. A. Smith
    was appointed chairman on each occasion.

    [84] For example, in August, 1852, Mr. Reynolds again brought the
    subject before the House by proposing that the remaining money due
    to depositors should be paid by the State. On this occasion he
    told how he had had the honour, in 1846, 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 serious
    appeals were equally unavailing.

    [85] 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 saving of the poor, but were negligent, in too many
    instances, in giving their personal services, whereby the business
    fell almost entirely under the exclusive management of the person
    appointed as actuary."--_Sir John Cross._

    [86] "Nearly all the frauds, and all the loss which had occurred
    in Savings Banks," said the Chancellor, "were owing to the actuary
    or secretary receiving money irregularly, sometimes at his own
    house, and very often out of office hours."

    [87] Even in seaport towns this inspection of pass-books might be
    accomplished 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 of all.

    [88] The Chancellor here pointed out that the _average_ rate of
    interest given to depositors at that time (1850) was but 2_l._
    18_s._ 4_d._ and that the reduction would be scarcely felt by any
    class; that reduction, however, would not only provide against the
    Government losing any more money, but would meet the expense of
    the proposed Government treasurers of Savings Banks.

    [89] _Hansard_, vol. cx., third series; and _Times_, 1850.

    [90] 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 place_
    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_l._ would be
    quite sufficient to allow a person to deposit in one year," and
    that, "when the deposits reach 100_l._ there is no necessity to
    allow further deposits to be made." Again, the Rev. W. Rowan,
    Treasurer of the Tralee Bank, when asked in the Committee of 1849,
    if he thought changes were necessary in Savings Banks, answered
    that, "The Savings 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."

    [91] A bill to continue the Act of 1848, "for Amending the Laws
    relating to Savings Banks in Ireland," was carried through
    Parliament in this session.

    [92] The gentleman to whom reference was here made is the present
    Comptroller-General, the veteran public 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 department 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 century, 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 constantly 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
    Commons, the Master of the Rolls, 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 held a meeting once in each
    quarter. Three Commissioners form a quorum, and their powers are
    defined by Act of Parliament. The Comptroller-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_l._; but must have
    increased considerably since that date.

    [93] "To amend the 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."

    [94] In a long petition to the House of Commons from the Trustees
    and Managers of the St. Martin's Place Savings Bank, this bill is
    strongly opposed, thus showing that Mr. Gladstone had not
    succeeded with the managers of that institution. Speaking of the
    direct Government guarantee proposed to be given, the managers say
    that they "find the proposed change fettered with 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 responsibilities
    ill-defined under the provisions of this bill, and not capable of
    being sufficiently understood or explained; subversive, as the
    proposed change will also prove, in this and many other
    well-regulated Savings Banks, of those systems of entry and check
    under which their present accuracy of accounts is so admirably and
    indisputably 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.

    [95] "You take the money of these depositors, and you give them
    the entire security of the State for their money. They cannot have
    a better 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 Chancellor of the Exchequer does with the money. If he invests
    it well, they are no richer; and if he plays all the tricks of the
    mountebank, or disposes of it with the artifice of the swindler,
    they are none the poorer. The depositor in Savings Banks have
    nothing to do with the question, and it is only weakening and
    impairing 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.

    [96] _Hansard_, vol. cxxxvi. 1854.

    [97] _Hansard_, vol. cxliv, p. 1292.

    [98] A clause was added to the bill now introduced to prohibit the
    assumption of the title of "Savings Banks," by institutions not
    established under the Savings Bank Acts.

    [99] A few days after this, Sir George Lewis gave a pledge to
    Viscount Goderich that, if the bill passed, the Committee should
    be appointed to consider every question that Sir H. Willoughby had
    raised.

    [100] 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 interested." In their opinion "considerably
    more importance has been attached to the terms 'Government
    security,' and 'Government guarantee,' than the facts of the case
    would require."

    [101] 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 Government auditors or inspectors. Mr.
    Hope Nield (1,937) thought it "desirable decidedly, if it can be
    obtained without trammelling or destroying the operations 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 things should be 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; applications are constantly made to know whether they
    have the security of Government or not. I think myself that
    depositors are entitled to have the real protection of a
    Government security, but I think also that it will be 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 conclusions to
    which the Committee of Inquiry came on the subject of this
    guarantee that we present them here _in extenso_. "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 from their liability,
    should not be bound to provide some other guarantee for the money
    of depositors, who have no share themselves in the management of
    their bank. It appears to your Committee that an alternative ought
    to be given, and freely offered to the choice of trustees, either
    to secure the guarantee of Parliament upon such conditions as the
    commission 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 various
    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 provide 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 in
    the practical management of banks. In one point all the witnesses
    concur; and your Committee must record their own opinion to the
    same effect, that the most effectual restraint upon malversation
    is to be found in the presence of a second party in every
    transaction where money is paid or received; and that a rule to
    this effect ought to be imperative in all banks, under a penalty
    on its infringement."

    [102] The Committee sat six days deliberating on their Report
    after all the witnesses had been examined. Draft reports were
    proposed by Mr. Ayrton, Sir Henry Willoughby, and the Chairman,
    the report ultimately carried, after a few emendations, being that
    by Mr. Estcourt.

    [103] Sir Alexander Spearman, who clearly explained the facts to
    the Committee of 1858, also described the routine gone through
    when Savings Banks made investments with Government. They first
    certify the appointment of trustees; then, appoint an agent in
    London, generally a banker, through whose hands the money passes.
    When the trustees of a Savings Bank wish to invest, they send up a
    notice to their agent, who presents it at the National Debt
    Office, where an order is given to the Bank of England to receive
    the stipulated sum and place it to the account of the fund for the
    Banks for Savings. Next morning a receipt is sent from the Bank of
    England to the National Debt Office, and from thence to the
    trustees who remitted the money. A somewhat similar proceeding
    takes place on the trustees of any Savings Bank wishing to
    withdraw money. It is done through the agent, who gives the
    necessary notice of withdrawal. No money is paid or received at
    the National Debt Office, but at the Bank of England, the
    Commissioner simply keeping the accounts.

    [104] "Suppose any bank should question the way in which their
    funds had been invested?"--"My answer would be," said Sir A.
    Spearman (4,029), "that this was a matter which did not in the
    least concern them. I am not aware that the Act of Parliament in
    any shape or in any manner makes the Commissioners or their
    officers responsible in the slightest degree to the trustees of
    Savings Banks." When asked if, "Supposing the money were used for
    financial purposes, or not invested at all, or invested so as to
    produce little interest, would Savings banks have a right to
    complain?" this witness answered, he "did not think so. What the
    Commissioners are responsible for is, to repay to the trustees of
    Savings Banks the amount received from them, together with the
    amount of interest due, whenever they call for it." "They are
    responsible for that, and nothing more."

    [105] A little prior to this, Lord Monteagle had spoken at great
    length and with great animation on the same subject in the House
    of Lords. He then went the length of saying, that, "now the money
    was coveted not so much on account of inculcating the growth of
    provident habits, but that it should afford the Chancellor of the
    Exchequer a large capital, which might be sold, bought, exchanged,
    or invested in Exchequer bills, or in stock, at the will and
    pleasure of the financial minister; and, consequently, that he
    could thus be enabled, as he saw fit, to influence the
    Money-market to an extent which no individual or combination of
    capitalists could possibly either equal or counteract." He added,
    that he could have no objection to the mere buying and selling of
    securities, so far as the Savings Banks were concerned; what he
    objected to was, that these transactions should be so carried on
    as to affect the value of the public securities and influence the
    Stock-Market--"rig the market," as a member of the House of
    Commons said at the same time.

    [106] Sir Francis Baring, Sir Charles Wood, Mr. Gladstone, Mr.
    Disraeli, and Sir George C. Lewis.

    [107] Exchequer-bill purchases, as we gather from the evidence
    taken before the Committee of Inquiry, are made in two modes. If
    the purchases are to be made in the market, the Cashier of the
    bank is directed in the same manner as when he is told to purchase
    Stock; pays for the bills out of the Savings Bank fund, and
    carries them to the credit of the Commissioners. The other mode
    is, by the issue of temporary Exchequer bills, such as Deficiency
    bills, or Ways and Means bills. Deficiency bills are bills issued
    under the authority of 57 George III., to enable the Government to
    provide for a temporary deficiency of money in the Exchequer.
    Deficiency bills are issued either to the Bank of England, or held
    temporarily by the National Debt Commissioners through the bank,
    the bank paying the money to the Exchequer, and paying itself the
    next day out of the Savings Bank fund. Ways and Means bills are of
    a pretty similar character, but chargeable to the revenue of the
    next succeeding quarter, and not, as in the former case, of the
    current one. Supply bills are of a still more permanent character,
    and are often held on from year to year, and are exchanged from
    year to year.

    [108] Mr. Boodle was for allowing part of the money to be
    otherwise invested than with Government. He suggested land
    drainage. Mr. Sturrock and Mr. Sikes were for keeping one-third of
    the money in the hands of trustees, to be invested "in freehold
    securities of unquestionable character," or in railway debentures.
    Mr. Deaker, Mr. Jameson, and Mr. Finney agreed. Lord Monteagle was
    "driven to the conclusion" of saying that in investing Savings
    Bank deposits, "you ought to deal in State securities and nothing
    else." The opinion of the Committee on the subject may of course
    be gathered from the digest of their report already given.

    [109] The indefatigable bank managers of London again sent round
    petitions against the proposals, and when they were presented to
    the House, one member, Mr. Hubbard, remarked they "were all
    apparently from one mint:" and indeed no secret was made of its
    being so.

    [110] So convinced was one individual organ--accustomed to treat
    largely of such subjects--that the bill now proposed would fail to
    accomplish any good, that it insisted upon its being called a
    "Bill to provide for the speedy extinction of all old Savings
    Banks, and to give a heavy blow and great discouragement to the
    trustees and managers thereof."

    [111] _Hansard_, vol. clxvi. p. 1394.

    [112] _Hansard_, vol. clxvi. p. 1974. It is not often that Mr.
    Griffith speaks the sentiments of the generality of English
    people, but he almost did so in this instance. No amount of
    tinkering could now make the old banks as simple, secure, and
    efficacious as those on the new plan. Mr. Griffith not having gone
    the length of mentioning any time, his prophecy was eminently a
    safe one. No one is more to blame, if indeed any one is to blame
    at all for such a state of things, than the authorities of Savings
    Banks themselves. Whilst they were systematically opposing with
    suicidal obstructiveness every measure of amendment, the whole
    ground was suddenly cut from under them by the institution of
    Postal Banks.

    [113] Appendix B.



                            CHAPTER VI.

                 A CHAPTER ON SAVINGS BANK FRAUDS.

    "There is such a powerful element of failure in all human
    affairs, that a shrewd man is always saying to himself,
    'What shall I do, if that which I count upon does not come
    out as I expect?' This foresight dwarfs and crushes all
    but men of great resolution."--_Companions of my Solitude._


In this chapter it is our intention to describe with more or less
minuteness the principal cases of frauds in Savings Banks pretty much
in the order of their occurrence, and also to speak to some extent of
the results which followed from them. How the progress of legislation
was affected by these frauds has been already shown; and with the
object of making more clear the legislation of 1844 and 1848, we have
already entered into the details of the notorious Cuffe Street Bank
failure, and one occurring in England prior to those dates. So far as
we have been able to ascertain, the first case of fraud in a Savings
Bank occurred at Carnarvon in the year 1824. In this case the actuary
received deposits to a large extent for which he in no way accounted.
Up to 1848 no less than ten cases, other than those already referred
to, occurred, in all of which the trustees promptly paid the claims.
These cases include the frauds which took place in Carmarthenshire,
Northamptonshire, and Cumberland, one at Mildenhall in Suffolk, and
another at Mitcham in the same county. In the latter case the
secretary managed to embezzle a sum amounting to near 12,000_l._, and
then made off; Mr. Hoare, the eminent brewer, paying down no less a
sum than 7,000_l._ to atone for his neglect, and the other trustees
making up the amount by subscriptions of 1,000_l._ and 500_l._ each.
Into any further particulars of the above cases it is impossible to
enter, inasmuch as they have never been allowed to transpire,--precautions
which, so long as there were no efficient remedies at hand, were both
wise and magnanimous. The catalogue, however, can be made black enough
and full enough without such cases; and it is to others which have
been exposed in all the fulness of their iniquity down to the minutest
details that we will now turn. Claiming priority in all respects was
the fraud on the County of Kerry Savings Bank at Tralee.

The Tralee Savings Bank was established in 1823, many of the noblemen
and leading gentlemen of the neighbourhood taking part in its
formation. The secretary from the commencement was Mr. John Lynch, who
was appointed by a majority of the trustees at a salary of 60_l._ per
annum. From the commencement the bank was held at the house of the
secretary, and was open from two till four every Monday.[114] Among
the directors there were five clergymen, and the rest were highly
respectable gentlemen of Tralee. The same might be said of the twenty
managers, nearly half of whom were clergymen. The Rev. A. B. Rowan was
treasurer of the bank. In the pass-books were abstracts of the Rules
and Regulations of the bank, and these were headed by the following
motto:--

         "For age and want save while you may,
          No morning sun lasts a whole day."

Other useful injunctions were given in sober prose, such as "Examine
your pass-book, and see that the entry is correct." "If you lose this
book, give immediate notice at the bank, otherwise you may be
defrauded."[115] With what feelings the pages of the books containing
this sage advice would be turned subsequently, we leave the reader to
judge after he has learnt more. Of course, Lynch was highly respected
in the town: one witness describes him as, from the first of his
connexion with the bank till the exposure, a man above suspicion; and
Mr. Rowan, the treasurer, told the Committee of 1848, that he believed
the public generally "had more confidence in Mr. Lynch than they had
in many, or any, of the trustees themselves." (839.) That he was
clever, as well as "correct," is manifest from the fact that he
succeeded for sixteen years in carrying on, unsuspected by anybody, a
complete system of frauds of different kinds, by which he appropriated
to his own use during that time no less than an average of 2,000_l._ a
year. He seems to have commenced his dishonest practices soon after
the formation of the bank; but until 1832 his peculations were of
small amount. From 1832 to 1847 he practised every possible
description of fraud, and though some of them might have been detected
by a rigid system of check, nearly all of them were remarkable for the
ingenuity they displayed: "The contrivance and adroitness with which
he managed these frauds," says one who subsequently went over the
accounts of the bank, "were so ingenious as almost to defy detection."
One of his practices was to account for a less sum than he received
from a depositor, and this description of fraud he managed as follows
(and this is a case which actually occurred): He received for lodgment
three sums of 30_l._, 15_l._, and 27_l._ in one day, without any
assistance or supervision from trustee or manager. These amounts he
entered in his books as 3_l._, 5_l._, and 7_l._ respectively, and
pocketed the difference. The manager at the close of the day, in
examining and certifying the business done, marked the three entries
as correct, as he found that they tallied exactly with the amount of
money received into the bank. No sooner, however, was the bank closed
and the acting manager left, than Lynch completed the case he had
commenced by securing himself against exposure in the event of the
depositor seeking to withdraw any of the sums named. The burden of the
fraud was made to fall upon the funds of the bank by the actuary now
altering the bank books to make them agree with the money actually
deposited; and this he did in the cases in question by putting an 0
after the figure 3, the figure 1 before the 5, and 2 before the 7. In
this way Lynch netted, with little or no risk of detection, a matter
of 57_l_. in one day. This was only one mode adopted. He likewise
received money out of office hours, which he never entered in any
day-book or accounted for to the manager. To preserve himself,
however, as in the previous case, he never forgot to post the amount
in the ledger, so that whenever it might be claimed it would appear to
the debit of the bank and at once be paid. Of course, there was here
the absence of everything like check or audit.[116] Other descriptions
of fraud may be left to be given in the culprit's own words.

Lynch held uninterrupted sway of the Tralee bank for a long series of
years, contriving to make away during the time with many thousands of
pounds; but retribution, though long in coming, arrived at last. "The
mill of God grinds late," says the Spanish proverb, "but it grinds to
powder," and the proverb meets with its exemplification here. A
trifling incident, as has often been the case before, led the way to
the full exposure. Lynch fell ill, to an extent which, though the bank
was held at his own house, precluded him from giving those precise
instructions which are eminently necessary in dealing with such
fragile machinery as that with which he had managed to work so long.
It was usual, it seems, to make weekly requisitions to the treasurer
of the bank for money to meet the demands upon its funds, and the
subordinate on the occasion in question asked for more money from that
functionary than had been credited to him altogether. The treasurer,
the Rev. A. Rowan, like the rest, had unbounded confidence in the
secretary, and had given himself little trouble over the affairs of
the bank. At a time when it must have been evident to all that several
thousand pounds sterling stood to the credit of depositors, Mr. Rowan
was satisfied to think that two or three thousand pounds formed the
capital of the bank. It is on record that he several times spoke of
the small amount of money in the bank, and innocently pointed to the
fact "as a sign of the depressed state of the country."[117] How this
illusion was at length dispelled we leave Mr. Rowan, himself to
tell.[118] "As I knew that the requisition of April 3d was for more
money than there was in the bank, I went to Mr. Lynch, and said there
must be some mistake somewhere, and told them to stop taking in any
more money till it was cleared up. The next day Mr. Lynch being ill in
bed, sent for me, and made a confession that he had committed frauds;
but he stated no amount. I then seized his books and papers and
everything I found connected with the bank, and swore information as
to the facts." The books were then subjected to a thorough
examination, and "frauds of every possible character," to the extent
of 36,000_l._, were found to have been committed. At the trial which
ensued, Lynch pleaded guilty, and was sentenced to fourteen years'
transportation.

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 malpractices, in order to exonerate a clerk of the
bank who had been arrested at the same time, and who was at first
thought to be 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 in 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 _bonâ 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 unfortunately 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, 36,000_l_. of the
hard-earned savings of the poorest classes around him. His estate at
the time of his apprehension was worth something like 3,000_l_.; this
property Lynch offered to give up in full, "leaving not even a bed for
his daughter;" but on Mr. 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.)[119] Mr.
Pratt had arrived by this time at Tralee, and was engaged in the
investigation of the affairs of the bank, and in making his 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_l_.
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 deposits 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 16,000_l_. The trustees disputed their
liability on the strength 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
benevolence 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, what 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 16,000_l_., 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
    consequence 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
    cheated, laugh at him, and tell him that they have spent
    their own money, while 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 Killarney had stopped payment. Mr. Pratt
had not even finished his awards in the one case before he was
required to investigate this fresh iniquity. It would seem that the
exposure of the one actuary had led to closer investigation on the
part of the trustees of the Killarney bank, and the earlier
development of the fraudulent proceedings of the other official. Here
again the frauds were found to be of an ingenious character, and might
have been continued 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_l._: the entire liabilities of the
Killarney bank were 36,000_l._, but the money in hand and the property
of the actuary, who decamped, which was calculated to realize about
5000_l._, reduced the loss to the former sum. As the average amount
due to each person was 45_l._ 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, both in and out of
Parliament, for the character of his decision, whereas it seems quite
evident now that he simply endeavoured 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[120] 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_s_. in the pound, whereas those coming after that year only got
3_s_. 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 occurrence, which
has been made the subject of any investigation, 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 was originally established in 1841, the principal landed
proprietors 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_l_. 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
Findlay, 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_l_. to his own use.
The liabilities of the bank were 4,300_l_., whilst the available
assets only realized 2,774_l_. 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 preserve the accounts
from being tampered with; it seems to have afforded no check: and when
a paltry sum of 150_l_. was needed to reimburse this deserving
population in full, the Perth institution came forward with--nothing
better than advice![121] 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 future._"

We have hitherto 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 Rochdale 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 particular
locality, but throughout the entire kingdom.

The Rochdale 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 Rochdale forming a very favourable
specimen of the Lancashire 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 gentlemen
who possessed large properties in the neighbourhood, an insurance
agent, and valuer and receiver of rents for the Lancashire and
Yorkshire Railway Company. Not less on account of his more private
character than from those multifarious 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.[122] 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?"[123] "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 handsomely, "though
scarcely with any particular extravagance;" he was above mere "gig
respectability," and rode in his carriage. "For the reputation of
honesty, probity, and wealth," said Mr. Taylor, "there was no man in
Rochdale who stood 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 full; but Haworth deceived even these people by putting
his connexion with the bank on the ground of charity, and an anxious
desire to promote the happiness of his poor fellow-tradesmen,--for
whom indeed he was each day laying up increased stores of untold
misery. 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 inscrutable 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
ignorant were they of the real state of the case and the true nature
of their late actuary, that they thought they were met simply to elect
his successor, and were actually prepared with different 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_l._, that the total assets
were calculated to realize 28,686_l._, and that the deficiency
amounted to the enormous sum of 71,715_l._ 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 very 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.[124] 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 Rochdale
at the time:--"I was in Lancashire some time ago, 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 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 believe 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 Committee 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_l._ was
readily subscribed among the trustees and their friends; another sum
of 17,000_l._ was realized out of Haworth's estate, and ultimately the
managers were enabled to give a dividend to depositors of 12_s._ 6_d._
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 Rochdale 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 respected, and everybody had faith in him," says Mr.
Taylor, naïvely; "but from what we discovered, he must have been
exceedingly designing for many years." In no instance that has come
within our notice were the trustees, who ought to have been this man's
master, so completely his tools. Haworth 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 found out afterwards, that he had
been appointed a manager in 1838, and never was aware of the
interesting fact _till the bank 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 manoeuvre 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 passing 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.

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 Rochdale
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
responsibility 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 bank_." 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 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. Him task was far easier, indeed, than that
of some of the Irish actuaries; and once the ascendency 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
himself. Under any sort of supervision or audit from a disinterested
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_l._, 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 30, thus making it appear that the society, instead of
depositing 30_l._ had withdrawn 130_l._" 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, declaring 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 buried in this
bad man's grave. The Rochdale 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 Yorkshire, 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 Reading 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.[125] In 1842 a
fraud was discovered in the Reading bank through one of the clerks
there 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_l._
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 themselves 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 subscription
amongst themselves, one of them giving 1,000_l._ Mr. Hatton, then a
clerk in the Reading 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_l._, and was proved to have arisen from falsifications in the
accounts of Mr. Buckoll, 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 to have been larger. He was unable to do
more, however, than confide his suspicions to the actuary of the
Reading 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_l._ 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 he 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
apprehension, 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 accomplished. The actuary, it seems, made false
entries in depositors' 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_l._ 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 entries in that book as well as
corresponding entries in the ledger; this book he would present to the
managers in attendance, 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, however, 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 transaction, 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
appropriate 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 suffered
nothing from the frauds. The bank had money in the "separate surplus
fund" to the extent of 3,000_l._, and this, with 600_l._ 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 professional 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;[126] nothing like a proper audit; and signatures
given by responsible persons without even a cursory examination. Thus
in the Isle of Wight 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 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 committed
his frauds in the same way. Again: "In some cases, fictitious accounts
had been raised in the ledgers, and closed again immediately
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_l._ a-year to one
individual. The secretary, indeed, William Wheeler Yelf, "was
generally much respected in the island," was distributor 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 principles to guide him. We have already spoken of many of the
results of the Rochdale fraud; the case of the Isle of Wight bank
shows that that fraud affected other banks. It was suggested after the
failure of the Rochdale 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 the practice of having the
balance-book containing 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 conclusion,
he would now have been found out. Mr. Grey thus explains the new
deception adopted to conceal the deficiency: "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." This labour was just what Yelf
wanted. "In point of fact," continues Mr. Grey, "the addition 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_l._ was dropped in one
place, 1,000_l._ in another, in the capital column, and 20_l._ here
and 30_l._ there in the interest column, with some odd money to make
up the required deficiency." 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 fraudulent proceedings in any large Savings Bank. It
unhappily comes, however, within the province of history to chronicle
one such case occurring so late as 1862, and another the facts of
which transpired even after the passing of the Consolidation Act of
1863.

The Bilston Savings Bank was established in 1838. Nothing unusual
marks its early history, except the fact that the man 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 Rev. 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 was
presented by them with the incumbency of St. Leonard's, Bilston, worth
700_l._ a year. That he should take a large share of honorary
employment after this was only what might have been expected. Whether
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 Rev.
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 important offices he did; but who
would think of saying so much _then_? Suffice it to say, that this
man, like so many more of whom we have had to speak, contrived to
ingratiate himself into the good will of all around him, and had that
peculiar kind of cleverness which succeeds in getting his application
and zeal laid to the credit of his disinterestedness and 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_l._ 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 Registrar 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
attaching 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 "Returns" to
which 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 knew nothing of
the circumstances of the 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, including 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 discrepancies
with which they abounded. On first discovering the frauds the actuary
spoke to the treasurer, who promised to confer with him about them; 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. The feeling produced by the disclosure was painful in
the extreme, and the 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 accord
the with the general feeling of the country, when it characterised
"this man Fletcher" as "the meanest, the most cowardly, and the most
cruel of swindlers."[127] 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 magistrate was a swindler, his books
a heap of lies, his balance-sheets pure fiction.

