The post office and its story

by Edward Bennett

If he is in urgent need of any sum not exceeding £10 he can, instead of forwarding by post a notice of withdrawal, telegraph for the money to the Head Office, and instructions will be sent by telegram to the local postmaster to pay him on production of his book and proof of identity. In out-of-the-way villages the paying officer is often a small tradesman who has a limited vocabulary and does not readily grasp the meaning of his instructions from headquarters. The meaning of the word “identity” was evidently misunderstood by one postmaster, who replied to the Head Office after paying money to a depositor, “The postmaster is quite satisfied with the depositor, and finds no identity in him whatever.” I cannot imagine to what ignominious examination the depositor was subjected, but as he was paid his money without establishing his identity, I presume he as well as the postmaster was satisfied.

A depositor can also purchase an Immediate or Deferred Annuity through the Post Office Savings Bank, and payments are made to him at his local post office. He can insure his life, and his premiums are paid by deductions from his deposit account. But this cannot be said to be a prosperous business. The Post Office is at a disadvantage compared with more popular Industrial Insurance Societies because of its steady refusal to employ canvassers.

Broadly speaking, these represent the chief advantages of an account in the Post Office Savings Bank, and the great principle which underlies the whole of the undertaking is that every transaction, in whatever corner of the United Kingdom it takes place, has to be registered at the Head Office in London. Every depositor's account is entered in a ledger, and the account must correspond exactly with his deposit book.

The average cost to the Department of every transaction is now about 5d., and it will readily be seen that after payment of 2½ per cent. interest, and allowing for thousands of small deposits and withdrawals, there is not much room for profit to the Government out of the business. For the funds of the Savings Bank are invested in Consols, and the reduction in the rate of interest on Consols from 3 per cent. to 2¾ per cent. and again to 2½ per cent. has seriously affected its revenue-producing capacity. But previous to 1896 a different tale was annually told, and the total surplus up to that year amounted to £1,598,767. Then in the years immediately preceding the South African War, the price of Consols rose considerably above par, and the day of annual deficits began. A slight profit was again made in the years 1900-1902, but the rate of interest on Consols was then reduced to 2½ per cent., and there has been no appreciable recovery since. No Government seems inclined to make the obvious but unpopular move of reducing the interest allowed to depositors.

There is, however, another way of looking at the matter, which perhaps disposes us less to insist on the Department being managed entirely as a revenue-producing institution. The advantages to the public outweigh the comparatively small annual loss which is now sustained—the loss in 1909 was £50,481—and the primary object of the founders of Savings Banks was benevolence. The Post Office Savings Bank makes no such claim, but it does aspire to be a convenience to the people of this country.

The depositors are drawn from all classes of the country. Though originally intended for the benefit of the working classes, the conveniences provided appeal to almost everybody. The Post Office is always at hand in every village or town to receive small sums. Cheques are accepted for deposit, and it is found that many people use their accounts chiefly as a means by which they can dispose of crossed cheques received by them.

At the back of this huge undertaking is the credit of the nation: there is complete security for every depositor, and it is difficult to conceive of a run on the Savings Bank, although a very large number of the depositors are of that class which most readily succumbs to a panic.

The Head Office is at Blythe Road, West Kensington, and the size of the building can be imagined when I say that the staff consists of 3263 persons, of whom 1826 are women. The Ledger Branch, in which every depositor's account is kept, is managed entirely by female clerks. The Correspondence and Account Branches are in the hands of the men clerks, and to them falls the duty of directing and advising the depositors as to their transactions. Much of the work provides an admirable index of the ways of the British people. It has been said that a man lays by money for a rainy day, but the experience of the Controller of the Post Office Savings Bank is that he more often lays money by for a fine day. Large sums are annually deposited, only to be withdrawn at the different Bank Holidays. At Christmas time the largest amounts are usually withdrawn, and then immediately afterwards, during the first weeks of January, under the influence of the good resolutions which are usually formed at this period, vast sums are deposited, and the largest number of new accounts are opened.

To the outsider the business of the Department may seem to consist mainly of the simple work of receiving and paying away money, but the correspondence with the public on matters arising out of their accounts is a huge item in the day's work. Correspondence is necessary on such subjects as depositors insane, depositors abroad, depositors married, husbands' claims, depositors deceased, lost deposit-books, fraudulent withdrawals, and “depositors apprehensive.” The difficulties and perplexities of the British public on the subject of money are known to no person more fully than the Controller of the Post Office Savings Bank. He is sometimes tempted to wonder what are the benefits achieved by the Compulsory Education Acts. For instance a depositor writes: “I received from your General Post Office a paper containing all about Stock, and I do not quite understand it, whether it is for land, corn, or silk stuffs. As I am taking up in it will you kindly write and let me know.” Many farmers who are familiar only with one application of the word “Stock” have desired to make purchases of cattle through the medium of the Post Office. And one lady who had exceeded the amount allowed in her deposit account was asked if she would like to invest the excess in Stock, and she replied regretfully that her garden was already full up, and she had no room for more.

A depositor who had presumably suffered from recent fluctuations of price in the Stock market wrote a letter to the Controller and addressed the envelope: “The Roleing Stock Department, General Post Office.” It was delivered in the first place, of course, to the Stores Department, General Post Office.