The ubiquitous swindler was not long in taking advantage of the telegraphic money order to ply a profitable trade. His chief resorts are Benares, Rameswaram, Tripati and the other great places of pilgrimage in India; his victim is generally some unfortunate pilgrim, who is only too anxious to meet an obliging friend willing to act as a guide and adviser in one of the sacred cities, and the procedure adopted is always the same. The swindler acts the part of the kind stranger and finds out all the details of the pilgrim's family. He then goes to the local post office, represents himself to be the pilgrim and sends a telegram to his victim's relations to say that he has lost his money and wants a certain sum at once. So confiding are the people of India that it is very seldom that a request of this kind does not meet with an immediate response, and the swindler, by waiting a couple of days during which he takes good care to ingratiate himself with the post office officials, walks off the richer by a considerable amount. The earlier reports of the Post Office on the telegraphic money order system abound in cases of the kind, and very stringent measures were adopted to put a stop to the practice. Identification of payees by well-known residents of the neighbourhood was insisted upon, and a payee of a telegraphic money order had to prove his claim and give satisfactory evidence of his permanent address. Despite all precautions, the telegraphic money order swindler is still common enough and manages to get away with large sums from time to time.
Probably in no country in the world is the poor man so dependent upon the Post Office for the transmission of small sums of money as in India. The average value of an inland money order in 1917-18 was Rs.18, and it is not infrequent for amounts as small as Rs.5 to be sent by telegraphic money order. The reason undoubtedly is the facility with which payment is made and the absolute confidence which the Indian villager places in the Post Office. An Indian coolie in Burma, who has saved a few hundred rupees and wants to return to his village, seldom carries the money on his person, and he has a strange mistrust for banks; they are much too grand places for him to enter. He usually goes to a post office and sends to himself a money order addressed to the post office nearest his own home and then he is satisfied. It may be months before he turns up to claim the money, as he frequently gets a job on the way back or spends some time at a place of pilgrimage, but he knows that his money is safe enough and he is quite content to use the Post Office as a temporary bank to the great inconvenience of the Audit Office. It is not too much to say that the money order system of India is part and parcel of the life of the people. They use it to assist their friends and defy their enemies. They have in that magic slip of paper, the money order acknowledgment, what they never had before, that which no number of lying witnesses can disprove, namely, an indisputable proof of payment.
CHAPTER VIII
SAVINGS BANK
The first Government Savings Banks were opened at the three Presidency towns of Calcutta, Madras and Bombay in 1833, 1834 and 1835, respectively. These Banks were announced as intended for the investment of the savings of "all classes British and Native," the return of the deposits with interest being guaranteed by Government. Between 1863 and 1865 the management of the Savings Banks was transferred to the Presidency Banks, and each Presidency framed its own rules. The first deposits were limited to Rs.500, and upon the balance reaching this sum it was invested in a Government Loan. The limit was gradually increased to Rs.3000 with interest at 4 per cent, but, as it was found that many people deposited the maximum amount at once, a rule was brought in prohibiting the deposit of more than Rs.500 a year in any one account.
In 1870 District Savings Banks were instituted in all parts of India except Calcutta and the Presidencies of Madras and Bombay. The limits for deposits were fixed at Rs.500 a year with a total of Rs.3000 and interest at 3¾ per cent was fixed. In December, 1879, revised rules were drawn up for District and other Government Savings Banks, the most important change being that the limit of a deposit account was raised to Rs.5000 and interest was fixed at 4-1/6 per cent. The result of these rules was to attract to the Savings Banks a large number of deposits which should have gone to other banks, and in 1880 the monthly limit of Rs.500 with a maximum of Rs.3000 was again imposed and interest was reduced to 3¾ per cent.
The proposal to establish Post Office Savings Banks on the lines of those which existed in England met with great opposition, especially from the Comptroller-General. The same arguments were brought forward which the opponents of the Post Office Savings Bank Bill in England used when Mr. Gladstone managed to get this wise and beneficial measure through both Houses in 1861. In 1882 the first Post Office Savings Banks were opened in every part of India except Calcutta, Bombay and the head-quarter stations of Madras. In Madras, savings banks could be opened by the Director-General, provided they were not within five miles of a head-quarter station. The immediate consequence of this measure was an increase in the number of savings banks in the country from 197 to 4243. The minimum deposit was fixed at 4 annas, and interest was allowed at 3 pies a month on every complete sum of Rs.5; it was also arranged to purchase Government Securities for depositors. The end of the first year's working showed 39,121 depositors with a balance of Rs.27,96,796.
On the 1st April, 1886, District Savings Banks were abolished and the balances transferred to the Post Office, but the Local Government Savings Banks at Calcutta, Bombay and Madras remained in the hands of the Presidency Banks until the 1st October, 1896.
In 1904, when the balance at the credit of depositors exceeded 130 millions of rupees, the Government of India began to be rather nervous of being liable to pay up such a large sum at call without any warning. A sudden rush of depositors to withdraw their savings would tax the resources of Government to the utmost and, in order to afford some protection, a rule was made that an extra quarter per cent would be paid upon deposits, which were not liable to withdrawal until six months' notice had been given. Needless to say, the bait did not prove attractive. The additional interest meant practically nothing to small depositors and was poor compensation to large depositors for the inconvenience of having their money tied up for six months. What the measure did involve was a great increase of work and account-keeping for little or no purpose, as the number of accounts subject to six months' notice of withdrawal never exceeded 3 per cent of the total. These accounts were abolished in 1908 and, although the Government of India does not keep any special reserve against the balance in the Post Office Savings Bank, the depositor has the satisfaction of knowing that his deposit is guaranteed by the whole revenue of the country.