Mr. Pratt was 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 weekly accounts. The Rev. R.
J. Heafield, a trustee and manager of the bank, confessed 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. _When I signed them, I
never in any way compared them with the books._ They were presented to
me either by Mr. or Mrs. Fletcher, _and I took no measures to verify
their accuracy._"[128] 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 discovered." 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 correctness 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 unfortunately was the sad state of the case.
Deceive the Commissioners 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:[129]--"The whole of
the Returns he held in his hand were signed by Mr. Fletcher, as
actuary and manager. In the statement dated January 1, 1859, the
amount received was returned at 234_l._ On looking at the books for
that day, he found it should have been 334_l._, therefore 100_l._ had
been abstracted on that day [cries of 'Shame,' and sensation]. On the
8th of January, he found the payments were set down at 174_l._,
whereas they had only been 74_l._, thus showing that the treasurer had
put another 100_l._ in his pocket that week. In the return dated
January 29, the receipts were set down at 183_l._, and the payments at
148_l._, whereas the former ought to have been 283_l._, and the latter
48_l._, thus taking to himself 200_l._ [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
1862, 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 completely reimbursed of their loss. In
1862, Mr. Fletcher was tried before Baron Channell, and found guilty
of "appropriating 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 indictment 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 Lichfield for the behoof
of the depositors, the repeated failures of justice in his case, his
eventual imprisonment for two years, it is not befitting that we
should enter, these being items of almost current police intelligence.

We can only spare a few words to tell how similar results 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 recklessness was induced in those who had been cruelly
wronged, 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 those 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. Nothing 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 point to. What was much wanted in
previous cases was some safe place, where timid depositors might
resort with their savings, and defrauded depositors go with what they
had saved from the wreck.[130] 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 depositors, 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. They 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
continued 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 the 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 must on no account do or say anything to weaken their trust in the
old Savings Banks."

The last case[131] 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 Rochdale, to which we have given so
much space. Nor is it a little singular that the actuary in the
Rochdale case was in many respects the prototype of the Canterbury
actuary: in the estimation in which both were held in their respective
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 the 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 afterwards 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 institution dates from 1830, when he was
appointed actuary at a salary of 40_l._ per annum. The salary,
however, was increased from year to year, up to the time of the
exposure, when it stood at the respectable figure of 200_l._
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 malappropriation 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
engagements it was always possible that money might be urgently
needed. Like Haworth of Rochdale, 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 difficulties." 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 early 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, 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
Rochdale, 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 himself 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 bock 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
depositors, 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 cheque 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 procedure, especially considering 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. The actuary, an old man of seventy, was tried
at the city quarter sessions in October, 1865; 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 following
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_l._ 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_l._, was applied to meet the case; the actuary gave
up property to the value of 1,700_l._; a gentleman who was his surety
for 400_l._ was called upon to pay that sum, and the remainder, about
3,000_l._, was subscribed by the 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
officials, 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_l._, 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 investigation, or have so occupied
the attention of the press as to have become grave subjects of public
discussion. Besides those leading cases, there have been, as we have
before hinted, a certain number that have been concealed from the
public from motives which, though they may have been open to question,
we cannot characterise as wholly bad or unwise. From two Returns
issued at different times on motions made in the House of Commons, we
are enabled to compile a complete 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. As it is, the following table gives the
name of the Bank, the amount of the Fraud, and the amount of the Loss
to depositors, so far as it can be correctly ascertained:--

  +----------------------+--------------+----------------+------------+
  |     Name of Bank.    |    Total     |   Defaulters.  | Depositors |
  |                      | Defalcations.|                |    Loss.   |
  +----------------------+--------------+----------------+------------+
  |      _England._      |      £       |                |       £    |
  |Bradford, Wilts       |      400     | Actuary        |      --    |
  |Bromley               |      932     | Actuary        |      --    |
  |Dunmow                |       16     |       --       |      --    |
  |Highgate              |      700     | Secretary      |      --    |
  |Newport, Isle of Wight|    8,156     | Secretary      |    7,850   |
  |Leicester             |      689     |{Clerk employed}|      --    |
  |                      |              |{ by Secretary.}|            |
  |Mitcham               |   10,000     | Actuary        |      --    |
  |Newtown               |      180     |       --       |      180   |
  |Ongar                 |      497     | Actuary        |      --    |
  |Poole                 |    6,221     | Secretary      |    5,663   |
  |Reeth                 |      230     |       --       |      147   |
  |Rochdale              |   71,715     | Actuary        |   37,433   |
  |Rugby                 |    1,438     | Secretary      |      --    |
  |Runcorn               |       98     | Actuary        |      --    |
  |St. Helen's           |   12,932     | Secretary      |    6,680   |
  |Southport             |      200     | Actuary        |      --    |
  |Spilsby               |    3,213     | Actuary        |    2,436   |
  |Upper Albany Street   |      250     |       --       |      --    |
  |West London           |    1,106     | Actuary        |      --    |
  |Yoxall and Barton     |      200     | Secretary      |      --    |
  |                      |              |                |            |
  |      _Scotland._     |              |                |            |
  |Auchterarder          |    1,400     | Actuary        |      430   |
  |Monquhitter           |      336     |       --       |      --    |
  |                      |              |                |            |
  |      _Ireland._      |              |                |            |
  |Kilkeel               |      976     | Actuary        |      976   |
  |Tralee                |   36,000     | Actuary        |   36,000   |
  |Killarney             |   20,370     | Actuary        |   19,105   |
  |Nenagh                |      832     |       --       |      832   |
  |Mallow                |                No returns.                 |
  |Castle Townsend       |                No returns.                 |
  +----------------------+--------------------------------------------+

The frauds at Hertford, Brighton, Reading, Cuffe Street, Bilston, and
Canterbury, where the amounts of the defalcations are known, are left
out of consideration. Thus the total amount of the frauds enumerated
in the Returns, extending over thirteen years, was 179,280_l._; 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 amount of defalcation
was at the rate of 17,600_l._ a year; or, taking the banks mentioned
in the Returns, upwards of 7,900_l._ for each involved. Doing the same
with the total loss to depositors, or 117,732_l._, we find the average
loss for each bank to be nearly 5,000_l._

The reader who may have followed us through this chapter, and
remembers the classes to which the cheated depositors generally
belonged,[132] 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 set himself to remedy
immediately afterwards, and, though unable to do so at the time
through the opposition of Savings Bank managers, it was not long
before another system was provided which struck for ever at the root
of this grievance; and for all practical purposes, and so far as it
was now possible, repaired the injury which the industrious classes
had suffered through the action of defective legislation, and the
moral obliquity of those who had been trusted with their
earnings.[133] After entering still more fully in the next chapter
into the defects of the Savings Bank institution, considered purely
_as a system_, and the attempts made from time to time to remedy its
deficiencies, it will be time to describe how the above beneficial
result was brought about.


    [114] "In the case of a fraudulent actuary, especially if the bank
    is carried on at the man's own house, there is no limit to the
    fraud which he may commit."--_Evidence of Mr. Tidd Pratt before
    the Committee of 1848._

    [115] That Lynch, was no ordinary man there is abundant evidence.
    The following address to the inhabitants of Tralee--which from
    anybody else would be considered well meant and well expressed
    advice, simply completes the burlesque in his case:--

         1. "Money, as the means of procuring the necessaries
         and comforts of life, is a blessing; and to be
         careful of it is a duty incumbent on all."

         2. "To lay by in the time of youth, and whilst we
         enjoy good health, a portion of the fruits of
         industry in store for future wants, is a mark of
         wisdom; and considering that all are liable to
         infirmities, a provision to alleviate them is of the
         greatest importance."

         3. "Some men by hard labour, and others by superior
         skill, earn high wages; yet for want of proper
         management they have nothing to reserve. Many might
         be disposed to save a part of their earnings if they
         knew how to set about it, _or where to place it with
         safety_; whilst others who have occasionally
         practiced saving, have lost what they had laid up,
         _by trusting it in unsafe hands_."

         4. "The promoters of this institution are aware that
         several of their neighbours, from various causes, are
         unable to procure many of the comforts, if not the
         necessaries of life; they are, nevertheless, fully
         persuaded that many others who have the advantage of
         constant employment, and are favoured with the
         enjoyment of health and strength, might, by
         practising laudable economy, reserve a portion of
         their earnings to meet the demands which a future
         pressure of bad times, sickness, old age, or an
         increase of family, may bring upon them, and thereby
         avoid the calamities under which so many of them
         suffer."

         5. "It is a great mistake to suppose that small sums
         are not worth saving. By the habit of saving in
         little matters, riches are acquired; farthings saved
         would soon accumulate to shillings, and those to
         pounds," &c. &c. &c.

    [116] A Mr. Fitzgerald was the manager who generally attended and
    did the current work of his office. His statement after the frauds
    had come to light was, that he made the best inspection he could
    of the ledgers of the bank. When asked why he never compared the
    ledgers with the daily cash books, he confessed he never thought
    of it, "there was the omission," "that was where the link of
    investigation broke," "that was the omission which concealed the
    fraud so long," and other similarly shiftless remarks.

    [117] _Report of the Select Committee of 1848_.

    [118] _Ibid._ (Qu. 674).

    [119] Mr. Pratt's idea was to make the 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
    questionable propriety, and very questionable, as it afterwards
    appeared, in law. The money, however, was lost to the depositors
    completely, and went to Lynch's relations.

    [120] 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_l_. from the Provincial Bank of Ireland, and to deposit it
    all in the Killarney bank in one day.

    [121] _Vide Select Committee on Savings Banks_, 1858. Evidence of
    Mr. Jameson, actuary of the Perth Bank. (Qu. 2,906.)

    [122] 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.

    [123] 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.

    [124] So prevalent was this impression, that for several weeks
    17_s._ 6_d._ in the pound was freely offered for Savings Bank
    books in Rochdale.

    [125] Evidence of Mr. Hatton, actuary of the Brighton Savings
    Bank.

    [126] 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!

    [127] _Times_, January 17, 1862.

    [128] _Midland Counties Express_, March 16, 1862.

    [129] Report of the depositors' meeting, _Birmingham Daily Post_,
    January 16, 1862.

    [130] 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 unseaworthy
    bark within sight of _terra firma_. 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."

    [131] No attempt is here made to catalogue and describe frauds not
    occurring in Savings Banks proper: a chapter itself might be
    written on banks for the people established and carried on under a
    system of complete deception and villany. Nor have we entered into
    the case of frauds in Penny Banks, such as the unfortunate case at
    Birmingham.

    [132] Of the Rochdale depositors, for example, 1,245 were women,
    722 unmarried factory operatives, 292 married, and 231 young
    girls; there were besides, 953 miners, 539 labourers, and 191
    members of sick clubs.

    [133] Since the above pages were in type, a deficiency has been
    made public in the accounts of the Worcester Savings Bank, the
    cashier, Benjamin B. Wilkins, having committed frauds to the
    extent of between 4,000_l._ and 5,000_l._ On the frauds coming to
    light last August the cashier decamped, and, as it now appears,
    found his way to America. The trustees, having heard of him
    through some channel, put the matter into the hands of the police,
    who have succeeded in apprehending him, and bringing him back to
    this country, and he will shortly be brought to justice.



                           CHAPTER VII.

         ON THE DEFICIENCIES OF THE EXISTING SYSTEM, AND THE
            ESTABLISHMENT OF SUPPLEMENTARY SAVINGS BANKS.

    "Were greater facilities provided for saving, and greater
    encouragement 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 convenient places in which to
    deposit his spare earnings, will not fail to be regarded
    by him as among his best friends."--MR. 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 intended; and we think we succeeded in proving that the
progress of these banks 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 up the statistics where we left them, and present the reader with
a continuation of the same, in a slightly different form.

                           TABLE 4.[134]

    Showing the amount of Deposits and Withdrawals, and the Capital,
    of Savings Banks, at the end of each year from 1841 to 1861
    inclusive.

  +-------------+-----------+-------------+--------------------+
  |             |           |             | Capital of Savings |
  | Year ending | Deposits. | Withdrawals.|   Banks in the     |
  | 20th Nov.   |           |             |  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 |  7,255,654  |     31,851,238     |
  |    1847     | 6,649,008 |  9,060,075  |     30,236,632     |
  |    1848     | 5,862,742 |  8,653,108  |     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  |     34,263,135     |
  |    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, 1848, 1849, and 1850, the withdrawals
of money exceeded the deposits by amounts respectively of
2,411,067_l._, 2,790,366_l._, 325,877_l._, and 396,638_l._ 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 responsibility 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 the 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 previous 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 Committee 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 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 observable in the
above table, let us proceed to compare the progress made during the
period of twenty years now under consideration 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 _decrease_ in the
business of Savings Banks to the extent of _twelve 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 Returns for 1864, we find that the deposits for
1854 amounted to 7,400,141_l._, and the deposits for 1864 to
8,174,679_l._, 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_l._; in 1861,
the amount deposited was 7,188,034_l._ Now the population of England
and Wales 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_l._; in 1861 it
had increased to the enormous sum of 125,102,814_l._, and last year
(1865) it stood at over 165 millions sterling. What the increase in
the amount paid as _wages_ 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 statistics 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.[135] Mr. David Chadwick, an eminent authority in Lancashire,
states that between 1840 and 1860 the wages of the operatives employed
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,
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 Returns 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. We 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 disposition 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 necessary 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, and 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 we find Mr. Bright saying in Parliament: "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."[136] Mr. Hume said the same on several occasions. Mr. H. A.
Herbert, an Irish member, whose name deserves to be associated very
intimately with legislative attempts to put 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 misapprehension, 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 authorities who must
have contributed to this improper impression. Mr. Scratchley, in his
_Practical Treatise on Savings Banks_, pp. 72-4, has taken great
pains[137] 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 McCulloch's _Commercial Dictionary_, Porter's _Progress of
the Nation_, _The Quarterly Review_, _Chambers's Information for the
People_, _Chambers'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,[138] 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 _Statistics of the British Empire_, "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 withheld
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 Commons of the Government in 1851, "of
preaching to the poor the duty of being honest, industrious, and
self-dependent, if the fruits of their hard earnings were thus to be
swept away?"

Ten years afterwards a more powerful voice than Mr. Herbert'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 _Times_: "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 care and constant supervision." Referring,
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 _where such things can occur_." The argument
was irrefutable; nor was the advice given hastily. The Postal Banks
had then been introduced 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 Office 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."[139]

We have said that the frauds in some of the Savings Banks led not only
to their stoppage, but to the closing of others in the neighbourhood.
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 Kerry there were almost an
equal number; 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, significant enough, that in the districts least
visited 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 638 Savings Banks; of
which 498 were in England, 33 in Wales, 51 in Scotland, 54 in Ireland,
and 2 in the Channel Islands. Computing from the census of that year,
there was one Savings Bank to every 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. Rutlandshire with its 22,983 inhabitants was the
exceptional county in England: but in Scotland there were nine, and in
Ireland four counties, entirely without Savings Bank accommodation.
The following is a list of those thirteen counties:--

                             SCOTLAND.

          Ayr,           with a population of 189,858
          Clackmannan       "     "     "      22,951
          Haddington        "     "     "      36,386
          Kinross           "     "     "       8,924
          Linlithgow        "     "     "      30,135
          Orkney & Shetland "     "     "      62,533
          Peebles           "     "     "      10,738
          Sutherland        "     "     "      25,793
          Wigtown           "     "     "      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, containing 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
these 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
accommodation had each one or more private or joint-stock banks.

But we have another consideration to urge here; and that 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
Dorsetshire 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 West Riding 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.e._ 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 not to be wondered at; though 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
remainder a considerable number were open two and three times a week,
and the rest did business at various periods. Investigating the matter
a little more closely still, we find that, in 1861, fifty Savings
Banks were open but _four hours monthly_; 124 were open only _one hour
each week_; and 150 open _but 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
metropolitan banks out of the consideration, an average of about two
hours and a half per week. Further, 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; Berkshire, with _ten banks_, had only
twenty-one hours; and Buckinghamshire, 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 money, even if inclined to do
so, from the want of convenient 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_l._ was accumulated in 1856; in Dorsetshire the
amount was 2,550_l._: on the other hand, in Lancashire, which we
described as most insufficiently served with banks, the amount per
thousand persons was only 1,562_l._, and in the West Riding of
Yorkshire but 1,266_l._ 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 depositors 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_l._ lodged
at Manchester belonged to persons who could not even sign their
names.[140] These facts did not fail to strike the members of the
Committee of 1858, and Mr. J. Hope Nield, the eminent actuary 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 constant endeavour to give." Mr. Nield
afterwards explained the facilities to which he referred. In many
banks, depositors 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 business for another day. In the Manchester 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 "restrictive principle." In a restrictive principle bank,
of which 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. Nield, "a free bank could
be pitted against one on the restrictive principle, 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 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. Referring to
the absence of what he considered reasonable facilities in Savings
Banks, Mr. Charles William Sikes, of Huddersfield, expressed his
decided conviction 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 popular 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 reorganization of them receives the confidence of the
country, the average annual deposit, which now amounts 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 fluctuation of two per 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 annual
deposit, 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 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 account, 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 with the habits and feelings of our British
soldiers, that the Savings Bank institution did not meet their wants
and requirements, and that supplementary banks were needed. This
project was frequently urged,[141] 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. An
Act of Parliament was obtained (5 and 6 Vict. c. 71), and immediately
afterwards the authorities at the different barracks commenced
operations, under regulations made by the Secretary for War. In 1847
this Act was amended. In 1849 the Regimental Benefit Societies were
dissolved, and incorporated 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 amount which any one in the service can deposit is unlimited,
though interest is not allowed on any excess over 30_l._ in one year,
except in the case of gratuities given for good conduct. When the sum
of 200_l._ is reached, no further interest is paid. The interest
allowed must not exceed 3_l._ 15_s._ per cent. The whole of the money
raised in Regimental Savings Banks is remitted to the War Secretary,
who holds an account with the National Debt Commissioners, which is
kept separately from other Savings Bank accounts, being entitled "The
Fund for the Military Savings Banks." Returns of all transactions made
in these banks are laid annually before Parliament. The Returns almost
from their commencement have been most satisfactory, and produce
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_l._ for each
depositor. This sum, however, 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, acting on 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
management, the expenses incurred in carrying on the business through
the Board of Trade (a department of which is constituted 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 Military Banks, an annual account must be rendered
to both Houses of Parliament of all transactions; 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.[142] All who know what Jack is ashore--and who does not?--will
wonder little at this result; he is universally pointed to as an
embodiment of Improvidence itself: but when it is known that the
machinery in question is applicable to married sailors, their wives
and families, the picture of want of thrift and inclination 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. The
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 other 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 how 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_l._ in
it.

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 following year Mr.
Queckett, a benevolent and painstaking clergyman, in the east of
London, established a Penny Bank in connexion with Christ's Church,
St. George's in the East, and the success attending the venture was
still more encouraging and remarkable; nearly 15,000 deposits
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 Riding of Yorkshire, 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_l._ in
amounts from one penny to one pound. Many 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
banks, since established, offers considerable inducements to the
poorest classes, and thus supersedes, though 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,[143] established in 1854, and excellently managed throughout,
and very successful in attracting depositors; the Halifax bank,
commenced in 1856, and equally successful; the Derby bank, established
in 1857, under the auspices of the Rev. 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 than 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
unknown in any other neighbourhood. 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 deposits in these sixty-eight banks during
the year 1864 was 9,386_l._, 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 cultivated and confirmed," and there
cannot exist a doubt on the matter. The principles upon which they and
all 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 workmen; 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 perplexed in dealing
with 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 _begins_ to save, the
Penny Bank deserves every countenance and encouragement.[144]

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 provisions, 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 bring about a better state of things in Savings Banks, the foremost
place is undoubtedly due to Mr. Charles William Sikes, of
Huddersfield. 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_l._, 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 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 Riding towns,
was heavily visited. In the neighbourhood 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

          "Into 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 between 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 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 bettering 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 anything 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 anything to do with the Huddersfield
Savings Bank--having abstained, through motives of delicacy, owing to
his connexion with an ordinary bank in the same town--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 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 propagated 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 organisation,
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
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
would 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 with the practical conviction that to their own advancing
intelligence and virtues must they mainly look to work out their own
social welfare!" It is very satisfactory to find that this advice 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 his
labours have been far from fruitless, a result in which the
philanthropist finds his best reward.[145]

Mr. Sikes's next exertion on behalf of the working population around
him was to help them to a proper estimate of the value of provident
habits, by the publication, in 1854, of a pamphlet entitled _Good
Times; or, the Savings Bank and the Fireside_;[146] an admirable
little manual for the class for which it was written, and which
deservedly obtained a large sale. Mr. Sikes himself described how 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 institutions. 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 usefulness 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 management. It is not at all difficult to comprehend
the steps by which Mr. Sikes, with his practical knowledge of Savings
Bank business, would arrive at the 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 Reforms."

Mr. Sikes first sought an interview with Sir George C. Lewis, and
obtained one, in company with Mr. Wickham, M.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
deserves 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.[147] Almost all the
previous _brochures_ 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 which
Dr. Hancock was secretary. Mr. Edward Taylor of Rochdale 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
unsatisfactory 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
requisition 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 further proposed that the rate of interest on sums up to 100_l._
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 should, on its part, insist upon weekly returns, a good and
uniform system of book-keeping, and a liability 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,"[148]
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, however, in getting such recommendations adopted--either because
the then Chancellor of the Exchequer (Sir G. C. Lewis) did not bring
his extraordinary powers to bear upon the subject, or else there was
still something lacking to give a more practical turn to the questions
at issue. As subsequent events have proved, it is more likely to have
been for the latter reason that the matter was not persevered in.

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.

When the Committee on Savings Banks was appointed, in 1858, Mr. Sikes
was called as a witness. He again described the plans which he had
suggested in 1856, and which 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 Report itself, to
which the Committee put their names, has been given. It provided, as
our readers will remember, for a new Government management of Savings
Banks, advised that increased power should 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
question almost untouched. Indeed, with the conflicting evidence
given, the Committee acted wisely in confining 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, and yet on no
single point could they all agree. This is, we think, no unimportant
phase of the subject; on the contrary, it is highly important, as
showing how very little could be effected for the body of Savings
Banks in the absence of any thing like unanimity amongst those who
best understood the subject. On the question of Government 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 Nield_
"thought it would be very advisable to assimilate the practice of the
different banks more than at present exists (1,895)." _Mr. Maitland_
and _Mr. Wortley_ would like uniformity, 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 the
books," said _Mr. Craig_, of Cork, "in some of the country banks, is
most abominable. I 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 National Debt Office, not one in ten is
honestly or 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 the 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 matter with favour,
all would not yet be smooth sailing. The difficulty 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 way, 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, "that there was nothing for it
    but sweeping every book out 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 opposite side of me, and
    a manager with each, determined to start them fairly. I
    remained there for a month. I saw that the clerks were
    very anxious that it should miscarry. I immediately 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 supplied us with a wheelbarrowful
    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 further
    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 get out."

Granting that Savings Bank clerks may be subdued after 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 distinctive 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 before the Committee.
_Mr. Meikle_ and _Mr. Sturrock_ objected to any alteration in the
limit of deposits which for many years had stood at 30_l._ for any one
year, and 150_l._ in all. _Mr. Boodle_ thought the annual limit should
be increased to 50_l._, and the total deposits to 250_l._ _Mr. Finney_
wished it to be at 50_l._ and 200_l._ respectively. _Mr. Saintsbury_
and _Mr. Maitland_ 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. Maitland_ 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_l._ 17_s._ or 2_l._ 18_s._ was
satisfactory to depositors. _Mr. Wortley_ thought three per cent. a
fair rate of interest. _Mr. C. W. Sikes_ suggested that the interest
to depositors should be three per cent. on sums up to 100_l._, 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 shall find 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 interest of three per cent. per annum; nothing can be more
mistaken. When 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 Return,
no less than thirty-two different rates of interest paid by Savings
Banks managers, and had the Return embraced a much more recent period
the same diversity would have been shown. Thus, in that year--

  banks                                               £ s. d.
   31 paid interest to depositors at the maxm rate of 3  0 10 per cent.
  107               "             at the rate of      3  0  0     "
  215               "                    "            2 18  4     "
   11               "                    "            2 13  6     "
   24               "                    "            2 17  1     "
   12               "                    "            2 16  8     "
   78               "                    "            2 15  6-1/2 "
   35               "                    "            2 15  0     "
    2               "                    "            2 10  0     "

added to which smaller numbers paid other rates, making thirty-two
separate rates.[149] In accordance with the above table the average
cost of management per cent. was, in 1857,--in Scotland 7_s._ 8_d._,
in Ireland 9_s._, and in England 6_s._ 7_d._; in Middlesex, however,
it was as much as 9_s._ 2_d._ Confining ourselves to individual banks,
we find that the Manchester Savings Bank cost at the same period, in
expenses, an average sum of 1_s._ 3-3/4_d._ per account, the
Bloomfield bank 1_s._ 9_d._, the St. Martin's Place 2_s._ 0-1/2_d._,
the Liverpool bank 2_s._ 5-1/4_d._, and the Cork bank 3_s._ 2_d._ 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. _Mr. Meikle_ thought it
was the interest of the banks rather to discourage small depositors
and encourage large ones. _Mr. Finney_ showed that they _were_
discouraged at the Marylebone 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 responsible 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 will 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
uniformity of accounts, which would have made this and other reforms
practicable. What was required of the Committee 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 summary 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 fortnight was required. _Mr. Meikle_
expressed himself strongly opposed to the English system of giving
notice: he said, the Scotch banks required no notice at all, though
they held a discretionary power in certain instances. _Mr. Saintsbury_
urged "a reasonable period." _Mr. Wortley_ thought the notice was a
protection against Savings Banks being used for other purposes than
for accumulating savings. _Mr. Sikes_ 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
Committee themselves were either not taken up, or if noticed, only in
such a way as to attest the difficulty, rather than the ease or
expediency with which any movement towards this end would be attended.
_Mr. Wortley_ said small banks were exceedingly unsafe; branch banks
under the cognizance of a head office _might_ answer. _Mr. Meikle_
agreed, and said that at first new banks were seldom self-supporting.
_Mr. Nield_ 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 diversities of
operation in the larger and best managed banks[150] of the kingdom
could not be better shown than by the following Return.[151] 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 Government 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 his money to
the Savings Bank had no means of knowing what was done with it. 2, The
country was most inadequately and most disproportionately supplied
with banks, and the facilities given by existing banks were also most
inadequate and disproportionate. Farther, and most important, the
number could not be increased on the same footing, 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 unmixed good, an adequate provision of Savings
Banks presupposes 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 been such as to produce a rate of interest
equal to that paid were 1847 and 1848." Government, in relation to
Savings 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 postpone 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 complaints on the part of the managers of Savings
Banks.

