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 100l. 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 30l. for any one year, and 150l. in all. Mr. Boodle thought the annual limit should be increased to 50l., and the total deposits to 250l. Mr. Finney wished it to be at 50l. and 200l. 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 2l. 17s. or 2l. 18s. 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 100l., 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—
| £ s. d. | ||||
|---|---|---|---|---|
| 31 | banks 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 6½ | " |
| 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 7s. 8d., in Ireland 9s., and in England 6s. 7d.; in Middlesex, however, it was as much as 9s. 2d. Confining ourselves to individual banks, we find that the Manchester Savings Bank cost at the same period, in expenses, an average sum of 1s. 3¾d. per account, the Bloomfield bank 1s. 9d., the St. Martin's Place 2s. 0-½d., the Liverpool bank 2s. 5¼d., and the Cork bank 3s. 2d. per account.