A History of Banks for Savings in Great Britain and Ireland

by William Lewins

[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 2l. 18s. 4d. 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 “20l. would be quite sufficient to allow a person to deposit in one year,” and that, “when the deposits reach 100l. 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Banks, answered that, “The Savings Bank system must either become a general failure, and the funds invested in them withdrawn, or you must place it upon an entirely different footing with respect to inspection and working.”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 14,000l.; 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.