RETURN relating to the Ten principal Savings Banks of the Country. (1861.)

  +-------------------+------------+-----------+------------+------------+
  |                   |            |           |            |            |
  |                   |            |           +            |  Rate of   |
  |    Name of Bank   |Total Amount| Number of |  Average   |  Interest  |
  |                   |  owing to  |Depositors.|  Amount of |  paid to   |
  |                   | Depositors.|           |  Deposit.  | Depositor. |
  |                   |            |           |            |            |
  +-------------------+------------+-----------+------------+------------+
  |                   |      £     |           | £ _s._ _d._| £ _s._ _d._|
  |St. Martin's Place |  1,780,725 |   61,736  | 6  2    1  | 2  18   1  |
  |Manchester         |  1,306,329 |   50,231  | 4  5    5  | 3   0   0  |
  |Exeter             |  1,087,773 |   40,776  | 5  1    9  | 3   0   0  |
  |Bishopsgate        |  1,032,513 |   53,737  | 4  3    8  | 2  17   6  |
  |Glasgow            |    927,427 |   42,122  | 3  3    1  | 3   0   0  |
  |Liverpool          |    872,253 |   29,123  | 9  4    7  | 3   0   0  |
  |Bloomsbury         |    583,453 |   23,524  | 4  6    9  | 2  18   4  |
  |Edinburgh          |    566,076 |   30,426  | 3  5    5  | 2  17   9  |
  |Birmingham         |    563,870 |   31,238  | 4  0    3  | 3   0   0  |
  |Marylebone         |    395,561 |   23,024  | 4  0    3  |{2  17   4  |
  |                   |            |           |            |{2  15   0  |
  +-------------------+------------+-----------+------------+------------+

  +-------------------+---------------------------------+
  |                   |          ANNUAL EXPENSES.       |
  |                   |------------+------------+-------+
  |    Name of Bank   |            |            |       |
  |                   |Per Account.|Per Cent. of| TOTAL.|
  |                   |            |  Capital.  |       |
  |                   |            |            |       |
  +-------------------+------------+------------+-------+
  |                   | _s._ _d._  |  _s._ _d._ |   £   |
  |St. Martin's Place |  1    5-1/2|   5    11  | 5,380 |
  |Manchester         |  1    3    |   5     3  | 3,206 |
  |Exeter             |  1    6    |   4    11  | 2,702 |
  |Bishopsgate        |  1    6    |   7     4  | 3,830 |
  |Glasgow            |  1    2    |   5     6  | 2,595 |
  |Liverpool          |  2    2    |   5     3  | 2,359 |
  |Bloomsbury         |  1   11    |   7     9  | 2,283 |
  |Edinburgh          |  1    8    |   9     0  | 2,558 |
  |Birmingham         |  1    3    |   6     8  | 1,908 |
  |Marylebone         |  1    9    |  11     1  | 2,212 |
  |                   |            |            |       |
  +-------------------+------------+------------+-------+


    [134] Compiled from Returns presented by the Statistical
    Department of the Board of Trade.

    [135] It is very difficult to obtain correct and complete
    statistics on this subject. It is to be regretted 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 with precision which will
    only admit of approximation.

    [136] Subsequently Mr. Bright went the length of saying, that
    Savings Banks were "nothing less than traps for the people who
    subscribed to them. There was a universal belief that Government
    was responsible."

    [137] Since writing 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 another, 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.

    [138] The preamble of the first 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.

    [139] Much to the same purpose a well-known writer in the _London
    Review_ says: "As long as Savings Banks are Savings 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 hearts." 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 morel 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 effectually 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."

    [140] 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.

    [141] According 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 history of this
    movement, it would appear that the first proposal for Regimental
    Savings Banks was made in 1816 by Paymaster Fairfowl, but allowed
    to drop; 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 beer money," and
    therefore suffered his proposals to be simply negatived.

    [142] 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

    [143] To the Honorary Secretary of this bank, Mr. W. W. Morrell,
    we 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.

    [144] 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 Rev. 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.

    [145] The first Preliminary Savings Bank in Scotland was started
    at Annan, in Dumfriesshire, and Mr. Sikes was consulted about it.
    A correspondent writing to Mr. Sikes a few years ago, says: "It
    may gratify you to know that I some time 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 believe 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 throughout the entire kingdom!"

    [146] Groombridge & Co. London.

    [147] Reference is due to another 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 Savings
    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_ labouring 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 10_l._"--_Letter
    from Mr. Maitland to Mr. Sikes_, February, 1857.

    [148] This proposition was revised in 1862 by Mr. Scratchley 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.

    [149] The Marylebone bank up to 1860 only allowed two per cent. on
    sums below 30_l._, but this arrangement has since been modified.

    [150] So well managed indeed, that we hope it may be long before
    they are superseded, however desirable it may be that bulk of the
    existing Savings Banks should become merged in a better system.

    [151] See next page.



                           CHAPTER VIII.

            ON PROPOSALS FOR GOVERNMENT SAVINGS BANKS.

    "I do not imagine that there can be 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 should 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."--MR. H.
    BELLENDEN KER.


For reasons which we have adduced at great length in the last chapter,
the feeling grew that a sweeping change would require to be made in
the institution of Savings Banks. Supplementary banks of different
kinds 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 effect them.[152] 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 different 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 proposals having the former object in view
that we must now turn.

It is not a little curious that long before Savings Banks were
legalized 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 promote 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. Whitbread'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. Whitbread's scheme, gave its sanction
and countenance to the banks which had been established on purely
benevolent principles, and which were totally independent of each
other. In the course of years, that system having 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 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 presents an office as near, and the clerk an officer
or sub-agent as suitable, as can be desired."[153] 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 difficulties
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 wished for in a system of Frugality
    Banks, commensurate to the whole population of the
    self-maintaining poor: viz.

        "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 time, 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. _Scale of Dealing_, commensurate to the peculiar
            faculties of each customer: _i.e._ on each
            occasion as large as or as small as his
            convenience 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 _suitable_:
            adapted in point of _vicinity_, as well as in
            other respect, to the conveniency of the customer.

        "6. _Mode_ of transacting business _accommodating_:
            suited to the circumstances 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 be.

        "8. Mode of book-keeping, clear and satisfactory."

There can be little doubt from the above extract, that if Bentham 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 _Quarterly Review_ for 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 recognised, 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 Savings Bank, to
which the Savings Banks in the country might contribute; "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 districts, 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 respect, 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 principal purse--(and that their position
in the country will at no distant period be a commanding one there
cannot be a reasonable 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 affording materials for more
deliberately investigating many claims which 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.[154]

Confining ourselves at present to the origination of the _principle_
of Post Office Banks, without reference to the wonderfully 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 proposed them, 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 independently 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 extraordinary versatility and power at the head of its
financial operations, and who has given abundant evidence of his
willingness 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 differing 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.

Returning 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 description of the feeling
of insecurity which they engendered, we have already spoken; those
exertions related exclusively, so far as we can gather from his
pamphlets, to a remedy for this grievance. In a paper[155] 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 undertake 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 would be called a
    Savings Bank; and in it the Government would be
    responsible 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 depositors 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 deposits 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 Government
    security for those officers, would 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,[156] Dr. Hancock made no further proposal towards the object
immediately in our view, although he said--

    "The Money Order Office of the Post Office shows that a
    large part of the business of banking for the poor can be
    cheaply and efficiently conducted by the officers of a
    public department. The first step towards the adoption of
    such measures is to produce in the public mind a
    conviction of the utter instability of banks as now
    constituted, and that conviction I have endeavoured 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 poor 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,[157]--it is only fair to that gentleman to say
that he was one of the first to recognise 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 unnecessarily 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 present plan must be very amusing; and yet
this is an error into which several have fallen, though traceable,
perhaps, to one source.[158] 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 3_d._ and 6_d._,
when any person desired to send a Savings Bank deposit to an adjacent
town.[159] In the draft report proposed by Mr. Ayrton after the close
of the investigation (which was not carried), the 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
expedient;" 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 misapprehension 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 sufficiently full in completing the plan of Penny Postage Reform
which, for several years after the passing of the Act of 1839, was
almost held in abeyance; and that, inundated with crude and
undeveloped schemes, it was requisite that a plan in which so much was
involved should be well matured, and go weighted with the stamp of
public approval. Whether, however, the Post Office system was prepared
so early as 1851,--the date 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 Rev. 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 Office,[160]
which it is but justice to say presents many, if not most, of the
features of the plan eventually produced. Mr. Hamilton met with
varying success; his proposals were not taken up warmly, but were
understood by him to present difficulties which might ultimately 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 Mr.
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 Mr. Hamilton, and quite
unknown to him, made proposals to the same effect, was Mr. John
Bullar, 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 Putney, 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 could be remedied." After thinking
the matter well over, he drew up the memorandum which we give
_verbatim_:--

    It is admitted that the present system 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 trustees
    by defaulting clerks, and want of opportunities for the
    labouring classes to make deposits as soon as they have
    anything to deposit.

    Many of the present Savings Banks are only opened for two
    or three hours once a week; so that those who would
    deposit in them are forced to be their own bankers during
    the rest of the week, and are exposed to the constant
    temptation of spending what they have in their pockets;
    the particular temptation from which Savings Banks were
    intended to relieve them.

    In order to give perfect security to depositors, they
    ought to have the security of the nation.

    The establishment of Savings Banks for the whole of the
    labouring classes being a matter of national importance,
    they ought to be a national, and not merely a
    philanthropic institution.

    In order that they may confer the greatest amount of
    benefit on the labouring classes, they ought to be open
    during the whole of every working day.

    The principle of a National Savings Bank as a National
    institution is already admitted in the Savings Banks for
    the Army, the Navy, and the Mercantile Marine.

    The principle of Government acting as Banker for the
    Nation is already admitted in the Money Order department
    of the Post Office.

    That department is, in fact, a National Bank. It receives
    money from all comers; it retains the money for divers
    periods, from four-and-twenty hours to several weeks; and
    it pays the money to those who are entitled to demand it.

    It would be a mere extension in point of detail if that
    department received more money from more comers, retained
    the money for longer periods, and paid it out with the
    addition of interest upon it.

    It is therefore suggested that the Money Order department
    of the Post Office should be made a National Savings Bank,
    investing the deposits in Government securities, paying a
    moderate rate of interest (say two and a half per cent.)
    and paying interest only on round pounds deposited for not
    less than a quarter of a year.

    The trustees of existing Savings Banks should be
    authorized (except so far as any depositors might object)
    to transfer their deposits to the department.

    In all probability the deposits with the department would
    amount to at least thirty millions in the course of a year
    or so; and at the present price of Consols, this would
    give to the Post Office about 200,000_l._ beyond the
    interest which they would have to pay to the depositors.

    If this would not meet the expenses, the rate of interest
    might be 2_l._ per cent., giving to the department an
    additional 150,000_l._ a year.

    The principle being admitted, there would be no
    insuperable difficulty in arranging the details.

                                                 JOHN BULLAR.

    _Temple, November 8, 1856._

This memorandum was written in November, 1856. Mr. Bullar 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, Mr. 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 afterwards 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. Subsequently 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 preferred."[161] 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, they dropped any further steps to bring
about this 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 circumstance 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 had not occurred to him. He himself
states, that, occupied with a favourite idea which he had long
cherished, of bringing 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 Office 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 deposits; 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 2-1/2 per cent. per
annum. That Mr. Sikes did not proceed boldly enough, and that there
were some defects and omissions in his scheme, 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 much 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 as they are given in the pamphlet before us.[162] Suffice
it 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 regulations
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
Office, the remittances of a district." Mr. Sikes then instituted a
comparison 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
business 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, and the arbitrary routine, and
restrictions imposed. If Savings Banks were worth anything, were they
not worth improving? And would not those supplementary banks do much
themselves, and very probably cause an improvement in existing ones?

Having matured his plan in June, 1859, Mr. Sikes communicated 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.) Rowland 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.[163] Encouraged to
persevere, Mr. Baines and Mr. Sikes had an interview 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 concerned assuring them that this
might be done "with great ease and simplicity."

The next step which Mr. Sikes took was to place himself in
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 hon. gentleman promised
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 somewhat 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 eventually did.

During the interval, when the ball was kept rolling in this manner,
Mr. Gladstone had amply fulfilled his promise to give the subject his
best attention, as sufficiently appears from a letter which, belonging
now to the history of Post Office Savings Banks, we append below.[164]
Expressions of opinion on the advantage of some such scheme still
continued to be sent to Mr. Gladstone and Mr. 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, presided 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.[165] In answer to these and
similar 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 remodel it, in order to make it fit into the machinery, (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 not nearly so liberal as they ought to be made. As an ardent
friend to the Savings Bank system, Mr. Sikes had doubtless 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 he 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 the 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 scheme,--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 originally
stood, and which proposals the Post Office authorities had generally
acquiesced in, seems to have been abandoned on account of the
practical difficulties which stood in the way; one of which Mr.
Gladstone indicated in the letter we have already given. The object
now, therefore, was to originate a mode of working altogether
independent of Mr. 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.

    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 must have led
    to confusion and great 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 description of "Interest Notes."
    The Money Orders and the "Notes" 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 Savings Banks. He proved at great 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 course, restricted the
    inhabitants of 600 towns to the dearer mode of operation,
    though the cheaper 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 entertained.

    4. Most unsatisfactory, however, was the proposal to make
    1_l._ the minimum sum that could be received. There were
    thousands of depositors in the ordinary banks whose
    average deposits 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 savings among
    those who had not yet begun to save. No provision,
    therefore, could have been more unfortunate; and it is
    well that Mr. 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 measure. 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 discussion, and it is scarcely too much to
say, that but for the unceasing vigilance of Mr. Gladstone, who
continued to urge 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 when matters were in this state of abeyance, and when the
difficulties in the way fairly threatened to overwhelm the scheme
altogether, that a gentleman, since prominently connected with all
that relates to Post Office Banks, was induced to turn his attention
to the subject. Mr. Chetwynd, 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, 1860, and
proposed a plan which he thought would, notwithstanding 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 payment of Money Orders;" and that the plan should be so
comprehensive as not to need the restriction which had been previously
put upon it that sums under 1_l._ 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 material
points of the plan proposed, and which has in its integrity been since
carried out, and forms the basis of existing 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 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 payment,
    the depositor 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
    acknowledgment for every deposit direct to the depositor
    through the Post Office.

    6. That a depositor who may wish to withdraw money, shall
    give notice in writing[166] 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
    depositor 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 Mr. Scudamore, who then
filled the office of Receiver and Accountant-General,--an office the
holder of which is at the head of the financial operations of the Post
Office. After going carefully 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 conjunction with the projector, Mr. Scudamore then
proposed some important modifications and additions to the plan,[167]
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, _Mr. 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 Consolidated 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
preliminary, provided that the burden of the measure should be thrown
upon the State. Mr. Gladstone stated[168] that in submitting this
resolution he did not wish to pledge members either to the principle
or the 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 existing 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 difficulty, 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 altogether, "recommended by its
incomparable convenience," for the purpose of carrying 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 compared
that machinery with the Money Order system at the Post Office and its
ramifications all over the country. Not only were the Money Order
Offices open every day for a considerable number of hours, but the
Postmasters were open and adequate to the transaction of increased
business. Mr. Gladstone then dwelt on the want of facilities, which,
he said, exercised an important influence on the amount of the savings
of the poor; "the experience of this winter, 1860-61, must have
demonstrated to anybody who thought upon 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 laid by twenty years before. He was sanguine
enough to expect that, if readier means were afforded than of laying
by in a season of prosperity, their ability to cope with the distress
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 Money 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 10_s._ 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 predecessors in office had argued before, that the State
could only be responsible for the acts of its own 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 Government guarantee. What,
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 invested 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
depositors, that difficulty might be met by a charge on the
Consolidated Fund. Mr. Gladstone, in concluding, hoped honourable
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.[169]

_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
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. The 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 had bestowed on the proposals of Mr. Sikes. Mr.
Crossley concluded: He "did not think Government ought to seek to make
a profit on the new business; nor did he think they 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 Sykes_ 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 connected with the mode of working the scheme. _Mr.
Arthur 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. Gladstone at once demurred to
this, and stated that he had no notion of establishing a national
bank. The money which came into the hands of Government by means of
the bill would 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 Office Savings Banks bill
was introduced into the House of Commons _pro formá_ by Mr. Massey,
the Chancellor of the Exchequer, and Mr. F. Peel. Mr. Sotheron
Estcourt on this occasion commented 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 18th 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 Office 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."[170] It would be for the House to decide whether this
result would be good 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 example, 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 existing 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 old 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 Hankey_ hoped that the proposed scheme, if
found practicable, would entirely supersede the existing banks, and
the sooner the better. _Mr. Baines_ followed in the same strain; he
would not regret if the new banks superseded the old, inasmuch as that
result could only be 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, though it
differed materially from his plan, Mr. Sikes of Huddersfield was a
"hearty supporter" of the scheme which the Post Office had
adopted.[171]

_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. Whether 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 Banks 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 somewhat less attraction; "the present
banks were established on 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 pressure 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 immeasurably 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,[172]
where trifling alterations were made in several of its clauses. _Mr.
Slaney_, 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 be 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 the
advocacy of the scheme before this period. In a long speech, Mr.
Ayrton took exception to most of the details of the measure as they
were now proposed, and to the principles of the measure as a whole.
Mr. 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 Superannuation Allowances bill, which
he said were introduced and passed under some such pretences. It would
be the same with the Savings Banks; the Government would never be able
to keep to the two and a half per cent., but would have to be guided
by the rate allowed to other bankers. "The scheme of a national bank,"
continued the honourable member, "_however 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
National 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; and it was
not expedient to discourage these societies by means of the proposed
banks. Nor was this all. It was desirable that the country gentlemen
should take an interest 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. _Mr. 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 establishment
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 would 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 honourable gentleman had more signally
distinguished himself than on the present occasion. "When 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 development of the
agency would be gradual. The extension of the system would be in
precise proportion to the demand; and the expense would be throughout
proportionate to the extension. 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 sevenpence 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 subversive 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 superiors,
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 operations 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.
Willoughby_, as he so often did before, condemned the system of
operating on the Stock-market with this money. Mr. Gladstone replied,
that the loss which was so often dwelt upon in connexion with the old
banks was nothing like loss; "the money so deposited with Government
had enabled successive administrations to effect an economy in the
management of the public money transcending 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
proposed 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
occasion his lordship went over[173] the ground covered by the
bill--the insufficiency in number, and the inadequacy of accommodation
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 of the losses
caused by the failures of Savings Banks. Referring to Mr. Whitbread's
proposals in 1807, Lord Stanley stated that 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 proposed 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
somewhat 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.[174] 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 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 Office officials to carry on
the work in every town. Among the Lords, however, the strongest and
bitterest opponent of the measure was Lord Monteagle of Brandon (once
Chancellor of the Exchequer as Mr. Spring Rice).[175] He made a long
speech on this occasion. He thought it was wrong to establish new
banks, or to make them rest on the deficiencies 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 was the time with which 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 increased
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 Monteagle was unlucky enough to cite the case of
several noble lords who paid a thousand pounds each to atone for their
neglect in connexion 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 was 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 Redesdale
also strongly opposed the bill, but he did not bring to its
consideration much of the practical knowledge 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 impossible."
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
arrangement, saying it would be _much better_ that the parties
themselves 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 Redesdale to the contrary. Lord Redesdale
said, in concluding, that "he was afraid the scheme would produce much
disappointment 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 25th 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 existing 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
"protest" 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 extenso_,[176] received the
Royal Assent on the 17th of May, 1861.


    [152] From this statement the ten or twelve principal banks in the
    country, many of which are open every day, and all in a
    flourishing financial condition, are of course excepted.

    [153] _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.

    [154] A little _Handy Book_ on the subject, published in 1861, by
    Mr. H. Riseborough Sharman, one of the Editors of the _Insurance
    Gazette_, and which deservedly had a large sale, went over very
    ably, though in a way which produced considerable acrimony from
    some portion of the public press, some of this ground. Though it
    is open to question whether at so early a date it was not
    premature, 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 advocacy, Mr. Sharman laboured very hard and very zealously
    to prepare the public mind for the adoption of the scheme of
    Postal Banks, and to spread a knowledge of their benefits after
    the measure had become law.

    [155] _Duties of the Public with respect to Charitable Savings
    Banks._ Dublin 1852.

    [156] _On the present State of the Savings Bank Question._ Dublin,
    1855.

    [157] Mr. Sharman's _Handy Book_, p. 10, 2d edit.

    [158] Mr. Sharman's _Handy Book_, p. 11, 2d edit.

    [159] It is pretty generally known, that no profit whatever
    accrues to the Post Office on orders for which threepence only is
    charged; yet in spite, as it were, of this fact, we find that Mr.
    Scratchley, in his _Practical Treatise_, takes up Mr. Ayrton's
    proposals, and "recommends" that "Money Order officials receive
    deposits on behalf of the nearest Savings Bank," and "that this
    should be done at a cost to the depositor of one penny for any sum
    not exceeding 5_l._" "It is also," adds Mr. Scratchley, "very
    desirable that the valuable privilege of freedom from postage
    recommended by Mr. Whitbread should be granted for the books and
    documents required to be transmitted on behalf of Savings Banks."
    Mr. Whitbread, it will remembered, made this one of the conditions
    of his scheme of National Banks; and it is quite evident that none
    but National institutions could obtain such a provision. "The
    valuable privilege 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!

    [160] The following were the details of the reverend gentleman's
    scheme, of the authenticity of which we have fully convinced
    ourselves:--

         1. That deposits from 1_s._ to 10_l._ 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 operation_, by which the Savings
            Bank system would be forthwith placed within the
            reach of every member of the community.

         2. _Cheapness 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 probably be superseded
            by slow degrees, and without hardship or
            inconvenience to any one.
                                                 GEO. HANS HAMILTON.

    [161] Like Mr. Hamilton, Mr. Bullar has subsequently proposed a
    plan for giving increased facilities in one direction to
    depositors, which will be referred to at the proper place.

    [162] _Letter to the Chancellor of the Exchequer_, 1859.

    [163] 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 far as the Post Office is concerned.

         "The plan also appears to me to be practicable in 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 effect, 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 arrives for doing so,
         to submit it for the approval of the Postmaster-General.

                                  "Faithfully yours,
                                    "ROWLAND HILL."

    [164] Mr. Gladstone to Mr. Sikes, 30th November, 1859.

         "DEAR SIR,--I have read with much interest your tract on Post
         Office Savings Banks, and have discussed the subject with Sir
         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."

    [165] "The Council of the Statistical Society of Dublin having had
    under their consideration the plan of Post Office Savings Banks
    proposed by Mr. C. W. Sikes of Huddersfield, desire to record
    their entire 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 successful in Ireland, and could be readily managed with a
    central Savings Bank in Dublin, as Government Stock is
    transferable in the Bank of Ireland. That the Council direct the
    Secretary to bring these resolutions under the consideration of
    the Chief Secretary for Ireland, with a view to their being
    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.

    [166] Forms for doing so were immediately afterwards provided.

    [167] Such, for example, as the extraordinary facilities now
    enjoyed for the depositing and withdrawal of money--of which we
    shall speak in the proper 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 facilities as no agency but the
    post-office ever attempted to give, and, more than that, could not
    possibly have given.

    [168] His speech on the occasion has not been reported _verbatim_,
    or we would never have ventured to have given it in the third
    person.

