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.)
| Annual Expenses. | |||||
|---|---|---|---|---|---|
| Name of Bank | Total Amount owing to Depositors. | Number of Depositors. | Per Account. | Per Cent. of Capital. | Total. |
| £ | s. d. | s. d. | £ | ||
| St. Martin's Place | 1,780,725 | 61,736 | 1 5½ | 5 11 | 5,380 |
| Manchester | 1,306,329 | 50,231 | 1 3 | 5 3 | 3,206 |
| Exeter | 1,087,773 | 40,776 | 1 6 | 4 11 | 2,702 |
| Bishopsgate | 1,032,513 | 53,737 | 1 6 | 7 4 | 3,830 |
| Glasgow | 927,427 | 42,122 | 1 2 | 5 6 | 2,595 |
| Liverpool | 872,253 | 29,123 | 2 2 | 5 3 | 2,359 |
| Bloomsbury | 583,453 | 23,524 | 1 11 | 7 9 | 2,283 |
| Edinburgh | 566,076 | 30,426 | 1 8 | 9 0 | 2,558 |
| Birmingham | 563,870 | 31,238 | 1 3 | 6 8 | 1,908 |
| Marylebone | 395,561 | 23,024 | 1 9 | 11 1 | 2,212 |
| Average Amount of Deposit. | Rate of Interest paid to Depositor. | ||||
| £ s. d. | £ s. d. | ||||
| St. Martin's Place | 6 2 1 | 2 18 1 | |||
| Manchester | 4 5 5 | 3 0 0 | |||
| Exeter | 5 1 9 | 3 0 0 | |||
| Bishopsgate | 4 3 8 | 2 17 6 | |||
| Glasgow | 3 3 1 | 3 0 0 | |||
| Liverpool | 9 4 7 | 3 0 0 | |||
| Bloomsbury | 4 6 9 | 2 18 4 | |||
| Edinburgh | 3 5 5 | 2 17 9 | |||
| Birmingham | 4 0 3 | 3 0 0 | |||
| 2 17 4 | |||||
| Marylebone | 4 0 3 | ⎨ | |||
| 2 15 0 | |||||
[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.”