    [169] _Hansard_, vol. clxi. p. 262; and _Times_ newspaper, 1861.

    [170] _Hansard_, vol. clxi. p. 2190; and _Times_, 1861.

    [171] That this was the case appears further from the circular
    which Mr. Sikes addressed to every member of the House before the
    second reading, in which he expressed his cordial approval of the
    bill, and craved the support of members in carrying it through
    Parliament.

    [172] _Hansard_, vol. clxii. 1861.

    [173] _Hansard_, vol. clxii. p. 880; and _Times_, April 23, 1861.

    [174] The phrase "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"
    people. 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 profession work fewer hours than the handicraftsmen of our
    towns. Lord Stanley might have gone even further in his comments
    on the earnings of the industrial 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 hundreds of the less successful classes above
    them, while their expected or necessary expenditure is in almost
    all cases very much smaller.

    [175] 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.

    [176] See Appendix (F.)



                            CHAPTER IX.

     ON THE DEVELOPMENT OF THE POST OFFICE SAVINGS BANK SYSTEM.

    "Should the Post Office Savings Bank bill 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 this 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 responsibility, 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 Chadwick, "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 middle classes which appeared to me so excellent in
    principle. I am disposed to say, as Sir Robert 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 Savings 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 Royal Assent on the 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 in their praise; and the
three-quarters of a million of depositors, 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 labour, the new banks have become, and
must yet become to a far greater extent, most effective agents in the
social and moral improvement of the people, and will give tenfold
effect to the endeavours which have been made, in so many 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 Government for the benefit of
the nation. Whatever differences of opinion may exist as to the claims
of the present Ministry to public gratitude, there can, 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 influence 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 eleemosynary institutions; and the
manner in which the business of the Postal Banks has been organized
and performed, the scheme has far more than realized the anticipations
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 first 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
supplied 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 accommodation; (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
transacting 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 in 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;[177] and over and above
this already ubiquitous and comprehensive 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 Birmingham, 22; in
Edinburgh, 18; 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_l._ in
deposits of the average amount of 3_l._ 11_s._ 10_d._ At the end of
the next year (1862) 180,199 persons had opened accounts in these
banks, depositing 1,947,139_l._, and withdrawing less than a quarter
of that sum. Year by year, up to the present time, as appears by the
accompanying 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 satisfactory 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_l._;[178] the
withdrawals during the same period of four years numbering 1,011,379,
and amounting to 5,619,251_l._ There were in December last, 611,819
open accounts, the amount standing to the credit of these accounts
being 6,526,400_l._

  TABLE showing the Amount and Nature of the Business done in the POST
     OFFICE SAVINGS BANKS from their opening in September, 1861, to
                           December, 1865.

     Table column headings:
         Col. A: Date.
         Col. B: Number of Deposits.
         Col. C: Amount of Deposits.
         Col. D: Average amount of each Deposit during the period.
         Col. E: Number of Withdrawals.
         Col. F: Amount of Withdrawal.
         Col. G: Average amount standing to the credit of each Account.

  +---------+---------+----------+--------+---------+---------+---------+
  |    A    |    B    |     C    |    D   |    E    |    F    |    G    |
  +---------+---------+----------+--------+---------+---------+---------+
  |         |    £    |     £    |£ s. d. |         |    £    | £ s. d. |
  |From 16 }|         |          |        |         |         |         |
  |Sept. to}|   46,643|   167,530|3 11 10 |    1,702|    6,759| 6  9  9 |
  |31 Dec. }|         |          |        |         |         |         |
  |1861.   }|         |          |        |         |         |         |
  |Year 1862|  592,573| 1,947,139|3  5  9 |   95,592|  431,878| 9 10  3 |
  |Year 1863|  842,848| 2,651,209|3  2 11 |  197,431|1,027,154|10 11  4 |
  |Year 1864|1,110,762| 3,350,000|3  0  3 |  309,242|1,834,849|10 12  1 |
  |Year 1865|1,302,309| 3,719,018|2 17  1 |  407,412|2,318,611|10 13  4 |
  +---------+---------+----------+--------+---------+---------+---------+
  |Total    |3,895,135|11,834,896|3  0  9 |1,011,379|5,619,251| 9 11  4 |
  +---------+---------+----------+--------+---------+---------+---------+

In the ten years ending November, 1861, the annual average increase in
the total number of Savings Bank depositors was at the rate of 3-4/5
per cent. In one year from this date the increase in the number of
depositors--taking the depositors of the old banks and the Post Office
Banks together--was at the rate of 6-3/4 per cent. That this increase
was altogether owing to the introduction of the 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.[179] 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 continued with
inconsiderable variations up to the present time, and, in his last
_Report_, the Postmaster-General, in view of all the facts of the
case, states: "On the whole, it seems reasonable to expect that the
annual increase in the business of the Post Office Banks will for some
time be from 130,000 to 140,000 in the number of depositors, and from
1,400,000_l._ to 1,500,000_l._ in the capital of depositors."[180] The
correctness of these calculations will not depend to any appreciable
extent 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 required for some time to
come. It is made to depend, we should imagine, on the principles of
Post Office Banks becoming 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
otherwise 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 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 indulgence 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. When the new banks commenced, the average amount of a single
deposit in the existing banks was, and had been for some time, 4_l._
6_s._ 5_d._; during the first year of the existence of the Post Office
Banks, the average amount was only 3_l._ 1_s._ 9_d._ But this average
has been still further reduced. The Post Office authorities,
describing more recent operations,[181] 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 reduction in the average amount of each deposit has
taken place, and that that amount has for some time ranged between
2_l._ and 3_l._, 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 have been able to attract, or that in
increasing so many fold, as we shall have to describe, the facilities
for the more frequent 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 accommodation being urgently
required by the poorer classes. In those towns and districts which
before 1861 were considered 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 3-1/2 to 5-3/4 per cent.;
in Dublin, from 4-1/2 to 7 per cent.; whilst in the county of
Middlesex, where, before the Post Office Banks were established, there
were "forty-one prosperous and excellently managed banks, which seemed
to hold out all needful inducements to prudence and frugality," 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 2-1/2 per
cent.; in 1861 and 1862, it was at the rate of 10 per cent.

The average amount standing to the credit of each depositor in the
Post Office Banks has for some time ranged between 10_l._ and 11_l._,
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_l._ and upwards. A general idea of the mass of depositors
may be gathered from the above facts, and they may be 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,
       Boatmen, Fishermen and Seamen                     140,518
     Tradesmen and their Male Assistants, Farmers
       and Clerks of all kinds except those
       mentioned below                                    53,756
     Males of no stated occupation, Professional Men
       and their Clerks or Assistants                     31,353
     Males engaged in education                            5,692
     Persons in the Army and Navy                          4,682
     Persons employed in the 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 to which they have penetrated; whilst in Ireland, which
contributes nearly three-fourths of the non-effective banks, these
districts must be still more numerous, and the population still less
able to save. Add to this, the fact that in more than one large
district in the sister country the grievous frauds in the old class of
banks have left 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 effaced in the chronic agitation which has for so long prevailed
in Ireland, and the only wonder is, that more of its 525 Post Office
Banks are not non-effective.

                      *     *     *     *     *

_As to the Results of the New Banks on the Old ones._ Before the Post
Office Banks were established, 638 ordinary Savings Banks were open in
the United Kingdom for the receipt of small savings. Of their
distribution throughout the country and the accommodation which they
gave, including the number of hours the bulk of them were open, we
have already spoken in a previous chapter. The Post Office Banks were
no sooner established and business fairly commenced 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 accommodation to the public,--the duration and frequency of the
time allowed for doing business being extended: the second was, that
the trustees of many of the old banks came to the resolution to close
their institutions, on the ground that their time and benevolence were
misspent in competing with the new banks, which enormously increased
the accommodation they had been powerless to afford.

The 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 established. If it be not desirable to
establish new banks, it cannot be a matter of much concern to the
country how soon the _bulk_ 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. From a careful and impartial
view of the whole subject, it seems to us, that no measure short of
the abolition of the Post Office 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 would wish to see the existence of any institution shortened,
which, 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 Office Banks has
supplied both.

Twelve months after the organization of the Post Office Banks the
trustees of thirty-five of the old Savings Banks had closed their
banks. Up to the present period (March, 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_l._ 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_l._
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 who
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.[182]

The following Return, which has been carefully compiled, is of
sufficient interest and importance to occupy the prominent place we
assign it.[183]

    RETURN containing the Names of SAVINGS BANKS CLOSED during
    the years 1861 to 1865 inclusive, together with the Date
    of Establishment, the Number of Hours open per Week, and
    the Capital on the 20th November preceding the date of
    closing of each Bank.

  +------------------+----------+-------------+-----------+-----------------+
  |                  |          |   Number    | Capital on|                 |
  |                  | Date of  |  of Hours   | 20th Nov. |                 |
  |  Name of Bank.   |Establish-|  open per   | preceding |     Remarks.    |
  |                  |   ment.  |    Week.    |the date of|                 |
  |                  |          |             |  closing. |                 |
  +------------------+----------+-------------+-----------+-----------------+
  |     _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   |   1861   |      1      |    1,988  |  fifth or sixth |
  |Blackpool         |   1859   |      1      |    2,197  |  in the Empire. |
  |Bodmin            |   1839   |      2-1/2  |   54,638  |                 |
  |Bowdon/Altrincham |   1823   |      4      |   49,183  |                 |
  |Braintree         |   1859   |      1      |    7,510  |                 |
  |Brixton           |   1860   |      1-1/2  |    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        |   1817   |      1-1/2  |   11,198  |  of the fraud   |
  |Chesham           |   1854   |      1      |    3,379  |  previously     |
  |Cheshunt          |   1850   |      2      |    1,535  |  spoken of.     |
  |Chipping Norton   |   1860   |      5      |    5,694  |20 Nov. 1863.    |
  |Chipping Ongar    |   1858   |2 fortnightly|    3,476  |                 |
  |Clapham           |   1816   |   1 to 2    |   28,411  |                 |
  |Clayton West      |   1861   |      1      |      494  |                 |
  |Cleobury Mortimer |   1859   |      1      |    2,580  |                 |
  |Coddenham         |   1818   |      4      |   15,729  |                 |
  |Covent Garden     |   1816   |      2      |   18,125  |                 |
  |Cuckfield         |   1836   |      1      |    7,191  |                 |
  |Dartford          |   1816   |      2      |   26,549  |                 |
  |Deptford          |   1816   |      2      |   30,712  |                 |
  |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   |      1-1/2  |   10,632  |                 |
  |Holt              |   1861   |      1      |    1,448  |                 |
  |Hornsey           |   1819   |      1      |      101  |                 |
  |Hoxton            |   1843   |      8      |      494  |This was the     |
  | [184]            |          |             |           |  first Bank     |
  |Kirby Stephen     |   1846   |      1      |    6,957  |  which          |
  |Leatherhead       |   1860   |      1      |      592  |  transferred its|
  |Lechlade          |   1844   |      1      |    4,636  |  business to the|
  |Lutterworth       |   1822   |      6      |   36,332  |  Post Office.   |
  |Lymington         |   1818   |      2      |    1,394  |                 |
  |Mansfield         |   1818   |      5      |   64,671  |                 |
  |Market Harboro'   |   1838   |      1      |   24,659  |                 |
  |Melbourne         |   1855   |      1      |    2,552  |                 |
  |Old Kent Road     |   1859   |      2      |    3,538  |                 |
  |Over Darwen       |   1860   |      2      |    1,071  |                 |
  |Pimlico           |   1860   |      5      |    1,900  |                 |
  |Poulton-le-Fylde  |   1822   |      1      |   30,822  |                 |
  |Rawtenstall       |   1836   |      2      |      240  |                 |
  |Rochford          |   1818   |      2      |    9,887  |                 |
  |Romsey, New Hall  |   1859   |      1      |      408  |                 |
  |Rugby             |   1818   |      2      |   46,839  |                 |
  |Saddleworth       |   1824   |      4      |    6,601  |                 |
  |St. Alban's       |   1859   |      1      |    4,140  |                 |
  |Sedbergh          |   1859   |  3 monthly  |      856  |                 |
  |Sheerness         |   1818   |      1      |    4,128  |                 |
  |Shiffnal          |   1819   | 11 monthly  |   15,851  |                 |
  |Southwold         |   1858   |  2 monthly  |    1,248  |                 |
  |Stavely           |   1854   |      1      |    1,457  |                 |
  |Tredegar          |   1855   |      2      |    1,726  |                 |
  |Wallasey          |   1843   |      1      |    3,229  |                 |
  |Walsall           |   1825   |      2      |   48,492  |                 |
  |Wandsworth        |   1816   |      1      |    1,269  |                 |
  |Watford           |   1817   |4 fortnightly|   38,968  |                 |
  |West Bromwich     |   1846   |      7      |   27,491  |                 |
  |West Ham          |   1819   |      2      |   17,739  |                 |
  |Weston-super-Mare |   1830   |      3-1/2  |    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  |                 |
  |Merthyr 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   |      6      |    2,023  |                 |
  |Glencoe           |   1859   |      2      |      396  |                 |
  |Leith             |          |             |      195  |Date and hours   |
  |Oban              |   1840   |     12      |      106  |  not given in   |
  |Stranraer         |   1860   |      4      |    1,533  |  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  |                 |
  |Strabane          |   1821   |      2      |   16,081  |                 |
  +------------------+----------+-------------+-----------+-----------------+

It ought to be stated that the Act of 1863, for amending the Post
Office Savings Bank bill, offered considerable inducements to the
winding up 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 enable 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
important 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 employment. The Birmingham Bank, when it transferred its
business, 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 business has been 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 fully aware of all the
practical details of a scheme which is at once so simple and so
satisfactory in its working, and which is at the same time as capable
of indefinite expansion as it is of infinite power for good. It is
indispensable, notwithstanding that these details are now so well
known,[185] 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 Depositing Money._ By the Post Office Savings Bank
bill any person who will subscribe the requisite declaration that he
is not a depositor in any other Savings Bank may now, on every working
day of from six to ten hours' duration, deposit any sum not less than
one shilling, and not more than 30_l._ 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_l._ 10_s._ 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 repayment when asked for.

Any person wishing to become a depositor in a Post Office Bank has
only to go to that Money Order Office 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 numbered, and on which his name, address, and
occupation will be written. 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 with the official stamp of his office. From the moment the
depositor gets his book handed to him 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 Money 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
acknowledgment is filled up and addressed[186] 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 department; and
subsequently, but on the same day, to ensure accuracy and afford a
check, each acknowledgment is compared by different officers with the
entries made in the ledgers, and then despatched by the same night's
post to the address furnished by the depositor.[187]

The receipt of this acknowledgment completes the depositor's
parliamentary title to repayment in full of principal and interest.
Should the depositor not receive his acknowledgment 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 _twice_
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
depositor'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, however, 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 the 450 banks there, and see which he likes best, and no
one will interfere with his freedom of choice. And though 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.[188]

_With regard to Withdrawing 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 Form. 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.

Following 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 with 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 prepared. This warrant is an order to the postmaster named to pay
the amount wanted; and after the amount of the warrant has been
entered in the 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 person withdrawing. 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 postmaster 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 applied 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 signature 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.[189]
When 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 Receiver and Accountant-General's Office,--as
well as the chief Savings Bank, are immediately concerned.[190]

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 7_d._; the actual average cost of each
transaction up to the present time has been 6-7/8_d._ 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 proportion of deposits to
withdrawals and of transactions to accounts to be the same in the Post
Office Banks as in the existing Savings Banks, when the former shall
be in full operation:--

                                                                £  s. d.
  Estimated cost of receipts and payments by Postmasters       210  0  0

  Estimated cost of transmission to central office, including
    check on receipts and payments, &c.                        690  0  0

  Estimated cost of keeping accounts with depositors,
    including calculation and entry of interest, periodical
    comparison of depositors' books, check on withdrawals,
    preparation of general accounts, stationery,
    and other miscellaneous items and general management     1,750  0  0
                                                            ------------
                                                             2,650  0  0
  To which may be added, 10 per cent. as a margin for
    omissions or errors of computation                         265  0  0
                                                           -------------
                      Total cost of 100,000 transactions    £2,915  0  0
                                                           -------------

We will now conclude this chapter with a rapid survey of the peculiar
advantages of the system of Post Office Banks, with some remarks on
what may be called the deficiencies of the system.

The system of Government banks seems exactly to meet the points 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 inconveniences 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 withdrawing money; and secrecy in the transactions
in which they should engage.

With regard to _Security_. The Post Office Banks being part of the
machinery of Government itself, offer the highest possible
security,--the whole credit and solvency of the British Government
being guarantee for the perfect safety of the deposits.[191]

As to _Despatch_. 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 convenience which attends the transaction of his
business contributes 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, we 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 borrowing for an emergency; there 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_l._
immediately, he would give 25 per cent. for it." Few could lose in
having to wait a couple of days for their money.[192]

Then as to _secrecy_. 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.[193] In the Postal Banks there
is, or need be, no occasion for particular observation; 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 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 arrangement 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 condition 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 admirable ones,
scarcely admitting of question, almost beyond criticism: 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
attractions of the Post Office Banks amply counterbalance the
disadvantage of the low rate, is evident from the enormous sum--twelve
millions 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 allurements have been held out to those who have surplus 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 one 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 ordinary
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
3_l._ 5_s._ per cent.; the Post Office Banks, of course, deposit their
money with Government, and are allowed interest at the rate of 2_l._
10_s._ 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 the lowest computation, to give
ten shillings per cent. more to depositors in the Post Office Banks.
If Government _cannot_ 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.

Reverting to the consideration of the actual Post Office Bank rate, it
is perhaps unlikely that the small tradesmen class--except where such
persons lodge their money at the Post Office merely for
security--feels satisfied with it. Happily, 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 Mr. Gladstone
has recently said, "with the labouring man's liberty of choice, or the
liberty of choice enjoyed by anybody else; if he thinks he can do
better with his money than by carrying 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 large section of depositors, or the banks
would not have 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
Savings 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 unimportant; 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.
Slaney'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, Mr. 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 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 reasonable facilities: and when these
were provided, as they have been, they were willing that the rest
should be left to themselves. 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 Office 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_ which is required from any one
opening an account, and the _limitation of deposits_ to 30_l._ in any
one year, and 150_l._ in all; and that when deposit and interest
together reach 200_l._ 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.[194]
These reasons do not now obtain. No 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 be 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 the 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.

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, 1865," 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_l._ in any one
year, the colonial depositor in Victoria is only debarred from
exceeding 50_l._ 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_l._ 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 respect 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 Government 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.


    [177] Whenever the 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.

    [178] Up to the end of February last the total sum reached
    exceeded twelve millions sterling,--a sum which it took the
    original old banks, with no competition, eight years to realize.

    [179] Thus, as we learn from an authentic account, in Bristol the
    old Savings Banks lost 700 and the Post Office Banks gained 2000
    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.

    [180] _Report on the Post Office_, 1864.

    [181] _Report on the Post Office_, 1864, p. 13.

    [182] 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
    trustee 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.

    [183] 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 Huntingdon Bank, a total of ninety-eight
    transfers.

    [184] The Huntingdon Savings Bank has given notice to close. The
    capital of the Hunts Saving Bank amounts to £60,000.

    [185] 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 Regulations 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 Banks._ London: Stevenson, 1861. (2) _Post Office
    Savings Banks: a few Plain Words concerning them._ London:
    Faithfull and Co. (3) _My Account with Her Majesty._ Reprinted
    from _All Year Round_ and the _British Workman_.

    [186] The well-known Form itself which in one piece of paper gives
    the acknowledgment, and folded, leaves room for the address, was
    designed and registered by Mr. Walshe, of the Post Office.

    [187] Acknowledgments are received in most parts of England by
    return 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.

    [188] The departmental arrangements for these cases, technically
    spoken of as "cross entries," need not be further explained.

    [189] The depositor's book must, of course, be invariably
    presented in every transaction, and when the depositor has
    obtained repayment of all his balance the book must be given up in
    order that the account may be closed.

    [190] 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 Banks as have been permitted to
    be made public. We may say, briefly, however, that the Chief
    Savings Bank commenced operations in a part of the building at St.
    Martin's-le-Grand, but was soon driven to seek more accommodation.
    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 temporary 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
    Correspondence 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 first Controller,
    before the Congrès International de Bienfaisance, in June, 1862,
    may soon be reprinted. It gives every detail which it is desirable
    to know.

    [191] The operations have not been carried on altogether without
    fraud. The cases, however, only serve to show how secure the
    depositors really are from loss. In 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 constantly
    occurring,--which it is now next to impossible they should be--it
    would not matter a pin-head to depositors, who, the moment they
    pay in their money into the Post Office, and obtain a deposit
    book, stake that money on the National credit.

    [192] 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
    any Savings Bank, a depositor may transfer his account without
    ever seeing his money.

    [193] The Secretary of a Workmen's Building Society was examined
    before Mr. Slaney's Committee (1850) on the _Investments for the
    Savings of the Middle and Lower 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 should 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 loudly 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. W. Cooper._

    [194] _Vide_ p. 59.



                            CHAPTER X.

       ON GOVERNMENT INSURANCE AND GOVERNMENT LIFE ANNUITIES.

    "It is difficult to estimate too highly 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 State; 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. RATHBONE 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 scoff 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 unknown."--BEATTIE.


Proposals for a Government 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 Reform, 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 fully half a century before his age. The
different schemes for the purchase of Government Annuities and the
Acts under which 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[195] 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 amendment, 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_l._ In the latter year 6,500 annuities were in force, the
amount represented by this number being 140,000_l._ 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 abolition 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 consequent 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
themselves of this Act, and granted both Immediate and Deferred
Annuities. 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 thereupon 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 organized 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 themselves should be extended, and that
this extension would be a legitimate offshoot of their original
scheme. Mr. Scudamore 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 business 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 Government Annuities should have no immediate connexion
with the Post Office Savings Banks; and that the purchasers of the
former should not necessarily 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
appearance and disappearance of bubble insurance companies, which have
been productive of very disastrous consequences during the last few
years, may probably induce a serious consideration of the subject at
no very distant date."

When 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 Parliament to authorize the grant of such Annuities
through Savings 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 11th 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 then moved
for leave to bring in a "Bill to amend the laws relating to the
purchase of Government Annuities through the 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 quite
possible to alter the system so that _small_ sums at frequent
intervals might be received; and not only so, but the restriction as
to effecting an Insurance, which was not only inconvenient, but
unreasonable in itself, might be done 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
unnecessary restriction, obtained leave to proceed with the
measure.[196]

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 institutions menaced, set to work to get
up an agitation. The measure was represented by one class of persons
as embodying the very questionable principle of Government
interference with 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 Post 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 chiefly, 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."[197] 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 going on with the bill without an
opportunity for full discussion, 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 impressions 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 Report for 1862, had recorded an unusual number of
very gross abuses and violations of trust on the part of those
Societies. The Report 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[198] had published several articles calling attention to the
scandalous condition of these institutions. It had been suggested to
him (Mr. Gladstone) that the subject of small life assurances, having
already received in principle the sanction of Parliament, 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 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. Mr. 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 interfered with the
liberty of private action. This bill, however, prohibited nothing
whatever. "I do not deny that it is Government 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 assumptions 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
principle, 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 Assurance 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 showing that they were exempted from
different duties, and received, like Savings Banks, more interest from
the money invested with Government than the money realized, Mr.
Gladstone held that nothing could be more plain than that Parliament
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. gentleman, "we had to deal with Loan Societies
    offering the most attractive terms to the public,
    promising them a rate of interest which could not possibly
    be paid under any sound and honest management, and then
    ending in disappointment 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 foremost
    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 promise 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 speaking of
those who had taken the principal part in carrying the measure into
practical operation, and arguing from their success, 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 which had been advanced against the plan. He
showed that the 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, however, 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, Mr.
Gladstone pointed to two other considerable advantages which the
Government would offer, viz., more favourable 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 measure entirely
self-supporting; after referring to what he called the "fugitive
character" of many insurance companies, and eloquently denouncing
their proceedings; to the failure of numerous Friendly Societies,[199]
and the ruin and disappointment entailed on thousands thereby, Mr.
Gladstone brought his long and remarkable speech to a conclusion by
summing up as follows:[200]--

    "I have endeavoured to prove that Parliament by
    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 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. I have endeavoured to show that the wide field 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
    affairs 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 giving their careful
    consideration to this question, and from determining in
    their own minds and hearts how the British Legislature 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 unsound 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. "They might shut their eyes for a time," said
the member for Dudley, "but Government would ultimately have to come
to that House with 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 taxpayers of the country."

_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. Hibbert_
and _Mr. Roebuck_ both warned the House against suffering a
"Constitutional Government" to be converted into what was termed a
"Paternal Government." In a characteristic speech, the latter
gentleman held that whatever concerned the individual was best left to
be done by the individual himself; that the Government 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. Newdegate_ and _Mr. W. E. Forster_ approved the
measure, but urged full consideration of it. _Mr. Bovill_ spoke very
strongly in favour. He believed, 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 delinquencies of
Friendly Societies and Insurances Companies. 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, Mr. Urquhart, Mr.
Henley, Mr. Baines and others, 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 presiding. 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 presented 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 with little effect. Several members warmly
supported Mr. Gladstone, 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. Göschen_, in an able speech, which showed 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. Ayrton_ 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 telling effect upon the old banks. So with
the present proposals; they would interfere with safe private
agencies. "The Government would pursue a much better plan," continued
Mr. Ayrton, "if they were to encourage the establishment 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
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 Committee, 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. Göschen, Mr.
Charles Turner, Mr. H. Herbert, Mr. Hubbard, Mr. Sheridan, Mr. Ayrton,
Mr. Hodgkinson, and Mr. Paget.[201] 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 which 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 100_l._; and, not to interfere unnecessarily with Friendly
Societies, that none should be granted for less than 20_l._ _Mr.
Estcourt_, especially, warmly espoused the measure. "No one now more
desired to see it passed than he did. If a master or employer 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 measure, 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 expressions 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, received the Royal 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 Reduction of the National Debt; and, working in
harmony with the Commissioners and with a common purpose, the Post
Office authorities at the same time arranged the Regulations under
which, and the organization by means of which, the whole of the plans
should be carried out. The Regulations themselves were, we understand,
arranged under the immediate superintendence of Mr. Scudamore, one of
the two gentlemen who organized the Post Office Banks; the machinery
chosen for the purpose was that of the Receiver and Accountant-General's
department. At the commencement of the session of 1865 both the Tables
and the Regulations were laid before Parliament and received the
proper sanction. The Tables, like all ordinary Insurance Tables, show
the various kinds of benefit which Government can now offer to the
community, and the price at which these benefits may be purchased. The
Regulations, on the 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.[202]

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 20_l._ and 100_l._; that he does this on
Government security; that he may do it without buying an annuity; that
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_l._ a year, either with or without the proviso of "money being
returnable" in the event of death before the annuity falls due.

                      *     *     *     *     *

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 "Regulations" 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 first as to _Insurances_. In the course of a short period,--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, embracing, 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. When this is the
case,--and to a great extent it is so already,--any person, whether
male or female, and _both_ 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 20_l._ and not
more than 100_l._ The steps which a person proposing 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 comprehended, 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 the questions propounded 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 further 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, 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 corresponded
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 Receipt-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 payment, 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 premiums 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 person in the sum of four
shillings if he is insured for 60_l._, 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 _kinds_ of payment under which a person may now
purchase the benefits of Life Insurance through the medium of the Post
Office. And certainly the most important 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 whole 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_l._, 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.[203] We are not informed in _Plain
Rules_ whether the insurer will in each case have to pass a medical
examination, or produce certificates 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 without the
necessity of the depositor seeing the money. Of the general plan of
paying the premium in one sum we cannot speak too highly. 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
shillings 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_l._ 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_l._; by paying two shillings
a month, between the ages of thirty and sixty, he may effect an
insurance 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 the 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 important 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 wants 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 Post Office itself. We think it was in
1859 that Mr. Scudamore of the Post Office devised a plan, which was
approved by the then Postmaster-General, by means of which and the
concurrence of a large number of first-class Insurance Companies a
considerable number of Post Office _employés_ were enabled to make
suitable provision for their families. In connexion with this plan,
substantial assistance was given, to those who took this rational and
necessary step, out of the Void Money-order Account. Under the
arrangements 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 salary 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 deductions are
so small as to be scarcely perceptible.[204] The success of the plan
has led to its partial adoption by the proprietors 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 shall, "if he think fit, make arrangements with the said
employers for such purpose, and shall constitute the departments,
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 fairness, are expected to
attempt to do so.

We must now speak of the Regulations for the purchase of _Government
Annuities_. It is well to make provision for our families 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 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 comply 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 questions 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 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 Office 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_l._ 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_l._ 3_s._ 4_d._, 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 purchase 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 annum, 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 completed his payments. Deferred Annuities may also be purchased
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, beginning on a small annuity, and increasing it from time
to time as he finds himself able to increase his annual payments. Once
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 four pounds a month,
immediately after that term of years.

The 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 event of
premature death, but "altogether sunk and lost." Soon afterwards,
however, the "Returnable 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 information from the popular
Abstract which will be presented to him free, on application, and from
the Official Tables which may be seen at any Post Office. It only
remains 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 Government 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 Report of the Post Office recently issued, the Postmaster-General
states that this information will be supplied, in proper course, in
his Report for 1865. Meanwhile, the following facts, which have been
ascertained by the examination of some hundreds of proposals, 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_l._ 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 premium in one sum;
and twenty-three per cent. wish the 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 offices 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_l._ The average
age of the proposers for the purchase of Annuities is fifty-eight
years.[205]

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 the unique and comprehensive 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. Meanwhile, 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 the 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
liabilities 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.


    [195] We have not space to go over the ground of the change; nor
    is it necessary, seeing how imperfect was the amendment introduced
    in 1853. Mr. McCulloch, however, in his _Statistical Account of
    the British Empire_, vol. ii. p. 712, may be said to have 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 individuals to consume their whole property during their
    lifetime, without caring anything for those who might come after
    them. Had Government given facilities to the middle and lower
    classes for insuring sums for their wives and 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 extravagance; 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 legislation if it were based upon
    such arguments as the foregoing; and successful it was not.

    [196] _Hansard_, vol. clxxv. p. 479.

    [197] "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 corner of the street, and
    Government tobacco-shops at the other, and leave the delicate
    matters of Assurance for the present."

    [198] The _Times_ and the _Daily Telegraph_.

    [199] 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.

    [200] _Hansard_, vol. clxxii. p. 1581.

    [201] _Hansard_, vol. clxxiv, p. 1474.

    [202] 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.

    [203] Thus, at the age of thirty, a person with 8_l._ 14_s._ 9_d._
    to spare may buy an assurance of 20_l._ to be paid at death. Two
    or three years afterwards, and after a prosperous interval, he may
    be disposed to increase that amount to 25_l._, 40_l._, or 50_l._
    Suppose the latter sum, and he has attained the age of
    thirty-three, he pays down another sum of 13_l._ 13_s._ 10_d._,
    and then finds himself insured by these two single payments in the
    sum of 50_l._ whenever 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 may best suit his convenience, to
    his original policy, till at last it acquires the value of 100_l._

    [204] Many postmen and rural letter-carriers are insured in this
    way for a sum of 100_l._

    [205] It will be remembered that under the Act 16 and 17 Vict., c.
    45, 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 proposal 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.



                            CHAPTER XI.

                        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 Rhymer 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.
Real economy and frugality 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
followed 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.

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 purpose for which and the manner how the
hoards once scraped together may be applied, more vicious still. This
is so palpable 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 emergencies that the wise man is
distinguished from the fool. Real 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.

It is well, therefore, and it is almost indispensable, that these
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 first 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 principally 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.[206] 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 keeps 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;" 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 further,
"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.[207] Thousands of people
of small means are content 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.[208] 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. On that day Esther Sykes became a
depositor to the extent of 1_l._

  She continued to deposit the Savings from her wages        £   s. d.
    from that time to the 21st of July, 1828, amounting to  119  11 0
  Interest accruing from 1818 to 1828                        30   9 0
                                                            ---------
                                                            150   0 0
                                                            =========
  This sum of £150 being allowed to accumulate by interest
    until 1836 became                                       200   0 0
                                                            ---------
  From 1836 interest on this sum had to be withdrawn
    half-yearly, which from 1836 to 1863 amounted to        160   9 8
                                                            ---------
  Esther Sykes died March, 1863, aged 78, and her
    executors received from the Bank the sum of             200   0 0
                                                            =========

Thus in this interesting case the cash deposited at different times
amounted to 119_l._ and the total amount of interest on that sum was
240_l._, of which 160_l._ was paid to the depositor herself during her
lifetime, and 200_l._ 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 Bank 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 difficulties, are doing a good work in
many localities. The stronghold of the system, be it remembered, is in
a town where, owing to the cupidity of the manager of the Savings
Bank, the savings of years were swallowed up, and, in consequence,
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-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. Personally, 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 perhaps ought to risk a proportion in such
societies, which, where properly and prudently managed, are very
beneficial to all connected with them.[209]

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 clubs, is being rapidly eliminated from them in most
localities, and almost everywhere the tradesman class predominates.[210]
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.[211]

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
advantage, 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 better known, and to bring
them still more within the reach 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 knowledge, 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;[212] they know
perfectly well that their "elevation"--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.[213]

A working man, though he 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 depends, 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 honourable 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
independent, 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 claiming 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 _safely_ 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 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 workmen, 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
described 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 which 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 _employés_ 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, but
for nearly all the provisions of a Friendly Society during sickness;
for a Deferred Annuity when they are past work, or after a certain
age; and in some instances--it ought 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 the 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 regard 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 Deferred 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 compulsory 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 themselves, 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 1864; and we again 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 Review_, 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 their 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 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 prodigality, 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 _principle_ is indeed recognised
by Government, as we have already shown, in the arrangements made for
its own servants; it is therefore 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 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."[214]

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 Government 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 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
generally, and they may very possibly be entirely removed by the
far-reaching, simple, ancillary measures of the last four years.


    [206] "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 fortune than himself, to comfort, to
    reputation, to wealth, to power."

    [207] "I have studied the matter to the core, and it has resulted
    in a firm conviction, 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_.

    [208] We are indebted to Mr. Sikes of Huddersfield for the
    particulars of this case.

    [209] 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-operator_, 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 plan 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
    _Quarterly 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 exclusively to the
    working classes as those we have quoted from Mr. Chorley.

    [210] 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 composed 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.

    [211] "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 operations (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 without means altogether, have compelled them to
    withdraw themselves."--_Evidence of Mr. W. Cooper. Committee on
    Provident Investments._ 1850.

    [212] A large volume might be compiled which should simply give a
    bare indication 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, _Greevous Grones for the Poore, done by
    a Wellwisher_, down to the latest benevolent scheme, and its list
    of patrons beginning with an Archbishop and ending with the
    Squire.

    [213] Savings Banks are not free from an amount of patronizing,
    which is only very 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, really proves something very different. "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 matter of personal
    gratification to Lord Spencer, the wise and excellent Lord Althorp
    of the Lower House.

    [214] "For the last twelve years," says a living practical
    philanthropist, "I have 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 considered their
    meanness), they further tax with the burden 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
    compulsory, 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 by Viscount
    Ingestre_, vol. ii.



                             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 the Savings of the Poor_." (1807.)[215]


This Bill provided that the _Office of the Poor's Fund_ should be
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 Commissioners
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 principally
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 Poor's Fund._

1. That any proper person may so pay to the Accountant, or remit
through the Post Office, any sum not exceeding five pounds.

2. That no person remit or pay more than 20_l._ in any one year, nor
more than 200_l._ in the whole.

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 principal and
dividends must not exceed 20_l._ in any one year, nor 200_l._ 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 his 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.

12. That persons entitled to the money may authorize in writing any
other person to receive the warrant, and after signing the warrant the
money may be paid to such other person.

13. That any person residing beyond the limits of the two-penny 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 certificates of such
purchases, with their amount and denomination, shall be sent to the
purchasers, or such other persons as they shall appoint.

15. Provides for the investment of small surpluses, and the payment of
the dividends upon them.

16. Provides that 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 Accountant" 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 management 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.

The persons who were entitled to the benefits of the Poor's Fund
should also be entitled to the benefits of Assurance Office under the
following

       _Rules and Regulations of the Poor's Assurance Office._

1. That any person desirous of insuring his life shall deliver or 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 two-penny 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 be made for more
than 200_l._; 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_l._

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 annuities,
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 be
empowered to frame rules for the guidance of the officers of each
Office; that the Commissioners to be appointed shall deliver to the
Governor and Company of the Bank of England a true and attested copy
of their commission of 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 appointment 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 stamp duty on probates
and letters of administration.

That the policies and other instruments shall be exempt from stamp
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
payment of all postage.

The Act concludes by making provision for the punishment of forgery
and perjury.


    [215] Referred to at some length at page 23, and other portions of
    this work, where the preamble of the bill is given.



                                (B.)

  _An Abstract of the Provisions of the Consolidated Act of
    1863, entitled_ "_An Act to Consolidate and Amend the Laws
    relating to Savings Banks_." (26 & 27 Vict. cap. 87.--28th
    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.  | An Act to consolidate and amend     | The whole.       |
  |  c. 92.    |   the Laws relating to Savings      |                  |
  |            |   Banks.                            |                  |
  |            |                                     |                  |
  |3 Will. IV. | An Act to enable Depositors in      | Sections 21, 22, |
  |  c. 14.    |   Savings Banks and others to       |   25, 28, 29, 30,|
  |            |   purchase Government Annuities     |   31, 32, 33, 34,|
  |            |   through the medium of Savings     |   and 35.        |
  |            |   Banks, and to amend an Act of     |                  |
  |            |   the Ninth Year of His late        |                  |
  |            |   Majesty to consolidate and        |                  |
  |            |   amend the Laws relating to        |                  |
  |            |   Savings Banks.                    |                  |
  |            |                                     |                  |
  |5 & 6       | An Act to extend to Scotland        | The whole.       |
  |  Will. IV. |   certain Provisions of an Act      |                  |
  |  c. 57.    |   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.        |                  |
  |            |                                     |                  |
  |7 & 8 Vict. | An Act to amend the Laws relating   | The whole.       |
  |  c. 83.    |   to Savings Banks, and to the      |                  |
  |            |   Purchase of Government Annuities  |                  |
  |            |   through the medium of Savings     |                  |
  |            |   Banks.                            |                  |
  |            |                                     |                  |
  |11 & 12     | An Act to amend the Laws relating   | The whole.       |
  |  Vict.     |   to Savings Banks in Ireland.      |                  |
  |  c. 133.   |                                     |                  |
  |            |                                     |                  |
  |17 & 18     | An Act to continue an Act of the    | Section 2.       |
  |  Vict.     |   Twelfth Year of Her present       |                  |
  |  c. 50.    |   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.     |                  |
  |            |                                     |                  |
  |22 & 23     | An Act to enable Charitable and     | The whole.       |
  |  Vict.     |   Provident Societies and Penny     |                  |
  |  c. 53.    |   Savings Banks to invest all their |                  |
  |            |   Proceeds in Savings Banks.        |                  |
  |            |                                     |                  |
  |23 & 24     | An Act to make further Provision    | The whole.       |
  |  Vict.     |   with respect to Moneys received   |                  |
  |  c. 137.   |   from Savings Banks and Friendly   |                  |
  |            |   Societies.                        |                  |
  +------------+-------------------------------------+------------------+

_Sec.[216] 2._ Provides that persons who may have formed or shall form
any society or institution of the nature of a bank to receive deposits
of money for the benefit of persons depositing the same, accumulating
at compound interest, and repayable when required, but, 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 regulations
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
certifying 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.

_Sec. 6._ Requires that the following regulations shall be adopted and
enrolled among the rules of all Savings Banks:--

    (1) The treasurer, trustees, or managers shall not derive
    any benefit from deposits, 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 repayment, so as to form a double check of every such
    transaction.

    (3) The depositor's pass book to be compared with the
    ledger on every transaction of repayment and on its first
    production after the 20th of November 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.

    (6) A public accountant or auditor, not of their 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
    meetings 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 provide for the due receipt and accounting of all
    moneys received; for the presence of a second party 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 Bank 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 National Debt Office. (_c_)

_Sec. 9._ Provides that any officer receiving deposits and not paying
them over to the managers shall be guilty of a misdemeanour. (_c_)

_Sec. 10._ The moneys, goods, chattels, and effects of all Savings
Banks to be invested in the trustees for the time being. (_a_)

_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 100_l._ 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 required,
on a demand from not less than two trustees and three managers, or
from a meeting of trustee 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, bankruptcy or
insolvency, before any other debts whatsoever. (_b_)

_See. 15._ The trustees of Savings Banks shall invest all the money
received by them in the Banks of England or Ireland; and no sum or
sums 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 time 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 securities. (_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 National 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. (_b_)

_Sec. 21._ Money invested with the Commissioners to be allowed
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 Nov. 20 and May 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 Saving Banks to appoint an agent who shall be
authorized to receive money from the Commissioners for repayment to
depositors. The agreement for the appointment of this agent, signed by
two trustees, shall be deposited with the Commissioners; but it may be
revoked and another appointment made.

_Sec. 25._ Trustees may draw for the whole 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_l._ must be signed by four trustees,
and their signature must be attested by separate witnesses, who may be
managers or other creditable persons. Drafts for 10,000_l._ not to be
paid before fourteen days after the receipt of such drafts. (_a_)

_Sec. 27._ Repayment of more than one draft of 10,000_l._ 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 draw upon such surplus fund for 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._ Repayment 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. (_c_)

_Sec. 32._ The funds of charitable societies, penny banks, &c., may be
deposited in Savings Banks; if with the approval of the Commissioners,
without any restriction as to the amount; and without that approval,
to the extent of 100_l._ per annum, or 300_l._ in this 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 Saving 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 trustee 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 declaration
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_l._ cannot be received in any one
year, nor more than 150_l._ in the whole; and when principal and
interest together amount to 200_l._, 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.

_Sec. 40._ Depositors may transfer their accounts to any other Savings
Bank by means of transfer certificates, the form of which is presented
in _Appendix_ (C).

_Sec. 41._ In the case of a depositor dying and leaving any sum
exceeding 50_l._ the money must not be paid except upon the probate of
the will of the deceased depositor, or letters of administration of
his or her estate and effects. No duty to be paid on probate when the
estate is under 50_l._, 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 50_l._
sterling shall be exempted from stamp duty. _(a)_

_Secs. 43_, _44_, _45_. Make 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 illegitimate
depositor according to the statute of limitations.

_Sec. 47._ Adapts the provisions of the Act as to intestate depositors
to the law of Scotland. _(b)_

_Sec. 48._ Provides that any dispute arising between the trustees of
Savings Banks and any individual depositor or his representatives, 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 offender prosecuted
and punished accordingly. _(c)_

_Sec. 50._ No 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 required to be
given, issued, signed, made, or produced in pursuance of this Act, to
be subject to or charged with any stamp duty or duties whatsoever.
(_a_)

_Sec. 51._ Provides for the appointment of auditors in Ireland, whose
names shall be sent up to the National Debt Office without delay.
(_d_)

_Sec. 52._ Every depositor in Ireland to be furnished with a
deposit-book which shall contain the rules of the bank printed at
length. A duplicate copy of the rules, and also of every annual
statement, shall also be exhibited from time to time in each Irish
bank, and shall be open to the inspection of every depositor. (_d_)

_Sec. 53._ Provides for the regular inspection of the books of Irish
depositors, not less than twice every year. (_d_)

_Sec. 54._ Commissioners may close accounts with Savings Banks in
Ireland which do not comply with their instructions, and re-open them
if they think fit. (_c_) In each case the Commissioners shall
forthwith publish a notification of the account being closed, or of
the account being re-opened, in the _Dublin Gazette_, and also in some
newspaper published in the county in which the said bank is
established. (_d_)

_Sec. 55._ For the more effectually ascertaining from time to time the
actual and progressive state of all Savings Banks enrolled under this
Act, the trustees of every bank shall annually cause a general
statement of the funds of their bank to be prepared up to the 20th
November in each year, showing the balance or principal sum due to all
the depositors, a statement of the expenses incurred, stating in whose
hands such balance is then remaining. Such annual statement shall be
attested by two managers or trustees, or one manager and one trustee,
and countersigned by the secretary or actuary of such bank, and shall
be transmitted to the National Debt Office in London or Dublin (as the
case may be) _within nine weeks_ from the date above given. If
trustees neglect to transmit this account, or refuse to obey the other
orders or directions of the Commissioners, then it shall be lawful for
the Commissioners to close the accounts of such trustees who thus
transgress, and also lawful to re-open them if they see occasion.
(_a_)

_Sec. 56._ If the accounts are not prepared and transmitted within the
prescribed time, it shall be lawful for the Commissioners to forthwith
publish in the _London Gazette_, and a newspaper published in the
county where the bank is situated, the name of such defaulting bank.
(_b_)

_Sec. 57._ The Commissioners are empowered to call for a detailed
statement of all the expenses incurred in the management of any
Savings Bank. (_b_)

_Sec. 58._ The treasurer of a Savings Bank must sign the annual
statement, where it is shown by that statement that any sum of money
belonging to the bank is in his hands. (_b_)

_Sec. 59._ A duplicate of every such annual statement, accompanied by
a list of the trustees and managers for the time being, shall be
publicly affixed and exhibited in some conspicuous part of each
Savings Bank for the information of all depositing therein; and every
depositor shall be entitled to receive from the Savings Bank a private
copy of the annual statement on payment of one penny. (_a_)

_Sec. 60._ The National Debt Commissioners shall, once in each year,
render the fullest account of all their dealings with Savings Banks to
the Lords of the Treasury, and copies of all such accounts shall be
laid before both Houses of Parliament.

_Sec. 61._ A distinct account to be rendered in the same way, showing
the aggregate amount of the Separate Surplus Fund.

_Sec. 62._ Savings Banks to compute interest on the 20th of May and
the 20th of November in each year. (_a_)

_Sec. 63._ The Commissioners may keep a balance in the Bank of Ireland
under the title of "The Fund for the Banks for Savings," to meet the
drafts which may be drawn on account of Savings Banks in Ireland.
(_a_)

_Sec. 64._ All receipts, orders, certificates, endorsements, accounts,
and returns required for carrying out this Act, shall be made in such
manner as shall be approved by the Commissioners.

_Sec. 65._ This Act shall be a full and sufficient indemnity and
discharge to the Commissioners, and to the Governor of the Bank, &c.
for all things to be done or required to be done in pursuance of this
Act. (_a_)

_Sec. 66._ Commissioners may employ a barrister and such officers as
may be necessary to the carrying out of the provisions of this Act,
and the Treasury shall pay them their remuneration, and meet
incidental expenses. (_a_)

_Sec. 67._ This Act to apply to all Savings Banks (except those
mentioned in the next section) established or hereafter to be
established in England, Scotland, Ireland, or Wales; Berwick-on-Tweed,
the Islands of Guernsey and Jersey, and the Isle of Man.

_Sec. 68._ This Act must not be held to repeal Acts relating to Post
Office Savings Banks, or any of the powers granted to the
Commissioners for the Reduction of the National Debt.[217]


    [216] Many of the clauses of the Consolidation 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 William 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.

    [217] We find from _The Clauses relating to the Establishment of
    the proposed Bradford Corporation Savings Bank_, kindly forwarded
    to us by Mr. Rayner, with whom the scheme originates, that
    sections 3, 4, 6, 8, 9, 11, 14, 30 to 39 inclusive, 41 to 46
    inclusive, 48 to 50 inclusive, of the Consolidation Act are
    proposed to be incorporated in the new Bill about to be introduced
    into the House of Commons. The new clauses provide that the
    Corporation may establish a Savings Bank, make regulations for its
    conduct, appoint a Committee of the Council to manage the
    undertaking, and a treasurer and other officers to work it; that
    the aggregate amount of deposits shall not exceed a quarter of a
    million sterling; that interest should be given at the rate of
    three farthings per pound per month (or three pounds fifteen per
    cent. per annum) that debentures shall be issued to depositors for
    the amounts invested; and that when a person's deposits amount to
    50_l._, he may require a mortgage for that sum to bear interest at
    four per cent. Other sections provide that the Corporation may
    raise money by annuities, for the transfer of annuities, for the
    exemption of deposits and annuities from property and income tax,
    and for the remedies for depositors, mortgages, and annuitants, by
    applying the Acts of 1855, 1858, and 1862, to them. We regret our
    want of space to enter more fully into the details of this
    important and promising scheme.



                                (C.)

  _Form of Certificate for Transfer from one Savings Bank to another,
    or to any other description of Savings Bank._


Savings Bank at_____________, in the county of__________.

Whereas_____________of______________, a depositor in the above-named
Savings Bank, is desirous of closing his [or her] account with the
said bank for the purpose of transferring his [or her] deposits to the
Savings Bank at___________, in the county of_____________; and to
enable him [or her] so to do, the said depositor has applied for a
certificate of the whole amount due to him [or her], pursuant to the
Act (26 and 27 Vict. c. 87): we hereby certify that the sum due to the
said depositor for money deposited by him [or her] in this Savings
Bank, inclusive of all interest due to him [or her] at this date,
amounts to the sum of [_state the amount in words_], of which the sum
of [_state the amount, if any, in words_] has been deposited since the
twentieth of November last; and we further certify, that his [or her]
account with this Savings Bank has been closed by the issue of this
certificate.

Witness our hands this_________ day of_________, 18____.

  _____________ } Two of the Trustees or Managers [appointed
                } for this object, by the Trustees] of the
  _____________ } above-named Savings Bank.

        Examined __________________________________

           the Actuary or Secretary of the above-named
           Savings Bank.



                                (D.)

  _An Abstract of the Act_ "_To make further provision for
    the Establishment of Savings Banks for Seamen_." (19 and
    20 Vict. c. 41.--7th July, 1856.)


_Preamble._ Whereas by the Merchant Shipping Act, 1854, certain powers
were given to the Commissioners for the Reduction of the National Debt
for the purpose of establishing Savings Banks for Seamen; and whereas
it has since been found to be expedient that the immediate management
and control of such Savings Banks should be placed in the hands of the
Board of Trade. Be it enacted, &c.

_Sec. 1._ That the Board of Trade may establish in London a central
Savings Bank for seamen, and branch banks at such ports or places as
they may deem expedient; and that they may receive deposits from or on
account of seamen, or their wives and children; and that the total
amount standing in the name of any one depositor shall not exceed
200_l._

_Sec. 2._ The Board of Trade may appoint shipping offices branch
Savings Banks under this Act, and shipping masters agents of the said
board to conduct this business.

_Sec. 3._ The Commissioners of the National Debt shall receive the
moneys deposited in these banks on the request of the Board of Trade;
shall invest these moneys in the same way as they do the moneys of
other banks; and shall pay, together with interest, the sums received
on a request signified in the like manner.

_Sec. 4._ Provides that the Board of Trade may make any alterations
which they think fit with respect to the persons entitled to become
depositors, the making and withdrawal of deposits, the rate and
payment of interest, or any other matter connected with these banks;
such regulations to be binding upon all.

_Sec. 5._ Provides that all sums of money due to any deceased
depositor, shall be paid and applied subject to the conditions of the
provisions of the Merchant Shipping Act.

_Sec. 6._ Provides that any person forging a document, or making false
representations in order to obtain deposits or interest, shall be
punishable with penal servitude or imprisonment.

_Sec. 7._ The Board of Trade to pay all expenses in carrying out this
Act out of the interest received from the National Debt Commissioners.

_Sec. 8._ An annual account of all deposits and repayments shall be
laid before both Houses of Parliament, as also a copy of all
regulations made for carrying out this Act.

_Sec. 9._ All criminal proceedings under this Act to be carried on as
under the Merchant Shipping Act of 1854.[218]


    [218] An Act for the establishment of Savings Banks in connexion
    with the Admiralty, for the benefit of the seaman and marines of
    the Royal Navy, has just been introduced into the House of
    Commons, and will, doubtless, be quickly passed into law.



                                (E.)

  _An Abstract of the Act_ "_To Amend and Consolidate the
    Laws relating to Military Savings Banks_." (22 and 23
    Vict. c. 20.--13th August, 1859.)


_Sec. 1._ Repeals the 5 and 6 Vict. c. 71, and the 8 and 9 Vict. c.
27, amending it, and the 12 and 13 Vict. c. 71, and amends and
consolidates the said Acts. It also provides that deposits made under
these Acts shall not be affected by their repealment.

_Sec. 2._ Makes it lawful for her Majesty to establish or continue
military or regimental Savings Banks, for the purpose of receiving
sums of money from non-commissioned officers and soldiers employed in
her service in the United Kingdom and foreign stations (India alone
excepted), and for the purpose of receiving moneys or funds raised or
paid for objects or purpose connected with these officers and soldiers
which her Majesty may think fit to authorize to be deposited in these
banks.

_Sec. 3._ Provides that the Secretary at War, with the concurrence of
the Commander-in-Chief and the Lords of the Treasury, may make
regulations for the conduct of these banks; and that when these
regulations shall be signed by her Majesty and laid before Parliament
they shall be binding on all concerned.

_Sec. 4._ These regulations shall determine the rate of interest
(which must not exceed three pounds fifteen shillings per cent. per
annum), and all the minor points connected therewith; the
circumstances under which deposits shall be forfeited to the public;
the payment of the money of deceased depositors: may make provision
for the deposit of money created for charitable purposes, and may make
it obligatory on commanding officers to so deposit such funds; shall
make provision for the withdrawal of money; and shall provide for the
keeping of proper accounts, and generally for all such matters as
relate to Savings Banks.

_Sec. 5._ The receipt of infants and married women shall be a sufficient
discharge for what shall be deemed a valid payment made to them.

_Sec. 6._ The moneys received in these banks may be applied by the
persons receiving them to the payment of such ordinary army services
as it may be their duty to pay; and sums payable to depositors shall
be paid out of the grants by Parliament for these services.

_Sec. 7._ Provides that the Secretary at War may direct payment out of
the moneys so granted to be made to the account of the National Debt
Commissioners, and carried to the account of the Fund for the Military
Savings Banks.

_Sec. 8._ The Commissioners of the National Debt to invest the surplus
money in the purchase of bank annuities; the interest arising also to
be so applied; and such interest or dividends shall not be subject to
any taxes, charges, or impositions whatever.

_Sec. 9._ The Secretary at War may direct, at fourteen days' notice,
the moneys invested in annuities to be transferred to the account of
the Paymaster-General at the Bank of England.

_Sec. 10._ Empowers the National Debt Commissioners to sell the
annuities.

_Sec. 11._ The money arising from the dissolution of certain
Regimental Benefit Societies, which was placed in the Savings Banks in
the name of each member to accumulate until his discharge, by the Act
(12 and 13 Vict. c. 71) may be withdrawn under certain conditions.

_Sec. 12._ The officers of Regimental Savings Banks shall not be
personally liable except for their own wilful neglect or default.

_Sec. 13._ Provides that full accounts of all transactions in these
banks shall be laid before both Houses of Parliament before the 1st of
April in each year.

_Sec. 14._ Military Savings Banks not to be within the provisions of
the Acts relating to Savings Banks proper.

_Sec. 15._ Refers to the construction of the word "India."

_Sec. 16._ Provides that the Act shall take effect immediately after
the regulations have been framed.



                                (F.)

  "_An Act[219] to grant Additional Facilities for depositing
    Small Savings at Interest, with the Security of the Government
    for due repayment thereof._" (24 Vict. c. 14.--17th May, 1861.)


        _Postmaster-General may direct Officers in Post Office
                       to receive Deposits._

1. It shall be lawful for the Postmaster-General, with the consent of
the Commissioners of Her Majesty's Treasury, to authorize and direct
such of his officers as he shall think fit, to receive deposits for
remittance to the principal office, and to repay the same, under such
regulations as he, with the concurrence of the Commissioners of Her
Majesty's Treasury, may prescribe in that respect.


              _Legal Title of Depositor to Repayment._

2. Every deposit received by any officer of the Postmaster-General
appointed for that purpose shall be entered by him at the time in the
depositor's book, and the entry shall be attested by him and by the
dated stamp of his office; and the amount of such deposit shall, upon
the day of such receipt, be reported by such officer to the
Postmaster-General, and the acknowledgment of the Postmaster-General,
signified by the officer whom he shall appoint for the purpose, shall
be forthwith transmitted to the depositor; and the said acknowledgment
shall be conclusive evidence of his claim to the repayment thereof,
with the interest thereon, upon demand made by him on the
Postmaster-General; and, in order to allow a reasonable time for the
receipt of the said acknowledgment, the entry by the proper officer in
the depositor's book shall also be conclusive evidence of title for
ten days from the lodgment of the deposit; and if the said
acknowledgment shall not have been received by the depositor through
the post within ten days, and he shall, before or upon the expiry
thereof, demand the said acknowledgment from the Postmaster-General,
then the entry in his book shall be conclusive evidence of title
during another term of ten days, and _toties quoties_; provided always
that such deposits shall not be of less amount than one shilling, nor
of any sum not a multiple thereof.


     _Depositors entitled to Repayments not later than Ten Days
                        after Demand made._

3. On demand of the depositor, or party legally authorized to claim on
account of a depositor, made in such form as shall be prescribed in
that behalf, for repayment of any deposit, or any part thereof, the
authority of the Postmaster-General for such repayment shall be
transmitted to the depositor forthwith; and the depositor shall be
absolutely entitled to repayment of any sum or sums that may be due to
him within ten days at farthest after his demand shall be made at any
Post Office where deposits are received or paid.


          _Names of Depositors, &c., not to be disclosed._

4. The officers of the Postmaster-General engaged in the receipt or
payment of deposits shall not disclose the name of any depositor, nor
the amount deposited or withdrawn, except to the Postmaster-General,
or to such of his officers as may be appointed to assist in carrying
this Act into operation.


     _Money to be paid to Commissioners for the Reduction of the
     National Debt, and repaid to Depositors through Post Office._

5. All moneys so deposited with the Postmaster-General shall forthwith
be paid over to the Commissioners for the Reduction of the National
Debt; and all sums withdrawn by depositors, or by parties legally
authorized to claim on account of depositors, shall be repaid to them
out of the said moneys, through the office of Her Majesty's
Postmaster-General.


                _Additional Security to Depositor._

6. If at any time the fund to be created under the authority of this
Act by the investment of the deposits shall be insufficient to meet
the lawful claims of all depositors, it shall be lawful for the
Commissioners of Her Majesty's Treasury, upon being duly informed
thereof by the Commissioners for the Reduction of the National Debt,
to issue the amount of such deficiency out of the Consolidated Fund of
the United Kingdom, or out of the growing produce thereof; and the
said Commissioners of Her Majesty's Treasury shall certify such
deficiency to Parliament.


             _Rate of Interest payable to Depositors._

7. The interest payable to the parties making such deposits shall be
at the rate of two pounds ten shillings per centum per annum; but such
interest shall not be calculated on any amount less than one pound, or
some multiple thereof, and not commence until the first day of the
calendar month next following the day of deposit, and shall cease on
the first day of the calendar month in which such deposit is withdrawn.


                       _Interest, how calculated._

8. Interest on deposits shall be calculated to the thirty-first day of
December in every year, and shall be added to and become part of the
principal money.


          _Investment of Funds received under this Act._

9. The moneys remitted to the Commissioners for the Reduction of the
National Debt, under the authority of this Act, shall be invested in
some or in all of the securities in which the funds of Savings Banks
established under the existing laws may be invested; and a separate
and distinct account shall be kept by the said Commissioners of all
receipts, investments, sales, and repayments; and a balance sheet of
such account, from the first of January to the thirty-first of
December in every year, shall be laid before both Houses of Parliament
not later than the thirty-first of March in every year.


         _Depositors desiring to Transfer their Deposits._

10. If any depositor making deposit under this Act shall desire to
transfer the amount of such deposit to a Savings Bank established
under the Acts relating to Savings Banks, he shall, upon application
to the chief office of the Postmaster-General, be furnished with a
certificate stating the whole amount which may be due to him, with
interest, and thereupon his account under this Act shall be closed;
and, upon delivery of such certificate to the trustees or managers of
the Savings Bank to which it is proposed by the depositor to transfer
such deposit, they shall, if they think fit, open an account for the
amount stated in such certificate for such depositor, who shall
thereupon be subject to the rules of such Savings Bank; and the amount
so transferred shall, upon such certificate being forwarded to the
Commissioners for the Reduction of the National Debt, be written off
in the books of the said Commissioners from the amount of moneys
received under the authority of this Act, and shall be carried to the
account of the Savings Bank to which such transfer shall have been
made; and, in like manner, if any depositor in a Savings Bank,
established under the Savings Bank Acts, shall desire to transfer the
amount due to him, with interest, from such Savings Bank to the
Postmaster-General, for deposit under the provisions of this Act, the
trustees or managers of such Savings Bank shall, upon his request,
furnish such depositor with a certificate, in a form to be approved by
the Commissioners for the Reduction of the National Debt, signed by
two trustees of such Savings Bank, and thereupon his account with such
Savings Bank shall be closed, which certificate the depositor may
deliver to any officer of the Postmaster-General authorized to receive
deposits under this Act, and such certificate shall for the amount
therein set forth be considered to be a deposit made under the
authority of this Act, and being forwarded to the said Commissioners,
the said amount shall then be transferred in the books of the said
Commissioners from the account of the said Savings Bank to the credit
of the account of moneys deposited under the authority of this Act.
Provided always, that nothing contained in this Act respecting Savings
Banks shall render it necessary to have the rules and regulations of
any Savings Bank again certified if the same have been before
certified according to law.


        _Postmaster-General, with consent of Treasury, to make
      Regulations, copies of which to be laid before Parliament._

11. The Postmaster-General, with the consent of the Commissioners of
Her Majesty's Treasury, may make, and from time to time, as he shall
see occasion, alter regulations for superintending, inspecting, and
regulating, the mode of keeping and examining the accounts of
depositors, and with respect to the making of deposits and to the
withdrawal of deposits and interest, and all other matters incidental
to the carrying this Act into execution, in his department; and all
regulations so made shall be binding on the parties interested in the
subject-matter thereof, to the same extent as if such regulations
formed part of this Act; and copies of all regulations issued under
the authority of this Act shall be laid before both Houses of
Parliament within fourteen days from the date thereof, if Parliament
shall be then sitting, and, if not, then within fourteen days from the
next re-assembling of Parliament.


             _Accounts to be laid before Parliament._

12. An annual account of all deposits received and paid under the
authority of this Act, and of the expenses incurred during the year
ended the thirty-first of December, together with a statement of the
total amount due at the close of the year to all depositors, shall be
laid by the Postmaster-General before both Houses of Parliament not
later than the thirty-first of March in every year.


        _Accounts to be examined by Commissioners of Audit._

13. The annual accounts of the Postmaster General, and of the
Commissioners for the Reduction of the National Debt, to the
thirty-first of December in each year, in respect to all moneys
deposited or invested under the authority of this Act, shall annually,
prior to the thirty-first of March, in each year, be submitted for
examination and audit to the Commissioners for auditing public
accounts.


     _Provisions of Savings Banks Acts applicable to this Act._

14. 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.


                        _Expenses of Act._

15. All expenses incurred in the execution of this Act shall be paid
out of the moneys received under the authority of this Act.


    [219] This Act is so short in proportion to its importance, that
    it is here given entire. Many of the provisions of the
    Consolidated Act (1863) apply to the banks established under this
    Act.



                                (G.)

              ABSTRACTS OF MINOR ACTS OF PARLIAMENT RELATING TO
                           SAVINGS BANKS.


  26 _Victoria, c. 14, entitled_ "_An Act to Amend the Laws
    relating to Post Office Savings Banks_," (4th May, 1863,)
    provides:--

_Sec. 1._ For the transfer of the accounts of minors.

_Sec. 2._ For the funds of a Savings Bank closing its business to be
paid over to the National Debt Commissioners, the money arising from
the sale of property to be carried to the separate surplus fund; the
receipt of the trustees on the sale of property to be a sufficient
discharge to the purchaser. The trustees of Savings Banks about to
close to have power to compensate their officers out of the separate
surplus fund.

_Sec. 3._ The information necessary as to the steps to be taken when
the trustees of any bank have determined to close.

_Sec. 4._ For the conversion of perpetual Government annuities at
three per cent. into capital stock at two pounds ten shillings per
cent.

_Sec. 5._ Power to trustees to appoint managers to sign transfer
certificates.

_Sec. 6._ That the warrants for converting annuities into capital
stock shall be laid before Parliament.


  26 _Victoria, c. 25, entitled_ "_An Act to make further
    Provision for the Investment of the Moneys received by the
    Commissioners for the Reduction of the National Debt from
    the Trustees of Savings Banks established under the Act 9
    Geo. IV. c. 92_," (8th June, 1863,) provides:--

_Sec. 1._ For the cancelling of 24,000,000_l._ of capital stock of
annuities, and the creation of a charge on the Consolidated Fund for
that amount.

_Sec. 2._ That the Treasury may cancel an additional amount of stock
not exceeding 5,000,000_l._ creating equivalent terminable annuities
chargeable upon the Consolidated Fund.

_Sec. 3._ That the Commissioners may invest the interest payable on
the securities created under this Act, and other moneys remitted to
them, in the purchase of parliamentary securities, or in any stock or
debentures or other securities the interest for which is guaranteed by
Parliament.

_Sec. 4._ That issues in money may be made out of the Consolidated
Fund on Savings Bank account on certificate from the National Debt
Commissioners.

_Sec. 5._ That at least one half of the whole amount of securities
held for Savings Banks, exclusive of the amount of the charge on the
Consolidated Fund (Section 1), shall be parliamentary securities.

_Sec. 6._ That every year the National Debt Commissioners shall
prepare a balance sheet giving the assets and liabilities in respect
to Savings Banks, to the credit of which shall be placed the amount of
the charge upon the Consolidated Fund for twenty-four millions and all
other moneys and securities of every kind; and that a copy of this
balance sheet be laid before Parliament each year.

_Sec. 7._ That the deficiency shown shall be a charge upon the
Consolidated Fund.

_Sec. 8._ That the powers of investment granted to the Commissioners
by other Acts, in so far as they are not varied by this Act, shall
continue in force.

                      *     *     *     *     *

"_The Savings Bank Investment Act_," which has just received the Royal
Assent (20th March, 1866), empowers the Treasury to substitute
terminable annuities for capital stock standing to the account of
Savings Banks and Post Office Savings Banks, and empowers the Treasury
to make rules as to payments to the National Debt Commissioners. The
Treasury is likewise empowered to cancel capital stocks of annuities,
and to substitute terminable annuities. The warrants issued by the
Treasury to the Bank of England to be a sufficient authority for the
cancelling of the stock.



                                (H.)

  FINANCIAL RETURNS, _giving the most recent information relating to
     Savings Banks, Post Office Savings Banks, and Military Banks,
        including the entire Amount of Deposits placed in each
              kind of Bank from their commencement_.


               SAVINGS BANKS AND FRIENDLY SOCIETIES.

  AN ACCOUNT of the Gross Amount of all Sums Received and Paid by the
    National Debt Commissioners on account of Savings Banks and Friendly
    Societies in Great Britain and Ireland from their commencement
    (August, 1817) to the 20th of November, 1865, inclusive.

  ----------------------+---------------------+----------------------
  From August, 1817, to | Gross Amount of all | Gross Amount of all
   20th November 1865.  |   Sums received     |Sums paid to Trustees,
                        |   from Trustees,    | including Interest.
                        | including Interest  |
                        |up to 20th Nov. 1865.|
  ----------------------+---------------------+----------------------
                        |     £      _s._ _d._|     £      _s._ _d._
    _Savings Banks._   }|                     |
   Great Britain       }|90,179,614   18    9 |51,142,506   15    0
     & Ireland.        }|                     |
                        |                     |
  _Friendly Societies._}|                     |
   Great Britain       }| 5,509,975    4    3 | 3,594,271    4   11
     & Ireland.        }|                     |
  ----------------------+---------------------+----------------------
          TOTAL.       }|                     |
  Savings Banks and    }|95,689,590    3    0 |54,736,777   19   11
    Friendly Societies.}|                     |
  ----------------------+---------------------+----------------------

  ----------------------+----------------------+---------------------
  From August 1817, to  |   Amount of Money,   |     Value of the
  20th November 1865.   |    Principal and     |  Securities held by
                        |   Interest, due to   |  the Commissioners
                        |     the Trustees     |    (Nov. 1865),
                        |     (Nov. 1865),     |at the Prices of that
                        |      including       | day, to provide for
                        | £302,030 8_s._5_d._  |    the Money due
                        |due on account of the |    to Trustees.
                        |separate Surplus Fund.|
  ----------------------+----------------------+---------------------
                        |     £      _s._ _d._ |     £      _s._ _d._
    _Savings Banks._   }|                      |
   Great Britain       }|39,037,108    3    9  |36,010,477    4    7
     & Ireland.        }|                      |
                        |                      |
  _Friendly Societies._}|                      |
   Great Britain       }| 1,915,703    19   4  | 1,071,198    3    6
     & Ireland.         |                      |
  ----------------------+----------------------+---------------------
          TOTAL.       }|                      |
  Savings Banks and    }|40,952,812     3   1  |37,081,675    8    1
    Friendly Societies.}|                      |
  ----------------------+----------------------+

                          Balance Deficient      3,871,136   15    0
                                                ---------------------
                                               £40,952,812    3    1
                                                =====================


                    POST OFFICE SAVINGS BANKS.

  AN 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 the books of the Commissioners
    for the Reduction of the National Debt; 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
    the Frauds committed in the Transmission of Deposits, or otherwise.

  ---------------------------------------------------------------------------
                           LIABILITIES.
  -------------------------------------------+---------------+---------------
                                             |    £     s. d.|    £     s. d.
  Total amount of deposits, from 16th        |               |
    September, 1861, to 31st March, 1865,    |               |
    of the interest allowed and added to     |               |
    principal on 31st December, 1861,        |               |
    31st December, 1862, 31st December, 1863,|               |
    and 31st December, 1864, and of the      |               |
    interest allowed and paid on closed      |               |
    accounts up to 31st March, 1865          |9,217,809  8  7|
                                             |               |
        Deduct--                             |               |
  Repayments to depositors, from 16th|       |
    September, 1861, to 31st March, 1866     |3,851,889 14  6|
                                             +---------------+
  Total sum due to all depositors in the Post Office Savings |
    Bank in the Savings 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.
  ------------------------------+------------+---------------+---------------
                                |  £    s. d.|    £     s. d.|    £     s. d.
  Total amount of the sums paid |            |               |
    by the Postmaster-General to|            |               |
    the National Debt Commis-   |            |               |
    sioners for investment, and |            |               |
    of the interest received on |            |               |
    such investments, from 16th |            |               |
    September, 1861, to         |            |               |
    31st March, 1865            |            |5,487,728  6 10|
                                |            |               |
        Deduct--                |            |               |
  Amount which has been repaid  |            |               |
    by the Commissioners for    |            |               |
    the  Reduction of the       |            |               |
    National Debt, on account of|            |               |
    108,506_l._ 12_s_ 11_d_,[220]|           |               |
    being the amount paid for   |            |               |
    the expenses of management  |            |               |
    of the Post Office Savings  |            |               |
    Banks from 16th September,  |            |               |
    1861, to 31st March, 1865   |91,848  7  4|               |
  Amount of sums transferred    |            |               |
    from Post Office Savings    |            |               |
    Banks to Savings Banks      | 5,255 19  5|               |
                                +------------+   97,104  6  9|
                                |            +---------------+5,390,624  0
  Balance remaining in the      |            |               |
    hands of the Postmaster-    |            |               |
    General to be paid over for |            |               |
     investment                 |            |   29,147 15  9|
                                |            |               |
        Deduct--                |            |               |
  Amount of loss through the    |            |               |
    defalcations of a former    |            |               |
    postmaster of Beverley      | 1,093 14  1|               |
  Amount of loss by the frauds  |            |               |
    committed by J. W. Thorne   |    94  0  0|               |
  Amount of expenses of         |            |               |
    management paid by the      |            |               |
    Postmaster-General during   |            |               |
    the quarter ended 31st      |            |               |
    March, 1865; not recovered  |            |               |
    from the Post Office Savings|            |               |
    Bank Fund at that date      |11,658  5  7|               |
                                +------------+   12,845 19  8|
                                |            +---------------+   16,301 16  1
                                |            |               +---------------
                                |            |               |5,406,925 16  2
  ==============================+============+===============+===============

    [220] According to the Parliamentary Paper No 523, 1861, it was
    estimated that the cost of each transaction would be 7_d._ The
    actual average cost of each transaction has been 6-7/8_d._


                      MILITARY SAVINGS BANKS.

  AN ACCOUNT of the GROSS AMOUNT of all MONEYS Received and
    Paid by the COMMISSIONERS for the REDUCTION of the
    NATIONAL DEBT, and of the GROSS AMOUNT of STOCK BOUGHT and
    SOLD by and Transferred To the Said COMMISSIONERS on
    account of "The FUND for the MILITARY SAVINGS BANKS,"
    Pursuant To Act 8 & 9 Vict. C. 27, S 5, From the 19th
    September, 1845, To the 5th January, 1866.

  --------------------+-------------+-------------+-------------+-------------
                      |Consolidated |   Reduced   |     New     |    TOTAL
                      |£3 per Cents.|£3 per Cents.|£3 per Cents.|    STOCK.
                      +-------------+-------------+-------------+-------------
                      |   £    s. d.|  £    s. d. |   £    s. d.|   £    s. d.
  Transferred to      |             |             |             |
    the Commissioners |             |             |             |
    by the            |             |             |             |
    Paymaster-General | 15,062 18  8|             |             | 15,062 18  8
                      |             |             |             |
  Purchased with      |             |             |             |
    Money received    |             |             |             |
    from the          |             |             |             |
    Paymaster-General,|            |             |             |
    and with the      |             |             |             |
    Amount of         |             |             |             |
    accumulated Div-  |             |             |             |
    idends received   |104,394 17  7|91,979  8 11 |237,877 10  4|434,251 16 10
                      +-------------+-------------+-------------+-------------
      TOTAL STOCK     |             |             |             |
        bought and    |             |             |             |
        transferred   |119,457 16  3|91,979  8 11 |237,877 10  4|449,314 15  6
                      |             |             |             |
      TOTAL STOCK     |             |             |             |
        sold by order |             |             |             |
        of Secretary  |             |             |             |
        of State for  |             |             |             |
        War           | 78,118  5 10|             | 16,118  0  8| 94,236  6  6
                      +-------------+-------------+-------------+-------------
      TOTAL STOCK at  |             |             |             |
        the Account   |             |             |             |
        of "The Fund  |             |             |             |
        for the       |             |             |             |
        Military      |             |             |             |
        Savings Banks"|            |             |             |
        at 5th        |             |             |             |
        January, 1866 | 41,339 10  5|91,979  8 11 |221,759  9  8|355,078  9  0
                      +=============+=============+=============+=============
                                                          +----------------
                                                          | CASH RECEIVED.
                                                          +----------------
                                                          |   £     s.  d.
    Total Sum received and applied by the Commissioners   |
      to the Purchase of 434,251_l._ 16_s._ 10_d._ £3     |
      per Cent. Stock, as above                           |407,511  14  10
                                                          |
    Deduct the Value received for 94,236_l._ 6_s._ 6_d._  |
      £3 per Cent. Stock, sold by order of Secretary of   |
      State for War                                       | 88,458   8   5
                                                          +----------------
                                                          |319,053   6   5
                                                          +================

                                      W. E. GLADSTONE, C. of E.}
                                      H. L. HOLLAND, Gov.      } Commissioners.
                                      THOS. N. HUNT, Dep. Gov. }

     National Debt Office,}     A. Y. SPEARMAN,
     15 February, 1866.   }        _Comptroller-General_.



                    POST OFFICE SAVINGS BANKS.

  AN ACCOUNT of all DEPOSITS Received and Paid under the
    Authority of the Act 24 Vict. c. 14, during the Year ended
    31st December, 1865, and of the EXPENSES incurred from the
    Commencement of Business, on 16th September, 1861, to 31st
    December, 1865, together with a STATEMENT of the TOTAL
    AMOUNT due at the Close of the year 1865 to all Depositors.


                              (_a._)

          ACCOUNT of all Deposits Received and Paid from
                1st January to 31st December, 1865.

  ---------------------------------+-------------------------------------------
                        £     s. d.|                                £     s. d.
  Balance brought                  |By Repayments from 1st
    forward         4,993,123 11  7|  January to 31st December,
                                   |  1865, viz.--
  To Cash received                 |
    from Depositors                |
    from 1st                       |                £      s. d.
    Jan. to 31st                   |  Cash paid 2,303,525  2  10
    December, 1865  3,719,017 13  4|  Warrants
                    ---------------|    issued,
                    8,712,141  4 11|    but not
  To Interest                      |    cashed
    thereon up to                  |    at date    15,085 11   7
    31st December,                 |            ----------------
    1865, computed                 |                            2,318,610 14  5
    according to                   |
    7th and 8th                    |
    sections of the                |
    above-cited Act,               |Balance due at the close of
    and added to the               |  the year 1865 to all
    Principal Money                |  Depositors, inclusive of
    of the said                    |  interest to 31st
    Depositors        132,869 13  7|  December, 1865            6,526,400  4  1
                    ---------------|                            ---------------
                    8,845,010 18  6|                            8,845,010 18  6
                    ===============|                            ===============


                              (_b._)

                      EXPLANATION OF BALANCE.

  -----------------------------------------------------------------------
                                                             £      s. d.
  Balance due at the close of the year to all
     Depositors                                           6,526,400  4  1
                                                          ===============
  Moneys remitted to the Commissioners
      for the Reduction of the National
      Debt, from 16th September, 1861,         £     s. d.
      to 31st December, 1864               4,800,900 11  8
    Ditto  ditto from 1st January to 31st
      December, 1865                       1,402,789 16  2
                                           ---------------
                                           6,203,690  7 10
        Deduct:--
  Amount transferred from Post
      Office Savings Banks, and
      which has been written off
      the account of Post Office
      Savings Banks, at the
      National Debt Office,
      during the period from
      16th September, 1861,     £    s. d.
      to 31st December, 1864  4,210   1  4
    Ditto  ditto during the
      year ended 31st
      December, 1865          2,698  17 11
                              ------------
                                               6,908 19  3
                                           ---------------
  Net Amount lodged with the
      Commissioners for the
      Reduction of the National
      Debt for investment                  6,196,781  8  7

        Add:--
  Interest accruing to Depositors up to
      31st December, 1865, including the
      Interest which accrued up to
      31st December, 1864                    310,755 16  9

  Amount advanced on account of
      Charges of Management, not
      recovered until after
      31st December, 1865    14,535  10 11
  Balance remaining on 31st
      December, 1865, to be
      paid over for
      investment              4,327   7 10
                            --------------
                                              18,862 18  9
                                              ------------
                                                          6,526,400  4  1
                                                          ===============


                              (_c._)

    ACCOUNT of CHARGES of MANAGEMENT and of EXPENSES incurred for
         POST OFFICE SAVINGS BANKS, from their Establishment
      on the 16th September, 1861, to the 31st December, 1865.

  -------------------------------------------------------------------
                                                           £    s. d.
  Charges and Expenses for the period from
     16th September, 1861, to the
     31st December, 1864                                91,848  7   4
  Charges and Expenses for the year ended
     31st December, 1865                                49,526 13  10
                                                       --------------
                                                       141,375  1   2[221]
                                                       ==============

                                                          £     s. d.
  The sum standing to the credit of the Post Office
    Savings Banks Fund on the 31st Dec. 1865, at
    the National Debt Office, was                    6,582,329 11   7

  And on the same day there was in the hands of
    the Postmaster-General a balance of                  4,327  7  10
                                                     ----------------
        Making in all                                6,586,656 19   5
                                                     ================
        To meet a liability of                      £6,526,400  4   0
                                                     ================


    [221] Of this sum, which includes the Allowances to Postmasters,
    Letter Receivers, and others, for conducting Savings Bank
    business, 126,839_l._ 10_s._ 3_d._ was recovered from the
    Commissioners for the Reduction of the National Debt prior to 31st
    December, 1865, and 14,535_l._ 10_s._ 11_d._ has since been
    recovered from the Commissioners.

  General Post Office,}                       STANLEY OF ALDERLEY,
  March, 1866.        }                        _Postmaster-General_.

                      GEORGE CHETWIND,
                        _Receiver and Accountant General_.

                      A. C. THOMSON,
                       _Assistant-Controller of Post Office Savings
                         Banks_.



                                (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 respecting
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, which are here given in his Lordship's own
words, plainly show 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 depositors 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. During the first part of the present year the
business has increased in a still greater proportion. In the first
nine weeks of 1865, the number of deposits was 258,917, and 48,777 new
accounts were opened; in the first nine weeks of 1866, 331,027
deposits were made, and 58,472 new accounts were opened. "It is
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 expecting 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 was 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 officers by whom this Scheme 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 depositors entered the banks;
but even under such sudden and unexpected augmentations of business
the scheme of operations has been found to work well."


The following is a comprehensive Statement of the Business of POST
OFFICE SAVINGS BANKS from their commencement to the close of the Year
1865, of the Cost of that Business, and of the Funds in hand at the
close of each Year.

  +------------------------+--------------------------------------------------+
  |                        |                     PERIOD.                      |
  |                        +--------------------------------------------------+
  |                        |From     |From     |From     |From     |From      |
  |                        |16th Sept|31st Dec.|31st Dec.|31st Dec.|31st Sept.|
  |                        |1861, to |1862, to |1863, to |1864, to |1861, to  |
  |                        |31st Dec.|31st Dec.|31st Dec.|31st Dec.|31st Dec. |
  |                        |1862.    |1863.    |1864.    |1865.    |1865.     |
  |                        |         |         |         |         |          |
  +--+---------------------+---------+---------+---------+---------+----------+
  | 1|Number of Post Office|         |         |         |         |          |
  |  |  Savings Banks at   |    2,535|    2,991|    3,081|    3,321|     3,321|
  |  |  close of Period.   |         |         |         |         |          |
  +--+---------------------+---------+---------+---------+---------+----------+
  | 2|Number of Deposits   |         |         |         |         |          |
  |  |  received during    |  639,216|  842,848|1,110,762|1,302,309| 3,895,135|
  |  |  Period.            |         |         |         |         |          |
  +--+---------------------+---------+---------+---------+---------+----------+
  | 3|Total Amount of      |    £    |    £    |    £    |    £    |     £    |
  |  |  Deposits received  |2,114,669|2,651,209|3,350,084|3,719,017|11,834,979|
  |  |  during Period.     |         |         |         |         |          |
  +--+---------------------+---------+---------+---------+---------+----------+
  | 4|Average Amount of    |         |         |         |         |          |
  |  |  each Deposit       | £ s. d. |  £ s. d.|  £ s. d.|  £ s. d.|  £ s. d. |
  |  |  received during    | 3  6  2 |  8  2 11|  3  0  3|  2 17  1|  3  0  9 |
  |  |   Period.           |         |         |         |         |          |
  +--+---------------------+---------+---------+---------+---------+----------+
  | 5|Number of Withdrawals|         |         |         |         |          |
  |  |  during Period.     |   97,294|  197,431|  309,242|  407,412| 1,011,379|
  +--+---------------------+---------+---------+---------+---------+----------+
  | 6|Total Amount of      |    £    |    £    |    £    |    £    |     £    |
  |  |  Withdrawals during |  438,637|1,027,154|1,834,849|2,318,610| 5,619,250|
  |  |  Period.            |         |         |         |         |          |
  +--+---------------------+---------+---------+---------+---------+----------+
  | 7|Average Amount of    | £ s. d. |  £ s. d.|  £ s. d.|  £ s. d.|  £ s. d. |
  |  |  each Withdrawal    |   10  2 |  5  4  0|  5 18  8|  5 13  9|  5 11  1 |
  |  |  during Period.     |         |         |         |         |          |
  +--+---------------------+---------+---------+---------+---------+----------+
  | 8|Charges of Management|    £    |    £    |    £    |    £    |     £    |
  |  |  during Period.     |   20,591|   25,401|   45,856|   49,627|   141,375|
  +--+---------------------+---------+---------+---------+---------+----------+
  | 9|Average Cost of each |   d._   |   d.    |   d.    |   d.    |    d.    |
  |  |  Transaction, viz.  |   6-7/10|   5-8/10|   7-7/10|   6-9/10|    6-9/10|
  |  |  of each Deposit or |         |    [223]|    [223]|         |          |
  |  |  Withdrawal.        |         |         |         |         |          |
  +--+---------------------+---------+---------+---------+---------+----------+
  |10|Number of Accounts   |         |         |         |         |          |
  |  |  opened during      |  205,928|  185,934|  226,153|  239,686|   857,701|
  |  |  Period.            |         |         |         |         |          |
  +--+---------------------+---------+---------+---------+---------+----------+
  |11|Number of Accounts   |         |         |         |         |          |
  |  |  closed during      |   27,433|   44,760|   74,964|   98,725|   245,882|
  |  |  Period.            |         |         |         |         |          |
  +--+---------------------+---------+---------+---------+---------+----------+
  |12|Number of Accounts   |         |         |         |         |          |
  |  |  remaining open at  |  178,496|  319,669|  470,858|  611,819|   611,819|
  |  |  close of Period.   |         |         |         |         |          |
  +--+---------------------+---------+---------+---------+---------+----------+
  |13|Total Amount standing|    £    |    £    |    £    |    £    |     £    |
  |  |  to credit of all   |1,698,221|3,377,481|4,993,163|6,526,400| 6,526,400|
  |  |  open Accounts,     |         |         |         |         |          |
  |  |  inclusive of       |         |         |         |         |          |
  |  |  Interest, to close |         |         |         |         |          |
  |  |  of Period.         |         |         |         |         |          |
  +--+---------------------+---------+---------+---------+---------+----------+
  |14|Average Amount       |         |         |         |         |          |
  |  |  standing to credit,| £ s. d. |  £ s. d.|  £ s. d.|  £ s. d.|  £ s. d. |
  |  |  of each open       | 9 10 3  | 10 11 4 | 10 12 1 | 10 13 4 |  10 13 4 |
  |  |  Account at close   |         |         |         |         |          |
  |  |  of Period.         |         |         |         |         |          |
  +--+---------------------+---------+---------+---------+---------+----------+
  |15|Total Sum standing to|    £    |    £    |    £    |    £    |     £    |
  |  |  credit of Post     |1,659,032|3,328,182|4,995,663|6,582,329| 6,582,329|
  |  |  Office Savings     |    [222]|    [222]|    [222]|    [222]|          |
  |  |  Banks on Books of  |         |         |         |         |          |
  |  |  National Debt      |         |         |         |         |          |
  |  |  Commisioners at    |         |         |         |         |          |
  |  |  close of Period.   |         |         |         |         |          |
  +--+---------------------+---------+---------+---------+---------+----------+
  |16|Balance in hands of  |    £    |    £    |    £    |    £    |     £    |
  |  |  Postmaster-General |  35,692 |  44,413 |   5,522 |   4,327 |    4,327 |
  |  |  after allowing for |         |         |         |         |          |
  |  |  Charges of         |         |         |         |         |          |
  |  |  Management, at     |         |         |         |         |          |
  |  |  close of Period.   |         |         |         |         |          |
  +--+---------------------+---------+---------+---------+---------+----------+
  |17|Total Balance in     |    £    |    £    |    £    |    £    |     £    |
  |  |  hand, applicable   |1,694,724|3,372,595|5,001,185|6,586,656| 6,586,656|
  |  |  to payment of      |    [222]|    [222]|    [222]|    [222]|          |
  |  |  Depositors, at     |         |         |         |         |          |
  |  |  close of Period.   |         |         |         |         |          |
  +--+---------------------+---------+---------+---------+---------+----------+
  |18|Number of Old Savings|         |         |         |         |          |
  |  |  Banks and Post     |    3,157|    3,594|    3,659|    3,822|     3,822|
  |  |  Office Banks       |         |         |         |         |          |
  |  |  combined, at close |         |         |         |         |          |
  |  |  of Period.         |         |         |         |         |          |
  +--+---------------------+---------+---------+---------+---------+----------+
  |19|Number of Depositors |         |         |         |         |          |
  |  |  in Old Savings     |1,732,556|1,876,389|1,967,663|2,078,346| 2,078,346|
  |  |  Banks and Post     |         |         |         |         |          |
  |  |  Office Banks       |         |         |         |         |          |
  |  |  combined, at       |         |         |         |         |          |
  |  |  close of Period.   |         |         |         |         |          |
  +--+---------------------+---------+---------+---------+---------+----------+


    [222] These sums do not include the dividends accruing to the Post
    Office Savings Bank on the 5th January; that is, five days after
    the close of the account in each year.

    [223] The falling off in the cost per transaction during 1863 and
    the increase in that cost during 1864 are attributable to one and
    the same cause, viz., to the payment during 1864 of various
    charges properly belonging to 1863.


                           _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
     18 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 prescribed fine for default.

"The total sum insured at the present time is 60,874_l._, and the
gross annual premium income, exclusive of the sums received in single
payments, is 1,924_l._

"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 pregnant 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 10_s._ per 100_l._
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. Of the proposals
which have been accepted, 150 have been for the purchase of Immediate
Annuities, the amount of annuity purchased being 3,430_l._, and the
purchase money being 39,774_l._ Of the remainder, 15 were for the
purchase, by immediate payments, of Deferred Annuities, the amount of
deferred annuity purchased being 232_l._, and the amount of purchase
money paid down being 1,543_l._ 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_l._, and the amount of
purchase money annually payable being 759_l._ Of the 238 intending
annuitants, 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 Legislature, 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
proposal 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
established for the protection of the Government have hitherto proved
sufficient for their purpose; that the advantages 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."



        GOVERNMENT ANNUITIES AND INSURANCES GRANTED UNDER ACT
                      27 & 28 VICT. CAP. 43.

  An Account showing the Number and Amount of Sums received
    and paid, and the Number and Amount of Contracts granted
    by Her Majesty's Postmaster-General, under authority of
    the Act 27 & 28 Vict. c. 43, from the Commencement of
    Business on the 17th April, 1865, to the 31st December,
    1865, together with the Number and Amount of Contracts in
    existence on the 31st December, 1865, and the Amount paid
    for Charges of Management.


                               (I.)

  An Account showing the Number and Amount of Sums received
    and paid on Account of Government Annuity and Insurance
    Contracts from the Commencement of Business on the 17th
    April, 1865, to the 31st December, 1865.


     ------------------------------+------------------++
                                   |     RECEIPTS     ||
                   --              +-----+------------++
                                   | No. |   Amount   ||
     ------------------------------+-----+------------++
     To Cash received for the      |     |  £    s  d ||
       purchase of Annuities,      |     |            ||
       viz.:--                     |     |            ||
                                   |     |            ||
                  +---+------------+     |            ||
                  |No.|  Amount    |     |            ||
                  +---+------------+     |            ||
     For Immediate|   |   £    s  d|     |            ||
      Annuities   | 87|22,738  9  9|     |            ||
     For Deferred |   |            |     |            ||
       Annuities, |   |            |     |            ||
     Money not    |   |            |     |            ||
      returnable  | 27|   845  7 10|     |            ||
     Ditto, Money |   |            |     |            ||
       returnable |   |            |     |            ||
                  | 40|   497  7  6|  154|24,081  5  1||
                  +---+------------+     |            ||
     To Cash received for Fees on  |     |            ||
       Annuity Contracts           |     |   139 14  0||
                                   |     |            ||
     To Cash received from the     |     |            ||
       Commissioners for the       |     |            ||
       Reduction of the National   |     |            ||
       Debt for payment to         |     |            ||
       Annuitants:--               |     |            ||
                      +------------+     |            ||
                      |   £    s  d|     |            ||
     Gross            |   430  5  0|     |            ||
     Less Income Tax  |     0 16  8|     |   429  8  4||
                      +------------+     |            ||
                                   |     |            ||
     To Cash received on account of|     |            ||
       Contracts for the payment of|     |            ||
       Sums at Death               |1,076| 1,165 13  1||
                                   |     |            ||
                                   |     |            ||
                                   |     |            ||
                                   |     |            ||
                                   |    £|25,816  8  6||
     ------------------------------+------------------++

     ++------------------------------+------------------
     ||                              |   PAYMENTS
     ++              --              +-----+------------
     ||                              | No. |   Amount
     ++------------------------------+-----+------------
     ||By Cash paid to the           |     |   £    s  d
     ||  Commissioners for the       |     |
     ||  Reduction of the National   |     |
     ||  Debt for Investment on      |     |
     ||  Account of Sums received for|     |
     ||  the purchase of Annuities.  |     |23,046  8  9
     ||By Cash paid to Annuitants,   |     |
     ||   viz:--                     |     |
     ||                 +------------+     |
     ||                 |   £    s  d|     |
     ||Cash paid        |   423 13  4|     |
     ||Warrants issued, |            |     |
     ||  but not cashed |            |     |
     ||  at date        |     5 10  0|   33|   429  8  4
     ||                 +------------+     |
     ||By Cash paid to the           |     |
     ||  Commissioners               |     |
     ||  for the Reduction of the    |     |
     ||  National Debt for Investment|     |
     ||  on account of Premiums      |     |
     ||  received on Contracts for   |     |
     ||  Sums payable at Death       |     |   984  0  0
     ||                              |     |
     ||By Balance remaining to be    |     |
     ||  paid to the Commissioners   |     |
     ||  for the Reduction of the    |     |
     ||  National Debt on the 31st   |     |
     ||  December, 1865, viz.:--     |     |
     ||                 +------------+     |
     ||On account of    |   £    s  d|     |
     ||  Annuity        |            |     |
     ||  Contracts,     |            |     |
     ||  including Fees | 1,174 10  4|     |
     ||On Account of    |            |     |
     ||  Contracts for  |            |     |
     ||  Sums payable   |            |     |
     ||  at Death       |   181 13  1|     | 1,356  3  5
     ||                 +------------+     +------------
     ||                              |    £|25,816  0  6
     ++------------------------------+------------------


                               (II.)

  An Account showing the Number and Amount of Contracts
    entered into by Her Majesty's Postmaster-General from the
    Commencement of Business on the 17th April, 1865, to the
    31st December, 1865, and the Number and Amount of
    Contracts in existence on the 31st December, 1865.

  +------------------------------------------------------+-----------------+
  |                                                      |   CONTRACTS.    |
  |                           --                         +---+-------------+
  |                                                      |No.|   Amount.   |
  +------------------------------------------------------+---+-------------+
  |Contracts for Annuities granted from the commencement |   |   £    s. d.|
  |  of business on the 17th April, 1865, to the 31st of |   |             |
  |  December, 1865, viz.:--                             |   |             |
  |                                      +--+------------+   |             |
  |                                      |  | £     s. d.|   |             |
  |Immediate Annuities                   |87|2,100   0  0|   |             |
  |Deferred Annuities,                   |  |            |   |             |
  |  Money not returnable                |20|  438   4  0|   |             |
  |Deferred Annuities,                   |  |            |   |             |
  |  Money returnable                    |25|  511  10  0|132|  3,049 14 0 |
  |                                      +--+------------+   |             |
  |                                                      |   |             |
  |Contracts for Sums payable at Death granted from the  |   |             |
  |  commencement of business on the 17th April, 1865,   |   |             |
  |  to the 31st December, 1865                          |547| 40,649  2 4 |
  |                                                      |   |             |
  |Contracts for Annuities in existence on the 31st      |   |             |
  |  December, 1865, viz.:--                             |   |             |
  |                                      +--+------------+   |             |
  |                                      |  | £     s. d.|   |             |
  |Immediate Annuities                   |87|2,100   0  0|   |             |
  |Deferred Annuities,                   |  |            |   |             |
  |  Money not returnable                |20|  436   4  0|   |             |
  |Deferred Annuities,                   |  |            |   |             |
  |  Money returnable                    |25|  511  10  0|132|  3,049 14 0 |
  |                                      +--+------------+   |             |
  |                                                      |   |             |
  |Contracts for Sums payable at Death in existence on   |   |             |
  | the 31st December, 1865                              |544| 40,349  2 4 |
  +------------------------------------------------------+---+-------------+


                            (III.)

  An Account showing the Amount paid for the Charges of Management
    from the Commencement of Business on the 17th April, 1865 to the
    31st December, 1865.

    +------------------------------------------------+-----------+
    |                                                |   £  s. d.|
    | Salaries of Officers                           | 159  0 10 |
    | Stamps on Policies                             |  32 10  0 |
    | Fees to Medical Officers                       |  13  7  6 |
    | Incidental disbursements, including Travelling |           |
    |   Charges                                      |   7  3  8 |
    | Postage                                        | 123  4  5 |
    |                                                +-----------+
    |                                               £| 335  6  6 |
    +------------------------------------------------+-----------+



                              INDEX.


                                 A.

  Acknowledgement of deposits in Post Office Banks, 329-331.

  Acts of Parliament relating to Savings Banks, Post Office Banks,
  Government Annuities, &c. See _Appendix_.

  Althorp, Lord, moves for a bill to grant Annuities through the medium
  of Saving Banks, 69;
    replies to Mr. Attwood, 73.

  Annuities, Government: first proposals for, 69; 347;
    alteration of the law relating to, 152;
    a new scheme is proposed in 1864, 348 _et seq_;
    Mr. Gladstone introduces a bill into Parliament concerning, 350;
    is discussed and carried, 353-362;
    regulations for working the measure, 362;
    how to purchase, 372-4;
    progress of the new measure of, 375-7.

  Attwood, Mr. Thomas, M.P. opposes legislation for Savings Banks, 71;
    speaks against Savings Banks, 72; 82.

  Auchterarder Savings Bank, failure of the, 137;
    particulars of this fraud, 193.

  Auditors, Government proposals for, 146.

  Australian Government Banks, 344.

  Ayrton, Mr., M.P. on Savings Banks, 162;
    assists in bringing in a bill to regulate Savings Banks, 179;
    assists in bringing in the Consolidation Act, 182;
    respecting his connexion with Government banks, 277;
    strongly opposes the Post Office Bank Bill in Committee, 303;
    presides at a working man's meeting in London in opposition to the
      Government Annuities Bill, 359;
    opposes it in the House, 360.


                                 B.

  Baines, Mr. E., M.P. advocates Mr. Sikes's proposals for Post Office
  Banks, 286;
    again, 301.

  Bath, the Provident Institution of, origin of, 25.

  Benefit Societies: compared with Savings Banks, 85; 86;
    disadvantages of, 37;
    unsound character of many of them, 353-5;
    oppose the Government Annuities Bill, 354, 356;
    on compulsory payment to, 391 _note_.

  Bentham, Jeremy, proposes "Frugality Banks," 271;
    provisions of his scheme, 271-2.

  Bentinck, Lord George, speaks on Savings Banks, 134.

  Bilston Savings Bank, frauds in, 208 _et seq_;
    the _Times_ on this fraud, 235.

  Birmingham Savings Bank, 324.

  Boodle, Mr., represents Savings Bank managers, 166;
    again, 173;
    gives evidence before the Committee of 1858, 173 _note_;
    on systems of book-keeping, 261;
    on confidence in trustee's names, 385 _note_.

  Book-keeping, different systems of, 260;
    difficulty of effecting changes in systems of, 261.

  Branch Banks, not in favour with Savings Bank managers, 286.

  Bright, Mr., M.P. in favor of Government paying defrauded depositors,
  142;
    on Government security, 232.

  Brighton Bank fraud, 204 _et seq_.

  Buckingham, Mr. J. Silk, on compulsory savings, 390-1.

  Building Societies compared with Savings Banks, 382-3.

  Bullar, Mr. John, proposes Postal Banks, 280 _et seq_; 343.

  Business done in Post Office Banks, amount of, 313 _et seq_;
    nature of, 318 _et seq_.


                                 C.

  Canterbury Bank fraud, 218 _et seq_.

  Chadwick, Mr. Edwin, on Post Office Banks, 311.

  Chalmers, Dr., on Savings Banks, 105;
    on the Interest Rate, 341.

  Chetwynd, Mr., proposes a scheme for applying Savings Banks to the Post
  Office machinery, 292;
    the scheme is recommended by Mr. Scudamore, 293;
    adopted in full, 294;
    is appointed Controller of the Post Office Banks, 313;
    on the Government Annuities scheme, 349.

  Clubs at Public Houses, 37.

  Cobbett, William, M.P. on Mr. Rose, 46, 81;
    speaks of the bubble of Savings Banks, 81.

  Committees on Savings Banks: one is appointed on Irish Banks in 1849,
  130;
    reappointed in 1850, 135;
    one is appointed to go over the whole subject in 1858, 164;
    report of proceedings of Committee on 1858, 165 _et seq_;
    recommendations of the same, 169-170;
    one is appointed on the Annuities scheme, 361.

  Compensation to Savings Bank officials, 328.

  Compulsory enactments to secure frugality, 50, 389 _et seq_.

  Consolidation Act of 1863, 182;
    clauses of the Act, _Appendix_ (B) 400 _et seq._

  Co-operative Societies and Savings Banks, 382-3.

  Corporation Savings Banks, _Appendix_, 410.

  Cost of transactions in Post Office Banks, 305; 334-5.

  Craig, Mr., of Cork, on systems of book-keeping, 260-1;
    objects to the taking of small deposits, 264.

  Crossley, Sir Francis, advocates Mr. Sikes's plan, 298.

  Cuffe Street Bank fraud: early history of this bank, 133;
    discovery of the actuary's defalcations, 115;
    subsequent management of the bank, 116;
    closing and its results, 118;
    a Committee is appointed concerning, 129-30;
    reappointed, 135;
    depositors are compensated by Government, 142.


                                 D.

  Declaration, origin of the subscribing of the Savings Banks, 59;
    is an unnecessary limitation, 342.

  Defects of Savings Bank system, 266-8;
    of the Post Office Bank system, 342-4.

  Deposits: limit of the amount of, 53;
    altered in 1824, 59;
    average amount of, in Post Office Banks, 320;
    acknowledgment of, in Post Office Banks, 330-1;
    limit of the total amount of, in Post Office Banks unnecessary, 342-3;
    may be made available for paying premiums on Government Life
      Insurances, 367.

  Depositors: defrauded, several members speak in behalf of, 150;
    number of, in Post Office Banks, 315;
    character of, in the same, 319;
    analysis of, in the same, 321;
    increase of, in the same, 320;
    number of Post Office Banks failing to obtain, 321;
    how they must proceed in Post Office Banks, 329 _et seq._

  Disraeli, Mr. M.P. speaks of Savings Bank legislation, 155.

  Distribution of Savings Banks, the irregular, 236.

  Douglas, Mr. M.P. introduces a bill to regulate Scotch Savings Banks, 57.

  Duncan, Dr. Henry, of Ruthwell: Founder of Savings Banks, 28;
    early life, 29;
    literary pursuits, 30;
    proposes Parish Banks, 32;
    establishes the Ruthwell Bank, 33;
    assists in the establishment of other banks, 33-4;
    writes an Essay on Savings Banks, 34;
    his death, 57;
    advises Government encouragement and protection, 57;
    corresponds with Mr. Douglas on the subject, 58.


                                 E.

  "Edinburgh Review," 1807, on Mr. Whitbread's proposals, 24;
    on Savings Banks, 28, 380.

  Edinburgh Savings Bank, the original 40-43; many banks are formed
    on its model, 41.

  Education, improvement in systems of, 6.

  Employers of labour: recommended to consider a scheme of Life
  Insurance at work at the Post Office, 369;
    how they may assist their workmen in the same way, 370-1;
    their duty to their workmen, 386;
    their influence, 389-90.

  Equalization of interest in different banks, 339-40.

  Estcourt, Mr. Sotheron, and Savings Banks, 162-3;
    is appointed Chairman of Committee of 1858, 164;
    speaks on failures in legislation, 176;
    assists in bringing in a bill, 179;
    opposes Post Office Banks, 300;
    on Government Annuities scheme, 359; 361-2.

  Exeter Savings Bank, establishment of, 26.

  Expenses of different banks, 264.


                                 F.

  Facilities, absence of, in Savings Banks, 239;
    not proportioned according to population, 240;
    increase of, 371.

  Farquhar, Sir Minto, on the Government Annuities Bill, 359; 362.

  Financial crisis of 1826: description of, 92;
    consequences of the, 93, 94.

  Fletcher, Rev. H. S. and his frauds at Bilston, 208 _et seq_.

  Frauds in Savings Banks: Cuffe Street, 111 _et seq_;
    Hertford Bank, 118;
    Tralee Bank, 184 _et seq_;
    Killarney Bank, 191 _et seq_;
    Auchterarder Bank, 193-4;
    Rochdale Bank, 203-4;
    Brighton Bank, 204 _et seq_;
    Mr. W. H. Grey on, 207-8;
    at Newport, Isle of Wight, 208;
    Bilston Bank, 208 _et seq_;
    Canterbury Bank, 218 _et seq_;
    return of, 223;
    Worcester Savings Bank, 225 _note_;
    the remedy for, 225;
    the result of, 231.

  Friendly Societies: benefits of, compared with those from Savings
  Banks, 69; 85-6;
    disputes between, 80;
    oppose the Government Insurance measures, 351;
    unsound societies, 353;
    Mr. Gladstone on, 354-5;
    failure of, 356;
    defended by Mr. Sheridan, 357.

  Frugality Banks proposed by Bentham, 271-2.


                                 G.

  Gladstone, Mr., his connexion with the subject, 156;
    introduces a bill into Parliament in 1853, 157;
    withdraws it, 158;
    obtains leave to introduce further measures in the session of 1855,
      158;
    speaks on the Government use of Savings Bank money, 159;
    introduces a bill relating to the investment of the same, 175;
    the bill is lost, 177;
    re-introduced and carried, 181;
    his connexion with Post Office Savings Banks, 179-80;
    considers Mr. Sikes's proposals, 288;
    urges the preparation of some such plan on the Post Office
      authorities, 291-2;
    brings in a bill to establish Post Office Banks, 294 _et seq_;
    speaks on the second reading, 301;
    again, in Committee, 304;
    answers objections to and questions concerning the bill, 305-6;
    as author of the bill, 312;
    on the interest given in Post Office Banks, 340;
    introduces his Annuities and Insurance scheme, 350;
    defends his plans in a long speech, 353-7;
    consents to the appointment of a Select Committee, 361;
    carries his measure through the House, 362.

  Göschen, Mr., M.P., on the Government Annuities Bill, 360, 361.

  Goulburn, Mr., incident in connexion with his official life, 66;
    opposes the reduction of the interest rate, 78;
    brings in a bill to amend the law, in 1844, 122;
    proposes a reduction of the interest rate, 124;
    assists the whigs in evading a full inquiry, 137;
    on Savings Bank money, 172.

  Government Banks, proposals for, chap. VIII. 269 _et seq_.

  Government and Savings Banks--its loss from Savings Banks, 74, 146;
    its gain from the use of Savings Bank money, 174; 268;
    makes good the loss from fraud, in one case, 141.

  Government employés and provident habits, 387-8.

  Greaves, Samuel, and the Canterbury Bank fraud, 218 _et seq_.

  Guarantee Fund, first proposed by Mr. Sikes, 258.


                                 H.

  Habits of workmen, improvements in, 10; 385;
    still need improvement, 390.

  Hamburg, Savings Banks in, 18.

  Hamilton, Rev. G. H. proposes Postal Banks, in 1852, 278;
    proposes that the Limitation clause be extended, 343.

  Hancock, Dr., writes on Savings Banks, 235;
    referred to in connexion with, 256-7;
    his connexion with Postal Banks, 275-6;
    approves Mr. Sikes' plan, 288.

  Hatton, Mr., a witness before the Committee of 1858, 165;
    investigates the Reading and Brighton frauds, 204; 206.

  Haworth, George, and the Rochdale frauds, 195 _et seq_.

  Herbert, Mr. H. A., M.P., speaks upon Irish Bank frauds, 157-9;
    moves a resolution disapproving the conduct of the Government in
      relation to Savings Banks, 154.

  Hertford Savings Bank: origin of the, 27;
    defalcations in, 118;
    account of the fraud, 119;
    discussion in the House of Lords concerning the fraud, 120;
    again, 310.

  Hill, Sir Rowland, on Mr. Sikes's plan, 286; 301.

  Hindrances to the usefulness of Savings Banks, 105;
    frauds in Savings Banks, chap. VI. p. 183 _et seq_.

  Hume, Mr. Joseph: his first speech on Savings Banks, 61;
    calls for a return, 63;
    speaks of the Government loss from Savings Banks, 62, 76;
    on the Surplus Fund, 64;
    speaks on the rate of interest, 74; 129;
    anecdote of, in connexion with Sir R. Peel, 129;
    speaks in favour of Sir Charles Wood's bill of 1850, 149-50.


                              I. J. K.

  Improvement in the social habits of the working classes, 10; 385.

  Improvidence of many classes, 13; 390.

  Increase of Savings Bank business, 1825 to 1840, 97;
    of depositors and deposits in Post Office Banks, 315-7.

  Inspection of depositors' books, 146.

  Insurance, Government: early objections to the plan of, 153;
    later objections to, 351;
    bill to regulate, 349 _et seq_;
    carried, 362;
    features of, and details of the measure, 362;
    special advantages of, 363 _et seq_.

  Interest given by Savings Banks: first rate of, 53;
    attracts the richer classes, 54;
    proposals to reduce the rate, 60; 75-6;
    the _Westminster Review_ on, 76;
    Mr. Spring Rice on, 77;
    the consequences of the reduction of 1828, 95;
    fresh proposals to reduce the rate, 147;
    Savings Bank managers, differ on the question, 262;
    in Post Office Banks, 338 _et seq._;
    Dr. Chalmers on, 341;
    Mr. Mill on, 341;
    shown by an interesting example, 381-2;
    interest given by Post Office Banks, 338-340.

  Investment of Savings Bank money: an early dispute concerning the, 53;
    the mode of, is explained to the Committee of 1858, 170-1;
    Savings Bank managers object to the mode, 173;
    benefits to the Government of present arrangements, 174.

  Irish Savings Banks: early banks, 44;
    at first beneficial to the country, 112;
    disastrous effects of the frauds in, 112; 118;
    Committees of Inquiry respecting, 130; 136;
    a bill is passed to amend the law relating to, 151;
    the frauds cause a breaking up of Irish banks, 236;
    number of Post Office Banks failing to obtain depositors in Ireland,
      322.

  Killarney Bank fraud, 191 _et seq_.


                                 L.

  Legislation on Savings Banks: early measures of, 45 _et seq_;
    Savings Bank Acts are consolidated, in 1828, 65;
    Mr. Goulburn's bill, 123;
    amendment is proposed, in 1848, 133-4;
    Act is made to apply to Ireland only, 135;
    Sir Charles Wood introduces the Amendment Act of 1850, 139-40;
    shown to be much required, 141;
    is withdrawn, 151;
    an Act is passed to amend the law on Government Annuities, 153;
    Sir G. Lewis introduces the Government bill, 160;
    withdraws it, 164;
    a Committee of Inquiry is appointed, in 1858, 164-5;
    finding of the Committee, 168-9;
    Mr. Gladstone introduces a bill to provide for the investment of
      Savings Bank money, 175;
    withdrawn, 177;
    re-introduced and carried, 182;
    the Consolidation Act is introduced and carried, 182;
    Mr. Gladstone brings in and carries his bill to establish Post
      Office Banks, 294 _et seq_.

  Lewis, Sir G. C., re-introduces the Government bill, 159;
    replies to objections, 163;
    withdraws it, 164;
    sees Mr. Sikes on Savings Bank reforms, 256.

  Limit of Deposits: is altered, 53;
    again altered, 59;
    proposals to alter, 124;
    fresh proposals to alter, 147;
    in Post Office Banks, 342-3.


                                 M.

  Maitland, Mr., of Edinburgh, 258 _note_.

  Managers of Savings Bank: combine to oppose Mr. Goulburn's Act, 128;
    meet in London to oppose Sir C. Wood's scheme, 147-9;
    are examined before the Committee of 1858, 165;
    object to Government using their money, 173;
    differences of opinion amongst, 260-2;
    many object to take small deposits, 264;
    differ as to notices of withdrawal &c., 265.

  Manchester Savings Bank, 240-1;
    compared with the Liverpool Savings Bank, 242.

  Masters of Workmen: deducting part of the wages of their operatives
  for investment in Savings Banks, 272;
    their attention directed to the regulations for Government Annuities
      and Insurance, 363;
    their duties, 385;
    how they may assist their workmen, 387-8.

  Mechanics' Institutes, and Savings Banks, 253.

  Military Savings Banks, 243 _et seq._;
    Acts regulation, 414 _et seq._

  Money Order Office: great progress of the, 285;
    assists in the business of Post Office Banks, 330; 333;
    all the offices to be Post Office Banks and agencies for the
      Annuities and Insurance business, 313; 375.

  Money of Savings Banks: security of, 56;
    Mr. Gladstone speaks of the Government use of, 158;
    benefits derived from the use of, 174.

  Monteagle, Lord, of Brandon examined before the Committee of 1858, 167;
    opposes the Post Office Bank bill, 303;
    makes a "protest" against it, 310.


                                 N.

  National Debt Office, 155;
    mode of proceeding in, with reference to Savings Bank matters, 170.

  Naval Savings Banks: proposals for, _Appendix_, 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 Liverpool Savings Bank, 242.

  Newport, Isle of Wight, fraud in Savings Bank, 208-9.

  Nineteenth Century, the century of the working man, 23.

  Number of Savings Banks inadequate, 238;
    of hours during which they were open in 1861, 239;
    of Post Office Banks, 314;
    of old banks which have transferred their business to the new banks,
      325 _et seq_.


                                 O.

  Officials of Savings Banks, the change from paid to unpaid, and
  results, 143;
    compensation to, on the breaking up of institutions, 328.

  Opposition to Government measures by Savings Bank managers, 128;
  141-9; 163-4; 177-80;
    by Insurance Societies and Benefit Societies, 352; 360.


                                P. Q.

  Pallmer, Mr., M.P., proposes the first Savings Bank Consolidation Act, 65.

  Parochial relief to Savings Bank depositors, 52;
    depositors compared with the number of persons in receipt of, 230.

  Pease, Mr. Joseph, M.P., on Savings Banks, 71.

  Penny Savings Banks, 246 _et seq._;
    advantages of, 249.

  Poor Laws and Savings Banks, 49-50;
    the result of Savings Banks on, 98;
    shown by Table, 100-1;
    the Amendment Act of 1834, 102; 389.

  Post Office and Life Insurance, 369-70;
    employés of, provided for by other provident measures, 387-8.

  Post Office Savings Banks: in relation to the frauds in ordinary
  Savings Banks, 216-17; 222;
    their present and future position, 273;
    _Handy Book_ on, 274 _note_;
    origination of the principle of, 274;
    persons wrongly credited with the origination of, 275-7;
    banks in connexion with the Money Order Office first proposed by
      Rev. G. H. Hamilton in 1852, 278;
    next by Mr. Bullar of the Temple, 280 _et seq._;
    Mr. Sikes, of Huddersfield, proposes Post Office Banks, 284;
    the nature of his proposals, 284-5;
    addresses Mr. Gladstone in a printed letter, 287;
    Mr. Gladstone's reply, 288;
    the proposals are referred to the Post Office, 289;
    important objections to them, 291;
    Mr. Chetwynd proposes an entirely new scheme, 292;
    is recommended by Mr. Scudamore, 293;
    adopted by Lord Stanley of Alderley, 294;
    Mr. Gladstone carries a bill through the House of Commons to
      establish the banks, 294 _et seq._;
    Lord Stanley of Alderley carries it through the Lords, 306 _et seq._;
    receives the Royal Assent, 310;
    the benefit of the banks to the country, 312;
    their success, 313;
    their introduction into the country, 313;
    the amount of business done in, 313 _et seq._;
    nature of the business done in, 318 _et seq._;
    number of, at different times, 314-15;
    statistics relating to, 315 _et seq._;
    increase in the number of depositors in, 317;
    have a special public, 319;
    their progress where they were not supposed to be wanted, 320;
    character of the new depositors in, 321;
    result of, on old banks, 322 _et seq._;
    return of old banks which have transferred their business to, 325
      _et seq._;
    mode of transacting business in, 328 _et seq._;
    information on the subject of, where obtainable, 329 _note_;
    as to depositing money in, 329-32;
    as to withdrawing money out of, 333;
    internal arrangements of chief Savings Bank, 333-4 _note_;
    cost of transactions in, 334-5;
    the peculiar advantages of, 335 _et seq._;
    how affected by frauds, 336;
    security, 335;
    despatch, 336;
    secrecy, 337;
    engage to take small sums, 338;
    rate of interest in, 338 _et seq._;
    Government Annuities scheme, an offshoot of, 350; 360;
    assist depositors in the matter of Government Annuities and
      Insurance, 367;
    Act regulating, _Appendix_ 416 _et seq._;
    further progress of, _Appendix_ 430.

  Pratt, Mr. John Tidd: appointed certifying barrister, &c. of Savings
  Banks, 67;
    his connexion with the Cuffe Street bank, 117;
    urges the reduction in the limit of deposits, 124;
    his powers are enlarged, 125;
    is blamed on account of Irish banks, 136; 139;
    exonerated by a Committee of Inquiry, 140;
    gives evidence before the Committee of 1858, 165;
    is consulted as to the Consolidation Act, 182;
    makes awards in the Tralee bank frauds, 191;
    in the Killarney case, 193;
    attends at Bilston on account of the frauds there, and explains
      them, 213-15.

  Preliminary Savings Banks, 253-4.

  Progress of Savings Banks: in their earlier stages, 89;
    shown by Table, 91;
    shown by Table, 97;
    shown by Table, 227;
    rate of, at different periods, 229;
    of Post Office Banks, 313 _et seq._;
    progress of the additional measures, 375-7.

  Progress of the country, between 1824 and 1840, shown by statistics, 103;
    shown again by statistics, 230-1.

  Provident habits, increase of, 99;
    importance of cultivating, 378-80;
    masters of workmen should help to cultivate, 386-7;
    want of among large numbers, 390.

  Provisions of the first legislative enactment on Saving Banks, 52-3;
    of the first Consolidation Act, 67-8;
    of the first bill to grant Annuities, 70;
    of Mr. Goulburn's Act of 1844, 127;
    of Sir Charles Wood's bill of 1850, 145 _et seq._;
    of the Government Annuities and Insurance scheme, 364, _et seq._;
    of the Acts at present in force with regard to Savings Banks, Post
      Office Banks, Annuities, and Government Insurance, _Appendix_.

  _Quarterly Review_, on Dr. Duncan, 30-31;
    on the prosperity of the country in 1826, 92;
    on the progress of Savings Banks, 80;
    makes proposals for a system of banks, 273-4;
    on compulsory investment of workmen's earnings, 389;
    on Co-operative Societies, 383 _note_.


                                 R.

  Rates of Interest: proposals to reduce the, 60; 75-6; 147;
    difference of opinion on the question, 262;
    different in different banks, 263;
    in Post Office Banks, 338 _et seq_; equalization of, 340.

  Reading Bank fraud, 203-4.

  Reform, agitation of 1831 & 2, 96;
    its consequences on Savings Banks, 98.

  Reynolds, Mr., M.P., speaks on the Dublin Bank fraud, 136;
    proposes and carries a Committee of Investigation in 1849, 138.

  Rice, Mr. Spring, defends the rate of interest given, 77;
    opposes Mr. Hume, 78;
    gives some interesting statistics on the matter of Savings Banks,
      78. (_See_ Lord Monteagle).

  Rochdale bank fraud, 195, _et seq_.

  Roebuck, Mr., M.P., on the Government Annuities bill, 385.

  Rose, Right Hon. George, establishes the Southampton Savings Bank, 26;
    Cobbett's attack upon him, 46-7;
    introduces the first Savings Bank bill, 47;
    re-introduces it the year after, 49.

  Rural districts, Savings Banks in, 109.

  Ruthwell Bank: established by Dr. Duncan, 31 _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 progress of the country, 1824 to 1840,
      104;
    their merits disputed, 106-7;
    frauds in, Chapter VI. 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 relating to the ten principal, 267;
    the principal defects of the Savings Bank system, 266-8;
    results of Post Office Banks on, 322 _et seq._;
    list of those transferred 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, _Appendix,_ 400 _et seq_.

  Scotch Savings Banks: early Acts relating to, 57-8;
    the Consolidation Act of 1828 extended to, 74.

  Scudamore, Mr., reports on Mr. Chetwynd's plan of Post Office Banks,
  293;
    on a scheme for working Government Annuities, 349;
    superintends the arrangements for introducing the measure, 362;
    devises a plan for assisting Post Office employés to insure their
      lives, 369.

  Seamen's Savings Banks, 245-6;
    Act regulating, 412-13.

  Secrecy in connexion with Post Office Banks, 337.

  Security of Savings, the most important consideration, 51;
    erroneous impression as to Government security, 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 particulars of his life, 250 _et seq._;
    proposes Preliminary Banks, 253;
    writes a pamphlet called "Good Times," 255;
    addresses Sir G. C. Lewis on Savings Bank reforms, 256;
    his recommendations, 257-8;
    Government Banks, 274;
    proposes Post Office Savings Banks, 283 _et seq._;
    addresses Mr. Gladstone on the subject, 287;
    defects of Mr. Sikes's plan, 291;
    supports the Government scheme, 301.

  Slaney, Mr., M.P., on Savings Banks, 73; 151.

  Smith, Rev. Thomas, of Wendover, establishes on 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 the 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 Government 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, Government Annuities, &c.
      _Appendix_, 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 applied to compensate Savings Bank officials, 328.


                              T. U. V.

  Taxation, removal of, 4.

  Taylor, Mr. E. of Rochdale, is examined before the Committee of 1858,
  196; 199;
    writes a pamphlet arising out of the Rochdale frauds, 233;
    on 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. _Appendix_ 417.

  Treasurers, Government proposals for, 145.

  Trust accounts, legislation on, 125.

  Trustees, Liability of: 60-61;
    unsatisfactory state of the law regarding, 111;
    mentioned in connexion with the Hertford Bank fraud, 120;
    legal decision on, 123;
    Sir C. Wood attempts to regulate the, 132.

  Vansittart, 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_.

  Wendover, and early bank at, 20.

  Whitbread, Mr., M.P., introduces his Poor Law bill, 21;
    proposes a Poor's Fund and Poor's Insurance Office, 23;
    further reference to his proposals, 270; 346;
    provisions of his measures. (See _Appendix_ A).

  Wilberforce, Mr., on Savings Banks, 50.

  Willoughby, Sir Henry: opposes Sir 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 bringing 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 Cuffe 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, 324; 385;
    like to be advised, 386;
    duty of employers to, 386-8.


LONDON: PRINTED BY R. CLAY, SON, AND TAYLOR



                      *     *     *     *     *



Transcriber's note:

Missing letters were added to incompletely printed words.

Punctuation was made consistent.

Italic marking was removed from abbreviations for shillings and pence
in table column headers.

Footnotes were numbered sequentially and moved to the end of the
chapter in which they occur. Footnote 49 refers to the table following
the anchor. The table was moved to fall between paragraphs, rather
than interrupt the paragraph. Footnote 56 refers to Table 3.

Very wide tables were split into sequences. Two table numbers were
standardized to Arabic. A key code for column headers was added to the
first table in Chapter IX.

Other changes:

  two instances of 'artizan' were changed to 'artisan'
  two instances of "i. e." changed to "i.e."
  'Rotherdam' changed to 'Rotherham' ... Guest and Chrimes, Rotherham.
  removed _l_ from '5_l_ percent' ...higher rate of 5 per cent....
  space removed from 'sm all' ... investment of small surpluses,...
  italics removed from abbreviations for shillings and pence, in tables.
  'Monquhilter' changed to 'Monquhitter' in the table in Chapter VI.
  'pamphet' changed to 'pamphlet' ... of a pamphlet entitled ...
  'gnee' changed to 'gone' ... to have gone so far,...
  index entry for Post Office Savings Banks:
     'busi-' changed to 'business' ... nature of the business done in ...
     'effected' to 'affected' ... how affected by frauds ...





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